during the year ended december 31 , 2017 , we recognized approximately $ 374,000 of royalty expense . following the signing of the new collaboration agreement , we retained a right to offset $ 15.0 million of future royalty payments . this offset will be reduced by up to $ 5.0 million upon the earlier of the approval of iluvien for posterior uveitis in any eu country or january 1 , 2020 , unless certain conditions under the new collaboration agreement are not met . 42 we commenced operations in june 2003. since our inception we have incurred significant losses . as of december 31 , 2017 , we had accumulated a deficit of $ 399.1 million . we expect to incur substantial losses through the continued commercialization of iluvien as we : continue the commercialization of iluvien in the u.s. and eea and , through our distributors , in the middle east , italy and spain ; continue to seek regulatory approval of iluvien in other jurisdictions and for other indications ; evaluate the use of iluvien for the treatment of other diseases ; and advance the clinical development of any future products or product candidates either currently in our pipeline , or that we may license or acquire in the future . as of december 31 , 2017 , we had approximately $ 24.1 million in cash and cash equivalents . on january 5 , 2018 , we entered into a $ 40.0 million loan and security agreement ( 2018 loan agreement ) with solar capital ltd. ( solar capital ) . under the 2018 loan agreement , we borrowed the entire $ 40.0 million as a term loan that matures on july 1 , 2022. we used the proceeds of the 2018 loan agreement loan to refinance the previous loan agreement with hercules capital , inc. ( hercules term loan agreement ) and to pay closing expenses associated with the 2018 loan agreement . we expect to use the remaining loan proceeds to provide additional working capital for general corporate purposes . ( see note 9 of our notes to consolidated financial statements below . ) our revenues for the fiscal years ended december 31 , 2017 and 2016 were generated from product sales primarily in the u.s. , germany , portugal and the united kingdom . in the u.s. , two large pharmaceutical distributors accounted for 73 % and 75 % of our consolidated revenues for the years ended december 31 , 2017 and 2016 , respectively . these distributors purchase iluvien from us , maintain inventories of iluvien and sell downstream to physician offices , pharmacies and hospitals . internationally , in countries where we sell direct , our customers are hospitals , clinics and pharmacies . we sometimes refer to physician offices , pharmacies , hospitals and clinics as end users . in international countries where we sell to distributors , these distributors maintain inventory levels of iluvien and sell to their customers . 43 results of operations replace_table_token_3_th revenue we began generating revenue from iluvien in 2013 , but do not expect positive cash flow from operations until late 2018 , if at all . in addition to generating revenue from product sales , we intend to seek to generate revenue from other sources such as upfront fees , milestone payments in connection with collaborative or strategic relationships , and royalties resulting from the licensing of iluvien or any future product candidates and other intellectual property . net revenue increased by approximately $ 1.6 million , or 5 % , to approximately $ 35.9 million for the year ended december 31 , 2017 , compared to approximately $ 34.3 million for the year ended december 31 , 2016. the increase was primarily attributable to increased sales volume in the u.s. and international segments , offset by the timing of the ordering of our two large u.s. distributors . cost of goods sold , excluding depreciation and amortization , and gross profit gross profit is affected by costs of goods sold , which includes ( a ) costs of manufactured goods sold and ( b ) payments to psivida in the form of ( 1 ) royalty payments under the new collaboration agreement ( after july 1 , 2017 ) , and ( 2 ) payments based on a percentage of net profits under our previous agreement with psivida ( before july 1 , 2017 ) . additionally , revenue from our international distributors fluctuates depending on the timing of the shipment of iluvien to the distributor and the distributors ' sales of iluvien to their customers . cost of goods sold , excluding depreciation and amortization increased by approximately $ 1.1 million , or 48 % , to approximately $ 3.4 million for the year ended december 31 , 2017 , compared to approximately $ 2.3 million for the year ended december 31 , 2016. the increase was primarily attributable to increases of approximately $ 370,000 in profit share and royalty expenses payable to psivida and $ 310,000 of costs associated with certain parts used to manufacture iluvien that were no longer unusable . 