we also have a clinical team , consisting of a scientific advisory board , in-house therapists and nurses , and a medical director ( part-time ) , that serves as a resource to clinicians and patients and guides our development of clinical evidence in support of our products . our patients are reimbursed by government and private payers for the purchase of our products pursuant to established rates with each payer . we rely on third-party contract manufacturers for the sourcing of parts , the assembly of our controllers and the manufacturing of the garments used with our systems . we conduct final assembly of the garments used with our flexitouch system , perform quality assurance , and ship our products from our facility in minneapolis , minnesota . 66 for the year ended december 31 , 2016 , we generated revenues of $ 84.5 million and had net income of $ 2.9 million , compared to revenues of $ 62.9 million and net income of $ 1.4 million for the year ended december 31 , 2015 and revenues of $ 47.7 million and net income of $ 2.1 million for the year ended december 31 , 2014. our primary sources of capital to date have been from operating income and private placements of our capital stock , as well as our initial public offering , which closed on august 2 , 2016. we operate in one segment for financial reporting purposes . components of our results of operations revenues we derive our revenues from the sale of our flexitouch , actitouch and entré systems to patients in the united states . revenue growth has been driven by increased clinician , patient and payer awareness of lymphedema and the clinical efficacy of our flexitouch system , and the launch of our actitouch and entré systems in 2013. we have expanded our direct sales force that helps us drive and support our revenue growth and intend to continue this expansion . however , any reversal in these recent trends could have a negative impact on our future revenues . our revenues have fluctuated , and we expect our revenues to continue to fluctuate , from quarter to quarter due to a variety of factors . for instance , our fourth quarter is consistently our strongest quarter of the year . see item 7 . “ management 's discussion and analysis of financial condition and results of operations – seasonality ” for a further discussion of factors contributing to our seasonality . further , our revenues are impacted by fluctuations in the mix of products being sold during each period and changes in the mix of our payers and contract pricing . we sell our products directly to patients , who are referred to us by physicians , therapists or nurses . we bill payers , such as private insurers , medicare , the veterans administration or medicaid , on behalf of our patients and bill patients directly for their cost-sharing amounts , including any portion of an unsatisfied deductible and any copayments or co-insurance . approximately 15 % of our revenues in 2016 came from the veterans administration , comparable to 2015. however , due to pricing changes , our flexitouch system sales volume with the veterans administration increased from 2015 to 2016. approximately 12 % of our revenues in 2016 and 13 % of our revenues in 2015 came from medicare patients . changes to the level of medicare coverage for our products , including the 2015 lcd modification to the criteria for medicare coverage , could reduce the number of medicare patients who have access to our products . our products currently are not subject to the competitive bidding process for supplying covered items to medicare recipients . we expect our revenues to continue to increase in the future as a result of increased awareness of our solutions , expansion of our direct sales force , enhanced marketing and customer support efforts , continued focus on developing clinical and economic outcome data , expanded third-party reimbursement and introduction of our solutions outside the united states . we also anticipate increasing pricing pressure from commercial insurance payers , which will result in increasing downward pressure on our revenue growth rate . cost of goods sold and gross margin cost of goods sold consists primarily of component costs , direct labor , overhead costs , product warranties , provisions for slow-moving and obsolete inventory and delivery costs for items sold . a significant portion of our cost of goods sold consists of manufacturing overhead costs . these overhead costs include the cost of quality assurance , material procurement , inventory control , facilities , equipment and operations supervision and management . we expect overhead costs as a percentage of revenues to decrease as a result of expected increases in production volume and yields . cost of goods sold also includes depreciation expense for product tooling , production equipment and shipping costs . we expect cost of goods sold to increase in absolute dollars primarily if , and to the extent , our revenues grow . we provide a warranty on our device controllers ranging from one to two years for commercially insured patients and five years for medicare patients , as required by cms . we also provide replacement garments to our patients for up to five years after purchase . we establish a reserve for warranty claims based on historical warranty repair and replacement costs incurred . provisions for warranty obligations , which are included in cost of goods sold , are recorded at the time of shipment . 