revenues consist of the recognized portion of amounts received from customers for the development of our filter designs , milestone payments based on the achievement of specific milestones and royalties from shipments of our licensed designs . the revenues related to upfront payments associated with our filter design development contracts are recognized ratably over the estimated development period associated with that upfront payment . as of january 1 , 2018 , we adopted financial accounting standards board , or fasb , accounting standards codification , or asc , topic 606 , revenues from contracts with customers , which requires a change in the method of recognizing revenue from contracts with customers . we recorded an adjustment to accumulated deficit for the cumulative effect as of the date of adoption . for the year ended december 31 , 2018 , under the new guidance , revenues consisted of the recognized portion of the transaction price associated with our contracts from customers recognized over time as the obligations under the terms of the contract are satisfied . generally , the transaction price includes both upfront and milestone payments that we expect to receive in exchange for providing services . additionally , we recognized royalty revenue related to sales by our customers of our licensed designs . for the years ended december 31 , 2017 and 2018 , we recognized $ 653,000 and $ 524,000 , respectively , of revenue . the adoption of asc topic 606 negatively impacted our revenue by $ 71,000 for the year ended december 31 , 2018. under the guidance in effect for 2017 , our revenue would have been $ 595,000 for the year ended december 31 , 2018. we have recorded $ 271,000 of deferred revenue as of december 31 , 2018 , which we expect to recognize over the next year . additionally , we expect to continue to recognize royalty revenue from our license agreements . research and development . these expenses relate to direct engineering and other costs associated with the development and commercialization of our technology , including the development of filter designs for our customers and consist primarily of the compensation costs of employees and consultants , including stock-based compensation , and to a lesser extent development related costs for equipment , software and supplies . we also include the costs for our intellectual property development program under research and development . this program focuses on patent strategy and invention extraction . 32 research and development expenses increased $ 4.3 million from $ 10.0 million in 2017 to $ 14.3 million in 2018. the increase was primarily related to higher compensation expense of $ 2.9 million associated with increased headcount , as well as higher development costs of $ 570,000 related to our isn ® software development and expanded activity on our filter designs under development . during the year ended december 31 , 2018 , we expanded our research and development employees from 37 at the beginning of the year to 46 at the end of the year . we anticipate that our research and development expenses may continue to increase as a result of anticipated growth . sales , marketing and administration expenses . these expenses relate to our sales and marketing efforts and our back-office support and include compensation costs of employees and consultants , including stock-based compensation . they also include expenses for facilities , travel expenses , telecommunications , investor relations , insurance and professional fees . sales , marketing and administration expenses increased $ 1.9 million , from $ 9.6 million in 2017 to $ 11.5 million in 2018. the increase included $ 2.3 million of increased compensation expense associated with increased headcount and consultants , offset by lower senior transition costs of $ 400,000 incurred in 2017. during the year ended december 31 , 2018 , we expanded our sales , marketing and administration employees from 12 at the beginning of the year to 21 at the end of the year . we anticipate that our sales , marketing and administration expenses may continue to increase as a result of anticipated growth . interest and investment income . interest and investment income increased by $ 414,000 from $ 67,000 in 2017 to $ 481,000 in 2018 primarily due to increased cash and investment balances . we expect interest income to fluctuate in proportion to our cash and investment balances . warrant inducement expense . in december 2017 we entered into warrant exercise agreements with certain holders of common stock purchase warrants in order to induce the holders to exercise their warrants in full and we paid the warrant holders an inducement fee . the inducement offer was considered a modification to the warrant and we were required to remeasure the fair value of the warrants immediately prior to , and after , the modification . the change in fair value due to modification totaled $ 4.3 million , and when combined with the cash inducement of $ 7.0 million paid to the warrant holders , resulted in $ 2.7 million of warrant inducement expense . there was no expense for the year ended december 31 , 2018 as there were no such agreements during the year . income taxes . we have earned minimal revenues and are currently operating at a loss . in addition to minimum taxes in the states where we conduct business , we are also responsible for income taxes in switzerland related to the earnings of our foreign subsidiary , gvr . the provision for ( benefit from ) income taxes primarily represents the net change in deferred income taxes of gvr . story_separator_special_tag them against certain liabilities that may arise by reason of their status or service as directors , officers or employees . story_separator_special_tag no demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated balance sheets , consolidated statements of comprehensive loss , consolidated statements of stockholders ' equity or consolidated statements of cash flows . purchasing commitments we have non-cancelable purchasing commitments that we incur in the ordinary course of business . the purchase commitments covered by these agreements are for less than one year and aggregate to $ 193,000 as december 31 , 2018. operating leases we lease various office facilities , including our corporate headquarters in goleta , california and our office in burlingame , california , under operating lease agreements . the terms of the lease agreements provide for rental payments on a graduated basis . we recognize rent expense on a straight-line basis over the lease periods . commitments 34 as of d ecember 31 , 2018 , our principal commitments consisted of obligations under our purchasing commitments and the operating leases for our offices . the