we began selling product during the third quarter of 2014 and recognized royalty revenue of $ 36,000 on those sales beginning in the fourth quarter of 2014. product sales our product sales revenue is the result of shipping vitaros ® product to our commercialization partners , which commenced in the third quarter of 2014. the $ 0.2 million decrease in product sales revenue during the year ended december 31 , 2015 as compared to the prior year was due to our commercialization partners shifting gears and contracting directly with our vitaros ® manufacturer . we expect this declining trend to continue as our remaining commercialization partners enter into contracts directly with third-party manufacturers . contract service revenue contract service revenue was generated by our former french subsidiaries which were deconsolidated in april 2013. we expect our cash inflows from operations during 2016 will result from licensing and milestone revenue received from commercial partners as well as royalty payments from vitaros ® product sales . the timing of this revenue is uncertain and as such our revenue may vary significantly between periods . cost of product sales our cost of product sales includes direct material costs associated with the production of inventories . cost of product sales also includes the cost of manufactured samples provided to our commercialization partners free of charge , which , if applicable , contributes to our negative margin . the cost of product sales for the year ended december 31 , 2015 was comparable to the prior year . with our support , many of our commercialization partners are working directly with our third-party manufacturers . we anticipate that our cost of product sales will decrease in future periods as all of our commercialization partners begin to contract directly with the manufacturer to produce vitaros ® . the change in cost of product sales for the year ended december 31 , 2014 as compared to the prior year is due to commencement of shipping vitaros ® product to our commercialization partners in the third quarter of 2014. cost of service revenue our cost of service revenue was related to our former french subsidiaries and included compensation , related personnel expenses and contract services to support our contract service revenue . our former french subsidiaries were deconsolidated in april 2013. operating expense ( income ) operating expense ( income ) was as follows ( in thousands , except percentages ) : replace_table_token_5_th 37 research and development expenses research and development ( “ r & d ” ) costs are expensed as they are incurred and include the cost of compensation and related expenses , as well as expenses for third parties who conduct r & d on our behalf . the $ 6.6 million decrease in r & d expense during the year ended december 31 , 2015 as compared to the prior year , resulted primarily from decreased consulting costs of approximately $ 7.5 million for fispemifene due to the one-time charge of $ 13.6 million in 2014 as a result of the fispemifene in-license agreement with forendo . this was offset by an increase in payroll costs in 2015 related to personnel added in order to manage our clinical and non-clinical trials . we expect to continue to incur additional expenses in 2016 related to the further development of fispemifene , resubmission of a new drug application ( “ nda ” ) for vitaros ® in the united states and the further development of room temperature vitaros ® . the $ 16.2 million increase in our r & d expenses during the year ended december 31 , 2014 , as compared to the prior year , resulted primarily from a charge of $ 13.6 million as a result of the fispemifene in-license agreement with forendo in october 2014 as well as other consulting and outside services for the development of room temperature vitaros ® and rayva . general and administrative expenses general and administrative expenses include expenses for personnel , finance , legal , business development and investor relations . general and administrative expenses decreased slightly during the year ended december 31 , 2015 as compared to the prior year . this decrease was due to a slight reduction in finance and legal expenses in 2015. the $ 2.1 million decrease in general and administrative expenses during 2014 , as compared to the prior year , is primarily due to a decrease in salary-related expenses as a result of the deconsolidation of our former french subsidiaries in april 2013. in addition , we incurred higher legal expenses in 2013 related to the disposition of certain assets and businesses and certain litigation expenses . consulting and professional fees also decreased in 2014 as compared to 2013. gain on contract settlement during the first quarter of 2014 , we recorded a gain on contract settlement of $ 0.9 million , which represented the fair value of 388,888 escrowed common shares that were returned to us in connection with the settlement with former employees of the french subsidiaries . these shares were restored as authorized , unissued common stock in march 2014. the $ 0.5 million gain on contract settlement recorded during 2013 represents the difference between the $ 1.2 million in common shares issued to topotarget in exchange for the extinguishment of $ 1.7 million of contingent consideration . recovery on sale of subsidiary in june 2014 , we amended our stock purchase agreement with biotox and received a one-time cash payment of approximately $ 0.6 million in exchange for relinquishing our rights to future minimum payments . story_separator_special_tag we consider a variety of factors in determining the appropriate method of accounting under our license agreements , including whether the various elements can be separated and accounted for individually as separate units of accounting . deliverables under the arrangement will be separate units of accounting , provided ( i ) a delivered item has value to the customer on a standalone basis ; and ( ii ) if the arrangement includes a general right of return relative to the delivered item and delivery or performance of the undelivered item is considered probable and substantially in our control . we account for revenue arrangements with multiple elements by separating and allocating consideration in a multiple-element arrangement according to the relative selling price of each