67 we calculate gross margin as gross profit divided by revenues . our gross margin has been and will continue to be affected by a variety of factors , including product and payer mix , production volumes , manufacturing costs and cost-reduction strategies . story_separator_special_tag replace_table_token_6_th revenues revenues increased $ 21.7 million , or 34 % , to $ 84.5 million in the year ended december 31 , 2016 , compared to $ 62.9 million in the year ended december 31 , 2015. the growth in revenues was primarily attributable to an increase of approximately $ 18.7 million , or 34 % , in sales of our flexitouch system in the year ended december 31 , 2016. the increase in flexitouch sales was driven primarily by expansion of our sales force , increased physician and patient awareness of the lymphedema condition , and increased contractual coverage with national and regional insurance payers . the growth in revenues in 2016 was also attributable to an increase of approximately $ 3.0 million , or 37 % , in sales of the actitouch and entré systems , compared to 2015. the following table summarizes our revenues by product for the years ended december 31 , 2016 and december 31 , 2015 , both in dollars and percentage of total revenues : replace_table_token_7_th 72 cost of goods sold and gross margin cost of goods sold increased $ 6.0 million , or 36 % , to $ 22.9 million during the year ended december 31 , 2016 , compared to $ 16.9 million during the year ended december 31 , 2015. the increase in cost of goods sold was primarily attributable to an increase in the number of systems sold . gross margin for each of the years ended december 31 , 2016 and 2015 was 73 % . sales and marketing expenses sales and marketing expenses increased $ 9.3 million , or 38 % , to $ 33.8 million during the year ended december 31 , 2016 , compared to $ 24.5 million during the year ended december 31 , 2015. the increase was primarily attributable to $ 6.1 million of increased compensation and related expenses as a result of increased sales and marketing headcount and increased commission and other variable selling expenses associated with favorable sales performance . in addition , other sales and marketing expenses increased $ 3.3 million primarily due to increased field sales meetings , travel and entertainment , consulting and field sales training expenses . research and development expenses r & d expenses increased $ 0.2 million , or 4 % , to $ 4.5 million during the year ended december 31 , 2016 , compared to $ 4.3 million during the year ended december 31 , 2015. the increase in r & d expenses was primarily attributable to increased clinical study and product development costs , including those related to the development of our new head and neck flexitouch system . reimbursement , general and administrative expenses reimbursement , general and administrative expenses increased $ 5.3 million , or 39 % , to $ 19.1 million during the year ended december 31 , 2016 , compared to $ 13.7 million during the year ended december 31 , 2015. the increase in reimbursement , general and administrative expenses was primarily attributable to personnel-related expenses as a result of increased headcount in our patient services , contracting , case management , billing and collections , advocacy , reimbursement and administrative teams , as well as increased stock-based compensation expense and incremental expenses associated with public company compliance requirements incurred in the third and fourth quarters of 2016 , subsequent to our initial public offering . other income ( expense ) , net other income , net was $ 38,000 for the year ended december 31 , 2016 compared to other expense of $ 0.2 million for the year ended december 31 , 2015. the other expense in 2015 was primarily due to interest expense recognized on the value of future minimum royalty payments . income tax expense income tax expense was $ 1.4 million on earnings before tax of $ 4.3 million for the year ended december 31 , 2016 , resulting in an effective income tax rate of 33 % . this compares to income tax expense of $ 1.9 million on earnings before tax of $ 3.3 million for the year ended december 31 , 2015 , resulting in an effective income tax rate of 57 % . the decrease in the effective tax rate in fiscal year 2016 was due to the adoption of accounting standards update ( asu ) 2016-09 , “ improvements to employee share-based payment accounting , ” which allows for the recognition of excess tax benefits in earnings . 