transactions with the affiliated companies were made in the ordinary course of business , and management believes that sales to the affiliated companies do not involve more than normal credit risk . we are nearing completion of the expansion project , which involves the expansion of kinpak 's manufacturing and warehouse facilities in montgomery , alabama . see “ business - recent developments ” in item 1 of this report for additional information . the tax cuts and jobs act , which was enacted on december 22 , 2017 , changes united states tax law significantly . the most important change affecting ocean bio-chem , inc. is the reduction in the united states corporate income tax rate from 35 % to 21 % , effective january 1 , 2018. among other things , the reduction in the corporate tax rate resulted in a substantial decrease in our deferred tax liabilities , which is discussed in more detail below under “ results of operations – provision for income taxes . ” 6 our operating results for 2016 were adversely affected by professional fees and expenses related to litigation against a competitor in which we and the competitor each claimed that the other was engaged in false advertising and related violations of law ( the “ advertising litigation ” ) . following a trial in which it was determined that neither party was liable to the other , the advertising litigation was concluded . our professional fees and expenses related to the advertising litigation were approximately $ 1,146,000 in 2016. as the advertising litigation was concluded in 2016 , we had no expenses related to the advertising litigation during 2017. critical accounting estimates : the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the united states of america requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . actual results could differ from those estimates and assumptions . we have identified the following as critical accounting estimates , which are defined as those that are reflective of significant judgments and uncertainties , are the most pervasive and important to the presentation of our financial condition and results of operations and , if subject to different assumptions and conditions , could lead to materially different results . collectability of trade accounts receivable in the ordinary course of business , we grant non-interest bearing trade credit to our unaffiliated customers on terms that range from 30 to 180 days . in an effort to reduce our credit risk , we perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and aging of receivables , as well as our customers ' creditworthiness , as determined by our review of their current credit information . we generally do not require collateral on trade accounts receivable . we maintain an allowance for doubtful accounts based on expected collectability of the trade accounts receivable , after considering our historical collection experience , the length of time an account is outstanding , the financial position of the customer if known and information provided by credit rating services . the adequacy of this allowance is reviewed each reporting period and adjusted as necessary . our allowance for doubtful accounts was approximately $ 79,000 and $ 75,000 at december 31 , 2017 and 2016 , respectively , which was approximately 1.6 % and 1.5 % of gross accounts receivable at december 31 , 2017 and 2016 , respectively . if the financial condition of our customers were to deteriorate , resulting in increased uncertainty as to their ability to make payments , or if unexpected events or significant future changes in trends were to occur , we may be required to increase the allowance or incur a bad debt expense . in this regard , we incurred a bad debt expense of approximately $ 199,000 in 2017 , most of which resulted from a customer 's bankruptcy . inventories our inventories primarily are composed of raw materials and finished goods and are stated at the lower of cost or net realizable value , using the first-in , first-out method . net realizable value is the estimated selling prices in the ordinary course of business , less reasonably predictable costs of completion , disposal and transportation . we maintain a reserve for slow moving and obsolete inventory to reflect the diminution in value resulting from product obsolescence , damage or other issues affecting marketability in an amount equal to the difference between the cost of the inventory and its estimated net realizable value . the adequacy of this reserve is reviewed each reporting period and adjusted as necessary . we regularly compare inventory quantities on hand against historical usage or forecasts related to specific items in order to evaluate obsolescence and excessive quantities . in assessing historical usage , we also qualitatively assess business trends to evaluate the reasonableness of using historical information as an estimate of future usage . our slow moving and obsolete inventory reserve was $ 274,295 and $ 268,159 at december 31 , 2017 and 2016 , respectively . income taxes we account for income taxes under the asset and liability method . under this method , deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . story_separator_special_tag we assess the remaining useful life and recoverability of intangible assets having finite lives ( patents and royalty rights ) whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable . such events or circumstances may include , for example , the occurrence of an adverse change with respect to a product line that utilizes the intangible assets . significant judgments in this area involve determining whether such an event or circumstance has occurred . any impairment loss , if indicated , equals the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset . results of operations : the following table provides a summary of our financial results for the years ended december 31 , 2017 and 2016 : replace_table_token_1_th 8 net sales for the year ended december 31 , 2017 increased by approximately $ 2,728,000 or 7.5 % , as compared to the year ended december 31 , 2016. the net sales increase principally is attributable to sales of our marine products to two of our largest customers . in addition , we experienced sales growth generally with respect to a wide range of customers , including mass merchandisers , large home improvement and marine/sports retail chains , and online retailers . cost of goods sold in creased by approximately $ 2,105,000 or 9.4 % in 2017 , as compared to 2016. the increase in cost of goods sold is principally a result of increased sales volume , higher raw material costs on our winterizing products and higher manufacturing costs . gross profit increased by approximately $ 623,000 or 4.5 % during 2017 , as compared to 2016. as a percentage of net sales , gross profit decreased to 37.2 % in 2017 from 38.3 % in 2016. the increase in gross profit in 2017 is primarily attributable to increased sales volume . the decrease in gross profit as a percentage of net sales during 2017 is principally a result of lower profit margins on sales of our winterizing products due to both lower sales prices and higher raw material costs . advertising and promotion expense increased by approximately $ 407,000 or 13.0 % during 2017 , as compared to 2016. as a percentage of net sales , advertising and promotion expense increased to 9.1 % in 2017 compared to 8.6 % in 2016. the increase in advertising and promotion expense is primarily a result of increases in customer cooperative advertising allowances provided to select customers and other marketing expenses . selling and administrative expenses decreased by approximately $ 363,000 or 4.7 % , during 2017 , as compared to 2016. the decrease reflects the conclusion of the advertising litigation in 2016. in 2016 , legal fees and expenses related to the advertising litigation were approximately $ 1,146,000. this decrease was partially offset by increased employee compensation expenses ( including salaries , commissions and stock awards ) ; bad debt expense of approximately $ 199,000 , of which approximately $ 188,000 resulted from a customer 's bankruptcy ; and increased costs of computer programming and other information technology services . as a percentage of net sales , selling and administrative expenses decreased to 18.7 % in 2017 from 21.2 % in 2016. interest income , net for the year ended december 31 , 2017 was approximately $ 2,000 ; for the year ended december 31 , 2016 , interest expense , net was approximately $ 18,000. interest income in 2017 was generated principally by an escrow account in which a portion of the funds relating to an industrial development bond financing were deposited pending our utilization of such funds in connection with the expansion project . the interest income was offset principally by interest under an earlier term loan that matured on july 6 , 2017 ; we paid all remaining principal and interest on the maturity date . the term loan also was the source of our primary interest obligation in 2016. provision for income taxes increased by approximately $ 91,000 for the year ended december 31 , 2017 , or 29.2 % of our pretax income , compared to approximately $ 983,000 in the year ended december 31 , 2016 , or 31.9 % of our pretax income . the increase in our provision for income taxes , which principally was due to the increase in our operating income , was offset in part by the benefit reflecting the reduction of our u.s. corporate income tax rate from 34 % to 21 % under the tax cuts and jobs act . we revalued our net deferred tax liabilities to give effect to the reduction in the corporate income tax rate , which resulted in an approximately $ 91,000 tax benefit . for additional information , see note 8 to the consolidated financial statements included in this report . story_separator_special_tag times , serif ; font-size : 10pt `` > some of our assets and liabilities are denominated in canadian dollars and are subject to currency exchange rate fluctuations . we do not engage in currency hedging and address currency risk as a pricing issue . for the year ended december 31 , 2017 , we recorded $ 1,496 in foreign currency translation adjustments ( decreasing shareholders ' equity by $ 1,496 ) . during the past few years , we have introduced a number of new products . at times , new product introductions have required us to increase our overall inventory and have resulted in lower inventory turnover rates . the effects of reduced inventory turnover have not been material to our overall operations . we believe that all capital required to fund any inventory increases will continue to be provided by operations and , if necessary , our current revolving line of credit or a renewal or replacement of the facility . however , we can not assure that we will be able to secure such a renewal or replacement of