44 gross profit increased by approximately $ 500,000 , or 2 % , to approximately $ 32.5 million for the year ended december 31 , 2017 , compared to approximately $ 32.0 million for the year ended december 31 , 2016. gross margin was 90 % and 93 % for the years ended december 31 , 2017 and 2016 , respectively . the change in gross margin was primarily impacted by profit share expense and royalty expense , in each case , payable to psivida . story_separator_special_tag for the year ended december 31 , 2017 , net cash provided by our financing activities was approximately $ 5.7 million . in the second and third quarters of 2017 , we sold a total of 4,203,015 shares of our common stock through our at-the-market offering , resulting in total gross proceeds of approximately $ 6.0 million , prior to the payment of by $ 180,000 of related commissions , issuance costs and placement agent fees . for the year ended december 31 , 2016 , net cash provided by our financing activities was approximately $ 25.4 million . in august 2016 , we closed an underwritten public offering in which we sold and issued 18,900,000 shares of our common stock at a price to the public of $ 1.40 per share , resulting in gross proceeds of $ 26,460,000. in june and july 2016 , we sold a total of 662,779 shares of our common stock through our at-the-market offering , resulting in total gross proceeds of $ 1.2 million . offsetting these increases were payments of approximately $ 1.3 million relating to common stock issuance costs , $ 1.1 million associated with the amendments of our hercules term loan agreement and $ 230,000 in payments on capital leases . 50 critical accounting policies and estimates our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the u.s. the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenues and expenses . on an ongoing basis , we evaluate these estimates and judgments , including those described below . we base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances . these estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results and experiences may differ materially from these estimates . we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we use in the preparation of our consolidated financial statements . product revenue we recognize revenue from our product sales when persuasive evidence of an arrangement exists , title to product and associated risk of loss have passed to the customer , the price is fixed or determinable , and collection from the customer is reasonably assured . title passes generally upon receipt by the customer . precise information regarding the receipt of product by the customer is not always readily available . in these cases , we estimate the date of receipt based upon shipping policies by geographic location . our shipping policies require delivery within 24 hours of shipment in most instances . taxes that are collected from customers and remitted to governmental authorities , primarily in europe , are not included in revenue . in the u.s. , we sell iluvien to a limited number of pharmaceutical distributors who in turn sell the product downstream to physician offices , pharmacies and hospitals . revenue is recorded net of provisions for estimated rebates , wholesaler chargebacks , distribution related fees , and other deductions . calculating these provisions involves management 's estimates and judgments . we review our estimates of rebates , chargebacks and other applicable provisions each period and record any necessary adjustments in the current period 's net product sales . in the international segment , in countries where we sell direct we recognize revenue at the time of sale to hospitals , pharmacies , and physician practices . revenue is recorded net of provisions for contractual rebates , cash discounts , and other deductions . in countries where we utilize a distributor , we recognize revenue in accordance with the terms of the respective distributor agreements , which may reflect revenue recognition upon the initial purchase of product by the distributor or upon sale to the end user at which time we recognize royalty revenue , or both . from time to time , we may recognize milestone revenue as it is earned . research and development costs research and development expenditures are expensed as incurred , pursuant to asc 730 , research and development . costs to license technology to be used in our research and development that have not reached technological feasibility , defined as regulatory approval for iluvien or any future products or product candidates , and have no alternative future use are expensed when incurred . payments to licensors that relate to the achievement of preapproval development milestones are recorded as research and development expense when incurred . clinical trial prepaid and accrued expenses we record prepaid assets and accrued liabilities related to clinical trials associated with contract research organizations ( cros ) , clinical trial investigators and other vendors based upon amounts paid and the estimated amount of work completed on each clinical trial . the financial terms of agreements vary from vendor to vendor and may result in uneven payment flows . as such , if we have advanced funds exceeding our estimate of the work completed , we record a prepaid asset . if our estimate of the work completed exceeds the amount paid , an accrued liability is recorded . all such costs are charged to research and development expenses based on these estimates . our estimates may or may not match the actual services performed by the organizations as determined by patient enrollment levels and related activities . we monitor patient enrollment levels and related activities to the extent possible through internal reviews , correspondence and discussions with our cros and review of contractual terms . however , if we have incomplete or inaccurate information , we may underestimate or

liquidity and capital resources since inception , we have incurred recurring losses , negative cash flow from operations and have accumulated a deficit of $ 399.1 million through december 31 , 2017. we have funded our operations through the public and private placement of common stock , convertible preferred stock , warrants , the sale of certain assets of the non-prescription business in which we were previously engaged and certain debt facilities . in september 2014 , we entered into a sales agreement with cowen and company , llc ( cowen ) to offer shares of our common stock from time to time through cowen , as our sales agent for the offer and sale of the shares up to an aggregate offering price of $ 35.0 million . we paid a commission equal to 3 % of the gross proceeds from the sales of shares of our common stock under the sales agreement . in 2015 , we sold a total of 268,978 shares of our common stock at a weighted average price of $ 3.07 per share through our at-the-market offering , for total gross proceeds of approximately $ 825,000 , reduced by approximately $ 100,000 of related commissions , issuance costs and placement agent fees . we used the net proceeds from this offering for general corporate purposes and working capital . in 2016 , we sold a total of 662,779 shares of our common stock at a weighted average price of $ 1.83 per share through our at-the-market offering , for total gross proceeds of approximately $ 1.2 million , reduced by approximately $ 60,000 of related commissions , issuance costs and placement agent fees . in 2017 , we sold 4,203,015 shares of our common stock at a weighted average price of $ 1.43 per share through our at-the-market offering , for total gross proceeds of approximately $ 6.0 million , reduced by approximately $ 180,000 of related commissions , issuance costs and placement agent fees . we used the net proceeds from this offering for general corporate purposes and working capital .


 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 since inception , we have incurred recurring losses , negative cash flow from operations and have accumulated a deficit of $ 399.1 million through december 31 , 2017. we have funded our operations through the public and private placement of common stock , convertible preferred stock , warrants , the sale of certain assets of the non-prescription business in which we were previously engaged and certain debt facilities . in september 2014 , we entered into a sales agreement with cowen and company , llc ( cowen ) to offer shares of our common stock from time to time through cowen , as our sales agent for the offer and sale of the shares up to an aggregate offering price of $ 35.0 million . we paid a commission equal to 3 % of the gross proceeds from the sales of shares of our common stock under the sales agreement . in 2015 , we sold a total of 268,978 shares of our common stock at a weighted average price of $ 3.07 per share through our at-the-market offering , for total gross proceeds of approximately $ 825,000 , reduced by approximately $ 100,000 of related commissions , issuance costs and placement agent fees . we used the net proceeds from this offering for general corporate purposes and working capital . in 2016 , we sold a total of 662,779 shares of our common stock at a weighted average price of $ 1.83 per share through our at-the-market offering , for total gross proceeds of approximately $ 1.2 million , reduced by approximately $ 60,000 of related commissions , issuance costs and placement agent fees . in 2017 , we sold 4,203,015 shares of our common stock at a weighted average price of $ 1.43 per share through our at-the-market offering , for total gross proceeds of approximately $ 6.0 million , reduced by approximately $ 180,000 of related commissions , issuance costs and placement agent fees . we used the net proceeds from this offering for general corporate purposes and working capital .
