we are developing rhopressa as the first of a new class of compounds that is designed to lower iop in patients through novel moas . we believe that , if approved , rhopressa will represent the first new moas for lowering iop in patients with glaucoma in over 20 years . based on preclinical studies and clinical data to date , we expect that rhopressa , if approved , will have the potential to compete with non-pga ( prostaglandin analog ) products as a preferred adjunctive therapy to pgas , due to its targeting of the diseased tissue known as the trabecular meshwork , or tm , its demonstrated iop-lowering ability at consistent levels across tested baselines with once-daily dosing relative to currently marketed non-pga products , its potential synergistic effect with pga products , its once daily dosing and its lack of serious drug related adverse events . in addition , if approved , we believe that rhopressa may also potentially become a preferred therapy where pgas are contraindicated , for patients who do not respond to pgas , for patients who have lower iops but nevertheless present with glaucomatous damage to 66 the optic nerve , which is commonly referred to as “ low-tension ” or “ normal tension ” glaucoma , as well as for patients who choose to avoid the cosmetic issues associated with pga products . our second product candidate , once-daily roclatan ophthalmic solution ( netarsudil/latanoprost ophthalmic solution ) 0.02 % /0.005 % ( “ roclatan ” ) , is a fixed-dose combination of rhopressa and latanoprost , the most commonly prescribed drug for the treatment of patients with open-angle glaucoma . the first phase 3 registration trial for roclatan , named “ mercury 1 , ” which is a 12-month safety trial with a 90-day efficacy readout , commenced in september 2015 and , in september 2016 , we announced that mercury 1 achieved its primary efficacy endpoint of demonstrating superiority of roclatan to each of its components . the trial is designed to evaluate patients with maximum baseline iops ranging from above 20 mmhg to below 36 mmhg at nine measured time points over the 90-day efficacy period . in the 90-day efficacy results , the iop-lowering effect of roclatan exceeded that of the latanoprost monotherapy in a range of 1.3 mmhg to 2.5 mmhg and that of the rhopressa monotherapy in a range of 1.8 mmhg to 3.0 mmhg . roclatan reduced mean diurnal iops to 16 mmhg or lower in 61 % of patients , a significantly higher percentage than observed in the comparator arms in the study . the safety and tolerability results for roclatan tm from the 90-day efficacy period of mercury 1 showed no drug-related serious adverse events . the most common adverse event observed in the roclatan tm arm was conjunctival hyperemia , or eye redness , which was reported in approximately 50 % of patients , approximately 80 % of which was reported as mild . there were no drug-related serious adverse events for any of the comparators in the trial . we expect to report mercury 1 topline 12-month safety data in the third quarter of 2017. the second phase 3 registration trial for roclatan , named “ mercury 2 , ” commenced in march 2016. mercury 2 is a 90-day efficacy and safety trial designed to demonstrate superiority of roclatan to each of its components . we expect to report the topline 90-day efficacy data for mercury 2 in the second quarter of 2017. if both mercury 1 and mercury 2 are successful , we expect to submit an nda for roclatan in late 2017 or early 2018 , which may be prior to obtaining approval for rhopressa . we are permitted to submit the roclatan nda while the rhopressa is still being reviewed by the fda . mercury 1 and mercury 2 will also be used for european approval of roclatan , and we plan to initiate a third phase 3 registration trial for roclatan , named “ mercury 3 , ” in europe in mid-2017 . mercury 3 will be designed to compare roclatan to ganfort® , a fixed-dose combination product of bimatoprost and timolol marketed in europe , which if successful , should improve our commercialization prospects in that region . we believe , based on our preclinical studies and clinical trials to date , that roclatan , if approved , will be the only glaucoma product that covers the full spectrum of currently known iop-lowering moas , giving it the potential to provide a greater iop-lowering effect than any currently marketed glaucoma product . therefore , we believe that roclatan tm , if approved , could compete with both pga and non-pga therapies for patients requiring maximal iop lowering , including those with higher iops and those who present with significant disease progression despite currently available therapies . our stated objective is to build a major ophthalmic pharmaceutical company . in