deliverable . if an element can be separated , an amount is allocated based upon the relative selling price of each element . we determine the relative selling price of a separate deliverable using the price we charge other customers when we sell that product or service separately ; however , if the product or service is not sold separately and third party pricing evidence is not available , we will use our best estimate of selling price . we defer recognition of non-refundable upfront fees if we have continuing performance obligations without which the technology , right , product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee that is separate and independent of our performance under the other elements of the arrangement . non-refundable , up-front fees that are not contingent on any future performance by us and require no consequential continuing involvement on our part are recognized as revenue when the license term commences and the licensed data , technology and or compound is delivered . the specific methodology for the recognition of the revenue is determined on a case-by-case basis according to the facts and circumstances of the applicable agreement . we evaluate milestone payments on an individual basis and revenues are recognized upon achievement of the associated milestone , provided that ( i ) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement and ( ii ) the amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with the milestone event . 43 long-lived assets we review our long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable . an impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount . if such asset is considered impaired , the amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset , the fair value of which is determined based upon discounted cash flows or appraised values , depending on the nature of the asset . there were no impairment charges recorded in 2015 related to our long-lived assets . stock based compensation in preparation of our consolidated financial statements , we calculate the value of stock options issued to employees , non-employee contractors and the board of directors and warrants issued to investors and debtholders . the fair value of each option and warrant is estimated on the date of grant using the black-scholes option pricing model . the black-scholes option pricing model is a generally accepted method of estimating the fair value of stock options and warrants . the black-scholes option pricing model requires us to estimate our dividend yield rate , expected volatility and risk free interest rate over the life of the option . the use of estimates on these factors may cause the fair value of the option to be under or overestimated ( see note 9 to our consolidated financial statements for the current estimates used in the black-scholes option pricing model ) . valuation of warrant liability our outstanding common stock warrants issued in connection with the february 2015 financing are classified as liabilities in the accompanying consolidated balance sheets as they contain provisions that require us to maintain active registration of the shares underlying such warrants , which is considered outside of our control . the warrants were recorded at fair value using the black-scholes option pricing model . the fair value of these warrants is re-measured at each financial reporting period with any changes in fair value being recognized as change in fair value of warrant liability in the accompanying consolidated statements of operations . of the inputs used to value the outstanding common stock warrant liabilities as of december 31 , 2015 , the most subjective input is the company 's estimate of expected volatility . if volatility increased to 150 % , the weighted average fair market value of the common stock warrants outstanding would increase by approximately $ 0.9 million , or 49.3 % . clinical trial accruals in preparation of our consolidated financial statements , we are required to estimate our expenses resulting from our obligations under contracts with vendors and consultants and clinical site agreements in connection with conducting clinical trials . the financial terms of these contracts are subject to negotiations which vary from contract to contract , and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts . our objective is to reflect the appropriate clinical trial expenses in our financial statements by matching those expenses with the period in which the services and efforts are expended . we account for these expenses according to the progress of the clinical trial as measured by patient progression and the timing of various aspects of the trial . we determine accrual estimates through financial models , taking into account discussion with applicable personnel and outside service

cash flow summary the following table summarizes selected items in our consolidated statements of cash flows ( in thousands ) : replace_table_token_7_th operating activities from continuing operations cash used in operating activities from continuing operations of $ 22.6 million in 2015 was primarily due to a net loss of $ 19.0 million net of adjustments to net loss for non-cash items such as the warrant liability revaluation of $ 3.2 million , stock based compensation expense of $ 1.2 million , and a $ 1.0 million decrease in deferred revenue primarily due to the recognition of license fee revenue related to sandoz of $ 1.0 million that had been previously deferred awaiting the satisfaction of a contractual condition in the sandoz license agreement that was met in the third quarter of 2015. changes in operating assets and liabilities also contributed to the cash used in operating activities , such as a decrease to accrued expenses primarily due to the decrease in accrued outside r & d services . cash used in operating activities from continuing operations of $ 18.0 million in 2014 was primarily due to net loss from continuing operations of $ 22.5 million , adjusted for non-cash items including $ 5.9 million of r & d expense paid to forendo in shares of common stock , stock based compensation expense of $ 1.7 million , a gain of $ 0.8 million related to the deconsolidation of our former french subsidiaries , and a $ 0.9 million gain on contract settlement .


 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.
