pursuant to the agreement , the seller agreed to irrevocably assign , sell , grant , transfer and convey , and ccphc agreed to accept and acquire , the exclusive right , title and interest in and to certain patents owned by the seller ( “ assigned ip ” ) , subject to the terms and conditions set forth in the agreement . as consideration for the assigned ip , the seller shall receive ( i ) payment in the amount of $ 250,000 from ccphc and ( ii ) 250,000 shares of common stock of the company , par value $ 0.0001 per share ( the “ consideration shares ” ) , with piggyback registration rights . the consideration shares were issued by the company to the seller , subject to the terms and conditions of a lock-up agreement . as a condition to the agreement , the seller agreed to enter into a lock-up agreement with the company , which lock-up agreement is included as an exhibit to the agreement ( the “ lock-up agreement ” ) . pursuant to the lock-up agreement , the seller shall not directly or indirectly offer , sell , pledge or transfer , or otherwise dispose of , the consideration shares for a period of 180 days commencing on january 11 , 2018 and ending on july 11 , 2018 ; provided , however , upon the effective date of the registration for resale of the consideration shares , and on each day thereafter , one twentieth ( 1/20 ) of the consideration shares shall be released from the restrictions contained in the lock-up agreement and may be freely sold , transferred , traded or otherwise disposed of . notwithstanding the foregoing , in the event that the consideration shares , in whole or in part , are not registered for resale on the 6-month anniversary of the date of issuance of the consideration shares ( “ six-month date ” ) , the holders thereof may sell , transfer , trade or otherwise dispose of one twentieth ( 1/20 ) of the consideration shares on the six-month date and on each day thereafter in addition , the company agreed to issue 25,000 shares of the company 's common stock to andrew kennedy lang , one of the named inventors of the patents , in exchange for consulting services , and 50,000 shares of the company 's common stock to another individual in exchange for consulting services , in connection with the acquisition of the assigned ip . lease and purchase of digital asset mining servers on february 7 , 2018 , marathon crypto mining , inc. ( “ mcm ” ) , a nevada corporation and wholly owned subsidiary of the company , entered into an agreement to acquire 1,400 bitmain 's antminer s9 miners ( “ antminer s9s ” ) . on february 12 , 2018 , in connection with the intended mining operations of mcm , the company assumed a lease contract dated november 11 , 2017 ( the “ lease agreement ” ) by and between 9349-0001 quebec inc. ( the “ lessor ” ) and blocespace inc. , formerly known as cryptoespace inc. ( the “ lessee ” ) . pursuant to the lease agreement , among other things , the lessee leases a building of 26,700 square feet ( the “ property ” ) in quebec , canada , for an initial term of five ( 5 ) years ( the “ term ” ) , commencing on december 1 , 2017 and terminating on november 30 , 2022. the lessee shall pay a monthly rent of $ 10,012.50 plus tax , or an annual rent of $ 120,150.00 plus tax ( “ yearly rent ” ) . at the signing of the lease agreement , the lessee paid the lessor a deposit equal to the yearly rent which amount will be dispersed during the term as set forth in the lease agreement . the lessee assigned the lease agreement to mcm pursuant to an assignment and assumption agreement ( the “ assignment ” ) by and between the company and the lessee 's parent company , bloctechnologies canada inc. subject to the terms and conditions of the assignment , mcm agreed to observe all the covenants and conditions of the lease agreement , including the payment of all rents due . the company shall be responsible for all necessary capital expenditures in connection with capital improvements to the property to set up mcm 's mining operations . the 1,400 antminer s9s were delivered to the property and installation commenced on or about march 7 , 2018 , with the commencement of digital asset mining shortly thereafter . annual shareholder meeting on march 7 , 2018 , the company held its 2017 annual meeting of shareholders ( the “ meeting ” ) . as of the record date for the meeting , 15,062,386 shares of common and preferred stock , on an as converted basis and eligible to vote , were issued and outstanding . a total of 11,448,855 shares of common and preferred stock , constituting a quorum , were present and accounted for at the meeting . at the meeting , the company 's shareholders approved the following proposals : 41 ( i ) the approval of the issuance of securities in one or more non-public offerings where the maximum discount at which securities will be offered will be equivalent to a discount of up to 25 % below the market price of our common stock , as required by and in accordance with nasdaq marketplace rule 5635 ( d ) ; the proposal was approved , and the votes were cast as follows : for against abstain 5,209,944 276,643 56,935 ( ii ) the approval of any change of control that could result from the potential issuance of securities in the non-public offerings following approval of proposal no . story_separator_special_tag accordingly , actual results could vary significantly from such estimates . the company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset . the company did not record any impairment charges on its long-lived assets , other than its definite-lived intangible assets , as identified above , during the years ended december 31 , 2017 and 2016. fair value measurement the fair value measurement guidance clarifies that fair value is an exit price , representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants . as such , fair value is a market-based measurement that should be determined based on assumptions that market participants would use in the valuation of an asset or liability . it establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value . the hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities ( level 1 measurements ) and the lowest priority to unobservable inputs ( level 3 measurements ) . the three levels of the fair value hierarchy under the fair value measurement guidance are described below : - level 1 - unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities ; - level 2 - quoted prices in markets that are not active , or inputs that are observable , either directly or indirectly , for substantially the full term of the asset or liability ; or - level 3 - prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable ( supported by little or no market activity ) . stock-based compensation stock-based compensation is accounted for based on the requirements of the share-based payment topic of asc 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award ( presumptively , the vesting period ) . the asc also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award . as stock-based compensation expense is recognized based on awards expected to vest , forfeitures are also estimated at the time of grant and revised , if necessary , in subsequent periods if actual forfeitures differ from those estimates . for the year ended december 31 , 2017 , the expected forfeiture rate was 12.75 % , which resulted in a decrease in expense of $ 108,644 , recognized in the company 's compensation expenses and for the year ended december 31 , 2016 , the expected forfeiture rate was 2.4 % , which resulted in a decrease in expense of $ 44,146 , recognized in the company 's compensation expenses . the company will continue to re-assess the impact of forfeitures if actual forfeitures increase in future quarters . 45 pursuant to asc topic 505-50 , for share-based payments to consultants and other third parties , compensation expense is determined at the “ measurement date . ” the expense is recognized over the vesting period of the award . until the measurement date is reached , the total amount of compensation expense remains uncertain . the company initially records compensation expense based on the fair value of the award at the reporting date . the volatility is based on historical volatilities of companies in the industry and , by statistical analysis of the daily share-pricing model . the volatility of stock-based compensation at any point in time is based on historical volatility of the company for the period of time commensurate with the lifespan of the underlying stock option grant . recent accounting pronouncements in july 2017 , the fasb issued asu 2017-11 , “ earnings per share ( topic 260 ) distinguishing liabilities from equity ( topic 480 ) derivatives and hedging ( topic 815 ) , ” which addresses the complexity of accounting for certain financial instruments with down round features . down round features are features of certain equity-linked instruments ( or embedded features ) that result in the strike price being reduced on the basis of the pricing of future equity offerings . current accounting guidance creates cost and complexity for entities that issue financial instruments ( such as warrants and convertible instruments ) with down round features that require fair value measurement of the entire instrument or conversion option . for public business entities , the amendments in part i of this update are effective for fiscal years , and interim periods within those fiscal years , beginning after december 15 , 2018 with early adoption permitted . the company is currently evaluating the impact this standard will have on its disclosures and presentation of instruments with down round features and the impact it will have on the company 's financial statements . in may 2017 , the fasb issued asu no . 2017-09 , compensation - stock compensation ( topic 718 ) : scope of modification accounting . this asu provides clarity about which changes to the terms or conditions of a share-based payment award require the application of modification accounting . specifically , asu 2017-09 clarifies that changes to the terms or conditions of an award should be accounted for as a modification unless all of the following are met : 1 ) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified , 2 ) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and 3

liquidity and capital resources liquidity is the ability of a company to generate funds to support its current and future operations , satisfy its obligations , and otherwise operate on an ongoing basis . at december 31 , 2017 the company 's cash balances totaled $ 14,948,529 compared to $ 4,998,314 at december 31 , 2016. the increase in the cash balance of $ 9,950,215 resulted primarily from the company 's net cash provided by operations and various financing transactions as set forth below in more detail . net working capital improved from a deficit of $ ( 14,939,583 ) at december 31 , 2016 to a surplus of $ 7,378,110 , which represents an improvement of $ 22,317,693. the increase in the net working capital deficit resulted primarily from cash proceeds received pursuant to various financing transactions as set forth below in more detail , cancellation of all indebtedness to fortress , reduction of the company 's accounts payable at a discount , elimination of the clouding earn-out liability and conversion of the remaining portion of the convertible debt issued in october 2014 to equity . this was partially offset by the increased value of a warrant liability associated with warrants issued in the december 2016 financing transaction .


