despite contractual product development commitments and the potential to receive future payments from our collaborators , we anticipate that , without taking into account deferred revenue , we will continue to incur losses for the foreseeable future , and we anticipate that our losses will increase as we continue our development of , and seek regulatory approval for , our product candidates . if we do not successfully develop and obtain regulatory approval of our existing product candidates or any future product candidates and effectively manufacture , market , and sell any products that are approved , we may never generate revenue from product sales . furthermore , even if we do generate revenue from product sales , we may never again achieve or sustain profitability on a quarterly or annual basis . our prior losses , combined with expected future losses , have had and will continue to have an adverse effect on our stockholders ' equity and working capital . our failure to become and remain profitable could depress the market price of our class a common stock and could impair our ability to raise capital , expand our business , diversify our product offerings , or continue our operations . the probability of success for each of our product candidates and clinical programs and our ability to generate product revenue and become profitable depend upon a variety of factors , including the quality of the product candidate , clinical results , investment in the program , competition , manufacturing capability , commercial viability , and our collaborators ' ability to successfully execute our development and commercialization plans . we will also require additional capital through equity or debt financings in order to fund our operations and execute on our business plans , and there is no assurance that such financing will be available to us on commercially reasonable terms or at all . for a description of the numerous risks and uncertainties associated with product development and raising additional capital , see “ risk factors ” included in this annual report . financial operations overview revenue our revenue to date has been generated primarily from licensing fees received under our collaborative license agreements and reimbursements for expenses . we currently have no approved products and have not generated any revenue from the sale of products to date . in 81 the future , we may generate revenue from product sales , royalties on product sales , reimbursements for collaboration services under our current collaboration agree ments , or license fees , milestones , or other upfront payments if we enter into any new collaborations or license agreements . we expect that our future revenue will fluctuate from quarter to quarter for many reasons , including the uncertain timing and amoun t of any such payments and sales . our license and milestone revenue has been generated primarily from our collaborative licensing agreements with abbvie and khk and consists of upfront payments and milestone payments . under our revenue recognition policy , license revenue associated with upfront , non-refundable license payments received under the collaboration agreements with abbvie and khk are recognized ratably over the expected term of the performance obligations under the agreements , which extend through various periods beginning in 2017 and ending in 2026. license revenue recorded with respect to the collaboration agreements with abbvie consists solely of the recognition of deferred revenue . license revenue recorded with respect to the collaboration agreements with khk consists of the recognition of deferred revenue and reimbursement of supply costs . we also have other license revenue , which consists of milestone payments from a disease advocacy organization in 2015 , and other revenue , which consists of reimbursements from khk for expenses incurred to obtain drug supplies . research and development expenses the largest component of our total operating expenses has historically been our investment in research and development activities , including the clinical development of our product candidates . from our inception through december 31 , 2016 , we have incurred a total of $ 478.2 million in research and development expense , a majority of which relates to the development of bardoxolone methyl and omaveloxolone . we expect our research and development expense to continue to increase in the future as we advance our product candidates through clinical trials and expand our product candidate portfolio . the process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming and we consider the active management and development of our clinical pipeline to be crucial to our long-term success . the actual probability of success for each product candidate and preclinical program may be affected by a variety of factors , including the safety and efficacy data for product candidates , investment in the program , competition , manufacturing capability , and commercial viability . research and development expenses include : expenses incurred under agreements with clinical trial sites that conduct research and development activities on our behalf ; expenses incurred under contract research agreements and other agreements with third parties ; employee and consultant-related expenses , which include salaries , benefits , travel , and stock-based compensation ; laboratory and vendor expenses related to the execution of preclinical and non-clinical studies , and clinical trials ; the cost of acquiring , developing , manufacturing , and distributing clinical trial materials ; and facilities , depreciation , and other expenses , which include direct and allocated expenses for rent and maintenance of facilities , insurance , and other supply costs . research and development costs are expensed as incurred . costs for certain development activities such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites . story_separator_special_tag 3. if the arrangement includes a general right of return relative to the delivered item , delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor . 88 both the khk agreement and the abbvie l icense agreement were executed prior to january 1 , 2011 , and contained both delivered and undelivered elements in the arrangements . we view the key elements of these arrangements as being the exclusive licenses to khk and abbvie and participation on joint steering committees . our involvement in the joint steering committees established under each of these agreements was assessed to determine whether the involvement is an obligation or a right to participate . based on this assessment , we concluded that invol vement in the joint steering committees was a substantive deliverable of the arrangement . we concluded that objective and reliable evidence of the fair value of the undelivered element of these arrangements ( participation on joint steering committees ) did not exist ; therefore , we are accounting for these arrangements as a single unit of accounting . we are recognizing revenue associated with the nonrefundable , up-front license fees received under the khk agreement and the abbvie license agreement ratably over the expected term of the joint steering committee performance obligations , which we estimate will be delivered through december 2021 and november 2017 for the khk agreement and the abbvie license agreement , respectively . we continue to participate in regular meetings for the joint steering committees established under the khk agreement and the abbvie license agreement . at this time , we believe our participation in these committees continues to be a substantive performance obligation of the agreements and has concluded that no changes in the estimated revenue recognition periods are warranted . deferred revenue arises from the excess of cash received over cumulative revenue recognized over the terms of our continuing obligations . both the khk agreement and the abbvie license agreement contain certain clinical development , regulatory , and sales milestones . we evaluated each of these milestones at inception of the respective arrangements and concluded that they were substantive milestones , and accordingly , we will recognize payments related to the achievement of such milestones , if any , when milestones or net sales levels are achieved and collection is reasonably assured . factors considered in this determination included scientific and regulatory risks that must be overcome to achieve each milestone , the level of effort and investment required to achieve each milestone , and the monetary value attributed to each milestone . in october 2009 , the financial accounting standards board , or fasb , issued accounting standards update , or asu , no . 2009-13 , multiple-deliverable revenue arrangements , which amended accounting standards codification , or asc , 605-25 , revenue recognition , to eliminate the requirement to obtain vendor-specific objective evidence of the fair value of undelivered elements in order to separate the deliverables into different units of accounting . we adopted this revised guidance as of january 1 , 2011 , and applied this guidance to the collaboration agreement with abbvie executed in december 2011. this guidance is also required to be applied to any material modifications that may be made to the existing khk agreement or abbvie license agreement , of which there were none in 2016 or 2015. we identified the following deliverables within the collaboration agreement with abbvie : the various exclusive , co-exclusive , and non-exclusive license grants to abbvie by us related to our molecules and to jointly discovered new molecules and to us by abbvie related to jointly discovered new molecules ; the substantive participation in the joint research and development incubator committee established by the agreement ; and the collaboration agreement to jointly develop and commercialize second-generation nrf2 activators , including participation in the joint executive committee , joint development committees , and joint marketing committees established by the agreement . we evaluated the deliverables within the collaboration agreement with abbvie and concluded that the only delivered element of the arrangement , the license grants , does not have value to abbvie on a stand-alone basis . accordingly , we concluded that the various elements of the arrangement can not be separated into different units of accounting . therefore , we are recognizing revenue associated with the nonrefundable , up-front payment over the estimated 15-year term necessary to execute the joint research , development , and commercialization terms under the agreement . research and development costs all research and development costs are expensed as incurred , including costs for drug supplies used in research and development or clinical trials , property and equipment acquired specifically for a finite research and development project , and nonrefundable deposits incurred at the initiation of research and development activities . research and development costs consist principally of costs related to clinical trials managed directly by the company and through contract research organizations , manufacture of clinical drug products for clinical trials , preclinical study costs , discovery research expenses , facilities costs , salaries , and related expenses . 