     ```cash flow summary the following table summarizes selected items in our consolidated statements of cash flows ( in thousands ) : replace_table_token_7_th operating activities from continuing operations cash used in operating activities from continuing operations of $ 22.6 million in 2015 was primarily due to a net loss of $ 19.0 million net of adjustments to net loss for non-cash items such as the warrant liability revaluation of $ 3.2 million , stock based compensation expense of $ 1.2 million , and a $ 1.0 million decrease in deferred revenue primarily due to the recognition of license fee revenue related to sandoz of $ 1.0 million that had been previously deferred awaiting the satisfaction of a contractual condition in the sandoz license agreement that was met in the third quarter of 2015. changes in operating assets and liabilities also contributed to the cash used in operating activities , such as a decrease to accrued expenses primarily due to the decrease in accrued outside r & d services . cash used in operating activities from continuing operations of $ 18.0 million in 2014 was primarily due to net loss from continuing operations of $ 22.5 million , adjusted for non-cash items including $ 5.9 million of r & d expense paid to forendo in shares of common stock , stock based compensation expense of $ 1.7 million , a gain of $ 0.8 million related to the deconsolidation of our former french subsidiaries , and a $ 0.9 million gain on contract settlement .
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 Suspicious Activity Report : we began selling product during the third quarter of 2014 and recognized royalty revenue of $ 36,000 on those sales beginning in the fourth quarter of 2014. product sales our product sales revenue is the result of shipping vitaros ® product to our commercialization partners , which commenced in the third quarter of 2014. the $ 0.2 million decrease in product sales revenue during the year ended december 31 , 2015 as compared to the prior year was due to our commercialization partners shifting gears and contracting directly with our vitaros ® manufacturer . we expect this declining trend to continue as our remaining commercialization partners enter into contracts directly with third-party manufacturers . contract service revenue contract service revenue was generated by our former french subsidiaries which were deconsolidated in april 2013. we expect our cash inflows from operations during 2016 will result from licensing and milestone revenue received from commercial partners as well as royalty payments from vitaros ® product sales . the timing of this revenue is uncertain and as such our revenue may vary significantly between periods . cost of product sales our cost of product sales includes direct material costs associated with the production of inventories . cost of product sales also includes the cost of manufactured samples provided to our commercialization partners free of charge , which , if applicable , contributes to our negative margin . the cost of product sales for the year ended december 31 , 2015 was comparable to the prior year . with our support , many of our commercialization partners are working directly with our third-party manufacturers . we anticipate that our cost of product sales will decrease in future periods as all of our commercialization partners begin to contract directly with the manufacturer to produce vitaros ® . the change in cost of product sales for the year ended december 31 , 2014 as compared to the prior year is due to commencement of shipping vitaros ® product to our commercialization partners in the third quarter of 2014. cost of service revenue our cost of service revenue was related to our former french subsidiaries and included compensation , related personnel expenses and contract services to support our contract service revenue . our former french subsidiaries were deconsolidated in april 2013. operating expense ( income ) operating expense ( income ) was as follows ( in thousands , except percentages ) : replace_table_token_5_th 37 research and development expenses research and development ( “ r & d ” ) costs are expensed as they are incurred and include the cost of compensation and related expenses , as well as expenses for third parties who conduct r & d on our behalf . the $ 6.6 million decrease in r & d expense during the year ended december 31 , 2015 as compared to the prior year , resulted primarily from decreased consulting costs of approximately $ 7.5 million for fispemifene due to the one-time charge of $ 13.6 million in 2014 as a result of the fispemifene in-license agreement with forendo . this was offset by an increase in payroll costs in 2015 related to personnel added in order to manage our clinical and non-clinical trials . we expect to continue to incur additional expenses in 2016 related to the further development of fispemifene , resubmission of a new drug application ( “ nda ” ) for vitaros ® in the united states and the further development of room temperature vitaros ® . the $ 16.2 million increase in our r & d expenses during the year ended december 31 , 2014 , as compared to the prior year , resulted primarily from a charge of $ 13.6 million as a result of the fispemifene in-license agreement with forendo in october 2014 as well as other consulting and outside services for the development of room temperature vitaros ® and rayva . general and administrative expenses general and administrative expenses include expenses for personnel , finance , legal , business development and investor relations . general and administrative expenses decreased slightly during the year ended december 31 , 2015 as compared to the prior year . this decrease was due to a slight reduction in finance and legal expenses in 2015. the $ 2.1 million decrease in general and administrative expenses during 2014 , as compared to the prior year , is primarily due to a decrease in salary-related expenses as a result of the deconsolidation of our former french subsidiaries in april 2013. in addition , we incurred higher legal expenses in 2013 related to the disposition of certain assets and businesses and certain litigation expenses . consulting and professional fees also decreased in 2014 as compared to 2013. gain on contract settlement during the first quarter of 2014 , we recorded a gain on contract settlement of $ 