the following discussion of year-to-year changes and trends in financial statement results under `` management 's discussion and analysis of financial condition and results of operations ” aligns with the financial statement presentation described above . results of operations qumu provides the tools businesses need to create , manage , secure , deliver and measure the success of their videos . qumu helps thousands of organizations around the world enhance the way they communicate and realize the greatest possible value from video and other rich content they create and publish . qumu 's video platform supports both live and on-demand streaming , and also incorporates secure download capabilities . the company markets its products to customers in north america , europe and asia . the company 's enterprise video content management software products are deployed primarily through the sale of software licenses , software on a server appliance , software-enabled devices and a cloud-based software-as-a-service ( saas ) platform . software maintenance contracts , professional services and managed services are also sold with these solutions . software license and appliance revenues on the accompanying consolidated statements of operations include the company 's sale of appliances , software-enabled devices and perpetual software licenses . service revenues on the consolidated statements of operations include revenues from maintenance contracts , software and maintenance subscription and cloud-based sass arrangements , managed services and professional services . qumu has no long-term debt and does not require significant capital investment as it outsources to third-party vendors the required fabrication of its hardware-related products . revenues . the table below describes qumu 's revenues by product category ( in thousands ) : replace_table_token_8_th total revenues for the continuing enterprise video content management software business were $ 26.5 million for 2014 , reflecting a 50 % increase from total revenues of $ 17.7 million in 2013 , which increased 80 % from total revenues of $ 9.8 million in 2012. the $ 8.8 million increase in total revenues from 2013 to 2014 reflects a $ 4.1 million increase in software license and appliance revenues and a $ 4.7 million increase in service revenues . the increase in software license and appliance revenues in 2014 was largely impacted by an increase in the value of perpetual product license contracts entered into and converted to revenue . revenues can vary year to year based on the type of contract the company enters into with each customer . contracts for perpetual software licenses generally result in revenue recognized closer to the contract commitment date while contracts for term-based software licenses and cloud-based saas arrangements result in most of the revenue being recognized over the period of the contract . the increase in service revenues in 2014 resulted from a rise in maintenance support revenues stemming primarily from growth in the customer base and higher professional services revenues as qumu assists its customers in the deployment of its growing base of enterprise video solutions . also contributing to the growth in service revenues was the recognition of revenue from a large term-based arrangement closed in the first quarter of 2014 for which revenue is being recognized over the three-year term of the contract . the growth in service revenues was also favorably impacted by the generation in the fourth quarter of cloud-based saas revenues from qumu 's acquisition of kulu valley effective october 3 , 2014. contracted commitments in 2014 totaled $ 39.4 million and contracted commitment backlog aggregated $ 31.6 million as of december 31 , 2014. the company defines contracted commitments as the dollar value of signed non-cancellable customer purchase commitments . the $ 7.9 million increase in revenues from 2012 to 2013 was driven by growth across both products and services . software license and appliance revenues increased by $ 2.9 million , or 68 % , reflecting expansion of the company 's customer base in both the u.s. and europe . software service revenue growth was impacted by increased maintenance revenues on a growing base of installations 23 and increased managed services and professional services revenues to support the growth in software license purchases from global customers . future consolidated revenues will be dependent upon many factors , including the rate of adoption of the company 's software solutions in its targeted markets and whether software license arrangements with customers are structured as term or perpetual licenses , which impacts the timing of revenue recognition . other factors that will influence future consolidated revenues include the timing of customer orders , the impact of changes in economic conditions and the impact of foreign currency exchange rate fluctuations , as well as the impact of incremental revenues expected to be generated as a result of the company 's expansion of its video content management software product offering with its acquisition effective october 3 , 2014 of kulu valley . gross profit . gross profit as a percentage of total revenues was 45.4 % for the year ended december 31 , 2014 , compared to 58.6 % and 60.2 % for the years ended december 31 , 2013 and 2012 , respectively . the decline in gross margin in each successive year resulted from increasing investments in customer support and professional services costs to support growth in the customer base , deployment of a growing base of software contracts and expansion of service offerings . additionally , in 2014 the sales mix shifted to include a higher concentration of lower margin hardware in perpetual license transactions . the overall growth in revenue volume in 2014 provided greater absorption of fixed service costs , partially offsetting the impact of the changes described above . story_separator_special_tag however , if an acceptance provision exists that is not perfunctory ( for example , acceptance provisions that are long-term in nature or are not included as standard terms of an arrangement ) , revenues are recognized upon the earlier of receipt of written customer acceptance or expiration of the acceptance period . for software licensed under subscription arrangements where the software is installed on an appliance that is housed on the customer 's premises , the arrangements generally include bundled maintenance and typically have contractual terms of one year or longer . to the extent the hardware portion of the arrangement meets sales-type lease criteria , the hardware is recognized when delivered and all other criteria for revenue recognition are met . revenue for the software-related elements of such arrangements is generally recognized ratably over the contract term beginning on the commencement date of the contract to the extent all other criteria required for revenue recognition have been met . the company also sells its software licenses and bundled maintenance as part of cloud-hosted or hybrid-cloud environments under subscription arrangements , which typically have non-cancelable contractual terms of one-year or more . the company 's acquisition 28 of kulu valley in october 2014 expands qumu 's offering of cloud-hosted solutions . cloud-hosted arrangements are delivered as a saas platform , offering a fully managed virtual solution . hybrid-cloud arrangements augment the cloud instance of the software with qumu videonet edge devices installed on the customer 's premises , which enables quality streaming to audiences inside and outside corporate firewalls from the cloud . the company 's cloud-hosted arrangements provide customers the right to access its hosted software applications ; however , customers do not have the contractual right or ability to take possession of the company 's software during the term of the hosted arrangement . revenues from cloud-hosted arrangements are derived primarily from the subscription for the saas technology , optional professional services and video production equipment . the optional professional services provide follow-on best practices consulting , portal branding and training services after the cloud-hosted solution is deployed . the company generally recognizes revenue for cloud-hosted and hybrid-cloud arrangements ratably over the non-cancelable term of the agreement , commencing upon the later of when the application is placed into a production environment or when all revenue recognition criteria have been met . professional services revenue associated with cloud-hosted arrangements is recognized as the services are performed . income taxes . the company is required to estimate income taxes in each of the jurisdictions in which it operates . this process involves estimating actual current tax expense and assessing temporary differences resulting from differing treatment of items for book and tax purposes . these temporary differences result in deferred tax assets and liabilities , which are included in the consolidated balance sheets . management records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized . increases in the valuation allowance result in the recognition of additional income tax expense . income tax expense could be materially different from actual results because of changes in management 's expectations regarding future taxable income , the relationship between book and taxable income and tax planning strategies employed by the company.as of december 31 , 2014 , the company carried a valuation allowance totaling $ 19.9 million against the company 's u.s. deferred tax assets . management recognizes a tax accrual for estimated exposures associated with uncertain tax positions and adjusts this accrual in light of changing facts and circumstances . however , due to the complexity of some of these uncertainties , the ultimate settlement may result in payments that are significantly different from management 's current estimate of tax liabilities , resulting in the recognition of additional charges or benefits to income tax expense . stock-based compensation . the company recognizes compensation expense on a straight-line basis over the vesting period . the company recognized stock-based compensation costs of approximately $ 1.8 million , $ 1.4 million and $ 1.7 million for the years ended december 31 , 2014 , 2013 and 2012 , respectively . the company utilizes a black-scholes option pricing model to estimate the fair value of each stock option award on the date of grant . the black-scholes model requires the input of certain assumptions that involve management judgment . key assumptions that affect the calculation