 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 liquidity is the ability of a company to generate funds to support its current and future operations , satisfy its obligations , and otherwise operate on an ongoing basis . at december 31 , 2017 the company 's cash balances totaled $ 14,948,529 compared to $ 4,998,314 at december 31 , 2016. the increase in the cash balance of $ 9,950,215 resulted primarily from the company 's net cash provided by operations and various financing transactions as set forth below in more detail . net working capital improved from a deficit of $ ( 14,939,583 ) at december 31 , 2016 to a surplus of $ 7,378,110 , which represents an improvement of $ 22,317,693. the increase in the net working capital deficit resulted primarily from cash proceeds received pursuant to various financing transactions as set forth below in more detail , cancellation of all indebtedness to fortress , reduction of the company 's accounts payable at a discount , elimination of the clouding earn-out liability and conversion of the remaining portion of the convertible debt issued in october 2014 to equity . this was partially offset by the increased value of a warrant liability associated with warrants issued in the december 2016 financing transaction .
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 Suspicious Activity Report : pursuant to the agreement , the seller agreed to irrevocably assign , sell , grant , transfer and convey , and ccphc agreed to accept and acquire , the exclusive right , title and interest in and to certain patents owned by the seller ( “ assigned ip ” ) , subject to the terms and conditions set forth in the agreement . as consideration for the assigned ip , the seller shall receive ( i ) payment in the amount of $ 250,000 from ccphc and ( ii ) 250,000 shares of common stock of the company , par value $ 0.0001 per share ( the “ consideration shares ” ) , with piggyback registration rights . the consideration shares were issued by the company to the seller , subject to the terms and conditions of a lock-up agreement . as a condition to the agreement , the seller agreed to enter into a lock-up agreement with the company , which lock-up agreement is included as an exhibit to the agreement ( the “ lock-up agreement ” ) . pursuant to the lock-up agreement , the seller shall not directly or indirectly offer , sell , pledge or transfer , or otherwise dispose of , the consideration shares for a period of 180 days commencing on january 11 , 2018 and ending on july 11 , 2018 ; provided , however , upon the effective date of the registration for resale of the consideration shares , and on each day thereafter , one twentieth ( 1/20 ) of the consideration shares shall be released from the restrictions contained in the lock-up agreement and may be freely sold , transferred , traded or otherwise disposed of . notwithstanding the foregoing , in the event that the consideration shares , in whole or in part , are not registered for resale on the 6-month anniversary of the date of issuance of the consideration shares ( “ six-month date ” ) , the holders thereof may sell , transfer , trade or otherwise dispose of one twentieth ( 1/20 ) of the consideration shares on the six-month date and on each day thereafter in addition , the company agreed to issue 25,000 shares of the company 's common stock to andrew kennedy lang , one of the named inventors of the patents , in exchange for consulting services , and 50,000 shares of the company 's common stock to another individual in exchange for consulting services , in connection with the acquisition of the assigned ip . lease and purchase of digital asset mining servers on february 7 , 2018 , marathon crypto mining , inc. ( “ mcm ” ) , a nevada corporation and wholly owned subsidiary of the company , entered into an agreement to acquire 1,400 bitmain 's antminer s9 miners ( “ antminer s9s ” ) . on february 12 , 2018 , in connection with the intended mining operations of mcm , the company assumed a lease contract dated november 11 , 2017 ( the “ lease agreement ” ) by and between 9349-0001 quebec inc. ( the “ lessor ” ) and blocespace inc. , formerly known as cryptoespace inc. ( the “ lessee ” ) . pursuant to the lease agreement , among other things , the lessee leases a building of 26,700 square feet ( the “ property ” ) in quebec , canada , for an initial term of five ( 5 ) years ( the “ term ” ) , commencing on december 1 , 2017 and terminating on november 30 , 2022. the lessee shall pay a monthly rent of $ 10,012.50 plus tax , or an annual rent of $ 120,150.00 plus tax ( “ yearly rent ” ) . at the signing of the lease agreement , the lessee paid the lessor a deposit equal to the yearly rent which amount will be dispersed during the term as set forth in the lease agreement . the lessee assigned the lease agreement to mcm pursuant to an assignment and assumption agreement ( the “ assignment ” ) by and between the company and the lessee 's parent company , bloctechnologies canada inc. subject to the terms and conditions of the assignment , mcm agreed to observe all the covenants and conditions of the lease agreement , including the payment of all rents due . the company shall be responsible for all necessary capital expenditures in connection with capital improvements to the property to set up mcm 's mining operations . the 1,400 antminer s9s were delivered to the property and installation commenced on or about march 7 , 2018 , with the commencement of digital asset mining shortly thereafter . annual shareholder meeting on march 7 , 2018 , the company held its 2017 annual meeting of shareholders ( the “ meeting ” ) . as of the record date for the meeting , 15,062,386 shares of common and preferred stock , on an as converted basis and eligible to vote , were issued and outstanding . a total of 11,448,855 