in april 2009 , we became a durable , medical equipment , prosthetics , orthotics , and supplies accredited medicare supplier by the accreditation commission for health care for our goleta , california facility for home/durable medical equipment services for oxygen equipment and supplies . we believe we are the only portable oxygen concentrator manufacturer that employs a direct-to-consumer marketing strategy in the united states , meaning we advertise directly to patients , process their physician paperwork , provide clinical support as needed and bill medicare or insurance on their behalf . revenue we derive a majority of our revenue from the sale and rental of our inogen one systems and related accessories to patients , insurance carriers , home healthcare providers and distributors . we sell multiple configurations of our inogen one systems with various batteries , accessories , warranties , power cords , and language settings . we also rent our products to medicare beneficiaries and patients with other insurance coverage to support their oxygen needs as prescribed by a physician as part of a care plan . our goal is to 50 design , build and market oxygen solutions that redefine how oxygen therapy is delivered . to accomplish this goal and to grow our revenue , we intend to continue to : ● expand our sales and marketing channels . we will continue to hire additional internal sales representatives to drive our direct-to-consumer marketing efforts . during the year ended december 31 , 2014 , we increased our internal sales representatives from 108 to 129. in 2014 , we experienced headcount turnover of our internal sales team of 22.1 % . typically , we expect new sales representatives to take 4-6 months to reach full productivity . additionally , we are building a physician referral channel that currently consists of twelve sales representatives up from eleven as of december 31 , 2013. lastly , we are focused on building our international distribution capabilities . ● invest in our product offerings to develop innovative products . we expended $ 3.0 million , $ 2.4 million and $ 2.3 million in 2014 , 2013 and 2012 , respectively , in research and development expenses , and we intend to continue to make such investments in the foreseeable future . ● secure contracts with healthcare payors and insurers . based on our patient population , we estimate that at least 30 % of oxygen therapy patients are covered by non-medicare payors , and that these patients often represent a younger , more active patient segment . by becoming an in-network provider with more insurance companies , we can reduce the co-insurance for patients , which we believe will allow us to attract additional patients to our inogen one solutions . we have been developing and refining the manufacturing of our inogen one systems over the past ten years . while nearly all of our manufacturing and assembly processes were originally outsourced , assembly of the manifold , compressor , sieve bed and concentrator is now conducted in-house in order to improve quality control and reduce cost . additionally , we use lean manufacturing practices to maximize manufacturing efficiency . we rely on third-party manufacturers to supply several components of our inogen one systems and inogen at home systems . we typically enter into supply agreements for these components that specify quantity , quality requirements and delivery terms . in certain cases , these agreements can be terminated by either party upon relatively short notice . we have elected to source certain key components from single sources of supply , including our batteries , bearings , carry bags , motors , pistons , valves , and molded plastic components . while alternative sources of supply are readily available for these components , we believe that maintaining a single-source of supply allows us to control production costs and inventory levels , and to manage component quality . historically , we have generated a majority of our revenue from sales and rentals to customers in the united states . in 2014 , 2013 and 2012 , approximately 22 % , 22 % and 27 % , respectively , of our total revenue was from customers outside the united states , primarily in europe . to date , most of our revenue has been denominated in united states dollars . as of december 31 , 2014 , we sold our products in 44 countries outside the united states through distributors or directly to large “ house ” accounts , which include gas companies and home oxygen providers . in those instances , we sell to and bill the distributor or “ house ” accounts directly , leaving responsibility for the patient billing , support and clinical setup to the local provider . as of december 31 , 2014 , we had five employees who focused on selling our products to distributors and “ house ” accounts worldwide . our total revenue increased $ 37.1 million to $ 112.5 million in 2014 from $ 75.4 million in 2013 , due to growth in rental revenue associated with an increase in the number of patients using medicare or private payors to rent our products , and growth in sales revenue associated with the increases in business-to-business