our pan-genotypic ns3 helicase lead compound is a first-in-class molecule , and we believe that drugs targeting this enzyme have the potential to define a novel treatment paradigm for hcv patients . growth strategy our strategy is to develop and commercialize novel broad spectrum antiviral agents by executing creative partnership and development strategies that will allow these products to come into the market faster and be utilized by the widest patient populations . focused discovery research – we will continue focusing on identifying novel drug targets and developing our proprietary drug discovery technologies . most established pharmaceutical companies use high-throughput screening for identifying good hits , and then carry out chemistry-driven lead discovery and optimization . this approach often requires a lengthy development timeline and considerable resources . as demonstrated in our hcv programs , our technology enables us to identify and evaluate the most attractive enzyme drug-binding pockets suitable for broad spectrum or pan-genotypic inhibitor development . upon completion of structural analysis , we execute structure-guided chemistry . we believe our approach combined with the focus on viral replication enzyme targets will accelerate our pipeline . . potential for combination therapies – we believe that combining two or more antiviral agents , particularly directed against different hcv targets , could lead to more potent inhibition of viral replication and to better suppression of the emergence of drug resistance compared to the use of single agents . we plan to explore combination therapy approaches with other hcv daas , including ns3 protease inhibitors , ns5a inhibitors , and ns5b nucs . cultivating strong partnerships – we will develop relationships with large multinational pharmaceutical companies to promote clinical development . this approach will enable us to focus our efforts on the discovery and early development of select compounds , while our collaborations with larger companies would fund the costly clinical trials and enable preparation for commercialization . -12- critical accounting policies and estimates the following policies and estimates apply to the legacy biozone pharmaceuticals business and to the audit report attached . basis of consolidation the consolidated financial statements include the accounts of biozone pharmaceuticals , inc. and its subsidiaries , all of which are wholly owned , its equity investment in betazone laboratories , llc , and 580 garcia ave , llc , a variable interest entity ( “ vie ” ) . the company considered the terms of its interest in 580 garcia and determined that it was a variable interest entity ( vie ) in accordance with acs 810-10-55 , and that it should be consolidated with the company . the company rents the manufacturing facility located at 580 garcia avenue , pittsburg ca from 580 garcia , is the sole tenant and is a guarantor of the mortgage note issued by 580 garcia to gecc , the lien holder on the property . use of estimates the preparation of the financial statements in conformity with generally accepted accounting principles ( “ gaap ” ) 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods . actual results could differ from those estimates . these estimates and assumptions include the collectability of accounts receivable and deferred taxes and related valuation allowances . certain of our estimates , including evaluating the collectability of accounts receivable , could be affected by external conditions , including those unique to our industry , and general economic conditions . it is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates . we re-evaluate all of our accounting estimates at least quarterly based on these conditions and record adjustments when necessary . revenue recognition we follow the guidance of the securities and exchange commission 's staff accounting bulletin ( “ sab ” ) 104 for revenue recognition and accounting standards codification ( “ asc ” ) topic 605 , “ revenue recognition ” . the company operates as a contract manufacturer and produces finished goods according to customer specifications . the agreements with customers do not contain any rights of return other than for goods that fail to meet the specifications provided by the customer . the company has not experienced any significant returns from customers and accordingly , in management 's opinion , no reserve for returns is provided . we record revenue when persuasive evidence of an arrangement exists , services have been rendered or product delivery has occurred , the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured . inventories inventories are stated at the lower of cost , determined using the weighted average cost method , and net realizable value . net realizable value is the estimated selling price , in the ordinary course of business , less estimated costs to complete and dispose of the product . if the company identifies excess , obsolete or unsalable items , its inventories are written down to their realizable value in the period in which the impairment is first identified . during the year ended december 31 , 2012 we recorded a charge to cost of sales of $ 405,918 while in the prior year period we charged $ 1,439,616 relating to the write-down of inventory due to obsolescence . shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the company 's consolidated statements of operations . story_separator_special_tag our clinical trials will involve people , and we and third parties with whom we contract also do research involving animals . governmental authorities could , for public health or other purposes , limit the use of human or animal research or prohibit the practice of our technology . in addition , animal rights activists could protest or make threats against our facilities , which may cause property damage and delay our research . ethical and other concerns about our methods , such as our use of human subjects in clinical trials or our use of animal testing , could adversely affect our market acceptance . we have limited experience in conducting and managing the preclinical development activities and clinical trials necessary to obtain approvals for marketing our product candidates , including approval by the fda . our efforts to develop our product candidates are at an early stage . we may be unable to progress our product candidates undergoing preclinical testing into clinical trials . success in preclinical testing and early clinical trials does not ensure that later clinical trials will succeed , and favorable initial results from a clinical trial do not determine outcomes in subsequent clinical trials . the indications of use for which we are pursuing development may have clinical effectiveness endpoints not previously reviewed or validated by the fda or foreign regulatory authorities , which may complicate or delay our effort to obtain marketing approval . we can not guarantee that our clinical trials will succeed . we have not obtained marketing approval or commercialized any of our product candidates . we may not successfully design or implement clinical trials required for marketing approval to market our product candidates . if we are unsuccessful in conducting and managing our preclinical development activities or clinical trials or obtaining marketing approvals , we might not be able to commercialize our product candidates , or might be significantly delayed in doing so , which will materially harm our business . risks related to our financial condition and need for additional capital we have a limited operating history , have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future . we are a preclinical-stage , biopharmaceutical discovery and development company , formed in 2007 , with a limited operating history . since inception of cocrystal discovery , our operations have been limited to organizing and staffing the company , acquiring and developing intellectual property rights , developing our technology platform , undertaking basic research on viral replication enzyme targets and conducting preclinical studies for our initial programs . we have not yet initiated a clinical trial or obtained regulatory approval for any product candidates . any predictions about our future success or viability , or any evaluation of our business and prospects , may not be accurate . cocrystal discovery has incurred losses in each year since our inception in september 2007. our net losses were $ 3.9 million and $ 0.9 million for the years ended december 31 , 2013 , 2012 respectively . as of december 31 , 2013 , we had an accumulated deficit of $ 12.3 million . we have devoted most of our financial resources to research and development . we have financed our operations primarily through the sale of equity securities . we entered into a strategic alliance with teva pharmaceutical industries limited , or teva , relating to a hepatitis c polymerase target for treatment of hepatitis c. teva has an option to fund our ongoing research related to the target and obtain an exclusive worldwide license for the development , manufacture and commercialization of a product candidate selected from our hepatitis c polymerase program . if teva exercises its option to obtain a license to develop , manufacture and commercialize the product candidate , it will assume responsibility for funding and conducting further clinical development and commercialization activities for the product candidate . however , if teva does not exercise its option for an exclusive license , we will have all rights to the program , but we will be responsible for funding further development of the product candidate and any other candidates , and we may not have the resources to do so unless we can enter into another strategic alliance for these product candidates . the results of our operations will depend , in part , on the rate of future expenditures and our ability to obtain funding through equity or debt financings , strategic alliances or grants . we have only recently initiated preclinical development of a product candidate and it will be several years , if ever , before we have a product candidate ready for commercialization . even if we or our present or future partners successfully obtain regulatory approval to market a product candidate , our revenues will also depend upon the size of any markets in which our product candidates have received market approval , and our ability to achieve sufficient market acceptance and adequate market share for our products . -21- we expect to continue to incur significant expenses and increasing operating losses for the foreseeable future . the results of our operations may fluctuate significantly from quarter to quarter . we anticipate our expenses will increase substantially if and as we continue our research and preclinical development of our product candidates , both independently and under any strategic alliance agreements ; seek to identify additional drug targets and product candidates ; acquire or in-license other products and technologies ; initiate clinical trials for our product candidates ; seek marketing approvals for our product candidates that successfully complete clinical trials ; ultimately establish a sales , marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval ; maintain , expand and protect our intellectual property portfolio ; hire additional clinical , quality control and scientific personnel ; and create additional infrastructure to support our operations as a

liquidity with the sale of its interests in biozone laboratories , inc. , we presently do not have any regularly recurring revenue . cocrystal believes that its cash and cash equivalents of $ 2.9 million as of march 20 , 2014 , and the assets acquired in a merger in early 2014 , including common stock of a publicly traded company , will be sufficient to allow cocrystal to fund its current operating plan for at least the next 12 months . a portion of the musclepharm common stock ( 600,000 shares ) is being held in escrow to satisfy any breaches of representations under the asset purchase agreement . as cocrystal continues to incur losses , achieving profitability is dependent upon the successful development , approval and commercialization of its product candidates , and achieving a level of revenues adequate to support cocrystal 's cost structure . cocrystal may never achieve profitability , and unless and until it does , cocrystal will continue to need to raise additional capital . over the next 12 months ending march 31 , 2015 , we estimate negative cash flow of approximately $ 7 million . management intends to fund future operations through additional private or public debt or equity offerings , and may seek additional capital through arrangements with strategic partners or from other sources . in addition we may , if appropriate or necessary sell investment stock currently held .