0.9 million , which represented the fair value of 388,888 escrowed common shares that were returned to us in connection with the settlement with former employees of the french subsidiaries . these shares were restored as authorized , unissued common stock in march 2014. the $ 0.5 million gain on contract settlement recorded during 2013 represents the difference between the $ 1.2 million in common shares issued to topotarget in exchange for the extinguishment of $ 1.7 million of contingent consideration . recovery on sale of subsidiary in june 2014 , we amended our stock purchase agreement with biotox and received a one-time cash payment of approximately $ 0.6 million in exchange for relinquishing our rights to future minimum payments . story_separator_special_tag we consider a variety of factors in determining the appropriate method of accounting under our license agreements , including whether the various elements can be separated and accounted for individually as separate units of accounting . deliverables under the arrangement will be separate units of accounting , provided ( i ) a delivered item has value to the customer on a standalone basis ; and ( ii ) if the arrangement includes a general right of return relative to the delivered item and delivery or performance of the undelivered item is considered probable and substantially in our control . we account for revenue arrangements with multiple elements by separating and allocating consideration in a multiple-element arrangement according to the relative selling price of each deliverable . if an element can be separated , an amount is allocated based upon the relative selling price of each element . we determine the relative selling price of a separate deliverable using the price we charge other customers when we sell that product or service separately ; however , if the product or service is not sold separately and third party pricing evidence is not available , we will use our best estimate of selling price . we defer recognition of non-refundable upfront fees if we have continuing performance obligations without which the technology , right , product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee that is separate and independent of our performance under the other elements of the arrangement . non-refundable , up-front fees that are not contingent on any future performance by us and require no consequential continuing involvement on our part are recognized as revenue when the license term commences and the licensed data , technology and or compound is delivered . the specific methodology for the recognition of the revenue is determined on a case-by-case basis according to the facts and circumstances of the applicable agreement . we evaluate milestone payments on an individual basis and revenues are recognized upon achievement of the associated milestone , provided that ( i ) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement and ( ii ) the amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with the milestone event . 43 long-lived assets we review our long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable . an impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount . if such asset is considered impaired , the amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset , the fair value of which is determined based upon discounted cash flows or appraised values , depending on the nature of the asset . there were no impairment charges recorded in 2015 related to our long-lived assets . stock based compensation in preparation of our consolidated financial statements , we calculate the value of stock options issued to employees , non-employee contractors and the board of directors and warrants issued to investors and debtholders . the fair value of each option and warrant is estimated on the date of grant using the black-scholes option pricing model . the black-scholes option pricing model is a generally accepted method of estimating the fair value of stock options and warrants . the black-scholes option pricing model requires us to estimate our dividend yield rate , expected volatility and risk free interest rate over the life of the option . the use of estimates on these factors may cause the fair value of the option to be under or overestimated ( see note 9 to our consolidated financial statements for the current estimates used in the black-scholes option pricing model ) . valuation of warrant liability our outstanding common stock warrants issued in connection with the february 2015 financing are classified as liabilities in the accompanying consolidated balance sheets as they contain provisions that require us to maintain active registration of the shares underlying such warrants , which is considered outside of our control . the warrants were recorded at fair value using the black-scholes option pricing model . the fair value of these warrants is re-measured at each financial reporting period with any changes in fair value being recognized as change in fair value of warrant liability in the accompanying consolidated statements of operations . of the inputs used to value the outstanding common stock warrant liabilities as of december 31 , 2015 , the most subjective input is the company 's estimate of expected volatility . if volatility increased to 150 % , the weighted average fair market value of the common stock warrants outstanding would increase by approximately $ 0.9 million , or 49.3 % . clinical trial accruals in preparation of our consolidated financial statements , we are required to estimate our expenses resulting from our obligations under contracts with vendors and consultants and clinical site agreements in connection with conducting clinical trials . the financial terms of these contracts are subject to negotiations which vary from contract to contract , and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts . our objective is to reflect the appropriate clinical trial expenses in our financial statements by matching those expenses with the period in which the services and efforts are expended . we account for these expenses according to the progress of the clinical trial as measured by patient progression and the timing of various aspects of the trial . we determine accrual estimates through financial models , taking into account discussion with applicable personnel and outside service

