see liquidity and capital resources. factors affecting our results of operations we expect our expenses to increase substantially in connection with our ongoing activities , particularly as we continue to invest in research and development and commence our phase 3 program of trabodenoson in 2015. we also expect our expenses to increase as we complete formulation and manufacturing activities of our fdc product candidate and commence clinical trials in 2016. in addition , if we successfully launch trabodenoson as a monotherapy or any other product candidates , we expect to incur significant commercialization expenses related to sales , marketing , manufacturing and distribution of our products . furthermore , we expect to incur additional costs associated with operating as a public company . we expect operating expenses to increase substantially to support an increased infrastructure and expanded operations . 85 accordingly , we will need to obtain additional funding in connection with our continuing operations . adequate additional financing may not be available to us on acceptable terms , or at all . if we are unable to raise capital when needed or on attractive terms , we would be forced to delay , reduce or eliminate our research and development programs or any potential future commercialization efforts . we will need to generate significant revenues to achieve profitability , and we may never do so . as a result , we expect to incur significant expenses and increasing operating losses for the foreseeable future . financial overview revenue we have not generated any revenue from product sales since our inception and do not expect to generate any revenue from the sale of products in the near future . our ability to generate revenues will depend on the successful development , regulatory approval and commercialization of trabodenoson and any other future product candidates . historically , we generated revenues primarily from research grants received from governmental agencies and private companies as well as revenue earned under licensing and research collaboration contracts that were unrelated to our current research and development programs . research and development expenses research and development expenses consist primarily of the costs associated with our research and development activities , conducting preclinical studies and clinical trials and activities related to regulatory filings . our research and development expenses consist of : direct clinical and non-clinical expenses which include expenses incurred under agreements with contract research organizations , or cros , contract manufacturing organizations and costs associated with preclinical activities and development activities and costs associated with regulatory activities ; employee and consultant-related expenses , including salaries , benefits , travel and stock-based compensation expense for research and development personnel as well as consultants that conduct and support clinical trials and preclinical studies ; and facilities and other expenses , which include direct and allocated expenses for rent and maintenance of facilities , insurance and other supplies used in research and development activities . we expense research and development costs as incurred . we record costs for some development activities , such as clinical trials , based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment , clinical site activations or other information our vendors provide to us . the following table summarizes our research and development expenses by type of activity for the years ended december 31 , 2014 , 2013 and 2012 : replace_table_token_7_th 86 all research and development efforts and expenses for the years ended december 31 , 2014 , 2013 and 2012 relate to the development of trabodenoson . we do not track trabodenoson -related expenses by product candidate . all expenses related to trabodenoson as a monotherapy also benefit the fdc product candidate trabodenoson with latanoprost . we have expended approximately $ 41 million for external development costs related to trabodenoson from inception through december 31 , 2014. the process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming and the successful development of our product candidates is highly uncertain . our future research and development expenses will depend on the clinical success of our product candidates , as well as ongoing assessments of the commercial potential of such product candidates . in addition , we can not forecast with any degree of certainty which product candidates may be subject to future collaborations , when such arrangements will be secured , if at all , and to what degree such arrangements would affect our development plans and capital requirements . we expect our research and development expenses to increase in future periods for the foreseeable future as we seek to complete development of our lead product candidate , trabodenoson , further develop our other product candidates and expand our research and development personnel to focus on these product candidate development activities . the successful development and commercialization of our product candidates is highly uncertain . this is due to the numerous risks and uncertainties associated with product development and commercialization , including the uncertainty of : the scope , progress , outcome and costs of our clinical trials and other research and development activities ; the efficacy and potential advantages of our product candidates compared to alternative treatments , including any standard of care ; the market acceptance of our product candidates ; obtaining , maintaining , defending and enforcing patent claims and other intellectual property rights ; significant and changing government regulation ; and the timing , receipt and terms of any marketing approvals . a change in the outcome of any of these variables with respect to the development of trabodenoson or any other product candidate that we may develop could mean a significant change in the costs and timing associated with the development of that product candidate . story_separator_special_tag unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability , and are developed based on the best information available in the circumstances . the fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality . the three levels of the fair value hierarchy are described below : level 1valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date ; level 2valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable , either directly or indirectly ; level 3valuations that require inputs that reflect our own assumptions that are both significant to the fair value measurement and unobservable . to the extent that valuation is based on models or inputs that are less observable or unobservable in the market , the determination of fair value requires more judgment . accordingly , the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in level 3. a financial instrument 's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement . our material financial instruments at december 31 , 2014 and 2013 consisted of cash and cash equivalents , preferred stock warrant liabilities and a convertible debt redemption rights derivative . we have determined that 94 our preferred stock warrant liabilities and convertible debt redemption rights derivative are subject to level 3 fair value measurements . we account for both our preferred stock warrant liabilities and convertible debt redemption rights derivative as liabilities based upon the characteristics and provisions of the underlying instruments . these liabilities were recorded at their fair value on the date of issuance and are re-measured on each subsequent balance sheet date , with fair value changes recognized as income ( decreases in fair value ) or expense ( increases in fair value ) in change in fair value of warrant liabilities and convertible notes redemption rights derivative in the statements of operations . stock-based compensation we measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award . that cost is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the award . the fair value of options on the date of grant is calculated using the black-scholes option pricing model based on key assumptions such as stock price , expected volatility and expected term . our estimates of these assumptions are primarily based on third-party valuations , historical data , peer company data and judgment regarding future trends and factors . we account for stock options issued to non-employees in accordance with the provisions of the financial accounting standards board , or fasb , asc subtopic 505-50 , equity-based payments to non-employees , which requires valuing the stock options using the black-scholes option pricing model and re-measuring such stock options at their current fair value as they vest . significant factors , assumptions and methodologies used in determining fair value determining the fair value of our convertible preferred stock warrants , convertible debt derivative and stock-based awards requires the use of subjective assumptions . in the absence of a publicly traded market for our securities , we conducted periodic valuations of our securities . valuations conducted in 2014 and 2013 a third-party valuation consultant was engaged to advise and assist us in connection with the valuations of our ( i ) series aa preferred stock warrants outstanding on december 31 , 2014 and 2013 , ( ii ) our convertible debt redemption rights derivative at issuance and at december 31 , 2014 , ( iii ) our common stock options issued in august 2014 and ( iv ) our series aa preferred stock warrants exercised in august and september 2014. because our series x preferred stock is entitled to a contingent liquidation preference which varies based on the total value of our equity , we were precluded from using a closed-form model , such as the black-scholes option pricing method , to value the series aa preferred stock warrants . therefore , we employed a monte carlo simulation methodology for all models used to determine the fair value of securities in our capital structure . common stock and preferred stock warrant valuations our initial equity value , or ev , was determined by utilizing a risk-adjusted discounted cash flow model based upon market research and management 's assessment thereof , which is an income approach and was corroborated with market data , coupled with a series of monte carlo simulations which projected various equity values under different possible liquidity events including ( i ) initial public offering , or ipo , ( ii ) merger and acquisition , or m & a , and ( iii ) stay-private , or sp , scenarios . the first two scenarios assume positive results from our recent phase 2 clinical trial , while the third scenario considered unfavorable results for valuations performed prior to december 31 , 2014 and , at december 31 , 2014 , no ipo or m & a transaction . key assumptions underlying the discounted cash flow model are described below : based on the research and industry knowledge of our officers and consultants , we developed projections of market penetration , product selling prices and required infrastructure to estimate our future revenues and operating expenses to determine projected free cash flows from our two current product candidates containing trabodenoson , through patent expiration . 95 probability of success . to determine the probability of success for the various phases of

liquidity and capital resources since inception , we have incurred accumulated net losses and negative cash flows from our operations . we incurred net losses of $ 9.5 million , $ 7.6 million and $ 6.1 million for the years ended december 31 , 2014 , 2013 and 2012 respectively . our operating activities used $ 9.7 million , $ 6.5 million and $ 6.9 million of cash during the years ended december 2014 , 2013 and 2012 , respectively . as of december 31 , 2014 , the company had $ 3.6 million of cash and cash equivalents . in february 2015 , we completed our ipo and concurrent note offering and in march 2015 the underwriters purchased a portion of their common stock and notes overallotment options resulting in net proceeds to us of approximately $ 55.5 million . as of march 30 , 2015 we have outstanding $ 21.0 million of 2020 notes . the company estimates that it has sufficient funding to sustain operations through at least the next 18 months . in december 2014 , the company sold an aggregate of $ 2.0 million of the 2014 bridge notes . in addition to other terms , the 2014 bridge notes had a maturity of june 30 , 2015 , accrued interest at the rate of 8 % per annum and were subordinate to all other senior indebtedness of the company . upon the closing of our ipo , the 2014 bridge notes , including accrued interest , automatically converted into 337,932 shares of our common stock . on june 28 , 2013 , we entered into notes payable agreements with two financial entities pursuant to which we issued a $ 3.5 million note to each lender and received net proceeds of $ 6.9 million .