addition to our primary product candidates , rhopressa and roclatan , we continue to explore the impact of rhopressa on the diseased tm . we have issued several research updates on preclinical results demonstrating that rhopressa may have the potential for disease modification , including stopping and potentially reversing fibrosis in the tm , and also increasing perfusion in the trabecular outflow pathway thus increasing both drainage and the delivery of nutrients to the diseased tissue . we are also conducting ongoing research to evaluate injectable sustained release formulation technologies with the potential capability of delivering rhopressa internally in the eye over several months for the treatment of glaucoma . we are also evaluating possible uses of our existing proprietary portfolio of rho kinase inhibitors beyond glaucoma . story_separator_special_tag fair value measurements we record certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability ( an exit price ) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants . the fair value of our financial instruments , including cash and cash equivalents , short-term investments , other current assets , accounts payable and accrued expenses approximate their respective carrying values due to the short-term nature of these instruments . the carrying amounts of long-term investments represent their estimated fair values . the estimated fair value of the 2014 convertible notes was $ 209.6 million and $ 140.1 million as of december 31 , 2016 and 2015 , respectively . the increase in the estimated fair value of the 2014 convertible notes was primarily attributable to the change in the closing price of our common stock on december 31 , 2016 as compared to december 31 , 2015. stock-based compensation we recognize compensation costs related to stock options granted to employees ratably over the requisite service period , which in most cases is the vesting period of the award for employees , based on the estimated fair value of the awards on the date of grant . compensation expense for options granted to non-employees is determined as the fair value of consideration received or the fair value of the equity instruments issued , whichever is more reliably measured . the fair value of the awards granted to non-employees is re-measured each period until the related service is complete . compensation expense related to restricted stock awards is based on the market value of our common stock on the grant date and is expensed ratably over the vesting period . compensation expense for stock purchase rights under our employee stock purchase plan is measured and recognized on the date that we become obligated to issue shares of our common stock and is based on the difference between the fair value of our common stock and the purchase price on such date . stock-based compensation expense was $ 16.8 million , $ 12.9 million and $ 9.2 million for the years ended december 31 , 2016 , 2015 and 2014 , respectively . as of december 31 , 2016 , we had $ 29.0 million of unrecognized compensation expense . the intrinsic value of all stock options outstanding as of december 31 , 2016 was $ 123.6 million , of which $ 88.7 million and $ 34.9 million related to stock options that were vested and unvested , respectively , at that date . significant factors , assumptions and methodologies used in determining fair value determining the appropriate fair value measurement of stock-based awards requires the use of subjective assumptions . in the absence of a public trading market for our common stock prior to the completion of our ipo , we conducted periodic assessments of the valuation of our common stock . the determination of the fair value measurement of options using the black-scholes option pricing model is affected by our estimated common stock fair values as well as assumptions regarding a number of other subjective variables . these other variables include the expected term of the options , our expected stock price volatility over the expected term of the options , stock option exercise and cancellation behaviors , risk-free interest rates and expected dividends . we estimated the fair value of stock options at the grant date using the following assumptions : fair value of our common stock . for all stock options granted after the completion of our ipo , the fair value for our underlying common stock is determined using the closing price on the date of grant as reported on the nasdaq global market . for all stock options granted prior to the completion of our ipo , the fair value for our underlying common stock was determined by our board of directors in its sole discretion based on recommendations from management and taking into account advice and assistance