89 as part of the process of recording research and development costs , we are required to estimate and accrue expenses , the largest of which are research and development expenses . this process involves the following : communicating with appropriate internal personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost ; estimating and accruing expenses in our consolidated financial statements as of each balance sheet date based on facts and circumstances known to us at the time ; and periodically confirming the accuracy of our estimates with service providers and making adjustments , if necessary . examples of estimated research and development expenses that we accrue

liquidity and capital resources since our inception , we have funded our operations primarily through collaboration and license agreements and the sale of preferred stock . to date , we have raised gross cash proceeds of $ 476.6 million through the sale of convertible preferred stock and $ 750.0 million from payments under license and collaboration agreements . we also obtained $ 60.9 million in net proceeds from our initial public offering of our class a common stock . we have not generated any revenue from the sale of any products . as of december 31 , 2016 , we had available cash and cash equivalents of approximately $ 84.7 million . our cash and cash equivalents are invested in accordance with our investment policy , primarily with a view to liquidity and capital preservation . cash flows the following table sets forth the primary sources and uses of cash for the years ended december 31 : replace_table_token_17_th 85 operating activities net cash used by operating activities was $ 19.3 million for the year ended december 31 , 2016 , consisting primarily of net loss of $ 6.2 million adjusted for non-cash items including stock-based compensation expense of $ 2.4 million , depreciation expense of $ 0.7 million , and a net decrease in operating assets and liabilities of $ 16.2 million . the significant items in the change in operating assets and liabilities include an increase of prepaid expenses and other current assets of $ 1.7 million due to prepayments on trial and other operating expenses and reimbursements due from khk , an increase in accrued direct research and other current liabilities of $ 3.1 million due to clinical trial activities , a decrease in income tax receivable of $ 31.9 million due to tax refunds received , and a decrease in deferred revenue of $ 49.7 million . the decrease in deferred revenue relates to the timing of upfront payments and ratable recognition of revenue over the expected term of the performance obligations under our collaboration agreements with abbvie and khk , resulting in recognition of $ 49.7 million of license and milestone revenue .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources since our inception , we have funded our operations primarily through collaboration and license agreements and the sale of preferred stock . to date , we have raised gross cash proceeds of $ 476.6 million through the sale of convertible preferred stock and $ 750.0 million from payments under license and collaboration agreements . we also obtained $ 60.9 million in net proceeds from our initial public offering of our class a common stock . we have not generated any revenue from the sale of any products . as of december 31 , 2016 , we had available cash and cash equivalents of approximately $ 84.7 million . our cash and cash equivalents are invested in accordance with our investment policy , primarily with a view to liquidity and capital preservation . cash flows the following table sets forth the primary sources and uses of cash for the years ended december 31 : replace_table_token_17_th 85 operating activities net cash used by operating activities was $ 19.3 million for the year ended december 31 , 2016 , consisting primarily of net loss of $ 6.2 million adjusted for non-cash items including stock-based compensation expense of $ 2.4 million , depreciation expense of $ 0.7 million , and a net decrease in operating assets and liabilities of $ 16.2 million . the significant items in the change in operating assets and liabilities include an increase of prepaid expenses and other current assets of $ 1.7 million due to prepayments on trial and other operating expenses and reimbursements due from khk , an increase in accrued direct research and other current liabilities of $ 3.1 million due to clinical trial activities , a decrease in income tax receivable of $ 31.9 million due to tax refunds received , and a decrease in deferred revenue of $ 49.7 million . the decrease in deferred revenue relates to the timing of upfront payments and ratable recognition of revenue over the expected term of the performance obligations under our collaboration agreements with abbvie and khk , resulting in recognition of $ 49.7 million of license and milestone revenue .