sales and direct-to-consumer cash sales of our inogen one systems and new product launches . we generated net income of $ 6.8 million in 2014 and net income of $ 25.4 million in 2013. we generated adjusted ebitda of $ 24.0 million and $ 13.4 million in 2014 and 2013 , respectively . adjusted net income was $ 6.6 million for 2014 , compared to adjusted net income of $ 3.6 million in 2013. as of december 31 , 2014 , our accumulated deficit was $ 56.7 million . the vast majority of our revenue consists of sales revenue and rental revenue . story_separator_special_tag as of december 31 , 2014 , we had 63 contracts with medicaid and private payors . these contracts qualify us an in-network provider for these payors . as a result , patients can use our systems at the same cost as other in-network oxygen therapy solutions , including those utilizing the delivery model . based on our patient population , we believe at least 30 % of all oxygen therapy patients are covered by private payors . private payors typically provide reimbursement at 60 % to 100 % of medicare allowables for in-network plans , and private payor plans can have 36-month caps similar to medicare . we anticipate that private payor reimbursement levels will generally be reset in accordance with medicare payment amounts established through competitive bidding . 54 we can not predict the full extent to which reimbursement for our products will be affected by competitive bidding or by initiatives to reduce costs for private payors . we believe that we are well positioned to respond to the changing reimbursement environment because our product offerings are innovative , patient-focused and cost-effective . we have historically been able to reduce our costs through scalable manufacturing , better sourcing , continuous innovation , and reliability improvements , as well as innovations that reduce our product service costs by minimizing exchanges , such as user replaceable batteries and oxygen filtration cartridges . as a result of bringing manufacturing and assembly largely in-house and our commitment to driving efficient manufacturing processes , we have reduced our overall system cost by 40 % from 2009-2013. we intend to continue to seek ways to reduce our cost of revenue through manufacturing and design improvements . basis of presentation the following describes the line items set forth in our statements of operations . revenue we classify our revenue in two main categories : sales revenue and rental revenue . there will be fluctuations in mix between business-to-business sales , direct-to-consumer sales and rentals from period to period . in addition , we expect both the average selling price and the manufacturing cost of our products to decrease following the introduction of future generations of our inogen one systems . inogen one system and inogen at home system selling prices and gross margins for our systems may fluctuate as we introduce new products and reduce our product costs . for example , the gross margin for our inogen one g3 is higher than our inogen one g2 . thus , to the extent our sales of our inogen one g3 systems are higher than sales of our inogen one g2 systems , our overall gross margins should improve and , conversely , to the extent our sales of our inogen one g2 systems are higher than sales of our inogen one g3 systems , our overall gross margins should decline . sales revenue . our sales revenue is derived from the sale of our inogen one systems , inogen at home systems , and related accessories to patients in the united states and to home healthcare providers , distributors and resellers worldwide . sales revenue is classified into two areas : business-to-business sales and direct-to-consumer sales . for the years ended december 31 , 2014 , 2013 and 2012 , business-to-business sales as a percentage of sales revenue were 60 % , 60 % and 68 % , respectively . generally , our direct-to-consumer sales have higher margins than our business-to-business sales . we also offer a lifetime warranty for direct-to-consumer sales . for a fixed price , we agree to provide a fully functional oxygen concentrator for the remaining life of the patient . lifetime warranties are only offered to patients upon the initial sale of oxygen equipment by us , and are non-transferable . product sales with lifetime warranties are considered to be multiple element arrangements within the scope of asc 605-25. there are two deliverables when a product that includes a lifetime warranty is sold . the first deliverable is the oxygen concentrator equipment which comes with a standard warranty of three years . the second deliverable is the lifetime warranty that provides for a functional oxygen concentrator for the remaining lifetime of the patient . these two deliverables qualify as separate units of accounting . the revenue is allocated to the two deliverables on a relative selling price method . we have vendor-specific objective evidence of selling price for the equipment . to determine the selling price of the lifetime warranty , we use our best estimate of the selling price for that deliverable as the lifetime warranty