following table summarizes our future minimum payments under these arrangements as of december 31 , 2018 : replace_table_token_1_th critical accounting policies and estimates our critical accounting estimates are included in our significant accounting policies as described in note 2 of the consolidated financial statements included in item 8 , financial statements and supplemental data , of this annual report on form 10-k. those consolidated financial statements were prepared in accordance with accounting principles generally accepted in the united states of america . critical accounting estimates are those that we believe are most important to the portrayal of our financial condition and results of operations . the preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenues and expenses . our estimates are evaluated on an ongoing basis and are drawn from historical operations , current trends , future business plans and other factors that management believes are relevant at the time our consolidated financial statements are prepared . actual results may differ from our estimates . management believes that the following accounting estimates reflect the more significant judgments and estimates we use in preparing our consolidated financial statements . investments —securities held-to-maturity : investments are classified as held-to-maturity when we have the positive intent and ability to hold the securities to maturity . when the fair value of an investment instrument classified as held-to-maturity is less than its amortized cost , management assesses whether or not : ( i ) we have the intent to sell the instrument or ( ii ) it is more likely than not that we will be required to sell the instrument before its anticipated recovery . if either of these conditions is met , we recognize an other-than-temporary impairment for the difference between the instrument 's amortized cost basis and its fair value , and include such amounts in other income ( expense ) . we continually evaluate investments and record impairment expense if needed . revenue recognition —as of january 1 , 2018 , we recognize revenue in accordance with financial accounting standards board , or fasb , accounting standards codification , or asc , topic 606 , revenue from contracts with customers . revenue is recognized upon the transfer of control of promised goods or services to the customers in an amount that reflects the consideration we expect to receive in exchange for those products or services . under the new guidance we are required to use estimates to determine the transaction price in the contract as well as the time over which we will satisfy the performance obligations . the determination of the transaction price may include estimates of amounts we expect to receive , including milestones that we may achieve which would result in additional payments upon achievement . these estimates are used for recognition of our revenue primarily related to upfront non-refundable fees received in connection with filter design projects with customers . our performance obligation is to design a licensable filter in accordance with customer specifications . we recognize revenue over the course of the estimated design development phase based on efforts expended to date . at the end of each reporting period , we reassess our measure of progress and adjust revenue when appropriate . stock-based compensation —we account for employee stock options in accordance with asc topic 718 , compensation-stock compensation . for stock options issued to employees and directors we use the black-scholes option valuation model for estimating fair value at the date of grant . for stock options issued for services rendered by non-employees , we recognize compensation expense in accordance with the requirements of asc topic 505-50 , equity , or asc 505-50 , as amended . non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period . at the end of each financial reporting period prior to performance , the value of these options , as calculated using the black-scholes option valuation model , is determined , and compensation expense recognized or recovered during the period is adjusted accordingly . since the fair market value of options granted to non-employees is subject to change in the future , the amount of the future compensation expense is subject to adjustment until the common stock options are fully vested . we account for restricted stock units issued to employees at fair value , based on the market price of our stock on the date of grant , net of estimated forfeitures . compensation expense is recognized for the portion of the award that is ultimately expected to vest over the period during which the recipient renders the required services to the company generally using the straight-line single option method . the fair value of non-employee restricted stock units awarded are remeasured as the awards 35 vest , and the resulting increase

liquidity and capital resources financing activities we have earned minimal revenues since inception . our operations have been funded with initial capital contributions and proceeds from the sale of equity securities and debt . as of december 31 , 2018 , we have raised aggregate gross proceeds of $ 85.4 million through the use of loans , convertible debt and equity through an ipo , private placement financings and secondary offerings of our common stock . we had current assets of $ 21.8 million and current liabilities of $ 3.3 million as of december 31 , 2018 , resulting in working capital of $ 18.5 million . this compares to working capital of $ 17.1 million as of december 31 , 2017. the change in working capital is primarily the result of proceeds from the issuance of equity offset by the use of cash in our normal business operations . our consolidated financial statements account for the continuation of our business as a going concern . we are subject to the risks and uncertainties associated with a new business . our principal sources of liquidity as of december 31 , 2018 consist of existing cash , cash equivalents and investments totaling $ 21.3 million . during the year ended december 31 , 2018 , we used $ 19.6 million of cash and investments for operating activities , the purchase of property and equipment , and expenditures for patents . due to these conditions , along with anticipated growth , substantial doubt exists as to our ability to continue as a going concern . after evaluation of these conditions , we believe our current resources will provide sufficient funding for planned operations into the second half of 2019. if necessary , we will seek to raise additional capital from the sale of equity securities or the incurrence of indebtedness to allow us to continue operations .


