total estimated costs of the feasibility program are based on management 's assessment of costs to complete the program based on an evaluation of the portion of the program completed , costs incurred to date , planned program activities , anticipated program timelines and the expected future costs of the program . adjustments to revenue are recorded if estimated costs to complete change materially from previous periods . to the extent that our estimated costs change materially , our revenues recorded under this activity could be materially affected and such change could have a material adverse effect on our operations in future periods . during the second quarter of 2005 , management increased its estimate of costs to complete the feasibility program to $ 16.1 million from its prior estimate . the increase in the cost to complete the feasibility program was primarily attributed to the additional patient safety monitoring related to amending the phase ii proof-of -concept clinical trial protocols for ep-2104r announced in july 2005. the impact of increasing the estimated cost to complete the feasibility program resulted in a reduction in product development revenue of approximately $ 1.5 million during the same period . during the fourth quarter of 2005 , management lowered its estimate of the cost to complete the feasibility program from $ 16.1 million to $ 15.2 million at december 31 , 2005 as a result of increased enrollment rate for this clinical trial . this latest reduction in the estimated total cost of the feasibility program resulted in an increase in product development revenue of $ 449,944 , which was recognized in the fourth quarter of 2005. revenue under our research collaboration with schering ag is recognized as services are provided , for which schering ag is obligated to reimburse us . royalty revenue is recognized based on actual revenues reported to us by bracco and schering ag . prior to the fourth quarter of 2004 , we recognized royalty revenue based on royalty reports received from bracco or on bracco 's estimates , historical revenues and trends when royalty reports from bracco were not available in a timely manner . in december 2004 , we were notified that bracco was asserting that it had overstated its non-u.s. royalties to us for the period 2001 to 2004 , and that bracco would offset the amount of the overstatement against its payments to us , including those triggered by fda approval of multihance ® in the u.s. although we are disputing bracco 's position regarding the overstatement , we recognized the impact of bracco 's claimed overstatement by reducing our 2004 royalty revenue . in addition , because we no longer believe that we have a reasonable basis to make royalty estimates under the agreement with bracco , we have , commencing in the fourth quarter of 2004 , only recognized royalty revenue from bracco in the period in which royalty reports are received . research and development research and development costs , including those associated with technology , licenses and patents , are expensed as incurred . research and development costs include employee salaries and related costs , third party service costs , the costs of preclinical and clinical trial supplies and consulting expenses . in order to conduct research and development activities and compile regulatory submissions , we enter into contracts with vendors who render services over extended periods of time , generally one to three years . 33 typically , we enter into three types of vendor contracts : time-based , patient-based or a combination thereof . under a time-based contract , using critical factors contained within the contract , usually the stated duration of the contract and the timing of services provided , we record the contractual expense for each service provided under the contract ratably over the period during which we estimate the service will be performed . under a patient-based contract , we first determine an appropriate per patient cost using critical factors contained within the contract , which include the estimated number of patients and the total dollar value of the contract . we then record expense based upon the total number of patients enrolled during the period . on a quarterly basis , we review both the timetable of services to be rendered and the timing of services actually rendered . based upon this review , revisions may be made to the forecasted timetable or to the extent of services performed , or both , in order to reflect our most current estimate of the contract . adjustments are recorded in the period in which the revisions are estimable . these adjustments could have a material effect on our results of operations . employee stock compensation we have elected to follow accounting principles board opinion no . 25 , accounting for stock issued to employees ,  or apb 25 , and related interpretations in accounting for our employee stock options under the intrinsic value method , rather than the alternative fair value accounting provided for under statement of financial accounting standards no . 123 ( r ) , share-based payments  an amendment of fasb statement no . 123 and 95 ,  or sfas 123r . under apb 25 , because the exercise price is equal to the market price of the underlying stock on the date of the grant , no compensation expense is recognized . our financial results could be materially adversely affected by the required adoption of sfas 123r , effective january 1 , 2006 , to the extent of the additional compensation expense that we would have to recognize , which could change significantly from period to period based on several factors , including the number of stock options granted and fluctuations in our stock price and or interest rates . see note 2 to the notes to financial statements . story_separator_special_tag because of anticipated spending for the continued development of vasovist and ep-2104r and to support selective research programs , we do not expect positive cash flow from operating activities for any future quarterly or annual period prior to commercialization of vasovist in the u.s. the following table represents payments due under contractual obligations and commercial commitments as of december 31 , 2005 : replace_table_token_3_th we have incurred tax losses to date and therefore have not paid significant federal or state income taxes since inception . as of december 31 , 2005 , we had federal net operating loss carryforwards of approximately $ 180.4 million available to offset future taxable income . these amounts expire at various times through 2025. as a result of ownership changes resulting from sales of