 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 with the sale of its interests in biozone laboratories , inc. , we presently do not have any regularly recurring revenue . cocrystal believes that its cash and cash equivalents of $ 2.9 million as of march 20 , 2014 , and the assets acquired in a merger in early 2014 , including common stock of a publicly traded company , will be sufficient to allow cocrystal to fund its current operating plan for at least the next 12 months . a portion of the musclepharm common stock ( 600,000 shares ) is being held in escrow to satisfy any breaches of representations under the asset purchase agreement . as cocrystal continues to incur losses , achieving profitability is dependent upon the successful development , approval and commercialization of its product candidates , and achieving a level of revenues adequate to support cocrystal 's cost structure . cocrystal may never achieve profitability , and unless and until it does , cocrystal will continue to need to raise additional capital . over the next 12 months ending march 31 , 2015 , we estimate negative cash flow of approximately $ 7 million . management intends to fund future operations through additional private or public debt or equity offerings , and may seek additional capital through arrangements with strategic partners or from other sources . in addition we may , if appropriate or necessary sell investment stock currently held .
```    
 Suspicious Activity Report : our pan-genotypic ns3 helicase lead compound is a first-in-class molecule , and we believe that drugs targeting this enzyme have the potential to define a novel treatment paradigm for hcv patients . growth strategy our strategy is to develop and commercialize novel broad spectrum antiviral agents by executing creative partnership and development strategies that will allow these products to come into the market faster and be utilized by the widest patient populations . focused discovery research – we will continue focusing on identifying novel drug targets and developing our proprietary drug discovery technologies . most established pharmaceutical companies use high-throughput screening for identifying good hits , and then carry out chemistry-driven lead discovery and optimization . this approach often requires a lengthy development timeline and considerable resources . as demonstrated in our hcv programs , our technology enables us to identify and evaluate the most attractive enzyme drug-binding pockets suitable for broad spectrum or pan-genotypic inhibitor development . upon completion of structural analysis , we execute structure-guided chemistry . we believe our approach combined with the focus on viral replication enzyme targets will accelerate our pipeline . . potential for combination therapies – we believe that combining two or more antiviral agents , particularly directed against different hcv targets , could lead to more potent inhibition of viral replication and to better suppression of the emergence of drug resistance compared to the use of single agents . we plan to explore combination therapy approaches with other hcv daas , including ns3 protease inhibitors , ns5a inhibitors , and ns5b nucs . cultivating strong partnerships – we will develop relationships with large multinational pharmaceutical companies to promote clinical development . this approach will enable us to focus our efforts on the discovery and early development of select compounds , while our collaborations with larger companies would fund the costly clinical trials and enable preparation for commercialization . -12- critical accounting policies and estimates the following policies and estimates apply to the legacy biozone pharmaceuticals business and to the audit report attached . basis of consolidation the consolidated financial statements include the accounts of biozone pharmaceuticals , inc. and its subsidiaries , all of which are wholly owned , its equity investment in betazone laboratories , llc , and 580 garcia ave , llc , a variable interest entity ( “ vie ” ) . the company considered the terms of its interest in 580 garcia and determined that it was a variable interest entity ( vie ) in accordance with acs 810-10-55 , and that it should be consolidated with the company . the company rents the manufacturing facility located at 580 garcia avenue , pittsburg ca from 580 garcia , is the sole tenant and is a guarantor of the mortgage note issued by 580 garcia to gecc , the lien holder on the property . use of estimates the preparation of the financial statements in conformity with generally accepted accounting principles ( “ gaap ” ) 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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods . actual results could differ from those estimates . these estimates and assumptions include the collectability of accounts receivable and deferred taxes and related valuation allowances . certain of our estimates , including evaluating the collectability of accounts receivable , could be affected by external conditions , including those unique to our industry , and general economic conditions . it is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates . we re-evaluate all of our accounting estimates at least quarterly based on these conditions and record adjustments when necessary . revenue recognition we follow the guidance of the securities and exchange commission 's staff accounting bulletin ( “ sab ” ) 104 for revenue recognition and accounting standards codification ( “ asc ” ) topic 605 , “ revenue recognition ” . the company operates as a contract manufacturer and produces finished goods according to customer specifications . the agreements with customers do not contain any rights of return other than for goods that fail to meet the specifications provided by the customer . the company has not experienced any significant returns from customers and accordingly , in management 's opinion , no reserve for returns is provided . we record revenue when persuasive evidence of an arrangement exists , services have been rendered or product delivery has occurred , the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured . inventories inventories are stated at the lower of cost , determined using the weighted average cost method , and net realizable value . net realizable value is the estimated selling price , in the ordinary course of business , less estimated costs to complete and dispose of the product . if the company identifies excess , obsolete or unsalable