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 Suspicious Activity Report : during the year ended december 31 , 2017 , we recognized approximately $ 374,000 of royalty expense . following the signing of the new collaboration agreement , we retained a right to offset $ 15.0 million of future royalty payments . this offset will be reduced by up to $ 5.0 million upon the earlier of the approval of iluvien for posterior uveitis in any eu country or january 1 , 2020 , unless certain conditions under the new collaboration agreement are not met . 42 we commenced operations in june 2003. since our inception we have incurred significant losses . as of december 31 , 2017 , we had accumulated a deficit of $ 399.1 million . we expect to incur substantial losses through the continued commercialization of iluvien as we : continue the commercialization of iluvien in the u.s. and eea and , through our distributors , in the middle east , italy and spain ; continue to seek regulatory approval of iluvien in other jurisdictions and for other indications ; evaluate the use of iluvien for the treatment of other diseases ; and advance the clinical development of any future products or product candidates either currently in our pipeline , or that we may license or acquire in the future . as of december 31 , 2017 , we had approximately $ 24.1 million in cash and cash equivalents . on january 5 , 2018 , we entered into a $ 40.0 million loan and security agreement ( 2018 loan agreement ) with solar capital ltd. ( solar capital ) . under the 2018 loan agreement , we borrowed the entire $ 40.0 million as a term loan that matures on july 1 , 2022. we used the proceeds of the 2018 loan agreement loan to refinance the previous loan agreement with hercules capital , inc. ( hercules term loan agreement ) and to pay closing expenses associated with the 2018 loan agreement . we expect to use the remaining loan proceeds to provide additional working capital for general corporate purposes . ( see note 9 of our notes to consolidated financial statements below . ) our revenues for the fiscal years ended december 31 , 2017 and 2016 were generated from product sales primarily in the u.s. , germany , portugal and the united kingdom . in the u.s. , two large pharmaceutical distributors accounted for 73 % and 75 % of our consolidated revenues for the years ended december 31 , 2017 and 2016 , respectively . these distributors purchase iluvien from us , maintain inventories of iluvien and sell downstream to physician offices , pharmacies and hospitals . internationally , in countries where we sell direct , our customers are hospitals , clinics and pharmacies . we sometimes refer to physician offices , pharmacies , hospitals and clinics as end users . in international countries where we sell to distributors , these distributors maintain inventory levels of iluvien and sell to their customers . 43 results of operations replace_table_token_3_th revenue we began generating revenue from iluvien in 2013 , but do not expect positive cash flow from operations until late 2018 , if at all . in addition to generating revenue from product sales , we intend to seek to generate revenue from other sources such as upfront fees , milestone payments in connection with collaborative or strategic relationships , and royalties resulting from the licensing of iluvien or any future product candidates and other intellectual property . net revenue increased by approximately $ 1.6 million , or 5 % , to approximately $ 35.9 million for the year ended december 31 , 2017 , compared to approximately $ 34.3 million for the year ended december 31 , 2016. the increase was primarily attributable to increased sales volume in the u.s. and international segments , offset by the timing of the ordering of our two large u.s. distributors . cost of goods sold , excluding depreciation and amortization , and gross profit gross profit is affected by costs of goods sold , which includes ( a ) costs of manufactured goods sold and ( b ) payments to psivida in the form of ( 1 ) royalty payments under the new collaboration agreement ( after july 1 , 2017 ) , and ( 2 ) payments based on a percentage of net profits under our previous agreement with psivida ( before july 1 , 2017 ) . additionally , revenue from our international distributors fluctuates depending on the timing of the shipment of iluvien to the distributor and the distributors ' sales of iluvien to their customers . cost of goods sold , excluding depreciation and amortization increased by approximately $ 1.1 million , or 48 % , to approximately $ 3.4 million for the year ended december 31 , 2017 , compared to approximately $ 2.3 million for the year ended december 31 , 2016. the increase was primarily attributable to increases of approximately $ 370,000 in profit share and royalty expenses payable to psivida and $ 310,000 of costs associated with certain parts used to manufacture iluvien that were no longer unusable . 