73 comparison of the years ended december 31 , 2015 and 2014 the following table presents our results of operations for the periods indicated . replace_table_token_8_th n.m. – not meaningful revenues revenues increased $ 15.1 million , or 32 % , to $ 62.9 million during the year ended december 31 , 2015 , compared to $ 47.7 million during the year ended december 31 , 2014. the growth in revenues was primarily attributable to an increase of approximately $ 11.0 million , or 25 % , in sales of our flexitouch system and an increase of approximately $ 4.1 million , or 103 % , in sales of our actitouch and entré systems . these increases in sales were driven by expansion of our sales force and increased physician and patient awareness . the following table summarizes our revenues by product for the years ended december 31 , 2015 and december 31 , 2014 , both in dollars and percentage of total revenues : replace_table_token_9_th cost of goods sold and gross margin cost of goods sold increased $ 4.2 million , or 33 % , to $ 16.9 million during the year ended december 31 , 2015 , compared to $ 12.7 million during the year ended december 31 , 2014. the increase in cost of goods sold was primarily attributable to an increase in the number of systems sold , partially offset by reduced material and labor costs for our products associated with better sourcing and increased

liquidity and capital resources overview as of december 31 , 2016 , we had cash and cash equivalents of $ 30.7 million , marketable securities of $ 11.0 million and an accumulated deficit of $ 2.8 million , compared to cash and cash equivalents of $ 7.1 million and an accumulated deficit of $ 5.7 million as of december 31 , 2015. our primary sources of capital to date have been from operating income and private placements of our capital stock , as well as our initial public offering , which closed on august 2 , 2016. cash flows at december 31 , 2016 , our principal sources of liquidity were cash and cash equivalents of $ 30.7 million , marketable securities of $ 11.0 million and net accounts receivable of $ 15.0 million . 75 the following table summarizes our cash flows for the periods indicated : replace_table_token_10_th net cash provided by ( used in ) operating activities net cash provided by operating activities during the year ended december 31 , 2016 was $ 7.0 million , resulting from net income of $ 2.9 million , non-cash expenses of $ 2.6 million and a net decrease in operating assets and liabilities of $ 1.5 million . the cash provided by operations was primarily due to our increased revenue volume , as well as increased accounts payable , accrued compensation and accrued expenses . the non-cash expense items primarily consisted of $ 1.9 million of stock-based compensation and $ 0.8 million of depreciation and amortization of equipment , leasehold improvements and patents of 0.8 million .


 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 overview as of december 31 , 2016 , we had cash and cash equivalents of $ 30.7 million , marketable securities of $ 11.0 million and an accumulated deficit of $ 2.8 million , compared to cash and cash equivalents of $ 7.1 million and an accumulated deficit of $ 5.7 million as of december 31 , 2015. our primary sources of capital to date have been from operating income and private placements of our capital stock , as well as our initial public offering , which closed on august 2 , 2016. cash flows at december 31 , 2016 , our principal sources of liquidity were cash and cash equivalents of $ 30.7 million , marketable securities of $ 11.0 million and net accounts receivable of $ 15.0 million . 75 the following table summarizes our cash flows for the periods indicated : replace_table_token_10_th net cash provided by ( used in ) operating activities net cash provided by operating activities during the year ended december 31 , 2016 was $ 7.0 million , resulting from net income of $ 2.9 million , non-cash expenses of $ 2.6 million and a net decrease in operating assets and liabilities of $ 1.5 million . the cash provided by operations was primarily due to our increased revenue volume , as well as increased accounts payable , accrued compensation and accrued expenses . the non-cash expense items primarily consisted of $ 1.9 million of stock-based compensation and $ 0.8 million of depreciation and amortization of equipment , leasehold improvements and patents of 0.8 million .