is neither separately priced nor is selling price available through third-party evidence . to calculate the selling price associated with the lifetime warranties , management considered the profit margins of the overall business , the average estimated cost of lifetime warranties and the price of extended warranties . a significant estimate used to calculate the price and expense of lifetime warranties is the life expectancy of patients . based on clinical studies , we estimate that 60 % of patients will succumb to their disease within three years . given the approximate mortality rate of 20 % per year , we estimate on average all patients will succumb to their disease within five years . we have taken into consideration that when patients decide to buy an inogen portable oxygen concentrator with a lifetime warranty , they typically have already been on oxygen for a period of time , which can have a large impact on their life expectancy from the time our product is deployed . after applying the relative selling price method , revenue from equipment sales is recognized when all other revenue recognition criteria for product sales are met . lifetime warranty revenue is recognized using the straight-line method during the fourth and fifth year after the delivery of the equipment which is the estimated usage period of the contract based on the average patient life expectancy . freight revenue

liquidity and capital resources as of december 31 , 2014 , we had cash and cash equivalents of $ 56.8 million , which consisted of highly-liquid investments with an original maturity of three months or less . since inception , we have financed our operations primarily through cash from operations , the sale of equity securities and , to a lesser extent , from borrowings . as of december 31 , 2014 , we had $ 0.6 million debt outstanding in patent licensing debt . since inception , we have received net proceeds of $ 91.7 million from the issuance of redeemable convertible preferred stock and $ 52.5 million in net proceeds in connection with the sale of common stock in our initial public offering . as of december 31 , 2014 , we had $ 15.0 million in available debt capacity under the revolving facility . our principal uses of cash are funding our capital expenditures including additional rental assets . we believe that our current cash and cash equivalents together with our short-term investments and available borrowings under our revolving credit agreement and the cash to be generated from expected product sales and rentals , will be sufficient to meet our projected operating and investing requirements for at least the next 12 months . 61 the following table shows a summary of our cash flows for the periods indicated : replace_table_token_25_th operating activities we derive operating cash flows from cash collected from the sale of our products and services . these cash flows received are partially offset by our use of cash for operating expenses to support the growth of our business . net income in each period has increased associated with increased sales associated with product mix and lower costs . in addition , operating expense leverage has increased as expenses have not grown as quickly as sales due to improved operating efficiencies .


 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 as of december 31 , 2014 , we had cash and cash equivalents of $ 56.8 million , which consisted of highly-liquid investments with an original maturity of three months or less . since inception , we have financed our operations primarily through cash from operations , the sale of equity securities and , to a lesser extent , from borrowings . as of december 31 , 2014 , we had $ 0.6 million debt outstanding in patent licensing debt . since inception , we have received net proceeds of $ 91.7 million from the issuance of redeemable convertible preferred stock and $ 52.5 million in net proceeds in connection with the sale of common stock in our initial public offering . as of december 31 , 2014 , we had $ 15.0 million in available debt capacity under the revolving facility . our principal uses of cash are funding our capital expenditures including additional rental assets . we believe that our current cash and cash equivalents together with our short-term investments and available borrowings under our revolving credit agreement and the cash to be generated from expected product sales and rentals , will be sufficient to meet our projected operating and investing requirements for at least the next 12 months . 61 the following table shows a summary of our cash flows for the periods indicated : replace_table_token_25_th operating activities we derive operating cash flows from cash collected from the sale of our products and services . these cash flows received are partially offset by our use of cash for operating expenses to support the growth of our business . net income in each period has increased associated with increased sales associated with product mix and lower costs . in addition , operating expense leverage has increased as expenses have not grown as quickly as sales due to improved operating efficiencies .
