the exercise of the over-allotment option brings the total number of shares of common stock sold by us in connection with our february offering to 6,388,888 shares and the total net proceeds received in connection with the february offering to approximately $ 80 million , after deducting underwriting discounts and estimated offering expenses . series a convertible preferred stock beginning in the first quarter of 2020 , we issued an aggregate of 60,000 shares of our series a convertible preferred stock , or series a preferred stock , for an aggregate purchase price of $ 6,000,000. in may 2020 , we completed our offering of series a preferred with the issuance of an additional 40,000 shares of series a preferred for an aggregate purchase price of $ 4,000,000. all outstanding shares of series a preferred stock automatically converted immediately prior to the closing of our ipo into 1,373,038 shares of common stock at a conversion price of $ 7.72 per share . acquisition of trigrow on january 22 , 2020 we completed the acquisition of all outstanding shares of trigrow . trigrow is an integrator and exclusive distributor of our premium indoor grow solutions for the indoor controlled agriculture marketplace . as part of the acquisition , we received trigrow 's 75 % interest in agrify brands , llc ( formerly trigrow brands , llc ) , a licensor of an established portfolio of consumer brands that utilize our grow technology . the license of these brands is ancillary to the sale of our avfus and provides a means to differentiate customers ' products in the marketplace . it is not a material aspect of our business and we have not realized any royalty income . accordingly , we are currently evaluating whether to continue this legacy business from an operational standpoint , as well as from a legal and regulatory perspective . in consideration of trigrow 's shares , we issued to trigrow 's shareholders 595,552 shares of common stock . in addition , the closing conditions included the assumption of trigrow 's outstanding obligation to invest $ 1,140,000 ( the “ funding amount ” ) in a form of a so called “ profit interest ” investment in cci finance , llc ( “ cci ” ) . we included this investment as part of the consideration for the acquisition . we satisfied this obligation and made payment of the funding amount on january 24 , 2020 pursuant to a profits interest agreement with cci . under the profits interest agreement , in return for our investment of the funding amount , cci is obligated to share with us 28.5 % of the net revenue generated from its equipment lease agreement with its customer , payable at least annually by cci to us . the revenue sharing percentage is reduced from 28.5 % to 20 % once we have received payments equaling an 18 % internal rate of return on the funding amount ( the “ preferred return ” ) prior to the fifth anniversary of the agreement . the revenue sharing terminates upon the later of five years , or our attainment of the preferred return . to date , no revenue has been generated and shared with us under this agreement . assuming a five-year payback , the annual payments required to reach the preferred return would be $ 364,500. assuming a seven-year payback , the annual payments required to reach the preferred return would be $ 299,000. as part of the acquisition of trigrow , we made available 121,539 shares of our common stock for issuance to certain executives of trigrow upon trigrow 's and or our receipt of $ 10,000,000 of accumulative purchase orders for trigrow and or our equipment , products , and services , for the period from november 21 , 2019 through june 30 , 2020 as a result of the efforts of the trigrow executives . such shares of common stock are to be distributed by us in our sole discretion to certain executives responsible for achievement of such milestone . we concluded that the earn-out , if materialized , will be considered as post combination services . additionally , we concluded that the value associated with the earn-out to be de minimis . no earn-out was earned through june 30 , 2020 . 51 the purchase price for trigrow was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates , with the remaining unallocated purchase prices recorded as goodwill . the fair value assigned to identifiable intangible assets acquired was determined primarily by using the income approach , which discounts expected future cash flows to present value using estimates and assumptions determined by our management . transaction and related costs , consisting primarily of professional fees , directly related to the acquisition , totaled $ 45,000 for the year ended december 31 , 2020. all transaction and related costs were expensed as incurred and are included in selling , general and administrative expenses . the purchase price allocation for the business combination has been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement period ( up to one year from the acquisition date ) . fair value still under review include values assigned to identifiable intangible assets and goodwill . the following table sets forth the components and the allocation of the purchase price for the business combination : replace_table_token_3_th brand rights and customer relationships were assigned estimated useful lives of ten years and nine years , respectively , the weighted average of which is approximately 9.5 years . story_separator_special_tag we have payment terms with our customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money . sales , value add , and other taxes we collect concurrent with revenue-producing activities are excluded from revenue . contract balances — we receive payment from customers based on specified terms that