we are working on developing new business partners and clients for our products to reduce our dependence on existing customers and is focusing our new business development efforts on ev parts and intelligent transportation products . on march 4 , 2019 , in order to build a logistics network composed of suppliers , manufacturers , warehouses , distribution centers and channel providers , meeting the needs of improving production and operation efficiency , the company participated in the formation of zhejiang kandi supply chain management co. , ltd. ( “ supply chain company ” ) . kandi vehicles has a 10 % ownership interest in supply chain company , the remaining 90 % is owned by unrelated other parties . through centralized purchasing from supply chain company , the company can reduce the purchasing cost by 3 % to 5 % . the covid-19 will affect the company 's business performance in 2020. however , , the extent to which the covid-19 impacts our operations will depend on future developments , which are highly uncertain and can not be predicted with confidence , including the duration of the outbreak , new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact , among others . the company originally planned to export 2,000 to 5,000 units electric vehicles to the u.s. in 2020 , but due to the covid-19 pandemic in the first half of 2020 , the plan should be adjusted according to the situation of covid-19 control in the u.s. 20 results of operations comparison of years ended december 31 , 2019 and 2018 the following table sets forth the amounts and the percentage relationship to revenues of certain items in our consolidated statements of operations for the years ended december 31 , 2019 and 2018 : replace_table_token_4_th 21 revenues for the year ended december 31 , 2019 , we had net revenues of $ 135,741,336 compared to net revenues of $ 112,438,828 for the year ended december 31 , 2018 , representing an increase of $ 23,302,508 , or 20.7 % , from 2018. compared to 2018 , the increase in revenue was primarily due to the increase in sales of ev parts and off-road vehicles . the following table summarizes our revenues by product type for the years ended december 31 , 2019 and 2018 : replace_table_token_5_th ev parts during the year ended december 31 , 2019 , our revenue from the sale of ev parts was $ 110,675,908 , representing an increase of $ 11,576,596 or 11.7 % from $ 99,099,312 for the year ended december 31 , 2018. the increase was mainly due to the sales from r ental market battery maintenance and developing new clients in 2019. our revenue for the year ended december 31 , 2019 primarily consisted of revenue from the sales of battery packs , body parts , ev controllers , air conditioning units and other auto parts for use in the manufacturing of ev products . these sales accounted for 81.5 % of total sales . during the years ended december 31 , 2019 and 2018 , our revenues from the sale of ev parts to the affiliate company accounted approximately 11.7 % and 43.3 % of our total net revenue for the year , respectively . the decrease is mainly due to the affiliate company 's temporary declining sales , which was caused by its product adjustments . during 2019 , the ev parts we provided to the affiliate company were primarily used for battery upgrade and market maintenance for the ev products that were previously put into the leasing market . ev products during the year ended december 31 , 2019 , our revenue from the sale of ev products was $ 108,640 , which was due to the export sales of hainan factories ' products including model k23 and k27 started in late 2019. there were n't any ev products sales in year 2018. off-road vehicles during the year ended december 31 , 2019 , our revenues from the sale of off-road vehicles including go-karts , all-terrain vehicles ( “ atvs ” ) , and others , were $ 22,743,142 , representing an increase of $ 9,403,626 or 70.5 % from $ 13,339,516 for the year ended december 31 , 2018. the increase in revenue of off-road vehicles was largely due to the increase sales from sc autosports . we consolidated sc autosports 's sales of off-road vehicles of $ 18,106,091 and $ 7,898,736 for the year ended december 31 , 2019 and 2018. sc autosports became our wholly-owned subsidiary in the u.s. in july 2018. our off-road vehicles business line accounted for approximately 16.8 % of our total net revenue for the year ended december 31 , 2019. electric scooters and electric self-balancing scooters during the year ended december 31 , 2019 , our revenue from the sale of electric scooters and electric self-balancing scooters was $ 2,213,646. these were new products launched by kandi vehicles in 2019. there were n't any electric scooters and electric self-balancing scooters sales in years 2018 . 