shares of common and preferred stock , constituting a quorum , were present and accounted for at the meeting . at the meeting , the company 's shareholders approved the following proposals : 41 ( i ) the approval of the issuance of securities in one or more non-public offerings where the maximum discount at which securities will be offered will be equivalent to a discount of up to 25 % below the market price of our common stock , as required by and in accordance with nasdaq marketplace rule 5635 ( d ) ; the proposal was approved , and the votes were cast as follows : for against abstain 5,209,944 276,643 56,935 ( ii ) the approval of any change of control that could result from the potential issuance of securities in the non-public offerings following approval of proposal no . story_separator_special_tag accordingly , actual results could vary significantly from such estimates . the company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset . the company did not record any impairment charges on its long-lived assets , other than its definite-lived intangible assets , as identified above , during the years ended december 31 , 2017 and 2016. fair value measurement the fair value measurement guidance clarifies that fair value is an exit price , representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants . as such , fair value is a market-based measurement that should be determined based on assumptions that market participants would use in the valuation of an asset or liability . it establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value . the hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities ( level 1 measurements ) and the lowest priority to unobservable inputs ( level 3 measurements ) . the three levels of the fair value hierarchy under the fair value measurement guidance are described below : - level 1 - unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities ; - level 2 - quoted prices in markets that are not active , or inputs that are observable , either directly or indirectly , for substantially the full term of the asset or liability ; or - level 3 - prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable ( supported by little or no market activity ) . stock-based compensation stock-based compensation is accounted for based on the requirements of the share-based payment topic of asc 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award ( presumptively , the vesting period ) . the asc also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award . as stock-based compensation expense is recognized based on awards expected to vest , forfeitures are also estimated at the time of grant and revised , if necessary , in subsequent periods if actual forfeitures differ from those estimates . for the year ended december 31 , 2017 , the expected forfeiture rate was 12.75 % , which resulted in a decrease in expense of $ 108,644 , recognized in the company 's compensation expenses and for the year ended december 31 , 2016 , the expected forfeiture rate was 2.4 % , which resulted in a decrease in expense of $ 44,146 , recognized in the company 's compensation expenses . the company will continue to re-assess the impact of forfeitures if actual forfeitures increase in future quarters . 45 pursuant to asc topic 505-50 , for share-based payments to consultants and other third parties , compensation expense is determined at the “ measurement date . ” the expense is recognized over the vesting period of the award . until the measurement date is reached , the total amount of compensation expense remains uncertain . the company initially records compensation expense based on the fair value of the award at the reporting date . the volatility is based on historical volatilities of companies in the industry and , by statistical analysis of the daily share-pricing model . the volatility of stock-based compensation at any point in time is based on historical volatility of the company for the period of time commensurate with the lifespan of the underlying stock option grant . recent accounting pronouncements in july 2017 , the fasb issued asu 2017-11 , “ earnings per share ( topic 260 ) distinguishing liabilities from equity ( topic 480 ) derivatives and hedging ( topic 815 ) , ” which addresses the complexity of accounting for certain financial instruments with down round features . down round features are features of certain equity-linked instruments ( or embedded features ) that result in the strike price being reduced on the basis of the pricing of future equity offerings . current accounting guidance creates cost and complexity for entities that issue financial instruments ( such as warrants and convertible instruments ) with down round features that require fair value measurement of the entire instrument or conversion option . for public business entities , the amendments in part i of this update are effective for fiscal years , and interim periods within those fiscal years , beginning after december 15 , 2018 with early adoption permitted . the company is currently evaluating the impact this standard will have on its disclosures and presentation of instruments with down round features and the impact it will have on the company 's financial statements . in may 2017 , the fasb issued asu no . 2017-09 , compensation - stock compensation ( topic 718 ) : scope of modification accounting . this asu provides clarity about which changes to the terms or conditions of a share-based payment award require the application of modification accounting . specifically , asu 2017-09 clarifies that changes to the terms or conditions of an award should be accounted for as a modification unless all of the following are met : 1 ) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified , 2 ) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and 3