of fair value include the expected life of stock-based awards , the company 's historical stock price volatility and the expected dividend yield . additionally , the company is required to estimate the expected forfeiture rate of unvested awards and recognize expense for only those shares expected to vest . the assumptions used in calculating the fair value of stock-based awards and the forfeiture rate of such awards reflect management 's best estimates . however , circumstances may change and additional data may become available over time , which could result in changes to these assumptions that materially impact the fair value determination of future awards or their estimated rate of forfeiture . if assumptions change for future stock-based awards , the compensation expense recorded may differ significantly from the expense recorded in the current period . see note 4 under the notes to consolidated financial statements in this form 10-k for additional information on stock-based compensation . valuation of intangible assets and goodwill . when a business is acquired , the purchase price is allocated , as applicable , between tangible assets , identifiable intangible assets and goodwill . the fair value of intangible assets acquired in 2011 and 2014 ( as part of the company 's acquisition of qumu , inc. and kulu valley , respectively ) , including trade names , developed technology , customer relationships and covenants not to compete , was based on management 's forecasted cash inflows and outflows using primarily a relief-from-royalty and multi-period excess earnings method with consideration to other

liquidity and capital resources the company expects it will be able to maintain current operations and anticipated capital expenditure requirements for the foreseeable future through its cash reserves and proceeds received from the sale of the company 's disc publishing business on july 1 , 2014 , as well as any cash flows that may be generated from current operations . at december 31 , 2014 , the company had aggregate working capital of $ 33.4 million , down $ 15.3 million from working capital of $ 48.7 million at december 31 , 2013. the primary contributors to the decrease in working capital were the net outlay of $ 11.6 million in cash to acquire kulu valley in october 2014 , the generation of a net loss from continuing operations adjusted for non-cash items of $ 24.8 million and purchases of property and equipment of $ 1.1 million , partially offset by gross proceeds , including restricted cash held in escrow , of 25 approximately $ 22 million from the sale of the disc publishing business . qumu has no long-term debt and does not require significant capital investment for its ongoing operations . the company 's primary source of cash from operating activities has been cash collections from sales of products and services to customers . the company expects cash inflows from operating activities to be affected by increases or decreases in sales and timing of collections . the company 's primary use of cash for operating activities has been for personnel costs , payment of royalties associated with third-party software licenses and purchases of equipment to fulfill customer orders . the company expects cash flows from operating activities to be affected by fluctuations in revenues , personnel costs and the amount and timing of royalty payments and equipment purchases as the company continues to support the growth of the business .


 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 the company expects it will be able to maintain current operations and anticipated capital expenditure requirements for the foreseeable future through its cash reserves and proceeds received from the sale of the company 's disc publishing business on july 1 , 2014 , as well as any cash flows that may be generated from current operations . at december 31 , 2014 , the company had aggregate working capital of $ 33.4 million , down $ 15.3 million from working capital of $ 48.7 million at december 31 , 2013. the primary contributors to the decrease in working capital were the net outlay of $ 11.6 million in cash to acquire kulu valley in october 2014 , the generation of a net loss from continuing operations adjusted for non-cash items of $ 24.8 million and purchases of property and equipment of $ 1.1 million , partially offset by gross proceeds , including restricted cash held in escrow , of 25 approximately $ 22 million from the sale of the disc publishing business . qumu has no long-term debt and does not require significant capital investment for its ongoing operations . the company 's primary source of cash from operating activities has been cash collections from sales of products and services to customers . the company expects cash inflows from operating activities to be affected by increases or decreases in sales and timing of collections . the company 's primary use of cash for operating activities has been for personnel costs , payment of royalties associated with third-party software licenses and purchases of equipment to fulfill customer orders . the company expects cash flows from operating activities to be affected by fluctuations in revenues , personnel costs and the amount and timing of royalty payments and equipment purchases as the company continues to support the growth of the business .