22 the following table shows the breakdown of our net revenues : replace_table_token_6_th cost of goods sold cost of goods sold for the year ended december 31 , 2019 was $ 110,310,427 , representing an increase of $ 18,119,044 , or 19.7 % , from $ 92,191,383 for the year ended december 31 , 2018. the increase of cost of goods sold compare to 2018 was primarily due to the corresponding increase in sales . please refer to the gross profit section below for product margin analysis . story_separator_special_tag control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled , usually at the time of delivery , at the net sales price ( transaction price ) . revenue is recognized net of any taxes collected from customers , which are subsequently remitted to governmental authorities . shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfillment costs rather than separate performance obligations and recorded as sales and marketing expenses . policy affecting leases effective january 1 , 2019 , the company adopted asc 842 using the effective date approach . the company elected to adopt both the transition relief provided in asu 2018-11 and the package of practical expedients which allowed us , among other things , to retain historical lease classifications and accounting for any leases that existed prior to adoption of the standard . additionally , the management elected the practical expedients allowing the company not to separate lease and non-lease components and not record leases with an initial term of twelve months or less ( “ short-term leases ” ) on the balance sheet across all existing asset classes . per asu 2018-01 , the management elected the practical expedient that permits the company to continue applying our current policy of accounting for land use rights that existed as of , or expired before , the effective date of asc 842. we have applied this policy to all of our existing land use rights that were not previously accounted for under asc 840. adoption of the new standard resulted in the recording of operating lease assets ( grouped in other long term assets of balance sheet ) of $ 10,743and operating lease liabilities ( grouped in other current liability of balance sheet ) of $ 11,509 , respectively , as of december 31 , 2019 based on the present value of the lease payments for the remaining lease term of the company 's existing leases . the assets and liabilities recognized upon application of the transition provisions were primarily associated to the corporate office leases for sc autosports . the standard did not materially impact the condensed consolidated statements of operations or cash flows . adopting the new standard did not have a material impact on the accounting for leases under which the company is the lessee . policy affecting options , warrants and convertible notes our stock option cost is recorded in accordance with asc 718 and asc 505. the fair value of stock options is estimated using the black-scholes-merton model . our expected volatility assumption is based on the historical volatility of our stock . the expected life assumption is primarily based on the expiration date of the option . the risk-free interest rate for the expected term of the option is based on the u.s. treasury yield curve in effect at the time of grant . stock option expense recognition is based on awards expected to vest . there were no estimated forfeitures . asc standards require forfeitures to be estimated at the time of grant and revised in subsequent periods , if necessary , if actual forfeitures differ from those estimates . the stock-based option expenses for the years ended december 31 , 2019 and 2018 were $ 0 , $ 1,586,926 net of a reversal for forfeited stock options of $ 2,644,877 , respectively . there were no forfeitures estimated during the reporting period . our warrant costs are recorded in liabilities and equities , respectively , in accordance with asc 480 , asc 505 and asc 815. the fair value of a warrant , which is classified as a liability , is estimated using the binomial tree model and the lattice valuation model . our expected volatility assumption is based on the historical volatility of our common stock . the expected life assumption is primarily based on the expiration date of the warrant . the risk-free interest rate for the expected term of the warrant is based on the u.s. treasury yield curve in effect at the time of measurement . our warrants , which are freestanding derivatives classified as liabilities on the balance sheet , are measured at fair value on each reporting date , with decreases in fair value recognized in earnings and increases in fair values recognized in expenses . 28 the fair value of equity-based warrants , which are not considered derivatives under asc 815 , is estimated using the black-scholes -merton model . our expected volatility assumption is based on the historical volatility of our common stock . the expected life assumption is primarily based on the expiration date of the warrant . the risk-free interest rate for the expected term of the option is based on the u.s. treasury yield curve in effect at the time of grant . in accordance with asc 815 , the conversion feature of the convertible notes is separated from the debt instrument and accounted for separately as a derivative instrument . on the date the convertible notes are issued , the conversion feature is recorded as a liability at its fair value , and future decreases in fair value are recognized in earnings while increases in fair values are recognized in expenses . we used the black-scholes -merton option-pricing model to obtain the fair value of the conversion feature . the expected volatility assumption is based on the historical volatility of our common stock . the expected life assumption is primarily based on the expiration date of the conversion features . the risk-free interest rate for the expected term of the conversion features is based on the u.s. treasury yield curve in effect at the time of measurement . warranty liability most of our non-ev products ( “ legacy products ” ) are exported out of china to foreign countries that have legal and regulatory requirements with which we are not familiar . the development of warranty policies for

liquidity and capital resources cash flow replace_table_token_8_th for the year ended december 31 , 2019 , cash used in operating activities was $ 29,886,272 , as compared to cash provided in operating activities was $ 13,587,621 for the year ended december 31 , 2018. our operating cash inflows include cash received primarily from sales of our ev parts and off-road vehicles . these cash inflows are offset largely by cash paid primarily to our suppliers for production materials and parts used in our manufacturing process , operation expenses , employee compensation , and interest expenses of our financings . the major operating activities that provided cash for the year ended december 31 , 2019 were an increase of accounts payable of $ 10,440,338. the major operating activity that used cash for year ended december 31 , 2019 was an increase of accounts receivable of $ 40,123,966. for the year ended december 31 , 2019 , cash provided in investing activities was $ 31,252,624 , as compared to cash used from investing activities of $ 947,441 for the year ended december 31 , 2018. the major investing activities that provided cash for the year ended december 31 , 2019 were an increase of cash received from equity sale in the affiliate company of $ 31,850,822. the major investing activities that used cash for the year ended december 31 , 2019 were $ 526,336 used for the purchases of property , plant and equipment .


 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 cash flow replace_table_token_8_th for the year ended december 31 , 2019 , cash used in operating activities was $ 29,886,272 , as compared to cash provided in operating activities was $ 13,587,621 for the year ended december 31 , 2018. our operating cash inflows include cash received primarily from sales of our ev parts and off-road vehicles . these cash inflows are offset largely by cash paid primarily to our suppliers for production materials and parts used in our manufacturing process , operation expenses , employee compensation , and interest expenses of our financings . the major operating activities that provided cash for the year ended december 31 , 2019 were an increase of accounts payable of $ 10,440,338. the major operating activity that used cash for year ended december 31 , 2019 was an increase of accounts receivable of $ 40,123,966. for the year ended december 31 , 2019 , cash provided in investing activities was $ 31,252,624 , as compared to cash used from investing activities of $ 947,441 for the year ended december 31 , 2018. the major investing activities that provided cash for the year ended december 31 , 2019 were an increase of cash received from equity sale in the affiliate company of $ 31,850,822. the major investing activities that used cash for the year ended december 31 , 2019 were $ 526,336 used for the purchases of property , plant and equipment .
```    
 Suspicious Activity Report : we are working on developing new business partners and clients for our products to reduce our dependence on existing customers and is focusing our new business development efforts on ev parts and intelligent transportation products . on march 4 , 2019 , in order to build a logistics network composed of suppliers , manufacturers , warehouses , distribution centers and channel providers , meeting the needs of improving production and operation efficiency , the company participated in the formation of zhejiang kandi supply chain management co. , ltd. ( “ supply chain company ” ) . kandi vehicles has a 10 % ownership interest in supply chain company , the remaining 90 % is owned by unrelated other parties . through centralized purchasing from supply chain company , the company can reduce the purchasing cost by 3 % to 5 % . the covid-19 will affect the company 's business performance in 2020. however , , the extent to which the covid-19 impacts our operations will depend on future developments , which are highly uncertain and can not be predicted with confidence , including the duration of the outbreak , new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact , among others . the company originally planned to export 2,000 to 5,000 units electric vehicles to the u.s. in 2020 , but due to the covid-19 pandemic in the first half of 2020 , the plan should be adjusted according to the situation of covid-19 control in the u.s. 20 results of operations comparison of years ended december 31 , 2019 and 2018 the following table sets forth the amounts and the percentage relationship to revenues of certain items in our consolidated statements of operations for the years ended december 31 , 2019 and 2018 : replace_table_token_4_th 21 revenues for the year ended december 31 , 2019 , we had net revenues of $ 135,741,336 compared to net revenues of $ 112,438,828 for the year ended december 31 , 2018 , representing an increase of $ 23,302,508 , or 20.7 % , from 2018. compared to 2018 , the increase in revenue was primarily due to the increase in sales of ev parts and off-road vehicles . the following table summarizes our revenues by product type for the years ended december 31 , 2019 and 2018 : replace_table_token_5_th ev parts during the year ended december 31 , 2019 , our revenue from the sale of ev parts was $ 110,675,908 , representing an increase of $ 11,576,596 or 11.7 % from $ 99,099,312 for the year ended december 31 , 2018. the increase was mainly due to the sales from r ental market battery maintenance and developing new clients in 2019. our revenue for the year ended december 31 , 2019 primarily consisted of revenue from the sales of battery packs , body parts , ev controllers , air conditioning units and other auto parts for use in the manufacturing of ev products . these sales accounted for 81.5 % of total sales . during the years ended december 31 , 2019 and 2018 , our revenues from the sale of ev parts to the affiliate company accounted approximately 11.7 % and 43.3 % of our total net revenue for the year , respectively . the decrease is mainly due to the affiliate company 's temporary declining sales , which was caused by its product adjustments . during 2019 , the ev parts we provided to the affiliate company were primarily used for battery upgrade and market maintenance for the ev products that were previously put into the leasing market . ev products during the year ended december 31 , 2019 , our revenue from the sale of ev products was $ 108,640 , which was due to the export sales of hainan factories ' products including model k23 and k27 started in late 2019. there were n't any ev products sales in year 2018. off-road vehicles during the year ended december 31 , 2019 , our revenues from the sale of off-road vehicles including go-karts , all-terrain vehicles ( “ atvs ” ) , and others , were $ 22,743,142 , representing an increase of $ 9,403,626 or 70.5 % from $ 13,339,516 for the year ended december 31 , 2018. the increase in revenue of off-road vehicles was largely due to the increase sales from sc autosports . we consolidated sc autosports 's sales of off-road vehicles of $ 18,106,091 and $ 7,898,736 for the year ended december 31 , 2019 and 2018. sc autosports became our wholly-owned subsidiary in the u.s. in july 2018. our off-road vehicles business line accounted for approximately 16.8 % of our total net revenue for the year ended december 31 , 2019. electric scooters and electric self-balancing scooters during the year ended december 31 , 2019 , our revenue from the sale of electric scooters and electric self-balancing scooters was $ 2,213,646. these were new products launched by kandi vehicles in 2019. there were n't any electric scooters and electric self-balancing scooters sales in years 2018 . 