equity securities , our ability to use the net operating loss carryforwards is subject to limitations as defined in sections 382 and 383 of the internal revenue code of 1986 , as amended , or the code . we currently estimate that the annual limitation on our use of net operating losses generated through may 31 , 1996 to be approximately $ 900,000. pursuant to sections 382 and 383 of the code , the change in ownership resulting from public equity offerings in 1997 and any other future ownership changes may further limit utilization of losses and credits in any one year . we also are eligible for research and development tax credits that can be carried forward to offset federal taxable income . the annual limitation and the timing of attaining profitability may result in the expiration of net operating loss and tax credit carryforwards before utilization . certain factors that may affect future results of operations this report contains certain forward-looking statements as that term is defined in the private securities litigation reform act of 1995. such statements are based on management 's current expectations and are subject to a number of factors and uncertainties , which could cause actual results to differ materially from those described in the forward-looking statements . we caution investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors , including , but not limited to , the following : the uncertainties associated with pre-clinical studies and clinical trials ; our lack of product revenues ; our history of operating losses and accumulated deficit ; our lack of commercial manufacturing experience and commercial sales , distribution and marketing capabilities ; reliance on suppliers of key materials necessary for production of our products and technologies ; the potential development by competitors of competing products and technologies ; our dependence on existing and potential collaborative partners , and the lack of assurance that we will receive any funding under such 40 relationships to develop and maintain strategic alliances ; the lack of assurance regarding patent and other protection for our proprietary technology ; governmental regulation of our activities , facilities , products and personnel ; the dependence on key personnel ; uncertainties as to the extent of reimbursement for the costs of our potential products and related treatments by government and private health insurers and other organizations ; the potential adverse impact of government-directed health care reform ; the risk of product liability claims ; and economic conditions , both generally and those specifically related to the biotechnology industry . as a result , our future development efforts involve a high degree of risk . for further information , refer to the more specific risks and uncertainties discussed throughout this annual report on form 10-k. management 's report on internal controls our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in rules 13a-15 ( f ) and 15d-15 ( f ) under the securities exchange act of 1934 , as amended , as a process designed by , or under the supervision of , our principal executive and principal financial officers and effected by our board of directors , management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles . our internal control over financial reporting includes those policies and procedures that : pertain to the maintenance of records that , in reasonable detail , accurately and fairly reflects transactions in and dispositions of our assets ; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles , and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors ; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition , use or disposition of our assets that could have a material effect on the financial statements . because of its inherent limitations , internal control over financial reporting may not prevent or detect misstatements . projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions , or that the degree of compliance with the policies or procedures may deteriorate . our management assessed the effectiveness of our internal control over financial reporting as of december 31 , 2005. in making this assessment , management used the criteria set forth by the committee of sponsoring organizations of the treadway commission ( coso ) in internal control-integrated framework . based on this assessment , management has concluded that , as of december 31 , 2005 , our internal control over financial reporting is effective based on those criteria . our independent registered public accounting firm has issued an audit report on our assessment of our internal control over financial reporting . this report appears immediately following below . 41 report of independent registered public accounting firm the board of directors and shareholders

liquidity and capital resources our principal sources of liquidity consist of cash , cash equivalents and available-for-sale marketable securities of $ 124.7 million at december 31 , 2005 as compared to $ 164.4 million at december 31 , 2004. the decrease in cash , cash equivalents and available-for-sale marketable securities was primarily attributed to funding of our ongoing operations and to management 's decision not to drawdown the $ 15.0 million loan facility from schering ag at the end of 2005. we used approximately $ 24.3 million of net cash to fund operations for the year ended december 31 , 2005 , which compares to $ 22.5 million for the same period in 2004. the net use of cash to fund operations during the year ended december 31 , 2005 resulted from the net loss of $ 24.3 million , combined with a reduction in deferred revenue of $ 2.4 million , and was offset by decreases in accounts receivable of $ 173,000 and prepaid expenses of $ 238,000 , an increase in accounts payable of $ 330,000 and to non-cash expenses , primarily comprised of depreciation and amortization of $ 1.7 million . the reduction in deferred revenue resulted from the offset of prepaid royalties from bracco , plus the recognition of other license fee revenue related to payments from schering ag , tyco/ mallinckrodt and bracco , which are being amortized into revenue in accordance with the requirements of sab 104. the decrease in accounts receivable was primarily attributed to lower pre-launch marketing costs reimbursable by schering ag . the decrease in prepaid expenses resulted from the change in the timing of insurance premium payments . the increase in accounts payable was due to a number of larger clinical trial invoices that came in late in the year related to the ep-2104r development program .