 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 inception , we have incurred accumulated net losses and negative cash flows from our operations . we incurred net losses of $ 9.5 million , $ 7.6 million and $ 6.1 million for the years ended december 31 , 2014 , 2013 and 2012 respectively . our operating activities used $ 9.7 million , $ 6.5 million and $ 6.9 million of cash during the years ended december 2014 , 2013 and 2012 , respectively . as of december 31 , 2014 , the company had $ 3.6 million of cash and cash equivalents . in february 2015 , we completed our ipo and concurrent note offering and in march 2015 the underwriters purchased a portion of their common stock and notes overallotment options resulting in net proceeds to us of approximately $ 55.5 million . as of march 30 , 2015 we have outstanding $ 21.0 million of 2020 notes . the company estimates that it has sufficient funding to sustain operations through at least the next 18 months . in december 2014 , the company sold an aggregate of $ 2.0 million of the 2014 bridge notes . in addition to other terms , the 2014 bridge notes had a maturity of june 30 , 2015 , accrued interest at the rate of 8 % per annum and were subordinate to all other senior indebtedness of the company . upon the closing of our ipo , the 2014 bridge notes , including accrued interest , automatically converted into 337,932 shares of our common stock . on june 28 , 2013 , we entered into notes payable agreements with two financial entities pursuant to which we issued a $ 3.5 million note to each lender and received net proceeds of $ 6.9 million .
```    
 Suspicious Activity Report : see liquidity and capital resources. factors affecting our results of operations we expect our expenses to increase substantially in connection with our ongoing activities , particularly as we continue to invest in research and development and commence our phase 3 program of trabodenoson in 2015. we also expect our expenses to increase as we complete formulation and manufacturing activities of our fdc product candidate and commence clinical trials in 2016. in addition , if we successfully launch trabodenoson as a monotherapy or any other product candidates , we expect to incur significant commercialization expenses related to sales , marketing , manufacturing and distribution of our products . furthermore , we expect to incur additional costs associated with operating as a public company . we expect operating expenses to increase substantially to support an increased infrastructure and expanded operations . 85 accordingly , we will need to obtain additional funding in connection with our continuing operations . adequate additional financing may not be available to us on acceptable terms , or at all . if we are unable to raise capital when needed or on attractive terms , we would be forced to delay , reduce or eliminate our research and development programs or any potential future commercialization efforts . we will need to generate significant revenues to achieve profitability , and we may never do so . as a result , we expect to incur significant expenses and increasing operating losses for the foreseeable future . financial overview revenue we have not generated any revenue from product sales since our inception and do not expect to generate any revenue from the sale of products in the near future . our ability to generate revenues will depend on the successful development , regulatory approval and commercialization of trabodenoson and any other future product candidates . historically , we generated revenues primarily from research grants received from governmental agencies and private companies as well as revenue earned under licensing and research collaboration contracts that were unrelated to our current research and development programs . research and development expenses research and development expenses consist primarily of the costs associated with our research and development activities , conducting preclinical studies and clinical trials and activities related to regulatory filings . our research and development expenses consist of : direct clinical and non-clinical expenses which include expenses incurred under agreements with contract research organizations , or cros , contract manufacturing organizations and costs associated with preclinical activities and development activities and costs associated with regulatory activities ; employee and consultant-related expenses , including salaries , benefits , travel and stock-based compensation expense for research and development personnel as well as consultants that conduct and support clinical trials and preclinical studies ; and facilities and other expenses , which include direct and allocated expenses for rent and maintenance of facilities , insurance and other supplies used in research and development activities . we expense research and development costs as incurred . we record costs for some development activities , such as clinical trials , based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment , clinical site activations or other information our vendors provide to us . the following table summarizes our research and development expenses by type of activity for the years ended december 31 , 2014 , 2013 and 2012 : replace_table_token_7_th 86 all research and development efforts and expenses for the years ended december 31 , 2014 , 2013 and 2012 relate to the development of trabodenoson . we do not track trabodenoson -related expenses by product candidate . all expenses related to trabodenoson as a monotherapy also benefit the fdc product candidate trabodenoson with latanoprost . we have expended approximately $ 41 million for external development costs related to trabodenoson from inception through december 31 , 2014. the process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming and the successful development of our product candidates is highly uncertain . our future research and development expenses will depend on the clinical success of our product candidates , as well as ongoing assessments of the commercial potential of such product candidates . in addition , we can not forecast with any degree of certainty which product candidates may be subject to future collaborations , when such arrangements will be secured , if at all , and to what degree such arrangements would affect our development plans and capital requirements . we expect our research and development expenses to increase in future periods for the foreseeable future as we seek to complete development of our lead product candidate , trabodenoson , further develop our other product