liquidity and capital resources : our cash balance was approximately $ 2,418,000 at december 31 , 2017 compared to approximately $ 4,070,000 at december 31 , 2016. the following table summarizes our cash flows for the years ended december 31 , 2017 and 2016 : replace_table_token_2_th 9 net cash provided by operating activities for the year ended december 31 , 2017 decreased by approximately $ 97,000 or 3.2 % , as compared to the year ended december 31 , 2016. the comparative decrease is attributable to changes in working capital ( excluding cash ) of approximately $ 1,099,000 for the year ended december 31 , 2017 as compared to changes of approximately $ 344,000 during the year ended december 31 , 2016. these changes were mostly offset by an increase in net income of approximately $ 508,000 combined with an increase of noncash expenses of approximately $ 158,000 during the year ended december 31 , 2017 as compared to the year ended december 31 , 2016. inventories , net were approximately $ 9,074,000 and $ 8,601,000 at december 31 , 2017 and 2016 , respectively , representing an increase of approximately $ 473,000 or 5.5 % in 2017. the 2017 increase in inventories reflects anticipated demand in the first quarter of 2018. net trade accounts receivable at december 31 , 2017 aggregated approximately $ 4,964,000 , an increase of approximately $ 32,000 or 0.7 % compared to approximately $ 4,932,000 in net trade accounts receivable outstanding at december 31 , 2016. receivables due from affiliated companies aggregated approximately $ 1,584,000 at december 31 , 2017 , an increase of approximately $ 394,000 , or 33.1 % over receivables due from affiliated companies of approximately $ 1,190,000 at december 31 , 2016. net cash used in investing activities for the year ended december 31 , 2017 increased by approximately $ 7,579,000 ,


 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 : our cash balance was approximately $ 2,418,000 at december 31 , 2017 compared to approximately $ 4,070,000 at december 31 , 2016. the following table summarizes our cash flows for the years ended december 31 , 2017 and 2016 : replace_table_token_2_th 9 net cash provided by operating activities for the year ended december 31 , 2017 decreased by approximately $ 97,000 or 3.2 % , as compared to the year ended december 31 , 2016. the comparative decrease is attributable to changes in working capital ( excluding cash ) of approximately $ 1,099,000 for the year ended december 31 , 2017 as compared to changes of approximately $ 344,000 during the year ended december 31 , 2016. these changes were mostly offset by an increase in net income of approximately $ 508,000 combined with an increase of noncash expenses of approximately $ 158,000 during the year ended december 31 , 2017 as compared to the year ended december 31 , 2016. inventories , net were approximately $ 9,074,000 and $ 8,601,000 at december 31 , 2017 and 2016 , respectively , representing an increase of approximately $ 473,000 or 5.5 % in 2017. the 2017 increase in inventories reflects anticipated demand in the first quarter of 2018. net trade accounts receivable at december 31 , 2017 aggregated approximately $ 4,964,000 , an increase of approximately $ 32,000 or 0.7 % compared to approximately $ 4,932,000 in net trade accounts receivable outstanding at december 31 , 2016. receivables due from affiliated companies aggregated approximately $ 1,584,000 at december 31 , 2017 , an increase of approximately $ 394,000 , or 33.1 % over receivables due from affiliated companies of approximately $ 1,190,000 at december 31 , 2016. net cash used in investing activities for the year ended december 31 , 2017 increased by approximately $ 7,579,000 ,