 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 our principal sources of liquidity consist of cash , cash equivalents and available-for-sale marketable securities of $ 124.7 million at december 31 , 2005 as compared to $ 164.4 million at december 31 , 2004. the decrease in cash , cash equivalents and available-for-sale marketable securities was primarily attributed to funding of our ongoing operations and to management 's decision not to drawdown the $ 15.0 million loan facility from schering ag at the end of 2005. we used approximately $ 24.3 million of net cash to fund operations for the year ended december 31 , 2005 , which compares to $ 22.5 million for the same period in 2004. the net use of cash to fund operations during the year ended december 31 , 2005 resulted from the net loss of $ 24.3 million , combined with a reduction in deferred revenue of $ 2.4 million , and was offset by decreases in accounts receivable of $ 173,000 and prepaid expenses of $ 238,000 , an increase in accounts payable of $ 330,000 and to non-cash expenses , primarily comprised of depreciation and amortization of $ 1.7 million . the reduction in deferred revenue resulted from the offset of prepaid royalties from bracco , plus the recognition of other license fee revenue related to payments from schering ag , tyco/ mallinckrodt and bracco , which are being amortized into revenue in accordance with the requirements of sab 104. the decrease in accounts receivable was primarily attributed to lower pre-launch marketing costs reimbursable by schering ag . the decrease in prepaid expenses resulted from the change in the timing of insurance premium payments . the increase in accounts payable was due to a number of larger clinical trial invoices that came in late in the year related to the ep-2104r development program .
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 Suspicious Activity Report : total estimated costs of the feasibility program are based on management 's assessment of costs to complete the program based on an evaluation of the portion of the program completed , costs incurred to date , planned program activities , anticipated program timelines and the expected future costs of the program . adjustments to revenue are recorded if estimated costs to complete change materially from previous periods . to the extent that our estimated costs change materially , our revenues recorded under this activity could be materially affected and such change could have a material adverse effect on our operations in future periods . during the second quarter of 2005 , management increased its estimate of costs to complete the feasibility program to $ 16.1 million from its prior estimate . the increase in the cost to complete the feasibility program was primarily attributed to the additional patient safety monitoring related to amending the phase ii proof-of -concept clinical trial protocols for ep-2104r announced in july 2005. the impact of increasing the estimated cost to complete the feasibility program resulted in a reduction in product development revenue of approximately $ 1.5 million during the same period . during the fourth quarter of 2005 , management lowered its estimate of the cost to complete the feasibility program from $ 16.1 million to $ 15.2 million at december 31 , 2005 as a result of increased enrollment rate for this clinical trial . this latest reduction in the estimated total cost of the feasibility program resulted in an increase in product development revenue of $ 449,944 , which was recognized in the fourth quarter of 2005. revenue under our research collaboration with schering ag is recognized as services are provided , for which schering ag is obligated to reimburse us . royalty revenue is recognized based on actual revenues reported to us by bracco and schering ag . prior to the fourth quarter of 2004 , we recognized royalty revenue based on royalty reports received from bracco or on bracco 's estimates , historical revenues and trends when royalty reports from bracco were not available in a timely manner . in december 2004 , we were notified that bracco was asserting that it had overstated its non-u.s. royalties to us for the period 2001 to 2004 , and that bracco would offset the amount of the overstatement against its payments to us , including those triggered by fda approval of multihance ® in the u.s. although we are disputing bracco 's position regarding the overstatement , we recognized the impact of bracco 's claimed overstatement by reducing our 2004 royalty revenue . in addition , because we no longer believe that we have a reasonable basis to make royalty estimates under the agreement with bracco , we have , commencing in the fourth quarter of 2004 , only recognized royalty revenue from bracco in the period in which royalty reports are received . research and development research and development costs , including those associated with technology , licenses and patents , are expensed as incurred . research and development costs include employee salaries and related costs , third party service costs , the costs of preclinical and clinical trial supplies and consulting expenses . in order to conduct research and development activities and compile regulatory submissions , we enter into contracts with vendors who render services over extended periods of time , generally one to three years . 33 typically , we enter into three types of vendor contracts : time-based , patient-based or a combination thereof . under a time-based contract , using critical factors contained within the contract , usually the stated duration of the contract and the timing of services provided , we record the contractual expense for each service provided under the contract ratably over the period during which we estimate the service will be performed . under a patient-based contract , we first determine an appropriate per patient cost using critical factors contained within the contract , which include the estimated number of patients and the total dollar value of the contract . we then record expense based upon the total number of patients enrolled during the period . on a quarterly basis , we review both the timetable of services to be rendered and the timing of services actually rendered . based upon this review , revisions may be made to the forecasted timetable or to the extent of services performed , or both , in order to reflect our most current estimate of the contract . adjustments are recorded in the period in which the revisions are estimable . these adjustments could have a material effect on our results of operations . employee stock compensation we have elected to follow accounting principles board opinion no . 