candidates and expand our research and development personnel to focus on these product candidate development activities . the successful development and commercialization of our product candidates is highly uncertain . this is due to the numerous risks and uncertainties associated with product development and commercialization , including the uncertainty of : the scope , progress , outcome and costs of our clinical trials and other research and development activities ; the efficacy and potential advantages of our product candidates compared to alternative treatments , including any standard of care ; the market acceptance of our product candidates ; obtaining , maintaining , defending and enforcing patent claims and other intellectual property rights ; significant and changing government regulation ; and the timing , receipt and terms of any marketing approvals . a change in the outcome of any of these variables with respect to the development of trabodenoson or any other product candidate that we may develop could mean a significant change in the costs and timing associated with the development of that product candidate . story_separator_special_tag unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability , and are developed based on the best information available in the circumstances . the fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality . the three levels of the fair value hierarchy are described below : level 1valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date ; level 2valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable , either directly or indirectly ; level 3valuations that require inputs that reflect our own assumptions that are both significant to the fair value measurement and unobservable . to the extent that valuation is based on models or inputs that are less observable or unobservable in the market , the determination of fair value requires more judgment . accordingly , the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in level 3. a financial instrument 's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement . our material financial instruments at december 31 , 2014 and 2013 consisted of cash and cash equivalents , preferred stock warrant liabilities and a convertible debt redemption rights derivative . we have determined that 94 our preferred stock warrant liabilities and convertible debt redemption rights derivative are subject to level 3 fair value measurements . we account for both our preferred stock warrant liabilities and convertible debt redemption rights derivative as liabilities based upon the characteristics and provisions of the underlying instruments . these liabilities were recorded at their fair value on the date of issuance and are re-measured on each subsequent balance sheet date , with fair value changes recognized as income ( decreases in fair value ) or expense ( increases in fair value ) in change in fair value of warrant liabilities and convertible notes redemption rights derivative in the statements of operations . stock-based compensation we measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award . that cost is recognized on a straight-line basis over the period during which the employee is required to provide service in exchange for the award . the fair value of options on the date of grant is calculated using the black-scholes option pricing model based on key assumptions such as stock price , expected volatility and expected term . our estimates of these assumptions are primarily based on third-party valuations , historical data , peer company data and judgment regarding future trends and factors . we account for stock options issued to non-employees in accordance with the provisions of the financial accounting standards board , or fasb , asc subtopic 505-50 , equity-based payments to non-employees , which requires valuing the stock options using the black-scholes option pricing model and re-measuring such stock options at their current fair value as they vest . significant factors , assumptions and methodologies used in determining fair value determining the fair value of our convertible preferred stock warrants , convertible debt derivative and stock-based awards requires the use of subjective assumptions . in the absence of a publicly traded market for our securities , we conducted periodic valuations of our securities . valuations conducted in 2014 and 2013 a third-party valuation consultant was engaged to advise and assist us in connection with the valuations of our ( i ) series aa preferred stock warrants outstanding on december 31 , 2014 and 2013 , ( ii ) our convertible debt redemption rights derivative at issuance and at december 31 , 2014 , ( iii ) our common stock options issued in august 2014 and ( iv ) our series aa preferred stock warrants exercised in august and september 2014. because our series x preferred stock is entitled to a contingent liquidation preference which varies based on the total value of our equity , we were precluded from using a closed-form model , such as the black-scholes option pricing method , to value the series aa preferred stock warrants . therefore , we employed a monte carlo simulation methodology for all models used to determine the fair value of securities in our capital structure . common stock and preferred stock warrant valuations our initial equity value , or ev , was determined by utilizing a risk-adjusted discounted cash flow model based upon market research and management 's assessment thereof , which is an income approach and was corroborated with market data , coupled with a series of monte carlo simulations which projected various equity values under different possible liquidity events including ( i ) initial public offering , or ipo , ( ii ) merger and acquisition , or m & a , and ( iii ) stay-private , or sp , scenarios . the first two scenarios assume positive results from our recent phase 2 clinical trial , while the third scenario considered unfavorable results for valuations performed prior to december 31 , 2014 and , at december 31 , 2014 , no ipo or m & a transaction . key assumptions underlying the discounted cash flow model are described below : based on the research and industry knowledge of our officers and consultants , we developed projections of market penetration , product selling prices and required infrastructure to estimate our future revenues and operating expenses to determine projected free cash flows from our two current product candidates containing trabodenoson , through patent expiration . 95 probability of success . to determine the probability of success for the various phases of