provided by third-party valuation consultants engaged to assist us in connection with such valuations . volatility . we calculate expected volatility based on our historical volatility in combination with reported data for a selected group of similar publicly traded companies , or guideline peer group , for which the relevant historical information is available . we selected representative companies from the pharmaceutical industry with similar characteristics to us , including stage of product development and therapeutic focus . we will continue to use a combination of our historical volatility and the guideline peer group volatility information for the foreseeable future . expected term . we used the simplified method as prescribed by the sec staff accounting bulletin no . 107 , share-based payment , as we do not have sufficient historical exercise and post-vesting termination data to 72 provide a reasonable basis upon which to estimate the expected term of stock options granted to employees . the simplified method is based on the vesting period and the contractual term for each grant , or for each vesting-tranche for awards with graded vesting . the midpoint between the vesting date and the maximum contractual expiration date is used as the expected term under this method . risk-free rate . the risk-free interest rate is based on the yields of u.s. treasury securities with maturities similar to the expected time to exercise . forfeiture . forfeitures are estimated such that we only recognize expense for the shares expected to vest , and adjustments are made if actual forfeitures differ from those estimates . we estimate our annual forfeiture rates based on our historical analysis of actual stock option forfeitures and our future expectations . dividend yield . except for a one-time cash dividend related to the spin-off of certain non-core intellectual property that occurred in 2012 , we have never declared or paid any

liquidity and capital resources since our inception , we have funded operations primarily through the sale of equity securities and the issuance of convertible notes . we have incurred losses and experienced negative operating cash flows since our inception and anticipate that we will continue to incur losses until such a time when our product candidates are commercially successful , if at all . prior to our ipo , we raised net cash proceeds of $ 78.6 million from the private placement of convertible preferred stock and convertible notes . prior to and in connection with our ipo , all outstanding shares of convertible preferred stock and all convertible notes were converted into shares of common stock . on october 30 , 2013 , we completed our ipo and issued 7,728,000 shares of our common stock at an ipo price of $ 10.00 per share . we received net proceeds from the ipo of approximately $ 68.3 million . on september 30 , 2014 , we issued $ 125.0 million aggregate principal amount of the 2014 convertible notes , of which we received net proceeds of approximately $ 122.9 million . on november 3 , 2014 , we filed a shelf registration statement on form s-3 ( “ the 2014 registration statement ” ) that permitted the offering , issuance and sale by us of up to a maximum aggregate offering price of $150.0 million of our common stock and permits sales of common stock by certain selling stockholders .


 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 operations primarily through the sale of equity securities and the issuance of convertible notes . we have incurred losses and experienced negative operating cash flows since our inception and anticipate that we will continue to incur losses until such a time when our product candidates are commercially successful , if at all . prior to our ipo , we raised net cash proceeds of $ 78.6 million from the private placement of convertible preferred stock and convertible notes . prior to and in connection with our ipo , all outstanding shares of convertible preferred stock and all convertible notes were converted into shares of common stock . on october 30 , 2013 , we completed our ipo and issued 7,728,000 shares of our common stock at an ipo price of $ 10.00 per share . we received net proceeds from the ipo of approximately $ 68.3 million . on september 30 , 2014 , we issued $ 125.0 million aggregate principal amount of the 2014 convertible notes , of which we received net proceeds of approximately $ 122.9 million . on november 3 , 2014 , we filed a shelf registration statement on form s-3 ( “ the 2014 registration statement ” ) that permitted the offering , issuance and sale by us of up to a maximum aggregate offering price of $150.0 million of our common stock and permits sales of common stock by certain selling stockholders .