25 , accounting for stock issued to employees ,  or apb 25 , and related interpretations in accounting for our employee stock options under the intrinsic value method , rather than the alternative fair value accounting provided for under statement of financial accounting standards no . 123 ( r ) , share-based payments  an amendment of fasb statement no . 123 and 95 ,  or sfas 123r . under apb 25 , because the exercise price is equal to the market price of the underlying stock on the date of the grant , no compensation expense is recognized . our financial results could be materially adversely affected by the required adoption of sfas 123r , effective january 1 , 2006 , to the extent of the additional compensation expense that we would have to recognize , which could change significantly from period to period based on several factors , including the number of stock options granted and fluctuations in our stock price and or interest rates . see note 2 to the notes to financial statements . story_separator_special_tag because of anticipated spending for the continued development of vasovist and ep-2104r and to support selective research programs , we do not expect positive cash flow from operating activities for any future quarterly or annual period prior to commercialization of vasovist in the u.s. the following table represents payments due under contractual obligations and commercial commitments as of december 31 , 2005 : replace_table_token_3_th we have incurred tax losses to date and therefore have not paid significant federal or state income taxes since inception . as of december 31 , 2005 , we had federal net operating loss carryforwards of approximately $ 180.4 million available to offset future taxable income . these amounts expire at various times through 2025. as a result of ownership changes resulting from sales of equity securities , our ability to use the net operating loss carryforwards is subject to limitations as defined in sections 382 and 383 of the internal revenue code of 1986 , as amended , or the code . we currently estimate that the annual limitation on our use of net operating losses generated through may 31 , 1996 to be approximately $ 900,000. pursuant to sections 382 and 383 of the code , the change in ownership resulting from public equity offerings in 1997 and any other future ownership changes may further limit utilization of losses and credits in any one year . we also are eligible for research and development tax credits that can be carried forward to offset federal taxable income . the annual limitation and the timing of attaining profitability may result in the expiration of net operating loss and tax credit carryforwards before utilization . certain factors that may affect future results of operations this report contains certain forward-looking statements as that term is defined in the private securities litigation reform act of 1995. such statements are based on management 's current expectations and are subject to a number of factors and uncertainties , which could cause actual results to differ materially from those described in the forward-looking statements . we caution investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors , including , but not limited to , the following : the uncertainties associated with pre-clinical studies and clinical trials ; our lack of product revenues ; our history of operating losses and accumulated deficit ; our lack of commercial manufacturing experience and commercial sales , distribution and marketing capabilities ; reliance on suppliers of key materials necessary for production of our products and technologies ; the potential development by competitors of competing products and technologies ; our dependence on existing and potential collaborative partners , and the lack of assurance that we will receive any funding under such 40 relationships to develop and maintain strategic alliances ; the lack of assurance regarding patent and other protection for our proprietary technology ; governmental regulation of our activities , facilities , products and personnel ; the dependence on key personnel ; uncertainties as to the extent of reimbursement for the costs of our potential products and related treatments by government and private health insurers and other organizations ; the potential adverse impact of government-directed health care reform ; the risk of product liability claims ; and economic conditions , both generally and those specifically related to the biotechnology industry . as a result , our future development efforts involve a high degree of risk . for further information , refer to the more specific risks and uncertainties discussed throughout this annual report on form 10-k. management 's report on internal controls our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in rules 13a-15 ( f ) and 15d-15 ( f ) under the securities exchange act of 1934 , as amended , as a process designed by , or under the supervision of , our principal executive and principal financial officers and effected by our board of directors , management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles . our internal control over financial reporting includes those policies and procedures that : pertain to the maintenance of records that , in reasonable detail , accurately and fairly reflects transactions in and dispositions of our assets ; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles , and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors ; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition , use or disposition of our assets that could have a material effect on the financial statements . because of its inherent limitations , internal control over financial reporting may not prevent or detect misstatements . projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions , or that the degree of compliance with the policies or procedures may deteriorate . our management assessed the effectiveness of our internal control over financial reporting as of december 31 , 2005. in making this assessment , management used the criteria set forth by the committee of sponsoring organizations of the treadway commission ( coso ) in internal control-integrated framework . based on this assessment , management has concluded that , as of december 31 , 2005 , our internal control over financial reporting is effective based on those criteria . our independent registered public accounting firm has issued an audit report on our assessment of our internal control over financial reporting . this report appears immediately following below . 41 report of independent registered public accounting firm the board of directors and shareholders