are generally less than 30 days from the satisfaction of performance obligations . there are no contract assets related to performance under the contract . the difference in the opening and closing balances of our deferred revenue primarily results from the timing difference between our performance and the customer 's payment . we fulfil our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer . accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional . we recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer certain proprietary products . we generally provide a one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated , and will pass on the warranties from its vendors , if any , which generally covers this one-year period . in accordance with asc 450-20-25 , we accrue for product warranties when the loss is probable and can be reasonably estimated . at december 31 , 2020 , we had no product warranty accrual our de minimis historical financial warranty experience . accounting for business combinations we allocated the purchase price of acquired company to the tangible and intangible assets acquired , including in-process research and development assets , and liabilities assumed , based upon their estimated fair values at the acquisition date . these fair values are typically estimated with assistance from independent valuation specialists . the purchase price allocation process requires us to make significant estimates and assumptions , especially at the acquisition date with respect to intangible assets , contractual support obligations assumed , contingent consideration arrangements , and pre-acquisition contingencies . 57 although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate , they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain . examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to : ● future expected cash flows from software license sales , support agreements , consulting contracts , other customer contracts , and acquired developed technologies ; ● expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed ; ● the acquired company 's brand and competitive position , as well as assumptions about the period of time the acquired brand will continue to be used in the combined company 's product portfolio ; ● cost of capital and discount rates ; and ● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize . the fair value assigned to identifiable intangible assets acquired during the year ended december 31 , 2020 , was determined primarily by using the income approach , which discounts expected future cash flows to present value using estimates and assumptions determined by our management . income taxes we account for income taxes pursuant to the provisions of asc topic 740 , “ income taxes , ” which requires , among other things , an asset and liability approach to calculating deferred income taxes . the asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities . a valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized . we follow the provisions of asc 740-10-25-5 , “ basic recognition threshold . ” when tax returns are filed , it is highly certain that some positions taken would be sustained upon examination by the taxing authorities , while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained . in accordance with the guidance of asc 740-10-25-6 , the benefit of a tax position is recognized in the consolidated financial statements in the period during which , based on all available evidence , management believes it is more likely than not that the position will be sustained upon examination , including the resolution of appeals or litigation processes , if any . tax positions taken are not offset or aggregated with other positions . tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority . the portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination . we believe our tax positions are all highly certain of being upheld upon examination . as such , we have not recorded a liability for unrecognized tax benefits . 58 we recognize the benefit of a tax position when it is effectively settled . asc 740-10-25-10 , “ basic recognition threshold ” provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits

cashflows the following table presents the major components of net cash flows from and used in operating , investing and financing activities for the years ended december 31 , 2020 , and 2019 : replace_table_token_9_th 64 cashflow from operating activities for the year ended december 31 , 2020 , we incurred a net loss of $ 21,617,000 , which includes non-cash expenses of $ 5,618,000 related to extinguishment of notes payable , $ 2,924,000 due to change in fair value of derivative liabilities , $ 407,000 related to depreciation and amortization , $ 1,921,000 in connection with the issuance of stock options , non-cash interest expenses of $ 447,000 related to the issuance of notes payable , provision of $ 54,000 for doubtful accounts and $ 120,000 from the disposal of fixed assets , partially offset by loss attributed to non-controlling interest in the amount of $ 22,000. net cash was reduced by a $ 3,709,000 increase in accounts receivable , a $ 2,941,000 increase in prepaid inventory due to demand forecast , a $ 2,249,000 decrease in deferred revenue , partially offset by $ 4,780,000 increase in accrued expenses , a $ 12,000 decrease in prepaid expenses , and a $ 527,000 decrease in accounts payable . for the year ended december 31 , 2019 , we incurred a net loss of $ 3,042,000 , which includes non-cash expenses of $ 10,000 related to depreciation and amortization , and $ 109,000 in connection with issuance of stock options .


 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.