```    
 Suspicious Activity Report : we also have a clinical team , consisting of a scientific advisory board , in-house therapists and nurses , and a medical director ( part-time ) , that serves as a resource to clinicians and patients and guides our development of clinical evidence in support of our products . our patients are reimbursed by government and private payers for the purchase of our products pursuant to established rates with each payer . we rely on third-party contract manufacturers for the sourcing of parts , the assembly of our controllers and the manufacturing of the garments used with our systems . we conduct final assembly of the garments used with our flexitouch system , perform quality assurance , and ship our products from our facility in minneapolis , minnesota . 66 for the year ended december 31 , 2016 , we generated revenues of $ 84.5 million and had net income of $ 2.9 million , compared to revenues of $ 62.9 million and net income of $ 1.4 million for the year ended december 31 , 2015 and revenues of $ 47.7 million and net income of $ 2.1 million for the year ended december 31 , 2014. our primary sources of capital to date have been from operating income and private placements of our capital stock , as well as our initial public offering , which closed on august 2 , 2016. we operate in one segment for financial reporting purposes . components of our results of operations revenues we derive our revenues from the sale of our flexitouch , actitouch and entré systems to patients in the united states . revenue growth has been driven by increased clinician , patient and payer awareness of lymphedema and the clinical efficacy of our flexitouch system , and the launch of our actitouch and entré systems in 2013. we have expanded our direct sales force that helps us drive and support our revenue growth and intend to continue this expansion . however , any reversal in these recent trends could have a negative impact on our future revenues . our revenues have fluctuated , and we expect our revenues to continue to fluctuate , from quarter to quarter due to a variety of factors . for instance , our fourth quarter is consistently our strongest quarter of the year . see item 7 . “ management 's discussion and analysis of financial condition and results of operations – seasonality ” for a further discussion of factors contributing to our seasonality . further , our revenues are impacted by fluctuations in the mix of products being sold during each period and changes in the mix of our payers and contract pricing . we sell our products directly to patients , who are referred to us by physicians , therapists or nurses . we bill payers , such as private insurers , medicare , the veterans administration or medicaid , on behalf of our patients and bill patients directly for their cost-sharing amounts , including any portion of an unsatisfied deductible and any copayments or co-insurance . approximately 15 % of our revenues in 2016 came from the veterans administration , comparable to 2015. however , due to pricing changes , our flexitouch system sales volume with the veterans administration increased from 2015 to 2016. approximately 12 % of our revenues in 2016 and 13 % of our revenues in 2015 came from medicare patients . changes to the level of medicare coverage for our products , including the 2015 lcd modification to the criteria for medicare coverage , could reduce the number of medicare patients who have access to our products . our products currently are not subject to the competitive bidding process for supplying covered items to medicare recipients . we expect our revenues to continue to increase in the future as a result of increased awareness of our solutions , expansion of our direct sales force , enhanced marketing and customer support efforts , continued focus on developing clinical and economic outcome data , expanded third-party reimbursement and introduction of our solutions outside the united states . we also anticipate increasing pricing pressure from commercial insurance payers , which will result in increasing downward pressure on our revenue growth rate . cost of goods sold and gross margin cost of goods sold consists primarily of component costs , direct labor , overhead costs , product warranties , provisions for slow-moving and obsolete inventory and delivery costs for items sold . a significant portion of our cost of goods sold consists of manufacturing overhead costs . these overhead costs include the cost of quality assurance , material procurement , inventory control , facilities , equipment and operations supervision and management . we expect overhead costs as a percentage of revenues to decrease as a result of expected increases in production volume and yields . cost of goods sold also includes depreciation expense for product tooling , production equipment and shipping costs . we expect cost of goods sold to increase in absolute dollars primarily if , and to the extent , our revenues grow . we provide a warranty on our device controllers ranging from one to two years for commercially insured patients and five years for medicare patients , as required by cms . we also provide replacement garments to our patients for up to five years after purchase . we establish a reserve for warranty claims based on historical warranty repair and replacement costs incurred . provisions for warranty obligations , which are included in cost of goods sold , are recorded at the time of shipment . 