```    
 Suspicious Activity Report : we are developing rhopressa as the first of a new class of compounds that is designed to lower iop in patients through novel moas . we believe that , if approved , rhopressa will represent the first new moas for lowering iop in patients with glaucoma in over 20 years . based on preclinical studies and clinical data to date , we expect that rhopressa , if approved , will have the potential to compete with non-pga ( prostaglandin analog ) products as a preferred adjunctive therapy to pgas , due to its targeting of the diseased tissue known as the trabecular meshwork , or tm , its demonstrated iop-lowering ability at consistent levels across tested baselines with once-daily dosing relative to currently marketed non-pga products , its potential synergistic effect with pga products , its once daily dosing and its lack of serious drug related adverse events . in addition , if approved , we believe that rhopressa may also potentially become a preferred therapy where pgas are contraindicated , for patients who do not respond to pgas , for patients who have lower iops but nevertheless present with glaucomatous damage to 66 the optic nerve , which is commonly referred to as “ low-tension ” or “ normal tension ” glaucoma , as well as for patients who choose to avoid the cosmetic issues associated with pga products . our second product candidate , once-daily roclatan ophthalmic solution ( netarsudil/latanoprost ophthalmic solution ) 0.02 % /0.005 % ( “ roclatan ” ) , is a fixed-dose combination of rhopressa and latanoprost , the most commonly prescribed drug for the treatment of patients with open-angle glaucoma . the first phase 3 registration trial for roclatan , named “ mercury 1 , ” which is a 12-month safety trial with a 90-day efficacy readout , commenced in september 2015 and , in september 2016 , we announced that mercury 1 achieved its primary efficacy endpoint of demonstrating superiority of roclatan to each of its components . the trial is designed to evaluate patients with maximum baseline iops ranging from above 20 mmhg to below 36 mmhg at nine measured time points over the 90-day efficacy period . in the 90-day efficacy results , the iop-lowering effect of roclatan exceeded that of the latanoprost monotherapy in a range of 1.3 mmhg to 2.5 mmhg and that of the rhopressa monotherapy in a range of 1.8 mmhg to 3.0 mmhg . roclatan reduced mean diurnal iops to 16 mmhg or lower in 61 % of patients , a significantly higher percentage than observed in the comparator arms in the study . the safety and tolerability results for roclatan tm from the 90-day efficacy period of mercury 1 showed no drug-related serious adverse events . the most common adverse event observed in the roclatan tm arm was conjunctival hyperemia , or eye redness , which was reported in approximately 50 % of patients , approximately 80 % of which was reported as mild . there were no drug-related serious adverse events for any of the comparators in the trial . we expect to report mercury 1 topline 12-month safety data in the third quarter of 2017. the second phase 3 registration trial for roclatan , named “ mercury 2 , ” commenced in march 2016. mercury 2 is a 90-day efficacy and safety trial designed to demonstrate superiority of roclatan to each of its components . we expect to report the topline 90-day efficacy data for mercury 2 in the second quarter of 2017. if both mercury 1 and mercury 2 are successful , we expect to submit an nda for roclatan in late 2017 or early 2018 , which may be prior to obtaining approval for rhopressa . we are permitted to submit the roclatan nda while the rhopressa is still being reviewed by the fda . mercury 1 and mercury 2 will also be used for european approval of roclatan , and we plan to initiate a third phase 3 registration trial for roclatan , named “ mercury 3 , ” in europe in mid-2017 . mercury 3 will be designed to compare roclatan to ganfort® , a fixed-dose combination product of bimatoprost and timolol marketed in europe , which if successful , should improve our commercialization prospects in that region . we believe , based on our preclinical studies and clinical trials to date , that roclatan , if approved , will be the only glaucoma product that covers the full spectrum of currently known iop-lowering moas , giving it the potential to provide a greater iop-lowering effect than any currently marketed glaucoma product . therefore , we believe that roclatan tm , if approved , could compete with both pga and non-pga therapies for patients requiring maximal iop lowering , including those with higher iops and those who present with significant disease progression despite currently available therapies . our stated objective is to build a major ophthalmic pharmaceutical company . in addition to our primary product candidates , rhopressa and roclatan , we continue to explore the impact of rhopressa on the diseased tm . we have issued several research updates on preclinical results demonstrating that rhopressa may have the potential for disease modification , including stopping and potentially reversing fibrosis in the tm , and also increasing perfusion in the trabecular outflow pathway thus increasing both drainage and the delivery of nutrients to the diseased tissue . we are also conducting ongoing research to evaluate injectable sustained release formulation technologies with the potential capability of delivering rhopressa internally in the eye over several months for the treatment of glaucoma . we are also evaluating possible uses of our existing proprietary portfolio of rho kinase inhibitors beyond glaucoma . story_separator_special_tag fair value measurements we record certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability ( an exit price ) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants . the fair value of our financial instruments , including cash and cash equivalents , short-term investments , other current assets , accounts payable and accrued expenses approximate their respective carrying values due to the short-term nature of these instruments . the carrying amounts of long-term investments represent their estimated fair values . the estimated fair value of the 2014 convertible notes was $ 209.6 million and $ 140.1 million as of december 31 , 2016 and 2015 , respectively . the increase in the estimated fair value of the 2014 convertible notes was primarily attributable to the change in the closing price of our common stock on december 31 , 2016 as compared to december 31 , 2015. stock-based compensation we recognize compensation costs related to stock options granted to employees ratably over the requisite service period , which in most cases is the vesting period of the award for employees , based on the estimated fair value of the awards on the date of grant . compensation expense for options granted to non-employees is determined as the fair value of consideration received or the fair value of the equity instruments issued , whichever is more reliably measured . the fair value of the awards granted to non-employees is re-measured each period until the related service is complete . compensation expense related to restricted stock awards is based on the market value of our common stock on the grant date and is expensed ratably over the vesting period . compensation expense for stock purchase rights under our employee stock purchase plan is measured and recognized on the date that we become obligated to issue shares of our common stock and is based on the difference between the fair value of our common stock and the purchase price on such date . stock-based compensation expense was $ 16.8 million , $ 12.9 million and $ 9.2 million for the years ended december 31 , 2016 , 2015 and 2014 , respectively . as of december 31 , 2016 , we had $ 29.0 million of unrecognized compensation expense . the intrinsic value of all stock options outstanding as of december 31 , 2016 was $ 123.6 million , of which $ 88.7 million and $ 34.9 million related to stock options that were vested and unvested , respectively , at that date . significant factors , assumptions and methodologies used in determining fair value determining the appropriate fair value measurement of stock-based awards requires the use of subjective assumptions . in the absence of a public trading market for our common stock prior to the completion of our ipo , we conducted periodic assessments of the valuation of our common stock . the determination of the fair value measurement of options using the black-scholes option pricing model is affected by our estimated common stock fair values as well as assumptions regarding a number of other subjective variables . these other variables include the expected term of the options , our expected stock price volatility over the expected term of the options , stock option exercise and cancellation behaviors , risk-free interest rates and expected dividends . we estimated the fair value of stock options at the grant date using the following assumptions : fair value of our common stock . for all stock options granted after the completion of our ipo , the fair value for our underlying common stock is determined using the closing price on the date of grant as reported on the nasdaq global market . for all stock options granted prior to the completion of our ipo , the fair value for our underlying common stock was determined by our board of directors in its sole discretion based on recommendations from management and taking into account advice and assistance provided by third-party valuation consultants engaged to assist us in connection with such valuations . volatility . we calculate expected volatility based on our historical volatility in combination with reported data for a selected group of similar publicly traded companies , or guideline peer group , for which the relevant historical information is available . we selected representative companies from the pharmaceutical industry with similar characteristics to us , including stage of product development and therapeutic focus . we will continue to use a combination of our historical volatility and the guideline peer group volatility information for the foreseeable future . expected term . we used the simplified method as prescribed by the sec staff accounting bulletin no . 107 , share-based payment , as we do not have sufficient historical exercise and post-vesting termination data to 72 provide a reasonable basis upon which to estimate the expected term of stock options granted to employees . the simplified method is based on the vesting period and the contractual term for each grant , or for each vesting-tranche for awards with graded vesting . the midpoint between the vesting date and the maximum contractual expiration date is used as the expected term under this method . risk-free rate . the risk-free interest rate is based on the yields of u.s. treasury securities with maturities similar to the expected time to exercise . forfeiture . forfeitures are estimated such that we only recognize expense for the shares expected to vest , and adjustments are made if actual forfeitures differ from those estimates . we estimate our annual forfeiture rates based on our historical analysis of actual stock option forfeitures and our future expectations . dividend yield . except for a one-time cash dividend related to the spin-off of certain non-core intellectual property that occurred in 2012 , we have never declared or paid any