     ```cashflows the following table presents the major components of net cash flows from and used in operating , investing and financing activities for the years ended december 31 , 2020 , and 2019 : replace_table_token_9_th 64 cashflow from operating activities for the year ended december 31 , 2020 , we incurred a net loss of $ 21,617,000 , which includes non-cash expenses of $ 5,618,000 related to extinguishment of notes payable , $ 2,924,000 due to change in fair value of derivative liabilities , $ 407,000 related to depreciation and amortization , $ 1,921,000 in connection with the issuance of stock options , non-cash interest expenses of $ 447,000 related to the issuance of notes payable , provision of $ 54,000 for doubtful accounts and $ 120,000 from the disposal of fixed assets , partially offset by loss attributed to non-controlling interest in the amount of $ 22,000. net cash was reduced by a $ 3,709,000 increase in accounts receivable , a $ 2,941,000 increase in prepaid inventory due to demand forecast , a $ 2,249,000 decrease in deferred revenue , partially offset by $ 4,780,000 increase in accrued expenses , a $ 12,000 decrease in prepaid expenses , and a $ 527,000 decrease in accounts payable . for the year ended december 31 , 2019 , we incurred a net loss of $ 3,042,000 , which includes non-cash expenses of $ 10,000 related to depreciation and amortization , and $ 109,000 in connection with issuance of stock options .
```    
 Suspicious Activity Report : the exercise of the over-allotment option brings the total number of shares of common stock sold by us in connection with our february offering to 6,388,888 shares and the total net proceeds received in connection with the february offering to approximately $ 80 million , after deducting underwriting discounts and estimated offering expenses . series a convertible preferred stock beginning in the first quarter of 2020 , we issued an aggregate of 60,000 shares of our series a convertible preferred stock , or series a preferred stock , for an aggregate purchase price of $ 6,000,000. in may 2020 , we completed our offering of series a preferred with the issuance of an additional 40,000 shares of series a preferred for an aggregate purchase price of $ 4,000,000. all outstanding shares of series a preferred stock automatically converted immediately prior to the closing of our ipo into 1,373,038 shares of common stock at a conversion price of $ 7.72 per share . acquisition of trigrow on january 22 , 2020 we completed the acquisition of all outstanding shares of trigrow . trigrow is an integrator and exclusive distributor of our premium indoor grow solutions for the indoor controlled agriculture marketplace . as part of the acquisition , we received trigrow 's 75 % interest in agrify brands , llc ( formerly trigrow brands , llc ) , a licensor of an established portfolio of consumer brands that utilize our grow technology . the license of these brands is ancillary to the sale of our avfus and provides a means to differentiate customers ' products in the marketplace . it is not a material aspect of our business and we have not realized any royalty income . accordingly , we are currently evaluating whether to continue this legacy business from an operational standpoint , as well as from a legal and regulatory perspective . in consideration of trigrow 's shares , we issued to trigrow 's shareholders 595,552 shares of common stock . in addition , the closing conditions included the assumption of trigrow 's outstanding obligation to invest $ 1,140,000 ( the “ funding amount ” ) in a form of a so called “ profit interest ” investment in cci finance , llc ( “ cci ” ) . we included this investment as part of the consideration for the acquisition . we satisfied this obligation and made payment of the funding amount on january 24 , 2020 pursuant to a profits interest agreement with cci . under the profits interest agreement , in return for our investment of the funding amount , cci is obligated to share with us 28.5 % of the net revenue generated from its equipment lease agreement with its customer , payable at least annually by cci to us . the revenue sharing percentage is reduced from 28.5 % to 20 % once we have received payments equaling an 18 % internal rate of return on the funding amount ( the “ preferred return ” ) prior to the fifth anniversary of the agreement . the revenue sharing terminates upon the later of five years , or our attainment of the preferred return . to date , no revenue has been generated and shared with us under this agreement . assuming a five-year payback , the annual payments required to reach the preferred return would be $ 364,500. assuming a seven-year payback , the annual payments required to reach the preferred return would be $ 299,000. as part of the acquisition of trigrow , we made available 121,539 shares of our common stock for issuance to certain executives of trigrow upon trigrow 's and or our receipt of $ 10,000,000 of accumulative purchase orders for trigrow and or our equipment , products , and services , for the period from november 21 , 2019 through june 30 , 2020 as a result of the efforts of the trigrow executives . such shares of common stock are to be distributed by us in our sole discretion to certain executives responsible for achievement of such milestone . we concluded that the earn-out , if materialized , will be considered as post combination services . additionally , we concluded that the value associated with the earn-out to be de minimis . no earn-out was earned through june 30 , 2020 . 