22 the following table shows the breakdown of our net revenues : replace_table_token_6_th cost of goods sold cost of goods sold for the year ended december 31 , 2019 was $ 110,310,427 , representing an increase of $ 18,119,044 , or 19.7 % , from $ 92,191,383 for the year ended december 31 , 2018. the increase of cost of goods sold compare to 2018 was primarily due to the corresponding increase in sales . please refer to the gross profit section below for product margin analysis . story_separator_special_tag control is typically deemed to have been transferred to the customer when the performance obligation is fulfilled , usually at the time of delivery , at the net sales price ( transaction price ) . revenue is recognized net of any taxes collected from customers , which are subsequently remitted to governmental authorities . shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods are accounted for as fulfillment costs rather than separate performance obligations and recorded as sales and marketing expenses . policy affecting leases effective january 1 , 2019 , the company adopted asc 842 using the effective date approach . the company elected to adopt both the transition relief provided in asu 2018-11 and the package of practical expedients which allowed us , among other things , to retain historical lease classifications and accounting for any leases that existed prior to adoption of the standard . additionally , the management elected the practical expedients allowing the company not to separate lease and non-lease components and not record leases with an initial term of twelve months or less ( “ short-term leases ” ) on the balance sheet across all existing asset classes . per asu 2018-01 , the management elected the practical expedient that permits the company to continue applying our current policy of accounting for land use rights that existed as of , or expired before , the effective date of asc 842. we have applied this policy to all of our existing land use rights that were not previously accounted for under asc 840. adoption of the new standard resulted in the recording of operating lease assets ( grouped in other long term assets of balance sheet ) of $ 10,743and operating lease liabilities ( grouped in other current liability of balance sheet ) of $ 11,509 , respectively , as of december 31 , 2019 based on the present value of the lease payments for the remaining lease term of the company 's existing leases . the assets and liabilities recognized upon application of the transition provisions were primarily associated to the corporate office leases for sc autosports . the standard did not materially impact the condensed consolidated statements of operations or cash flows . adopting the new standard did not have a material impact on the accounting for leases under which the company is the lessee . policy affecting options , warrants and convertible notes our stock option cost is recorded in accordance with asc 718 and asc 505. the fair value of stock options is estimated using the black-scholes-merton model . our expected volatility assumption is based on the historical volatility of our stock . the expected life assumption is primarily based on the expiration date of the option . the risk-free interest rate for the expected term of the option is based on the u.s. treasury yield curve in effect at the time of grant . stock option expense recognition is based on awards expected to vest . there were no estimated forfeitures . asc standards require forfeitures to be estimated at the time of grant and revised in subsequent periods , if necessary , if actual forfeitures differ from those estimates . the stock-based option expenses for the years ended december 31 , 2019 and 2018 were $ 0 , $ 1,586,926 net of a reversal for forfeited stock options of $ 2,644,877 , respectively . there were no forfeitures estimated during the reporting period . our warrant costs are recorded in liabilities and equities , respectively , in accordance with asc 480 , asc 505 and asc 815. the fair value of a warrant , which is classified as a liability , is estimated using the binomial tree model and the lattice valuation model . our expected volatility assumption is based on the historical volatility of our common stock . the expected life assumption is primarily based on the expiration date of the warrant . the risk-free interest rate for the expected term of the warrant is based on the u.s. treasury yield curve in effect at the time of measurement . our warrants , which are freestanding derivatives classified as liabilities on the balance sheet , are measured at fair value on each reporting date , with decreases in fair value recognized in earnings and increases in fair values recognized in expenses . 28 the fair value of equity-based warrants , which are not considered derivatives under asc 815 , is estimated using the black-scholes -merton model . our expected volatility assumption is based on the historical volatility of our common stock . the expected life assumption is primarily based on the expiration date of the warrant . the risk-free interest rate for the expected term of the option is based on the u.s. treasury yield curve in effect at the time of grant . in accordance with asc 815 , the conversion feature of the convertible notes is separated from the debt instrument and accounted for separately as a derivative instrument . on the date the convertible notes are issued , the conversion feature is recorded as a liability at its fair value , and future decreases in fair value are recognized in earnings while increases in fair values are recognized in expenses . we used the black-scholes -merton option-pricing model to obtain the fair value of the conversion feature . the expected volatility assumption is based on the historical volatility of our common stock . the expected life assumption is primarily based on the expiration date of the conversion features . the risk-free interest rate for the expected term of the conversion features is based on the u.s. treasury yield curve in effect at the time of measurement . warranty liability most of our non-ev products ( “ legacy products ” ) are exported out of china to foreign countries that have legal and regulatory requirements with which we are not familiar . the development of warranty policies for