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 Suspicious Activity Report : in april 2009 , we became a durable , medical equipment , prosthetics , orthotics , and supplies accredited medicare supplier by the accreditation commission for health care for our goleta , california facility for home/durable medical equipment services for oxygen equipment and supplies . we believe we are the only portable oxygen concentrator manufacturer that employs a direct-to-consumer marketing strategy in the united states , meaning we advertise directly to patients , process their physician paperwork , provide clinical support as needed and bill medicare or insurance on their behalf . revenue we derive a majority of our revenue from the sale and rental of our inogen one systems and related accessories to patients , insurance carriers , home healthcare providers and distributors . we sell multiple configurations of our inogen one systems with various batteries , accessories , warranties , power cords , and language settings . we also rent our products to medicare beneficiaries and patients with other insurance coverage to support their oxygen needs as prescribed by a physician as part of a care plan . our goal is to 50 design , build and market oxygen solutions that redefine how oxygen therapy is delivered . to accomplish this goal and to grow our revenue , we intend to continue to : ● expand our sales and marketing channels . we will continue to hire additional internal sales representatives to drive our direct-to-consumer marketing efforts . during the year ended december 31 , 2014 , we increased our internal sales representatives from 108 to 129. in 2014 , we experienced headcount turnover of our internal sales team of 22.1 % . typically , we expect new sales representatives to take 4-6 months to reach full productivity . additionally , we are building a physician referral channel that currently consists of twelve sales representatives up from eleven as of december 31 , 2013. lastly , we are focused on building our international distribution capabilities . ● invest in our product offerings to develop innovative products . we expended $ 3.0 million , $ 2.4 million and $ 2.3 million in 2014 , 2013 and 2012 , respectively , in research and development expenses , and we intend to continue to make such investments in the foreseeable future . ● secure contracts with healthcare payors and insurers . based on our patient population , we estimate that at least 30 % of oxygen therapy patients are covered by non-medicare payors , and that these patients often represent a younger , more active patient segment . by becoming an in-network provider with more insurance companies , we can reduce the co-insurance for patients , which we believe will allow us to attract additional patients to our inogen one solutions . we have been developing and refining the manufacturing of our inogen one systems over the past ten years . while nearly all of our manufacturing and assembly processes were originally outsourced , assembly of the manifold , compressor , sieve bed and concentrator is now conducted in-house in order to improve quality control and reduce cost . additionally , we use lean manufacturing practices to maximize manufacturing efficiency . we rely on third-party manufacturers to supply several components of our inogen one systems and inogen at home systems . we typically enter into supply agreements for these components that specify quantity , quality requirements and delivery terms . in certain cases , these agreements can be terminated by either party upon relatively short notice . we have elected to source certain key components from single sources of supply , including our batteries , bearings , carry bags , motors , pistons , valves , and molded plastic components . while alternative sources of supply are readily available for these components , we believe that maintaining a single-source of supply allows us to control production costs and inventory levels , and to manage component quality . historically , we have generated a majority of our revenue from sales and rentals to customers in the united states . in 2014 , 2013 and 2012 , approximately 22 % , 22 % and 27 % , respectively , of our total revenue was from customers outside the united states , primarily in europe . to date , most of our revenue has been denominated in united states dollars . as of december 31 , 2014 , we sold our products in 44 countries outside the united states through distributors or directly to large “ house ” accounts , which include gas companies and home oxygen providers . in those instances , we sell to and bill the distributor or “ house ” accounts directly , leaving responsibility for the patient billing , support and clinical setup to the local provider . as of december 31 , 2014 , we had five employees who focused on selling our products to distributors and “ house ” accounts worldwide . our total revenue increased $ 37.1 million to $ 112.5 million in 2014 from $ 75.4 million in 2013 , due to growth in rental revenue associated with an increase in the number of patients using medicare or private payors to rent our products , and growth in sales revenue associated with the increases in business-to-business sales and direct-to-consumer cash sales of our inogen one systems and new product launches . we generated net income of $ 6.8 million in 2014 and net income of $ 25.4 million in 2013. we generated adjusted ebitda of $ 24.0 million and $ 13.4 million in 2014 and 2013 , respectively . adjusted net income was $ 6.6 million for 2014 , compared to adjusted net income of $ 3.6 million in 2013. as of december 31 , 2014 , our accumulated deficit was $ 56.7 million . the vast majority of our revenue consists of sales revenue and rental revenue . story_separator_special_tag as of december 31 , 2014 , we had 63 contracts with medicaid and private payors . these contracts qualify us an in-network provider for these payors . as a result , patients can use our systems at the same cost as other in-network oxygen therapy solutions , including those utilizing the delivery model . based on our patient population , we believe at least 30 % of all oxygen therapy patients are covered by private payors . private payors typically provide reimbursement at 60 % to 100 % of medicare allowables for in-network plans , and private payor plans can have 36-month caps similar to medicare . we anticipate that private payor reimbursement levels will generally be reset in accordance with medicare payment amounts established through competitive bidding . 