51 the purchase price for trigrow was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates , with the remaining unallocated purchase prices recorded as goodwill . the fair value assigned to identifiable intangible assets acquired was determined primarily by using the income approach , which discounts expected future cash flows to present value using estimates and assumptions determined by our management . transaction and related costs , consisting primarily of professional fees , directly related to the acquisition , totaled $ 45,000 for the year ended december 31 , 2020. all transaction and related costs were expensed as incurred and are included in selling , general and administrative expenses . the purchase price allocation for the business combination has been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement period ( up to one year from the acquisition date ) . fair value still under review include values assigned to identifiable intangible assets and goodwill . the following table sets forth the components and the allocation of the purchase price for the business combination : replace_table_token_3_th brand rights and customer relationships were assigned estimated useful lives of ten years and nine years , respectively , the weighted average of which is approximately 9.5 years . story_separator_special_tag we have payment terms with our customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money . sales , value add , and other taxes we collect concurrent with revenue-producing activities are excluded from revenue . contract balances — we receive payment from customers based on specified terms that are generally less than 30 days from the satisfaction of performance obligations . there are no contract assets related to performance under the contract . the difference in the opening and closing balances of our deferred revenue primarily results from the timing difference between our performance and the customer 's payment . we fulfil our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer . accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional . we recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer certain proprietary products . we generally provide a one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated , and will pass on the warranties from its vendors , if any , which generally covers this one-year period . in accordance with asc 450-20-25 , we accrue for product warranties when the loss is probable and can be reasonably estimated . at december 31 , 2020 , we had no product warranty accrual our de minimis historical financial warranty experience . accounting for business combinations we allocated the purchase price of acquired company to the tangible and intangible assets acquired , including in-process research and development assets , and liabilities assumed , based upon their estimated fair values at the acquisition date . these fair values are typically estimated with assistance from independent valuation specialists . the purchase price allocation process requires us to make significant estimates and assumptions , especially at the acquisition date with respect to intangible assets , contractual support obligations assumed , contingent consideration arrangements , and pre-acquisition contingencies . 57 although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate , they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain . examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to : ● future expected cash flows from software license sales , support agreements , consulting contracts , other customer contracts , and acquired developed technologies ; ● expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed ; ● the acquired company 's brand and competitive position , as well as assumptions about the period of time the acquired brand will continue to be used in the combined company 's product portfolio ; ● cost of capital and discount rates ; and ● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize . the fair value assigned to identifiable intangible assets acquired during the year ended december 31 , 2020 , was determined primarily by using the income approach , which discounts expected future cash flows to present value using estimates and assumptions determined by our management . income taxes we account for income taxes pursuant to the provisions of asc topic 740 , “ income taxes , ” which requires , among other things , an asset and liability approach to calculating deferred income taxes . the asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities . a valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized . we follow the provisions of asc 740-10-25-5 , “ basic recognition threshold . ” when tax returns are filed , it is highly certain that some positions taken would be sustained upon examination by the taxing authorities , while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained . in accordance with the guidance of asc 740-10-25-6 , the benefit of a tax position is recognized in the consolidated financial statements in the period during which , based on all available evidence , management believes it is more likely than not that the position will be sustained upon examination , including the resolution of appeals or litigation processes , if any . tax positions taken are not offset or aggregated with other positions . tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority . the portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination . we believe our tax positions are all highly certain of being upheld upon examination . as such , we have not recorded a liability for unrecognized tax benefits . 58 we recognize the benefit of a tax position when it is effectively settled . asc 740-10-25-10 , “ basic recognition threshold ” provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits

