please see “ forward-looking statements ” at the beginning of this form 10-k. the following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this form 10-k. we undertake no obligation to update any forward-looking statements in the discussion of our financial condition and results of operations to reflect events or circumstances after the date of this report or to reflect actual outcomes . overview we are a specialty pharmaceutical company that seeks to acquire , license , develop and commercialize products principally for use in the acute/intensive care hospital setting . our current product candidate is intravenous ( iv ) tramadol , for the treatment of moderate to moderately severe post-operative pain . in 2016 , we completed a pharmacokinetic ( pk ) study for iv tramadol in healthy volunteers as well as an end of phase 2 ( eop2 ) meeting with the u.s. food and drug administration ( fda ) . in the third quarter of 2017 , we initiated a phase 3 development program of iv tramadol for the management of post-operative pain . under the terms of certain agreements described herein , we have an exclusive license to develop and commercialize iv tramadol in the united states . to date , we have not received approval for the sale of our product candidate in any market and , therefore , have not generated any sales revenue from our product candidates . on june 26 , 2017 , we completed an initial public offering ( ipo ) of our common stock , resulting in net proceeds of approximately $ 34.2 million after deducting underwriting discounts , and other offering costs . we have used the proceeds from our ipo to initiate our first phase 3 trial of iv tramadol in patients with moderate-to-severe pain following bunionectomy , which had its first patient dosed in september 2017. in may 2018 , we announced the study met its primary endpoint and all key secondary endpoints . further , in december 2018 , we initiated the second phase 3 trial in patients with moderate-to-severe pain following abdominoplasty upon successful completion of the bunionectomy study . based on the enrollment pace of similar studies , we anticipate that we will have topline data from this second phase 3 trial as early as mid-2019 . in december 2017 , we initiated an open-label safety study , which will run concurrently with the two phase 3 trials . if these studies meet their primary endpoints , we plan to submit a new drug application , or an nda , for iv tramadol to treat moderate to moderately severe postoperative pain pursuant to section 505 ( b ) ( 2 ) of the federal food , drug and cosmetic act , or fdca , by the end of 2019. on november 12 , 2018 , we entered into a stock purchase and merger agreement ( spma ) with invagen pharmaceuticals inc. ( invagen ) , madison pharmaceuticals inc. ( merger sub ) , and fortress biotech , inc. ( fortress ) , pursuant to which invagen agreed to purchase , for $ 35 million , common shares representing 33.3 % of the fully diluted capitalization of the company ( the stock purchase transaction ) and subsequently acquire the remaining issued and outstanding capital stock of the company for $ 180 million , subject to certain reductions , in a reverse subsidiary merger transaction ( the merger transaction ) . pursuant to the terms and subject to the conditions set forth in the spma , invagen will , at second closing , hold 100 % of the issued and outstanding equity interests of the company . consummation of the merger transaction is conditioned , among other things , upon fda approval of iv tramadol , its labeling and scheduling and the absence of any risk evaluation and mitigation strategy ( “ rems ” ) restrictions in effect with respect to iv tramadol , as well as the expiration of any waiting period applicable to the acquisition under the hart-scott-rodino antitrust improvements act of 1976 , as amended . the aggregate consideration to be paid by invagen under the spma is $ 215 million in cash , subject to certain potential reductions , which invagen intends to have sufficient immediately available funds to pay . in addition , we are subject to certain lock-up restrictions and agreed not to ( subject to customary exceptions ) , during the period commencing at the signing of the spma until the merger transaction , issue , buy , sell , or otherwise subject to a security interest , pledge , hypothecation , mortgage or lien , any securities of the company . 44 the spma was approved by a majority of our stockholders , including a majority of our non-affiliated stockholders , at our special shareholder meeting on february 6 , 2019. on february 8 , 2019 , the company and invagen consummated the stock purchase transaction whereby invagen acquired 5,833,333 shares of our common stock at $ 6.00 per share for total gross consideration of $ 35.0 million , representing a 33.3 % stake in our capital stock on a fully diluted basis . our net loss for the years ended december 31 , 2018 and 2017 was approximately $ 21.5 million and $ 12.3 million , respectively . as of december 31 , 2018 , we had an accumulated deficit of approximately $ 42.2 million . substantially all our net losses resulted from costs incurred in connection with our research and development program of iv tramadol and from general and administrative costs associated with our operations . story_separator_special_tag due to these uncertainties , we concluded that we could not reasonably estimate the contingent consideration until shares were actually issued on february 17 , 2018. because the issuance of shares on february 17 , 2018 occurred prior to the issuance of the december 31 , 2017 financial statements , we recorded approximately $ 1.1 million in research and development - licenses acquired for the year ended december 31 , 2017. due to the waiver agreement , we recorded $ 0 in research and development - licenses acquired for the year ended december 31 , 2018. stock-based compensation we expense stock-based compensation to employees and board members over the requisite service period based on the estimated grant-date fair value