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 Suspicious Activity Report : transactions with the affiliated companies were made in the ordinary course of business , and management believes that sales to the affiliated companies do not involve more than normal credit risk . we are nearing completion of the expansion project , which involves the expansion of kinpak 's manufacturing and warehouse facilities in montgomery , alabama . see “ business - recent developments ” in item 1 of this report for additional information . the tax cuts and jobs act , which was enacted on december 22 , 2017 , changes united states tax law significantly . the most important change affecting ocean bio-chem , inc. is the reduction in the united states corporate income tax rate from 35 % to 21 % , effective january 1 , 2018. among other things , the reduction in the corporate tax rate resulted in a substantial decrease in our deferred tax liabilities , which is discussed in more detail below under “ results of operations – provision for income taxes . ” 6 our operating results for 2016 were adversely affected by professional fees and expenses related to litigation against a competitor in which we and the competitor each claimed that the other was engaged in false advertising and related violations of law ( the “ advertising litigation ” ) . following a trial in which it was determined that neither party was liable to the other , the advertising litigation was concluded . our professional fees and expenses related to the advertising litigation were approximately $ 1,146,000 in 2016. as the advertising litigation was concluded in 2016 , we had no expenses related to the advertising litigation during 2017. critical accounting estimates : the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the united states of america requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . actual results could differ from those estimates and assumptions . we have identified the following as critical accounting estimates , which are defined as those that are reflective of significant judgments and uncertainties , are the most pervasive and important to the presentation of our financial condition and results of operations and , if subject to different assumptions and conditions , could lead to materially different results . collectability of trade accounts receivable in the ordinary course of business , we grant non-interest bearing trade credit to our unaffiliated customers on terms that range from 30 to 180 days . in an effort to reduce our credit risk , we perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and aging of receivables , as well as our customers ' creditworthiness , as determined by our review of their current credit information . we generally do not require collateral on trade accounts receivable . we maintain an allowance for doubtful accounts based on expected collectability of the trade accounts receivable , after considering our historical collection experience , the length of time an account is outstanding , the financial position of the customer if known and information provided by credit rating services . the adequacy of this allowance is reviewed each reporting period and adjusted as necessary . our allowance for doubtful accounts was approximately $ 79,000 and $ 75,000 at december 31 , 2017 and 2016 , respectively , which was approximately 1.6 % and 1.5 % of gross accounts receivable at december 31 , 2017 and 2016 , respectively . if the financial condition of our customers were to deteriorate , resulting in increased uncertainty as to their ability to make payments , or if unexpected events or significant future changes in trends were to occur , we may be required to increase the allowance or incur a bad debt expense . in this regard , we incurred a bad debt expense of approximately $ 199,000 in 2017 , most of which resulted from a customer 's bankruptcy . inventories our inventories primarily are composed of raw materials and finished goods and are stated at the lower of cost or net realizable value , using the first-in , first-out method . net realizable value is the estimated selling prices in the ordinary course of business , less reasonably predictable costs of completion , disposal and transportation . we maintain a reserve for slow moving and obsolete inventory to reflect the diminution in value resulting from product obsolescence , damage or other issues affecting marketability in an amount equal to the difference between the cost of the inventory and its estimated net realizable value . the adequacy of this reserve is reviewed each reporting period and adjusted as necessary . we regularly compare inventory quantities on hand against historical usage or forecasts related to specific items in order to evaluate obsolescence and excessive quantities . in assessing historical usage , we also qualitatively assess business trends to evaluate the reasonableness of using historical information as an estimate of future usage . our slow moving and obsolete inventory reserve was $ 274,295 and $ 268,159 at december 31 , 2017 and 2016 , respectively . income taxes we account for income taxes under the asset and liability method . under this method , deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . story_separator_special_tag we assess the remaining useful life and recoverability of intangible assets having finite lives ( patents and royalty rights ) whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable . such events or circumstances may include , for example , the occurrence of an adverse change with respect to a product line that utilizes the intangible assets . significant judgments in this area involve determining whether such an event or circumstance has occurred . any impairment loss , if indicated , equals the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset . results of operations : the following table provides a summary of our financial results for the years ended december 31 , 2017 and 2016 : replace_table_token_1_th 8 net sales for the year ended december 31 , 2017 increased by approximately $ 2,728,000 or 7.5 % , as compared to the year ended december 31 , 2016. the net sales increase principally is attributable to sales of our marine products to two of our largest customers . in addition , we experienced sales growth generally with respect to a wide range of customers , including mass merchandisers , large home improvement and marine/sports retail chains , and online retailers . cost of goods sold in creased by approximately $ 2,105,000 or 9.4 % in 2017 , as compared to 2016. the increase in cost of goods sold is principally a result of increased sales volume , higher raw material costs on our winterizing products and higher manufacturing costs . gross profit increased by approximately $ 623,000 or 4.5 % during 2017 , as compared to 2016. as a percentage of net sales , gross profit decreased to 37.2 % in 2017 from 38.3 % in 2016. the increase in gross profit in 2017 is primarily attributable to increased sales volume . the decrease in gross profit as a percentage of net sales during 2017 is principally a result of lower profit margins on sales of our winterizing products due to both lower sales prices and higher raw material costs . advertising and promotion expense increased by approximately $ 407,000 or 13.0 % during 2017 , as compared to 2016. as a percentage of net sales , advertising and promotion expense increased to 9.1 % in 2017 compared to 8.6 % in 2016. the increase in advertising and promotion expense is primarily a result of increases in customer cooperative advertising allowances provided to select customers and other marketing expenses . selling and administrative expenses decreased by approximately $ 363,000 or 4.7 % , during 2017 , as compared to 2016. the decrease reflects the conclusion of the advertising litigation in 2016. in 2016 , legal fees and expenses related to the advertising litigation were approximately $ 1,146,000. this decrease was partially offset by increased employee compensation expenses ( including salaries , commissions and stock awards ) ; bad debt expense of approximately $ 199,000 , of which approximately $ 188,000 resulted from a customer 's bankruptcy ; and increased costs of computer programming and other information technology services . as a percentage of net sales , selling and administrative expenses decreased to 18.7 % in 2017 from 21.2 % in 2016. interest income , net for the year ended december 31 , 2017 was approximately $ 2,000 ; for the year ended december 31 , 2016 , interest expense , net was approximately $ 18,000. interest income in 2017 was generated principally by an escrow account in which a portion of the funds relating to an industrial development bond financing were deposited pending our utilization of such funds in connection with the expansion project . the interest income was offset principally by interest under an earlier term loan that matured on july 6 , 2017 ; we paid all remaining principal and interest on the maturity date . the term loan also was the source of our primary interest obligation in 2016. provision for income taxes increased by approximately $ 91,000 for the year ended december 31 , 2017 , or 29.2 % of our pretax income , compared to approximately $ 983,000 in the year ended december 31 , 2016 , or 31.9 % of our pretax income . the increase in our provision for income taxes , which principally was due to the increase in our operating income , was offset in part by the benefit reflecting the reduction of our u.s. corporate income tax rate from 34 % to 21 % under the tax cuts and jobs act . we revalued our net deferred tax liabilities to give effect to the reduction in the corporate income tax rate , which resulted in an approximately $ 91,000 tax benefit . for additional information , see note 8 to the consolidated financial statements included in this report . story_separator_special_tag times , serif ; font-size : 10pt `` > some of our assets and liabilities are denominated in canadian dollars and are subject to currency exchange rate fluctuations . we do not engage in currency hedging and address currency risk as a pricing issue . for the year ended december 31 , 2017 , we recorded $ 1,496 in foreign currency translation adjustments ( decreasing shareholders ' equity by $ 1,496 ) . during the past few years , we have introduced a number of new products . at times , new product introductions have required us to increase our overall inventory and have resulted in lower inventory turnover rates . the effects of reduced inventory turnover have not been material to our overall operations . we believe that all capital required to fund any inventory increases will continue to be provided by operations and , if necessary , our current revolving line of credit or a renewal or replacement of the facility . however , we can not assure that we will be able to secure such a renewal or replacement of

