this occurs upon shipment of the merchandise , which is when legal transfer of title occurs . reserves for sales allowances and customer returns are established based upon historical experience and our estimates of future returns . sales returns for the years ended december 31 , 2017 and 2016 aggregated $ 200,000 and $ 84,000 , respectively . the allowance for sales returns and allowances and doubtful accounts at december 31 , 2017 and 2016 aggregated $ 40,000 and $ 49,000 , respectively . we review the actual sales returns and bad debts for our customers and establish an estimate of future returns and an allowance for doubtful accounts . inventory - inventory , consisting principally of products held for resale , is recorded at the lower of cost ( determined using the first in-first out method ) or net realizable value . we had inventory balances in the amount of $ 4,990,000 and $ 5,055,000 at december 31 , 2017 and 2016 , respectively , which is presented net of valuation allowances of $ 7,848,000 and $ 8,537,000 at december 31 , 2017 and 2016 , respectively . we evaluate inventories to identify excess , high-cost , slow-moving or other factors rendering inventories as unmarketable at normal profit margins . due to the large number of transactions and the complexity of managing and maintaining a large inventory of product offerings , estimates are made regarding adjustments to the cost of inventories . if our assumptions about future demand change , or market conditions are less favorable than those projected , additional write-downs of inventories may be required . in any case , actual amounts could be different from those estimated . regulations - our worldwide operations are subject to local laws and regulations . as such , of particular interest is the european union ( “ eu ” ) directive relating to the restriction of certain hazardous substance ( “ rohs ” ) . on july 1 , 2006 , this directive restricted the distribution of products within the eu containing certain substances , including lead . at the present time , much of our inventory contains substances prohibited by the rohs directive . further , many of our suppliers are not yet supplying rohs compliant products . the legislation is effective and some of our inventory has become obsolete . management has estimated the impact of the legislation and have written down or reserved for related inventories based on amounts expected to be realized given all available current information . actual amounts realized from the ultimate disposition of related inventories could be different from those estimated . deferred taxes – we review the nature of each component of our deferred income taxes for reasonableness . if determined that it is more likely than not that we will not realize all or part of our net deferred tax assets in the future , we record a valuation allowance against the deferred tax assets , which allowance will be charged to income tax expense in the period of such determination . we also consider the scheduled reversal of deferred tax liabilities , tax planning strategies and future taxable income in assessing if deferred tax assets could be realized . we also consider the weight of both positive and negative evidence in determining whether a valuation allowance is needed . however , due to the continued net losses , we have fully reserved a $ 3,018,000 and $ 4,585,000 allowance against our net deferred tax assets at december 31 , 2017 and 2016 , respectively . 8 overview we are primarily focused on supplying odm products for our oem customer 's multi-year turn-key projects . we also distribute discrete semiconductors , commodity integrated circuits ( ics ) , optoelectronic devices and passive components to other electronic distributors , cems and oems , who incorporate them in their products . our core strategy has shifted to primarily focus on higher margin odm projects that require custom products designed for specific applications to oem customers , and away from actively marketing our superstore strategy of maintaining a vast quantity of electronic components to fill customer orders immediately from available stock held in inventory . as a result , we expect our components inventory will be more passively marketed and distributed online for clearance through our internet sales portal , however at potentially lower rates due to the pricing pressures normally attributed with online shopping . in 2017 , we recorded a $ 180,000 increase to our inventory reserves , compared to a $ 3,640,000 increase in 2016. we believe the significant 2016 increase was a reasonable estimate to allow for the potential obsolescence and lower valuation of our vast inventory of electronic component products as a result of the shift in our marketing focus . in accordance with generally accepted accounting principles , we have classified inventory as a current asset in our december 31 , 2017 , consolidated financial statements representing approximately 54 % of current assets and 37 % of total assets . however , if all or a substantial portion of the inventory was required to be immediately liquidated , the inventory would not be as readily marketable or liquid as other items included or classified as a current asset , such as cash . we can not assure you that demand in the discrete semiconductor market will increase and that market conditions will improve . therefore , it is possible that further declines in our carrying values of inventory may result . our gross profit margins are subject to a number of factors , including product demand , the relative strength of the u.s. dollar , provisions for inventory reserves , our ability to purchase inventory at favorable prices and our sales product mix . results of operations the year ended december 31 , 2017 compared to the year ended december 31 , 2016 net sales were $ 7,622,000 and $ 6,915,000 in 2017 and 2016 , respectively , story_separator_special_tag this occurs upon shipment of the merchandise , which is when legal transfer of title occurs . reserves for sales allowances and customer returns are established based upon historical experience and our estimates of future returns . sales returns for the years ended december 31 , 2017 and 2016 aggregated $ 200,000 and $ 84,000 , respectively . the allowance for sales returns and allowances and doubtful accounts at december 31 , 2017 and 2016 aggregated $ 40,000 and $ 49,000 , respectively . we review the actual sales returns and bad debts for our customers and establish an estimate of future returns and an allowance for doubtful accounts . inventory - inventory , consisting principally of products held for resale , is recorded at the lower of cost ( determined using the first in-first out method ) or net realizable value . we had inventory balances in the amount of $ 4,990,000 and $ 5,055,000 at december 31 , 2017 and 2016 , respectively , which is presented net of valuation allowances of $ 7,848,000 and $ 8,537,000 at december 31 , 2017 and 2016 , respectively . we evaluate inventories to identify excess , high-cost , slow-moving or other factors rendering inventories as unmarketable at normal profit margins . due to the large number of transactions and the complexity of managing and maintaining a large inventory of product offerings , estimates are made regarding adjustments to the cost of inventories . if our assumptions about future demand change , or market conditions are less favorable than those projected , additional write-downs of inventories may be required . in any case , actual amounts could be different from those estimated . regulations - our worldwide operations are subject to local laws and regulations . as such , of particular interest is the european union ( “ eu ” ) directive relating to the restriction of certain hazardous substance ( “ rohs ” ) . on july 1 , 2006 , this directive restricted the distribution of products within the eu containing certain substances , including lead . at the present time , much of our inventory contains substances prohibited by the rohs directive . further , many of our suppliers are not yet supplying rohs compliant products . the legislation is effective and some of our inventory has become obsolete . management has estimated the impact of the legislation and have written down or reserved for related inventories based on amounts expected to be realized given all available current information . actual amounts realized from the ultimate disposition of related inventories could be different from those estimated . deferred taxes – we review the nature of each component of our deferred income taxes for reasonableness . if determined that it is more likely than not that we will not realize all or part of our net deferred tax assets in the future , we record a valuation allowance against the deferred tax assets , which allowance will be charged to income tax expense in the period of such determination . we also consider the scheduled reversal of deferred tax liabilities , tax planning strategies and future taxable income in assessing if deferred tax assets could be realized . we also consider the weight of both positive and negative evidence in determining whether a valuation allowance is needed . however , due to the continued net losses , we have fully reserved a $ 3,018,000 and $ 4,585,000 allowance against our net deferred tax assets at december 31 , 2017 and 2016 , respectively . 8 overview we are primarily focused on supplying odm products for our oem customer 's multi-year turn-key projects . we also distribute discrete semiconductors , commodity integrated circuits ( ics ) , optoelectronic devices and passive components to other electronic distributors , cems and oems , who incorporate them in their products . our core strategy has shifted to primarily focus on higher margin odm projects that require custom products designed for specific applications to oem customers , and away from actively marketing our superstore strategy of maintaining a vast quantity of electronic components to fill customer orders immediately from available stock held in inventory . as a result , we expect our components inventory will be more passively marketed and distributed online for clearance through our internet sales portal , however at potentially lower rates due to the pricing pressures normally attributed with online shopping . in 2017 , we recorded a $ 180,000 increase to our inventory reserves , compared to a $ 3,640,000 increase in 2016. we believe the significant 2016 increase was a reasonable estimate to allow for the potential obsolescence and lower valuation of our vast inventory of electronic component products as a result of the shift in our marketing focus . in accordance with generally accepted accounting principles , we have classified inventory as a current asset in our december 31 , 2017 , consolidated financial statements representing approximately 54 % of current assets and 37 % of total assets . however , if all or a substantial portion of the inventory was required to be immediately liquidated , the inventory would not be as readily marketable or liquid as other items included or classified as a current asset , such as cash . we can not assure you that demand in the discrete semiconductor market will increase and that market conditions will improve . therefore , it is possible that further declines in our carrying values of inventory may result . our gross profit margins are subject to a number of factors , including product demand , the relative strength of the u.s. dollar , provisions for inventory reserves , our ability to purchase inventory at favorable prices and our sales product mix . results of operations the year ended december 31 , 2017 compared to the year ended december 31 , 2016 net sales were $ 7,622,000 and $ 6,915,000 in 2017 and 2016 , respectively ,

liquidity and capital resources we historically have satisfied our liquidity requirements through cash generated from operations , short-term commercial loans , subordinated promissory notes and issuance of equity securities . a summary of our cash flows resulting from our operating , investing and financing activities for the years ended december 31 , 2017 and 2016 were as follows : replace_table_token_1_th cash provided by operating activities decreased to $ 388,000 during 2017 , as compared to $ 1,247,000 in the prior year . the decrease in cash was primarily due to trade accounts receivable levels increasing by $ 935,000 during 2017. cash used in investing activities increased to $ 130,000 during 2017 , as compared to $ 4,000 in the prior year . the increase was primarily due to our additional $ 93,000 investment in zowie technology corporation ( see part ii , item 8 : note 4 – other assets ) . cash used in financing activities was $ 1,014,000 during 2017 , as compared to $ 914,000 in the prior year . the increase was primarily due to our 2017 cash dividends payments included four quarters , as compared to 2016 only included three quarters ( see part ii, item 5 : market information , for more information on our quarterly dividends declared ) .


 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 we historically have satisfied our liquidity requirements through cash generated from operations , short-term commercial loans , subordinated promissory notes and issuance of equity securities . a summary of our cash flows resulting from our operating , investing and financing activities for the years ended december 31 , 2017 and 2016 were as follows : replace_table_token_1_th cash provided by operating activities decreased to $ 388,000 during 2017 , as compared to $ 1,247,000 in the prior year . the decrease in cash was primarily due to trade accounts receivable levels increasing by $ 935,000 during 2017. cash used in investing activities increased to $ 130,000 during 2017 , as compared to $ 4,000 in the prior year . the increase was primarily due to our additional $ 93,000 investment in zowie technology corporation ( see part ii , item 8 : note 4 – other assets ) . cash used in financing activities was $ 1,014,000 during 2017 , as compared to $ 914,000 in the prior year . the increase was primarily due to our 2017 cash dividends payments included four quarters , as compared to 2016 only included three quarters ( see part ii, item 5 : market information , for more information on our quarterly dividends declared ) .
```    
 Suspicious Activity Report : this occurs upon shipment of the merchandise , which is when legal transfer of title occurs . reserves for sales allowances and customer returns are established based upon historical experience and our estimates of future returns . sales returns for the years ended december 31 , 2017 and 2016 aggregated $ 200,000 and $ 84,000 , respectively . the allowance for sales returns and allowances and doubtful accounts at december 31 , 2017 and 2016 aggregated $ 40,000 and $ 49,000 , respectively . we review the actual sales returns and bad debts for our customers and establish an estimate of future returns and an allowance for doubtful accounts . inventory - inventory , consisting principally of products held for resale , is recorded at the lower of cost ( determined using the first in-first out method ) or net realizable value . we had inventory balances in the amount of $ 4,990,000 and $ 5,055,000 at december 31 , 2017 and 2016 , respectively , which is presented net of valuation allowances of $ 7,848,000 and $ 8,537,000 at december 31 , 2017 and 2016 , respectively . we evaluate inventories to identify excess , high-cost , slow-moving or other factors rendering inventories as unmarketable at normal profit margins . due to the large number of transactions and the complexity of managing and maintaining a large inventory of product offerings , estimates are made regarding adjustments to the cost of inventories . if our assumptions about future demand change , or market conditions are less favorable than those projected , additional write-downs of inventories may be required . in any case , actual amounts could be different from those estimated . regulations - our worldwide operations are subject to local laws and regulations . as such , of particular interest is the european union ( “ eu ” ) directive relating to the restriction of certain hazardous substance ( “ rohs ” ) . on july 1 , 2006 , this directive restricted the distribution of products within the eu containing certain substances , including lead . at the present time , much of our inventory contains substances prohibited by the rohs directive . further , many of our suppliers are not yet supplying rohs compliant products . the legislation is effective and some of our inventory has become obsolete . management has estimated the impact of the legislation and have written down or reserved for related inventories based on amounts expected to be realized given all available current information . actual amounts realized from the ultimate disposition of related inventories could be different from those estimated . deferred taxes – we review the nature of each component of our deferred income taxes for reasonableness . if determined that it is more likely than not that we will not realize all or part of our net deferred tax assets in the future , we record a valuation allowance against the deferred tax assets , which allowance will be charged to income tax expense in the period of such determination . we also consider the scheduled reversal of deferred tax liabilities , tax planning strategies and future taxable income in assessing if deferred tax assets could be realized . we also consider the weight of both positive and negative evidence in determining whether a valuation allowance is needed . however , due to the continued net losses , we have fully reserved a $ 3,018,000 and $ 4,585,000 allowance against our net deferred tax assets at december 31 , 2017 and 2016 , respectively . 8 overview we are primarily focused on supplying odm products for our oem customer 's multi-year turn-key projects . we also distribute discrete semiconductors , commodity integrated circuits ( ics ) , optoelectronic devices and passive components to other electronic distributors , cems and oems , who incorporate them in their products . our core strategy has shifted to primarily focus on higher margin odm projects that require custom products designed for specific applications to oem customers , and away from actively marketing our superstore strategy of maintaining a vast quantity of electronic components to fill customer orders immediately from available stock held in inventory . as a result , we expect our components inventory will be more passively marketed and distributed online for clearance through our internet sales portal , however at potentially lower rates due to the pricing pressures normally attributed with online shopping . in 2017 , we recorded a $ 180,000 increase to our inventory reserves , compared to a $ 3,640,000 increase in 2016. we believe the significant 2016 increase was a reasonable estimate to allow for the potential obsolescence and lower valuation of our vast inventory of electronic component products as a result of the shift in our marketing focus . in accordance with generally accepted accounting principles , we have classified inventory as a current asset in our december 31 , 2017 , consolidated financial statements representing approximately 54 % of current assets and 37 % of total assets . however , if all or a substantial portion of the inventory was required to be immediately liquidated , the inventory would not be as readily marketable or liquid as other items included or classified as a current asset , such as cash . we can not assure you that demand in the discrete semiconductor market will increase and that market conditions will improve . therefore , it is possible that further declines in our carrying values of inventory may result . our gross profit margins are subject to a number of factors , including product demand , the relative strength of the u.s. dollar , provisions for inventory reserves , our ability to purchase inventory at favorable prices and our sales product mix . results of operations the year ended december 31 , 2017 compared to the year ended december 31 , 2016 net sales were $ 7,622,000 and $ 6,915,000 in 2017 and 2016 , respectively , story_separator_special_tag this occurs upon shipment of the merchandise , which is when legal transfer of title occurs . reserves for sales allowances and customer returns are established based upon historical experience and our estimates of future returns . sales returns for the years ended december 31 , 2017 and 2016 aggregated $ 200,000 and $ 84,000 , respectively . the allowance for sales returns and allowances and doubtful accounts at december 31 , 2017 and 2016 aggregated $ 40,000 and $ 49,000 , respectively . we review the actual sales returns and bad debts for our customers and establish an estimate of future returns and an allowance for doubtful accounts . inventory - inventory , consisting principally of products held for resale , is recorded at the lower of cost ( determined using the first in-first out method ) or net realizable value . we had inventory balances in the amount of $ 4,990,000 and $ 5,055,000 at december 31 , 2017 and 2016 , respectively , which is presented net of valuation allowances of $ 7,848,000 and $ 8,537,000 at december 31 , 2017 and 2016 , respectively . we evaluate inventories to identify excess , high-cost , slow-moving or other factors rendering inventories as unmarketable at normal profit margins . due to the large number of transactions and the complexity of managing and maintaining a large inventory of product offerings , estimates are made regarding adjustments to the cost of inventories . if our assumptions about future demand change , or market conditions are less favorable than those projected , additional write-downs of inventories may be required . in any case , actual amounts could be different from those estimated . regulations - our worldwide operations are subject to local laws and regulations . as such , of particular interest is the european union ( “ eu ” ) directive relating to the restriction of certain hazardous substance ( “ rohs ” ) . on july 1 , 2006 , this directive restricted the distribution of products within the eu containing certain substances , including lead . at the present time , much of our inventory contains substances prohibited by the rohs directive . further , many of our suppliers are not yet supplying rohs compliant products . the legislation is effective and some of our inventory has become obsolete . management has estimated the impact of the legislation and have written down or reserved for related inventories based on amounts expected to be realized given all available current information . actual amounts realized from the ultimate disposition of related inventories could be different from those estimated . deferred taxes – we review the nature of each component of our deferred income taxes for reasonableness . if determined that it is more likely than not that we will not realize all or part of our net deferred tax assets in the future , we record a valuation allowance against the deferred tax assets , which allowance will be charged to income tax expense in the period of such determination . we also consider the scheduled reversal of deferred tax liabilities , tax planning strategies and future taxable income in assessing if deferred tax assets could be realized . we also consider the weight of both positive and negative evidence in determining whether a valuation allowance is needed . however , due to the continued net losses , we have fully reserved a $ 3,018,000 and $ 4,585,000 allowance against our net deferred tax assets at december 31 , 2017 and 2016 , respectively . 8 overview we are primarily focused on supplying odm products for our oem customer 's multi-year turn-key projects . we also distribute discrete semiconductors , commodity integrated circuits ( ics ) , optoelectronic devices and passive components to other electronic distributors , cems and oems , who incorporate them in their products . our core strategy has shifted to primarily focus on higher margin odm projects that require custom products designed for specific applications to oem customers , and away from actively marketing our superstore strategy of maintaining a vast quantity of electronic components to fill customer orders immediately from available stock held in inventory . as a result , we expect our components inventory will be more passively marketed and distributed online for clearance through our internet sales portal , however at potentially lower rates due to the pricing pressures normally attributed with online shopping . in 2017 , we recorded a $ 180,000 increase to our inventory reserves , compared to a $ 3,640,000 increase in 2016. we believe the significant 2016 increase was a reasonable estimate to allow for the potential obsolescence and lower valuation of our vast inventory of electronic component products as a result of the shift in our marketing focus . in accordance with generally accepted accounting principles , we have classified inventory as a current asset in our december 31 , 2017 , consolidated financial statements representing approximately 54 % of current assets and 37 % of total assets . however , if all or a substantial portion of the inventory was required to be immediately liquidated , the inventory would not be as readily marketable or liquid as other items included or classified as a current asset , such as cash . we can not assure you that demand in the discrete semiconductor market will increase and that market conditions will improve . therefore , it is possible that further declines in our carrying values of inventory may result . our gross profit margins are subject to a number of factors , including product demand , the relative strength of the u.s. dollar , provisions for inventory reserves , our ability to purchase inventory at favorable prices and our sales product mix . results of operations the year ended december 31 , 2017 compared to the year ended december 31 , 2016 net sales were $ 7,622,000 and $ 6,915,000 in 2017 and 2016 , respectively ,