of the awards . stock-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award . for stock-based compensation awards to non-employees , we measure the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award . changes in the estimated fair value of these non-employee awards are recognized as compensation expense in the period of change . the assumptions used in calculating the fair value of stock-based awards represent management 's best estimates and involve inherent uncertainties and the application of management 's judgment . fair value option as permitted under asc 825 , financial instruments , ( asc 825 ) , we have elected the fair value option to account for our convertible notes that were issued during 2016. in accordance with asc 825 , we record these convertible notes at fair value with changes in fair value recorded in the statement of operations . as a result of applying the fair value option , direct costs and fees related to the convertible notes were recognized in earnings as incurred and were not deferred . valuation of warrant related to nsc note in accordance with asc 815 derivatives and hedging , we classified the fair value of the warrant ( contingently issuable warrants ) that we may be obligated to issue to national securities , inc. ( nsc ) , in connection with the transfer on october 31 , 2015 of $ 3.0 million of indebtedness to nsc , as a derivative liability as there was a potential that we would not have a sufficient number of authorized common shares available to settle this instrument . we valued these contingently issuable warrants using a black-scholes model and used estimates for an expected dividend yield , a risk-free interest rate , and expected volatility together with management 's estimate of the probability of issuance of the contingently issuable warrants . at each reporting period , as long as the contingently issuable warrants were potentially issuable and there was a potential for an insufficient number of authorized shares available to settle the contingently issuable warrants , the contingently issuable warrants had to be revalued and any difference from the previous valuation date would be recognized as a change in fair value in our statement of operations . on june 26 , 2017 , the warrants were issued . income taxes no income tax expense or benefit was recognized in the accompanying financial statements . our deferred tax assets are comprised primarily of net operating loss carryforwards . we maintain a full valuation allowance on our deferred tax assets since we have not yet achieved sustained profitable operations . as a result , we have not recorded any income tax benefit since our inception . 46 results of operations comparison of the years ended december 31 , 2018 and 2017 replace_table_token_3_th research and development expenses for the years ended december 31 , 2018 and 2017 , research and development expenses were $ 17.7 million and $ 6.7 million , respectively . the $ 11.0 million increase primarily reflects an increase of $ 10.2 million in clinical trial costs associated with the completion of the bunionectomy study in may 2018 , the ongoing safety study and the initiation of the abdominoplasty study in december 2018. there were also increases of $ 0.4 million in personnel costs and $ 0.4 million in stock compensation costs associated with increased headcount . research and development expenses – licenses acquired for the years ended december 31 , 2018 and 2017 , research and development expenses – licenses acquired were $ 0 and $ 1.1 million , respectively . the $ 1.1 million expense in 2017 represents the payment of the annual class a preferred stock dividend of 2.5 % of the fully dilutive shares . there was no payment for the year ended december 31 , 2018 due to the spma with invagen . general and administrative expenses for the years ended december 31 , 2018 and 2017 , general and administrative expenses were $ 4.1 million and $ 3.6 million , respectively . the $ 0.5 million increase primarily reflects increases of $ 0.2 million for personnel costs , $ 0.4 million for legal costs , $ 0.1 million for marketing research cost and $ 0.2 million for professional fees partially offset by a decrease of $ 0.4 million for stock compensation costs associated with the 2.5 % financing fee due to fortress from the ipo in 2017. interest income interest income was $ 0.1 million for the years ended december 31 , 2018 and 2017 , respectively . interest income was earned from our proceeds from our ipo in june 2017. interest expense interest expense was $ 0 and $ 0.3 million for the years ended december 31 , 2018 and 2017 , respectively . interest expense was primarily related to our note payable with nsc which was repaid in july 2017. interest expense - related party interest expense - related party was $ 0 and $ 0.1 million for the years ended december 31 , 2018 and 2017 , respectively . interest expense - related party was primarily related

liquidity and capital resources we have incurred substantial operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable . as of december 31 , 2018 , we had an accumulated deficit of $ 42.2 million . on june 26 , 2017 , we completed an ipo of our common stock , which resulted in the issuance of 6,325,000 shares of its common stock , inclusive of 825,000 shares which were subject to an underwriter over-allotment . the shares were issued at $ 6.00 per share , resulting in net proceeds of approximately $ 34.2 million after deducting underwriting discounts , and other offering costs . on february 8 , 2019 , invagen acquired 5,833,333 shares of our common stock at $ 6.00 per share for net proceeds of $ 31.5 million after deducting commission fees and other offering costs , representing a 33.3 % stake in our company 's capital stock on a fully diluted basis . we expect to use the net proceeds from the above transactions primarily for general corporate purposes , which may include financing our growth , developing new or existing product candidates , and funding capital expenditures and investments .