items , its inventories are written down to their realizable value in the period in which the impairment is first identified . during the year ended december 31 , 2012 we recorded a charge to cost of sales of $ 405,918 while in the prior year period we charged $ 1,439,616 relating to the write-down of inventory due to obsolescence . shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the company 's consolidated statements of operations . story_separator_special_tag our clinical trials will involve people , and we and third parties with whom we contract also do research involving animals . governmental authorities could , for public health or other purposes , limit the use of human or animal research or prohibit the practice of our technology . in addition , animal rights activists could protest or make threats against our facilities , which may cause property damage and delay our research . ethical and other concerns about our methods , such as our use of human subjects in clinical trials or our use of animal testing , could adversely affect our market acceptance . we have limited experience in conducting and managing the preclinical development activities and clinical trials necessary to obtain approvals for marketing our product candidates , including approval by the fda . our efforts to develop our product candidates are at an early stage . we may be unable to progress our product candidates undergoing preclinical testing into clinical trials . success in preclinical testing and early clinical trials does not ensure that later clinical trials will succeed , and favorable initial results from a clinical trial do not determine outcomes in subsequent clinical trials . the indications of use for which we are pursuing development may have clinical effectiveness endpoints not previously reviewed or validated by the fda or foreign regulatory authorities , which may complicate or delay our effort to obtain marketing approval . we can not guarantee that our clinical trials will succeed . we have not obtained marketing approval or commercialized any of our product candidates . we may not successfully design or implement clinical trials required for marketing approval to market our product candidates . if we are unsuccessful in conducting and managing our preclinical development activities or clinical trials or obtaining marketing approvals , we might not be able to commercialize our product candidates , or might be significantly delayed in doing so , which will materially harm our business . risks related to our financial condition and need for additional capital we have a limited operating history , have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future . we are a preclinical-stage , biopharmaceutical discovery and development company , formed in 2007 , with a limited operating history . since inception of cocrystal discovery , our operations have been limited to organizing and staffing the company , acquiring and developing intellectual property rights , developing our technology platform , undertaking basic research on viral replication enzyme targets and conducting preclinical studies for our initial programs . we have not yet initiated a clinical trial or obtained regulatory approval for any product candidates . any predictions about our future success or viability , or any evaluation of our business and prospects , may not be accurate . cocrystal discovery has incurred losses in each year since our inception in september 2007. our net losses were $ 3.9 million and $ 0.9 million for the years ended december 31 , 2013 , 2012 respectively . as of december 31 , 2013 , we had an accumulated deficit of $ 12.3 million . we have devoted most of our financial resources to research and development . we have financed our operations primarily through the sale of equity securities . we entered into a strategic alliance with teva pharmaceutical industries limited , or teva , relating to a hepatitis c polymerase target for treatment of hepatitis c. teva has an option to fund our ongoing research related to the target and obtain an exclusive worldwide license for the development , manufacture and commercialization of a product candidate selected from our hepatitis c polymerase program . if teva exercises its option to obtain a license to develop , manufacture and commercialize the product candidate , it will assume responsibility for funding and conducting further clinical development and commercialization activities for the product candidate . however , if teva does not exercise its option for an exclusive license , we will have all rights to the program , but we will be responsible for funding further development of the product candidate and any other candidates , and we may not have the resources to do so unless we can enter into another strategic alliance for these product candidates . the results of our operations will depend , in part , on the rate of future expenditures and our ability to obtain funding through equity or debt financings , strategic alliances or grants . we have only recently initiated preclinical development of a product candidate and it will be several years , if ever , before we have a product candidate ready for commercialization . even if we or our present or future partners successfully obtain regulatory approval to market a product candidate , our revenues will also depend upon the size of any markets in which our product candidates have received market approval , and our ability to achieve sufficient market acceptance and adequate market share for our products . -21- we expect to continue to incur significant expenses and increasing operating losses for the foreseeable future . the results of our operations may fluctuate significantly from quarter to quarter . we anticipate our expenses will increase substantially if and as we continue our research and preclinical development of our product candidates , both independently and under any strategic alliance agreements ; seek to identify additional drug targets and product candidates ; acquire or in-license other products and technologies ; initiate clinical trials for our product candidates ; seek marketing approvals for our product candidates that successfully complete clinical trials ; ultimately establish a sales , marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval ; maintain , expand and protect our intellectual property portfolio ; hire additional clinical , quality control and scientific personnel ; and create additional infrastructure to support our operations as a