54 we can not predict the full extent to which reimbursement for our products will be affected by competitive bidding or by initiatives to reduce costs for private payors . we believe that we are well positioned to respond to the changing reimbursement environment because our product offerings are innovative , patient-focused and cost-effective . we have historically been able to reduce our costs through scalable manufacturing , better sourcing , continuous innovation , and reliability improvements , as well as innovations that reduce our product service costs by minimizing exchanges , such as user replaceable batteries and oxygen filtration cartridges . as a result of bringing manufacturing and assembly largely in-house and our commitment to driving efficient manufacturing processes , we have reduced our overall system cost by 40 % from 2009-2013. we intend to continue to seek ways to reduce our cost of revenue through manufacturing and design improvements . basis of presentation the following describes the line items set forth in our statements of operations . revenue we classify our revenue in two main categories : sales revenue and rental revenue . there will be fluctuations in mix between business-to-business sales , direct-to-consumer sales and rentals from period to period . in addition , we expect both the average selling price and the manufacturing cost of our products to decrease following the introduction of future generations of our inogen one systems . inogen one system and inogen at home system selling prices and gross margins for our systems may fluctuate as we introduce new products and reduce our product costs . for example , the gross margin for our inogen one g3 is higher than our inogen one g2 . thus , to the extent our sales of our inogen one g3 systems are higher than sales of our inogen one g2 systems , our overall gross margins should improve and , conversely , to the extent our sales of our inogen one g2 systems are higher than sales of our inogen one g3 systems , our overall gross margins should decline . sales revenue . our sales revenue is derived from the sale of our inogen one systems , inogen at home systems , and related accessories to patients in the united states and to home healthcare providers , distributors and resellers worldwide . sales revenue is classified into two areas : business-to-business sales and direct-to-consumer sales . for the years ended december 31 , 2014 , 2013 and 2012 , business-to-business sales as a percentage of sales revenue were 60 % , 60 % and 68 % , respectively . generally , our direct-to-consumer sales have higher margins than our business-to-business sales . we also offer a lifetime warranty for direct-to-consumer sales . for a fixed price , we agree to provide a fully functional oxygen concentrator for the remaining life of the patient . lifetime warranties are only offered to patients upon the initial sale of oxygen equipment by us , and are non-transferable . product sales with lifetime warranties are considered to be multiple element arrangements within the scope of asc 605-25. there are two deliverables when a product that includes a lifetime warranty is sold . the first deliverable is the oxygen concentrator equipment which comes with a standard warranty of three years . the second deliverable is the lifetime warranty that provides for a functional oxygen concentrator for the remaining lifetime of the patient . these two deliverables qualify as separate units of accounting . the revenue is allocated to the two deliverables on a relative selling price method . we have vendor-specific objective evidence of selling price for the equipment . to determine the selling price of the lifetime warranty , we use our best estimate of the selling price for that deliverable as the lifetime warranty is neither separately priced nor is selling price available through third-party evidence . to calculate the selling price associated with the lifetime warranties , management considered the profit margins of the overall business , the average estimated cost of lifetime warranties and the price of extended warranties . a significant estimate used to calculate the price and expense of lifetime warranties is the life expectancy of patients . based on clinical studies , we estimate that 60 % of patients will succumb to their disease within three years . given the approximate mortality rate of 20 % per year , we estimate on average all patients will succumb to their disease within five years . we have taken into consideration that when patients decide to buy an inogen portable oxygen concentrator with a lifetime warranty , they typically have already been on oxygen for a period of time , which can have a large impact on their life expectancy from the time our product is deployed . after applying the relative selling price method , revenue from equipment sales is recognized when all other revenue recognition criteria for product sales are met . lifetime warranty revenue is recognized using the straight-line method during the fourth and fifth year after the delivery of the equipment which is the estimated usage period of the contract based on the average patient life expectancy . freight revenue