 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 financing activities we have earned minimal revenues since inception . our operations have been funded with initial capital contributions and proceeds from the sale of equity securities and debt . as of december 31 , 2018 , we have raised aggregate gross proceeds of $ 85.4 million through the use of loans , convertible debt and equity through an ipo , private placement financings and secondary offerings of our common stock . we had current assets of $ 21.8 million and current liabilities of $ 3.3 million as of december 31 , 2018 , resulting in working capital of $ 18.5 million . this compares to working capital of $ 17.1 million as of december 31 , 2017. the change in working capital is primarily the result of proceeds from the issuance of equity offset by the use of cash in our normal business operations . our consolidated financial statements account for the continuation of our business as a going concern . we are subject to the risks and uncertainties associated with a new business . our principal sources of liquidity as of december 31 , 2018 consist of existing cash , cash equivalents and investments totaling $ 21.3 million . during the year ended december 31 , 2018 , we used $ 19.6 million of cash and investments for operating activities , the purchase of property and equipment , and expenditures for patents . due to these conditions , along with anticipated growth , substantial doubt exists as to our ability to continue as a going concern . after evaluation of these conditions , we believe our current resources will provide sufficient funding for planned operations into the second half of 2019. if necessary , we will seek to raise additional capital from the sale of equity securities or the incurrence of indebtedness to allow us to continue operations .
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 Suspicious Activity Report : revenues consist of the recognized portion of amounts received from customers for the development of our filter designs , milestone payments based on the achievement of specific milestones and royalties from shipments of our licensed designs . the revenues related to upfront payments associated with our filter design development contracts are recognized ratably over the estimated development period associated with that upfront payment . as of january 1 , 2018 , we adopted financial accounting standards board , or fasb , accounting standards codification , or asc , topic 606 , revenues from contracts with customers , which requires a change in the method of recognizing revenue from contracts with customers . we recorded an adjustment to accumulated deficit for the cumulative effect as of the date of adoption . for the year ended december 31 , 2018 , under the new guidance , revenues consisted of the recognized portion of the transaction price associated with our contracts from customers recognized over time as the obligations under the terms of the contract are satisfied . generally , the transaction price includes both upfront and milestone payments that we expect to receive in exchange for providing services . additionally , we recognized royalty revenue related to sales by our customers of our licensed designs . for the years ended december 31 , 2017 and 2018 , we recognized $ 653,000 and $ 524,000 , respectively , of revenue . the adoption of asc topic 606 negatively impacted our revenue by $ 71,000 for the year ended december 31 , 2018. under the guidance in effect for 2017 , our revenue would have been $ 595,000 for the year ended december 31 , 2018. we have recorded $ 271,000 of deferred revenue as of december 31 , 2018 , which we expect to recognize over the next year . additionally , we expect to continue to recognize royalty revenue from our license agreements . research and development . these expenses relate to direct engineering and other costs associated with the development and commercialization of our technology , including the development of filter designs for our customers and consist primarily of the compensation costs of employees and consultants , including stock-based compensation , and to a lesser extent development related costs for equipment , software and supplies . we also include the costs for our intellectual property development program under research and development . this program focuses on patent strategy and invention extraction . 32 research and development expenses increased $ 4.3 million from $ 10.0 million in 2017 to $ 14.3 million in 2018. the increase was primarily related to higher compensation expense of $ 2.9 million associated with increased headcount , as well as higher development costs of $ 570,000 related to our isn ® software development and expanded activity on our filter designs under development . during the year ended december 31 , 2018 , we expanded our research and development employees from 37 at the beginning of the year to 46 at the end of the year . we anticipate that our research and development expenses may continue to increase as a result of anticipated growth . sales , marketing and administration expenses . these expenses relate to our sales and marketing efforts and our back-office support and include compensation costs of employees and consultants , including stock-based compensation . they also include expenses for facilities , travel expenses , telecommunications , investor relations , insurance and professional fees . sales , marketing and administration expenses increased $ 1.9 million , from $ 9.6 million in 2017 to $ 11.5 million in 2018. the increase included $ 2.3 million of increased compensation expense associated with increased headcount and consultants , offset by lower senior transition costs of $ 400,000 incurred in 2017. during the year ended december 31 , 2018 , we expanded our sales , marketing and administration employees from 12 at the beginning of the year to 21 at the end of the year . we anticipate that our sales , marketing and administration expenses may continue to increase as a result of anticipated growth . interest and investment income . interest and investment income increased by $ 414,000 from $ 67,000 in 2017 to $ 481,000 in 2018 primarily due to increased cash and investment balances . we expect interest income to fluctuate in proportion to our cash and investment balances . warrant inducement expense . in december 2017 we entered into warrant exercise agreements with certain holders of common stock purchase warrants in order to induce the holders to exercise their warrants in full and we paid the warrant holders an inducement fee . the inducement offer was considered a modification to the warrant and we were required to remeasure the fair value of the warrants immediately prior to , and after , the modification . the change in fair value