44 gross profit increased by approximately $ 500,000 , or 2 % , to approximately $ 32.5 million for the year ended december 31 , 2017 , compared to approximately $ 32.0 million for the year ended december 31 , 2016. gross margin was 90 % and 93 % for the years ended december 31 , 2017 and 2016 , respectively . the change in gross margin was primarily impacted by profit share expense and royalty expense , in each case , payable to psivida . story_separator_special_tag for the year ended december 31 , 2017 , net cash provided by our financing activities was approximately $ 5.7 million . in the second and third quarters of 2017 , we sold a total of 4,203,015 shares of our common stock through our at-the-market offering , resulting in total gross proceeds of approximately $ 6.0 million , prior to the payment of by $ 180,000 of related commissions , issuance costs and placement agent fees . for the year ended december 31 , 2016 , net cash provided by our financing activities was approximately $ 25.4 million . in august 2016 , we closed an underwritten public offering in which we sold and issued 18,900,000 shares of our common stock at a price to the public of $ 1.40 per share , resulting in gross proceeds of $ 26,460,000. in june and july 2016 , we sold a total of 662,779 shares of our common stock through our at-the-market offering , resulting in total gross proceeds of $ 1.2 million . offsetting these increases were payments of approximately $ 1.3 million relating to common stock issuance costs , $ 1.1 million associated with the amendments of our hercules term loan agreement and $ 230,000 in payments on capital leases . 50 critical accounting policies and estimates our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the u.s. the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenues and expenses . on an ongoing basis , we evaluate these estimates and judgments , including those described below . we base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances . these estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results and experiences may differ materially from these estimates . we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we use in the preparation of our consolidated financial statements . product revenue we recognize revenue from our product sales when persuasive evidence of an arrangement exists , title to product and associated risk of loss have passed to the customer , the price is fixed or determinable , and collection from the customer is reasonably assured . title passes generally upon receipt by the customer . precise information regarding the receipt of product by the customer is not always readily available . in these cases , we estimate the date of receipt based upon shipping policies by geographic location . our shipping policies require delivery within 24 hours of shipment in most instances . taxes that are collected from customers and remitted to governmental authorities , primarily in europe , are not included in revenue . in the u.s. , we sell iluvien to a limited number of pharmaceutical distributors who in turn sell the product downstream to physician offices , pharmacies and hospitals . revenue is recorded net of provisions for estimated rebates , wholesaler chargebacks , distribution related fees , and other deductions . calculating these provisions involves management 's estimates and judgments . we review our estimates of rebates , chargebacks and other applicable provisions each period and record any necessary adjustments in the current period 's net product sales . in the international segment , in countries where we sell direct we recognize revenue at the time of sale to hospitals , pharmacies , and physician practices . revenue is recorded net of provisions for contractual rebates , cash discounts , and other deductions . in countries where we utilize a distributor , we recognize revenue in accordance with the terms of the respective distributor agreements , which may reflect revenue recognition upon the initial purchase of product by the distributor or upon sale to the end user at which time we recognize royalty revenue , or both . from time to time , we may recognize milestone revenue as it is earned . research and development costs research and development expenditures are expensed as incurred , pursuant to asc 730 , research and development . costs to license technology to be used in our research and development that have not reached technological feasibility , defined as regulatory approval for iluvien or any future products or product candidates , and have no alternative future use are expensed when incurred . payments to licensors that relate to the achievement of preapproval development milestones are recorded as research and development expense when incurred . clinical trial prepaid and accrued expenses we record prepaid assets and accrued liabilities related to clinical trials associated with contract research organizations ( cros ) , clinical trial investigators and other vendors based upon amounts paid and the estimated amount of work completed on each clinical trial . the financial terms of agreements vary from vendor to vendor and may result in uneven payment flows . as such , if we have advanced funds exceeding our estimate of the work completed , we record a prepaid asset . if our estimate of the work completed exceeds the amount paid , an accrued liability is recorded . all such costs are charged to research and development expenses based on these estimates . our estimates may or may not match the actual services performed by the organizations as determined by patient enrollment levels and related activities . we monitor patient enrollment levels and related activities to the extent possible through internal reviews , correspondence and discussions with our cros and review of contractual terms . however , if we have incomplete or inaccurate information , we may underestimate or