 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 we have incurred substantial operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable . as of december 31 , 2018 , we had an accumulated deficit of $ 42.2 million . on june 26 , 2017 , we completed an ipo of our common stock , which resulted in the issuance of 6,325,000 shares of its common stock , inclusive of 825,000 shares which were subject to an underwriter over-allotment . the shares were issued at $ 6.00 per share , resulting in net proceeds of approximately $ 34.2 million after deducting underwriting discounts , and other offering costs . on february 8 , 2019 , invagen acquired 5,833,333 shares of our common stock at $ 6.00 per share for net proceeds of $ 31.5 million after deducting commission fees and other offering costs , representing a 33.3 % stake in our company 's capital stock on a fully diluted basis . we expect to use the net proceeds from the above transactions primarily for general corporate purposes , which may include financing our growth , developing new or existing product candidates , and funding capital expenditures and investments .
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 Suspicious Activity Report : please see “ forward-looking statements ” at the beginning of this form 10-k. the following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this form 10-k. we undertake no obligation to update any forward-looking statements in the discussion of our financial condition and results of operations to reflect events or circumstances after the date of this report or to reflect actual outcomes . overview we are a specialty pharmaceutical company that seeks to acquire , license , develop and commercialize products principally for use in the acute/intensive care hospital setting . our current product candidate is intravenous ( iv ) tramadol , for the treatment of moderate to moderately severe post-operative pain . in 2016 , we completed a pharmacokinetic ( pk ) study for iv tramadol in healthy volunteers as well as an end of phase 2 ( eop2 ) meeting with the u.s. food and drug administration ( fda ) . in the third quarter of 2017 , we initiated a phase 3 development program of iv tramadol for the management of post-operative pain . under the terms of certain agreements described herein , we have an exclusive license to develop and commercialize iv tramadol in the united states . to date , we have not received approval for the sale of our product candidate in any market and , therefore , have not generated any sales revenue from our product candidates . on june 26 , 2017 , we completed an initial public offering ( ipo ) of our common stock , resulting in net proceeds of approximately $ 34.2 million after deducting underwriting discounts , and other offering costs . we have used the proceeds from our ipo to initiate our first phase 3 trial of iv tramadol in patients with moderate-to-severe pain following bunionectomy , which had its first patient dosed in september 2017. in may 2018 , we announced the study met its primary endpoint and all key secondary endpoints . further , in december 2018 , we initiated the second phase 3 trial in patients with moderate-to-severe pain following abdominoplasty upon successful completion of the bunionectomy study . based on the enrollment pace of similar studies , we anticipate that we will have topline data from this second phase 3 trial as early as mid-2019 . in december 2017 , we initiated an open-label safety study , which will run concurrently with the two phase 3 trials . if these studies meet their primary endpoints , we plan to submit a new drug application , or an nda , for iv tramadol to treat moderate to moderately severe postoperative pain pursuant to section 505 ( b ) ( 2 ) of the federal food , drug and cosmetic act , or fdca , by the end of 2019. on november 12 , 2018 , we entered into a stock purchase and merger agreement ( spma ) with invagen pharmaceuticals inc. ( invagen ) , madison pharmaceuticals inc. ( merger sub ) , and fortress biotech , inc. ( fortress ) , pursuant to which invagen agreed to purchase , for $ 35 million , common shares representing 33.3 % of the fully diluted capitalization of the company ( the stock purchase transaction ) and subsequently acquire the remaining issued and outstanding capital stock of the company for $ 180 million , subject to certain reductions , in a reverse subsidiary merger transaction ( the merger transaction ) . pursuant to the terms and subject to the conditions set forth in the spma , invagen will , at second closing , hold 100 % of the issued and outstanding equity interests of the company . consummation of the merger transaction is conditioned , among other things , upon fda approval of iv tramadol , its labeling and scheduling and the absence of any risk evaluation and mitigation strategy ( “ rems ” ) restrictions in effect with respect to iv tramadol , as well as the expiration of any waiting period applicable to the acquisition under the hart-scott-rodino antitrust improvements act of 1976 , as amended . the aggregate consideration to be paid by invagen under the spma is $ 215 million in cash , subject to certain potential reductions , which invagen intends to have sufficient immediately available funds to pay . in addition , we are subject to certain lock-up restrictions and agreed not to ( subject to customary exceptions ) , during the period commencing at the signing of the spma until the merger transaction , issue , buy , sell , or otherwise subject to a security interest , pledge , hypothecation , mortgage or lien , any securities of the company . 44 the spma was approved by a majority of our stockholders , including a majority of our non-affiliated stockholders , at our special shareholder meeting on february 6 , 2019. on february 8 , 2019 , the company and invagen consummated the stock purchase transaction whereby invagen acquired 5,833,333 shares of our common stock at $ 6.00 per share for total gross consideration of $ 35.0 million , representing a 33.3 % stake in our capital stock on a fully diluted basis . our net loss for the years ended december 31 , 2018 and 2017 was approximately $ 21.5 million and $ 12.3 million , respectively . as of december 31 , 2018 , we had an accumulated deficit of approximately $ 42.2 million . substantially all our net losses resulted from costs incurred in connection with our research and development program of iv tramadol and from general and administrative costs associated with our operations . story_separator_special_tag due to these uncertainties , we concluded that we could not reasonably estimate the contingent consideration until shares were actually issued on february 17 , 2018. because the issuance of shares on february 17 , 2018 occurred prior to the issuance of the december 31 , 2017 financial statements , we recorded approximately $ 1.1 million in research and development - licenses acquired for the year ended december 31 , 2017. due to the waiver agreement , we recorded $ 0 in research and development - licenses acquired for the year ended december 31 , 2018. stock-based compensation we expense stock-based compensation to employees and board members over the requisite service period based on the estimated grant-date fair value of the awards . stock-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award . for stock-based compensation awards to non-employees , we measure the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award . changes in the estimated fair value of these non-employee awards are recognized as compensation expense in the period of change . the assumptions used in calculating the fair value of stock-based awards represent management 's best estimates and involve inherent uncertainties and the application of management 's judgment . fair value option as permitted under asc 825 , financial instruments , ( asc 825 ) , we have elected the fair value option to account for our convertible notes that were issued during 2016. in accordance with asc 825 , we record these convertible notes at fair value with changes in fair value recorded in the statement of operations . as a result of applying the fair value option , direct costs and fees related to the convertible notes were recognized in earnings as incurred and were not deferred . valuation of warrant related to nsc note in accordance with asc 815 derivatives and hedging , we classified the fair value of the warrant ( contingently issuable warrants ) that we may be obligated to issue to national securities , inc. ( nsc ) , in connection with the transfer on october 31 , 2015 of $ 3.0 million of indebtedness to nsc , as a derivative liability as there was a potential that we would not have a sufficient number of authorized common shares available to settle this instrument . we valued these contingently issuable warrants using a black-scholes model and used estimates for an expected dividend yield , a risk-free interest rate , and expected volatility together with management 's estimate of the probability of issuance of the contingently issuable warrants . at each reporting period , as long as the contingently issuable warrants were potentially issuable and there was a potential for an insufficient number of authorized shares available to settle the contingently issuable warrants , the contingently issuable warrants had to be revalued and any difference from the previous valuation date would be recognized as a change in fair value in our statement of operations . on june 26 , 2017 , the warrants were issued . income taxes no income tax expense or benefit was recognized in the accompanying financial statements . our deferred tax assets are comprised primarily of net operating loss carryforwards . we maintain a full valuation allowance on our deferred tax assets since we have not yet achieved sustained profitable operations . as a result , we have not recorded any income tax benefit since our inception . 46 results of operations comparison of the years ended december 31 , 2018 and 2017 replace_table_token_3_th research and development expenses for the years ended december 31 , 2018 and 2017 , research and development expenses were $ 17.7 million and $ 6.7 million , respectively . the $ 11.0 million increase primarily reflects an increase of $ 10.2 million in clinical trial costs associated with the completion of the bunionectomy study in may 2018 , the ongoing safety study and the initiation of the abdominoplasty study in december 2018. there were also increases of $ 0.4 million in personnel costs and $ 0.4 million in stock compensation costs associated with increased headcount . research and development expenses – licenses acquired for the years ended december 31 , 2018 and 2017 , research and development expenses – licenses acquired were $ 0 and $ 1.1 million , respectively . the $ 1.1 million expense in 2017 represents the payment of the annual class a preferred stock dividend of 2.5 % of the fully dilutive shares . there was no payment for the year ended december 31 , 2018 due to the spma with invagen . general and administrative expenses for the years ended december 31 , 2018 and 2017 , general and administrative expenses were $ 4.1 million and $ 3.6 million , respectively . the $ 0.5 million increase primarily reflects increases of $ 0.2 million for personnel costs , $ 0.4 million for legal costs , $ 0.1 million for marketing research cost and $ 0.2 million for professional fees partially offset by a decrease of $ 0.4 million for stock compensation costs associated with the 2.5 % financing fee due to fortress from the ipo in 2017. interest income interest income was $ 0.1 million for the years ended december 31 , 2018 and 2017 , respectively . interest income was earned from our proceeds from our ipo in june 2017. interest expense interest expense was $ 0 and $ 0.3 million for the years ended december 31 , 2018 and 2017 , respectively . interest expense was primarily related to our note payable with nsc which was repaid in july 2017. interest expense - related party interest expense - related party was $ 0 and $ 0.1 million for the years ended december 31 , 2018 and 2017 , respectively . interest expense - related party was primarily related