due to modification totaled $ 4.3 million , and when combined with the cash inducement of $ 7.0 million paid to the warrant holders , resulted in $ 2.7 million of warrant inducement expense . there was no expense for the year ended december 31 , 2018 as there were no such agreements during the year . income taxes . we have earned minimal revenues and are currently operating at a loss . in addition to minimum taxes in the states where we conduct business , we are also responsible for income taxes in switzerland related to the earnings of our foreign subsidiary , gvr . the provision for ( benefit from ) income taxes primarily represents the net change in deferred income taxes of gvr . story_separator_special_tag them against certain liabilities that may arise by reason of their status or service as directors , officers or employees . story_separator_special_tag no demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated balance sheets , consolidated statements of comprehensive loss , consolidated statements of stockholders ' equity or consolidated statements of cash flows . purchasing commitments we have non-cancelable purchasing commitments that we incur in the ordinary course of business . the purchase commitments covered by these agreements are for less than one year and aggregate to $ 193,000 as december 31 , 2018. operating leases we lease various office facilities , including our corporate headquarters in goleta , california and our office in burlingame , california , under operating lease agreements . the terms of the lease agreements provide for rental payments on a graduated basis . we recognize rent expense on a straight-line basis over the lease periods . commitments 34 as of d ecember 31 , 2018 , our principal commitments consisted of obligations under our purchasing commitments and the operating leases for our offices . the following table summarizes our future minimum payments under these arrangements as of december 31 , 2018 : replace_table_token_1_th critical accounting policies and estimates our critical accounting estimates are included in our significant accounting policies as described in note 2 of the consolidated financial statements included in item 8 , financial statements and supplemental data , of this annual report on form 10-k. those consolidated financial statements were prepared in accordance with accounting principles generally accepted in the united states of america . critical accounting estimates are those that we believe are most important to the portrayal of our financial condition and results of operations . the preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities , revenues and expenses . our estimates are evaluated on an ongoing basis and are drawn from historical operations , current trends , future business plans and other factors that management believes are relevant at the time our consolidated financial statements are prepared . actual results may differ from our estimates . management believes that the following accounting estimates reflect the more significant judgments and estimates we use in preparing our consolidated financial statements . investments —securities held-to-maturity : investments are classified as held-to-maturity when we have the positive intent and ability to hold the securities to maturity . when the fair value of an investment instrument classified as held-to-maturity is less than its amortized cost , management assesses whether or not : ( i ) we have the intent to sell the instrument or ( ii ) it is more likely than not that we will be required to sell the instrument before its anticipated recovery . if either of these conditions is met , we recognize an other-than-temporary impairment for the difference between the instrument 's amortized cost basis and its fair value , and include such amounts in other income ( expense ) . we continually evaluate investments and record impairment expense if needed . revenue recognition —as of january 1 , 2018 , we recognize revenue in accordance with financial accounting standards board , or fasb , accounting standards codification , or asc , topic 606 , revenue from contracts with customers . revenue is recognized upon the transfer of control of promised goods or services to the customers in an amount that reflects the consideration we expect to receive in exchange for those products or services . under the new guidance we are required to use estimates to determine the transaction price in the contract as well as the time over which we will satisfy the performance obligations . the determination of the transaction price may include estimates of amounts we expect to receive , including milestones that we may achieve which would result in additional payments upon achievement . these estimates are used for recognition of our revenue primarily related to upfront non-refundable fees received in connection with filter design projects with customers . our performance obligation is to design a licensable filter in accordance with customer specifications . we recognize revenue over the course of the estimated design development phase based on efforts expended to date . at the end of each reporting period , we reassess our measure of progress and adjust revenue when appropriate . stock-based compensation —we account for employee stock options in accordance with asc topic 718 , compensation-stock compensation . for stock options issued to employees and directors we use the black-scholes option valuation model for estimating fair value at the date of grant . for stock options issued for services rendered by non-employees , we recognize compensation expense in accordance with the requirements of asc topic 505-50 , equity , or asc 505-50 , as amended . non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period . at the end of each financial reporting period prior to performance , the value of these options , as calculated using the black-scholes option valuation model , is determined , and compensation expense recognized or recovered during the period is adjusted accordingly . since the fair market value of options granted to non-employees is subject to change in the future , the amount of the future compensation expense is subject to adjustment until the common stock options are fully vested . we account for restricted stock units issued to employees at fair value , based on the market price of our stock on the date of grant , net of estimated forfeitures . compensation expense is recognized for the portion of the award that is ultimately expected to vest over the period during which the recipient renders the required services to the company generally using the straight-line single option method . the fair value of non-employee restricted stock units awarded are remeasured as the awards 35 vest , and the resulting increase