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 Suspicious Activity Report : despite contractual product development commitments and the potential to receive future payments from our collaborators , we anticipate that , without taking into account deferred revenue , we will continue to incur losses for the foreseeable future , and we anticipate that our losses will increase as we continue our development of , and seek regulatory approval for , our product candidates . if we do not successfully develop and obtain regulatory approval of our existing product candidates or any future product candidates and effectively manufacture , market , and sell any products that are approved , we may never generate revenue from product sales . furthermore , even if we do generate revenue from product sales , we may never again achieve or sustain profitability on a quarterly or annual basis . our prior losses , combined with expected future losses , have had and will continue to have an adverse effect on our stockholders ' equity and working capital . our failure to become and remain profitable could depress the market price of our class a common stock and could impair our ability to raise capital , expand our business , diversify our product offerings , or continue our operations . the probability of success for each of our product candidates and clinical programs and our ability to generate product revenue and become profitable depend upon a variety of factors , including the quality of the product candidate , clinical results , investment in the program , competition , manufacturing capability , commercial viability , and our collaborators ' ability to successfully execute our development and commercialization plans . we will also require additional capital through equity or debt financings in order to fund our operations and execute on our business plans , and there is no assurance that such financing will be available to us on commercially reasonable terms or at all . for a description of the numerous risks and uncertainties associated with product development and raising additional capital , see “ risk factors ” included in this annual report . financial operations overview revenue our revenue to date has been generated primarily from licensing fees received under our collaborative license agreements and reimbursements for expenses . we currently have no approved products and have not generated any revenue from the sale of products to date . in 81 the future , we may generate revenue from product sales , royalties on product sales , reimbursements for collaboration services under our current collaboration agree ments , or license fees , milestones , or other upfront payments if we enter into any new collaborations or license agreements . we expect that our future revenue will fluctuate from quarter to quarter for many reasons , including the uncertain timing and amoun t of any such payments and sales . our license and milestone revenue has been generated primarily from our collaborative licensing agreements with abbvie and khk and consists of upfront payments and milestone payments . under our revenue recognition policy , license revenue associated with upfront , non-refundable license payments received under the collaboration agreements with abbvie and khk are recognized ratably over the expected term of the performance obligations under the agreements , which extend through various periods beginning in 2017 and ending in 2026. license revenue recorded with respect to the collaboration agreements with abbvie consists solely of the recognition of deferred revenue . license revenue recorded with respect to the collaboration agreements with khk consists of the recognition of deferred revenue and reimbursement of supply costs . we also have other license revenue , which consists of milestone payments from a disease advocacy organization in 2015 , and other revenue , which consists of reimbursements from khk for expenses incurred to obtain drug supplies . research and development expenses the largest component of our total operating expenses has historically been our investment in research and development activities , including the clinical development of our product candidates . from our inception through december 31 , 2016 , we have incurred a total of $ 478.2 million in research and development expense , a majority of which relates to the development of bardoxolone methyl and omaveloxolone . we expect our research and development expense to continue to increase in the future as we advance our product candidates through clinical trials and expand our product candidate portfolio . the process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming and we consider the active management and development of our clinical pipeline to be crucial to our long-term success . the actual probability of success for each product candidate and preclinical program may be affected by a variety of factors , including the safety and efficacy data for product candidates , investment in the program , competition , manufacturing capability , and commercial viability . research and development expenses include : expenses incurred under agreements with clinical trial sites that conduct research and development activities on our behalf ; expenses incurred under contract research agreements and other agreements with third parties ; employee and consultant-related expenses , which include salaries , benefits , travel , and stock-based compensation ; laboratory and vendor expenses related to the execution of preclinical and non-clinical studies , and clinical trials ; the cost of acquiring , developing , manufacturing , and distributing clinical trial materials ; and facilities , depreciation , and other expenses , which include direct and allocated expenses for rent and maintenance of facilities , insurance , and other supply costs . research and development costs are expensed as incurred . costs for certain development activities such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites . story_separator_special_tag 3. if the arrangement includes a general right of return relative to the delivered item , delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor . 88 both the khk agreement and the abbvie l icense agreement were executed prior to january 1 , 2011 , and contained both delivered and undelivered elements in the arrangements . we view the key elements of these arrangements as being the exclusive licenses to khk and abbvie and participation on joint steering committees . our involvement in the joint steering committees established under each of these agreements was assessed to determine whether the involvement is an obligation or a right to participate . based on this assessment , we concluded that invol vement in the joint steering committees was a substantive deliverable of the arrangement . we concluded that objective and reliable evidence of the fair value of the undelivered element of these arrangements ( participation on joint steering committees ) did not exist ; therefore , we are accounting for these arrangements as a single unit of accounting . we are recognizing revenue associated with the nonrefundable , up-front license fees received under the khk agreement and the abbvie license agreement ratably over the expected term of the joint steering committee performance obligations , which we estimate will be delivered through december 2021 and november 2017 for the khk agreement and the abbvie license agreement , respectively . we continue to participate in regular meetings for the joint steering committees established under the khk agreement and the abbvie license agreement . at this time , we believe our participation in these committees continues to be a substantive performance obligation of the agreements and has concluded that no changes in the estimated revenue recognition periods are warranted . deferred revenue arises from the excess of cash received over cumulative revenue recognized over the terms of our continuing obligations . both the khk agreement and the abbvie license agreement contain certain clinical development , regulatory , and sales milestones . we evaluated each of these milestones at inception of the respective arrangements and concluded that they were substantive milestones , and accordingly , we will recognize payments related to the achievement of such milestones , if any , when milestones or net sales levels are achieved and collection is reasonably assured . factors considered in this determination included scientific and regulatory risks that must be overcome to achieve each milestone , the level of effort and investment required to achieve each milestone , and the monetary value attributed to each milestone . in october 2009 , the financial accounting standards board , or fasb , issued accounting standards update , or asu , no . 2009-13 , multiple-deliverable revenue arrangements , which amended accounting standards codification , or asc , 605-25 , revenue recognition , to eliminate the requirement to obtain vendor-specific objective evidence of the fair value of undelivered elements in order to separate the deliverables into different units of accounting . we adopted this revised guidance as of january 1 , 2011 , and applied this guidance to the collaboration agreement with abbvie executed in december 2011. this guidance is also required to be applied to any material modifications that may be made to the existing khk agreement or abbvie license agreement , of which there were none in 2016 or 2015. we identified the following deliverables within the collaboration agreement with abbvie : the various exclusive , co-exclusive , and non-exclusive license grants to abbvie by us related to our molecules and to jointly discovered new molecules and to us by abbvie related to jointly discovered new molecules ; the substantive participation in the joint research and development incubator committee established by the agreement ; and the collaboration agreement to jointly develop and commercialize second-generation nrf2 activators , including participation in the joint executive committee , joint development committees , and joint marketing committees established by the agreement . we evaluated the deliverables within the collaboration agreement with abbvie and concluded that the only delivered element of the arrangement , the license grants , does not have value to abbvie on a stand-alone basis . accordingly , we concluded that the various elements of the arrangement can not be separated into different units of accounting . therefore , we are recognizing revenue associated with the nonrefundable , up-front payment over the estimated 15-year term necessary to execute the joint research , development , and commercialization terms under the agreement . research and development costs all research and development costs are expensed as incurred , including costs for drug supplies used in research and development or clinical trials , property and equipment acquired specifically for a finite research and development project , and nonrefundable deposits incurred at the initiation of research and development activities . research and development costs consist principally of costs related to clinical trials managed directly by the company and through contract research organizations , manufacture of clinical drug products for clinical trials , preclinical study costs , discovery research expenses , facilities costs , salaries , and related expenses . 89 as part of the process of recording research and development costs , we are required to estimate and accrue expenses , the largest of which are research and development expenses . this process involves the following : communicating with appropriate internal personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost ; estimating and accruing expenses in our consolidated financial statements as of each balance sheet date based on facts and circumstances known to us at the time ; and periodically confirming the accuracy of our estimates with service providers and making adjustments , if necessary . examples of estimated research and development expenses that we accrue