67 we calculate gross margin as gross profit divided by revenues . our gross margin has been and will continue to be affected by a variety of factors , including product and payer mix , production volumes , manufacturing costs and cost-reduction strategies . story_separator_special_tag replace_table_token_6_th revenues revenues increased $ 21.7 million , or 34 % , to $ 84.5 million in the year ended december 31 , 2016 , compared to $ 62.9 million in the year ended december 31 , 2015. the growth in revenues was primarily attributable to an increase of approximately $ 18.7 million , or 34 % , in sales of our flexitouch system in the year ended december 31 , 2016. the increase in flexitouch sales was driven primarily by expansion of our sales force , increased physician and patient awareness of the lymphedema condition , and increased contractual coverage with national and regional insurance payers . the growth in revenues in 2016 was also attributable to an increase of approximately $ 3.0 million , or 37 % , in sales of the actitouch and entré systems , compared to 2015. the following table summarizes our revenues by product for the years ended december 31 , 2016 and december 31 , 2015 , both in dollars and percentage of total revenues : replace_table_token_7_th 72 cost of goods sold and gross margin cost of goods sold increased $ 6.0 million , or 36 % , to $ 22.9 million during the year ended december 31 , 2016 , compared to $ 16.9 million during the year ended december 31 , 2015. the increase in cost of goods sold was primarily attributable to an increase in the number of systems sold . gross margin for each of the years ended december 31 , 2016 and 2015 was 73 % . sales and marketing expenses sales and marketing expenses increased $ 9.3 million , or 38 % , to $ 33.8 million during the year ended december 31 , 2016 , compared to $ 24.5 million during the year ended december 31 , 2015. the increase was primarily attributable to $ 6.1 million of increased compensation and related expenses as a result of increased sales and marketing headcount and increased commission and other variable selling expenses associated with favorable sales performance . in addition , other sales and marketing expenses increased $ 3.3 million primarily due to increased field sales meetings , travel and entertainment , consulting and field sales training expenses . research and development expenses r & d expenses increased $ 0.2 million , or 4 % , to $ 4.5 million during the year ended december 31 , 2016 , compared to $ 4.3 million during the year ended december 31 , 2015. the increase in r & d expenses was primarily attributable to increased clinical study and product development costs , including those related to the development of our new head and neck flexitouch system . reimbursement , general and administrative expenses reimbursement , general and administrative expenses increased $ 5.3 million , or 39 % , to $ 19.1 million during the year ended december 31 , 2016 , compared to $ 13.7 million during the year ended december 31 , 2015. the increase in reimbursement , general and administrative expenses was primarily attributable to personnel-related expenses as a result of increased headcount in our patient services , contracting , case management , billing and collections , advocacy , reimbursement and administrative teams , as well as increased stock-based compensation expense and incremental expenses associated with public company compliance requirements incurred in the third and fourth quarters of 2016 , subsequent to our initial public offering . other income ( expense ) , net other income , net was $ 38,000 for the year ended december 31 , 2016 compared to other expense of $ 0.2 million for the year ended december 31 , 2015. the other expense in 2015 was primarily due to interest expense recognized on the value of future minimum royalty payments . income tax expense income tax expense was $ 1.4 million on earnings before tax of $ 4.3 million for the year ended december 31 , 2016 , resulting in an effective income tax rate of 33 % . this compares to income tax expense of $ 1.9 million on earnings before tax of $ 3.3 million for the year ended december 31 , 2015 , resulting in an effective income tax rate of 57 % . the decrease in the effective tax rate in fiscal year 2016 was due to the adoption of accounting standards update ( asu ) 2016-09 , “ improvements to employee share-based payment accounting , ” which allows for the recognition of excess tax benefits in earnings . 73 comparison of the years ended december 31 , 2015 and 2014 the following table presents our results of operations for the periods indicated . replace_table_token_8_th n.m. – not meaningful revenues revenues increased $ 15.1 million , or 32 % , to $ 62.9 million during the year ended december 31 , 2015 , compared to $ 47.7 million during the year ended december 31 , 2014. the growth in revenues was primarily attributable to an increase of approximately $ 11.0 million , or 25 % , in sales of our flexitouch system and an increase of approximately $ 4.1 million , or 103 % , in sales of our actitouch and entré systems . these increases in sales were driven by expansion of our sales force and increased physician and patient awareness . the following table summarizes our revenues by product for the years ended december 31 , 2015 and december 31 , 2014 , both in dollars and percentage of total revenues : replace_table_token_9_th cost of goods sold and gross margin cost of goods sold increased $ 4.2 million , or 33 % , to $ 16.9 million during the year ended december 31 , 2015 , compared to $ 12.7 million during the year ended december 31 , 2014. the increase in cost of goods sold was primarily attributable to an increase in the number of systems sold , partially offset by reduced material and labor costs for our products associated with better sourcing and increased