```    
 Suspicious Activity Report : the following discussion of year-to-year changes and trends in financial statement results under `` management 's discussion and analysis of financial condition and results of operations ” aligns with the financial statement presentation described above . results of operations qumu provides the tools businesses need to create , manage , secure , deliver and measure the success of their videos . qumu helps thousands of organizations around the world enhance the way they communicate and realize the greatest possible value from video and other rich content they create and publish . qumu 's video platform supports both live and on-demand streaming , and also incorporates secure download capabilities . the company markets its products to customers in north america , europe and asia . the company 's enterprise video content management software products are deployed primarily through the sale of software licenses , software on a server appliance , software-enabled devices and a cloud-based software-as-a-service ( saas ) platform . software maintenance contracts , professional services and managed services are also sold with these solutions . software license and appliance revenues on the accompanying consolidated statements of operations include the company 's sale of appliances , software-enabled devices and perpetual software licenses . service revenues on the consolidated statements of operations include revenues from maintenance contracts , software and maintenance subscription and cloud-based sass arrangements , managed services and professional services . qumu has no long-term debt and does not require significant capital investment as it outsources to third-party vendors the required fabrication of its hardware-related products . revenues . the table below describes qumu 's revenues by product category ( in thousands ) : replace_table_token_8_th total revenues for the continuing enterprise video content management software business were $ 26.5 million for 2014 , reflecting a 50 % increase from total revenues of $ 17.7 million in 2013 , which increased 80 % from total revenues of $ 9.8 million in 2012. the $ 8.8 million increase in total revenues from 2013 to 2014 reflects a $ 4.1 million increase in software license and appliance revenues and a $ 4.7 million increase in service revenues . the increase in software license and appliance revenues in 2014 was largely impacted by an increase in the value of perpetual product license contracts entered into and converted to revenue . revenues can vary year to year based on the type of contract the company enters into with each customer . contracts for perpetual software licenses generally result in revenue recognized closer to the contract commitment date while contracts for term-based software licenses and cloud-based saas arrangements result in most of the revenue being recognized over the period of the contract . the increase in service revenues in 2014 resulted from a rise in maintenance support revenues stemming primarily from growth in the customer base and higher professional services revenues as qumu assists its customers in the deployment of its growing base of enterprise video solutions . also contributing to the growth in service revenues was the recognition of revenue from a large term-based arrangement closed in the first quarter of 2014 for which revenue is being recognized over the three-year term of the contract . the growth in service revenues was also favorably impacted by the generation in the fourth quarter of cloud-based saas revenues from qumu 's acquisition of kulu valley effective october 3 , 2014. contracted commitments in 2014 totaled $ 39.4 million and contracted commitment backlog aggregated $ 31.6 million as of december 31 , 2014. the company defines contracted commitments as the dollar value of signed non-cancellable customer purchase commitments . the $ 7.9 million increase in revenues from 2012 to 2013 was driven by growth across both products and services . software license and appliance revenues increased by $ 2.9 million , or 68 % , reflecting expansion of the company 's customer base in both the u.s. and europe . software service revenue growth was impacted by increased maintenance revenues on a growing base of installations 23 and increased managed services and professional services revenues to support the growth in software license purchases from global customers . future consolidated revenues will be dependent upon many factors , including the rate of adoption of the company 's software solutions in its targeted markets and whether software license arrangements with customers are structured as term or perpetual licenses , which impacts the timing of revenue recognition . other factors that will influence future consolidated revenues include the timing of customer orders , the impact of changes in economic conditions and the impact of foreign currency exchange rate fluctuations , as well as the impact of incremental revenues expected to be generated as a result of the company 's expansion of its video content management software product offering with its acquisition effective october 3 , 2014 of kulu valley . gross profit . gross profit as a percentage of total revenues was 45.4 % for the year ended december 31 , 2014 , compared to 58.6 % and 60.2 % for the years ended december 31 , 2013 and 2012 , respectively . the decline in gross margin in each successive year resulted from increasing investments in customer support and professional services costs to support growth in the customer base , deployment of a growing base of software contracts and expansion of service offerings . additionally , in 2014 the sales mix shifted to include a higher concentration of lower margin hardware in perpetual license transactions . the overall growth in revenue volume in 2014 provided greater absorption of fixed service costs , partially offsetting the impact of the changes described above . story_separator_special_tag however , if an acceptance provision exists that is not perfunctory ( for example , acceptance provisions that are long-term in nature or are not included as standard terms of an arrangement ) , revenues are recognized upon the earlier of receipt of written customer acceptance or expiration of the acceptance period . for software licensed under subscription arrangements where the software is installed on an appliance that is housed on the customer 's premises , the arrangements generally include bundled maintenance and typically have contractual terms of one year or longer . to the extent the hardware portion of the arrangement meets sales-type lease criteria , the hardware is recognized when delivered and all other criteria for revenue recognition are met . revenue for the software-related elements of such arrangements is generally recognized ratably over the contract term beginning on the commencement date of the contract to the extent all other criteria required for revenue recognition have been met . the company also sells its software licenses and bundled maintenance as part of cloud-hosted or hybrid-cloud environments under subscription arrangements , which typically have non-cancelable contractual terms of one-year or more . the company 's acquisition 28 of kulu valley in october 2014 expands qumu 's offering of cloud-hosted solutions . cloud-hosted arrangements are delivered as a saas platform , offering a fully managed virtual solution . hybrid-cloud arrangements augment the cloud instance of the software with qumu videonet edge devices installed on the customer 's premises , which enables quality streaming to audiences inside and outside corporate firewalls from the cloud . the company 's cloud-hosted arrangements provide customers the right to access its hosted software applications ; however , customers do not have the contractual right or ability to take possession of the company 's software during the term of the hosted arrangement . revenues from cloud-hosted arrangements are derived primarily from the subscription for the saas technology , optional professional services and video production equipment . the optional professional services provide follow-on best practices consulting , portal branding and training services after the cloud-hosted solution is deployed . the company generally recognizes revenue for cloud-hosted and hybrid-cloud arrangements ratably over the non-cancelable term of the agreement , commencing upon the later of when the application is placed into a production environment or when all revenue recognition criteria have been met . professional services revenue associated with cloud-hosted arrangements is recognized as the services are performed . income taxes . the company is required to estimate income taxes in each of the jurisdictions in which it operates . this process involves estimating actual current tax expense and assessing temporary differences resulting from differing treatment of items for book and tax purposes . these temporary differences result in deferred tax assets and liabilities , which are included in the consolidated balance sheets . management records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized . increases in the valuation allowance result in the recognition of additional income tax expense . income tax expense could be materially different from actual results because of changes in management 's expectations regarding future taxable income , the relationship between book and taxable income and tax planning strategies employed by the company.as of december 31 , 2014 , the company carried a valuation allowance totaling $ 19.9 million against the company 's u.s. deferred tax assets . management recognizes a tax accrual for estimated exposures associated with uncertain tax positions and adjusts this accrual in light of changing facts and circumstances . however , due to the complexity of some of these uncertainties , the ultimate settlement may result in payments that are significantly different from management 's current estimate of tax liabilities , resulting in the recognition of additional charges or benefits to income tax expense . stock-based compensation . the company recognizes compensation expense on a straight-line basis over the vesting period . the company recognized stock-based compensation costs of approximately $ 1.8 million , $ 1.4 million and $ 1.7 million for the years ended december 31 , 2014 , 2013 and 2012 , respectively . the company utilizes a black-scholes option pricing model to estimate the fair value of each stock option award on the date of grant . the black-scholes model requires the input of certain assumptions that involve management judgment . key assumptions that affect the calculation of fair value include the expected life of stock-based awards , the company 's historical stock price volatility and the expected dividend yield . additionally , the company is required to estimate the expected forfeiture rate of unvested awards and recognize expense for only those shares expected to vest . the assumptions used in calculating the fair value of stock-based awards and the forfeiture rate of such awards reflect management 's best estimates . however , circumstances may change and additional data may become available over time , which could result in changes to these assumptions that materially impact the fair value determination of future awards or their estimated rate of forfeiture . if assumptions change for future stock-based awards , the compensation expense recorded may differ significantly from the expense recorded in the current period . see note 4 under the notes to consolidated financial statements in this form 10-k for additional information on stock-based compensation . valuation of intangible assets and goodwill . when a business is acquired , the purchase price is allocated , as applicable , between tangible assets , identifiable intangible assets and goodwill . the fair value of intangible assets acquired in 2011 and 2014 ( as part of the company 's acquisition of qumu , inc. and kulu valley , respectively ) , including trade names , developed technology , customer relationships and covenants not to compete , was based on management 's forecasted cash inflows and outflows using primarily a relief-from-royalty and multi-period excess earnings method with consideration to other

