we have also formed a new dental professional advisory board , made up of four founding members , who have made significant contributions to the specialties of periodontics , implantology , oral surgery , multi-stage restorative therapy , and peri-implantitis therapy . our goal is to refocus our energies on strengthening leadership , worldwide competitiveness and our professional customers and their patients . we completed two private placements in the latter half of 2014 totaling in net proceeds after offering expenses , of approximately $ 46.3 million . we used a portion of the proceeds to repay our lines of credit in july 2014. the remainder of the proceeds is being used for working capital and general corporate purposes . prior to these infusions of capital , the available borrowing capacity on our lines of credit with comerica bank and the net proceeds from the february 2014 equity transaction have been principal sources of liquidity during the first half of 2014. on april 10 , 2014 , we entered into a forbearance agreement that reduced our total aggregate available borrowings to $ 4.0 million . on may 5 , 2014 , june 3 , 2014 and july 9 , 2014 , we amended the forbearance agreement to extend the forbearance periods and paid fees associated with such amendments . on july 28 , 2014 , we paid in full all amounts due under the revolving lines of credit , including principal , accrued interest , and fees which totaled , in the aggregate , approximately $ 2.9 million , and the credit agreements were terminated . further discussion of the amendments is included in note 5 to the consolidated financial statements in part iv , item 15 of this annual report on form 10-k , which is incorporated herein by reference . 40 critical accounting policies the preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the united states requires us to make judgments , assumptions , and estimates that affect the amounts reported . the following is a summary of those accounting policies that we believe are necessary to understand and evaluate our reported financial results . revenue recognition . we sell our products in north america directly to customers through our direct sales force and through non-exclusive distributors . we sell our products internationally through exclusive and non-exclusive distributors as well as directly to customers in certain countries . sales are recorded upon shipment from our facility and payment of our invoices is generally due within 90 days or less . internationally , we primarily sell products through independent distributors . we record revenue based on four basic criteria that must be met before revenue can be recognized : ( i ) persuasive evidence of an arrangement exists ; ( ii ) delivery has occurred and title and the risks and rewards of ownership have been transferred to our customer , or services have been rendered ; ( iii ) the price is fixed or determinable ; and ( iv ) collectability is reasonably assured . revenue is recorded for all sales upon shipment assuming all other revenue recognition criteria are met . sales of our laser systems include separate deliverables consisting of the product , disposables used with the laser systems , installation , and training . we apply the relative selling price method , which requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method . this requires us to use estimated selling prices of each of the deliverables in the total arrangement . the sum of those prices is then compared to the arrangement , and any difference is applied to the separate deliverable ratably . this method also establishes a selling price hierarchy for determining the selling price of a deliverable , which includes : ( i ) vendor-specific objective evidence ( “ vsoe ” ) , if available , ( ii ) third-party evidence if vsoe is not available , and ( iii ) estimated selling price if neither vsoe nor third-party evidence is available . vsoe is determined based on the value we sell the undelivered element to a customer as a stand-alone product . revenue attributable to the undelivered elements is included in deferred revenue when the product is shipped and is recognized when the related service is performed . disposables not shipped at time of sale and installation services are typically shipped or installed within 30 days . training is included in deferred revenue when the product is shipped and is recognized when the related service is performed or upon the approximate expiration of time offered under the agreement . the adoption of the relative selling price method does not significantly change the value of revenue recognized . key judgments related to our revenue recognition include the collectability of payment from the customer , the satisfaction of all elements of the arrangement having been delivered , and that no additional customer credits and discounts are needed . we evaluate a customer 's credit-worthiness prior to the shipment of the product . based on our assessment of the available credit information , we may determine the credit risk is higher than normally acceptable , and we will either decline the purchase or defer the revenue until payment is reasonably assured . future obligations required at the time of sale may also cause us to defer the revenue until the obligation is satisfied . although all sales are final , we accept returns of products in certain , limited circumstances and record a provision for sales returns based on historical experience concurrent with the recognition of revenue . the sales returns allowance is recorded as a reduction of accounts receivable and revenue . story_separator_special_tag in connection with our initiative to measure and improve customer satisfaction , the warranty for waterlase systems purchased after january 1 , 2014 was extended from one year to two years , which added $ 519,000 to the cost of revenue during fiscal 2014. in the third quarter of fiscal 2013 , we recorded a provision of $ 1.0 million for excess and obsolete inventory related to negative market trends for certain products and the decreased velocity of certain elements of our inventory at that time . as a result , cost of revenue as a percentage of net revenue , remained consistent between fiscal 2014 and fiscal 2013 despite the decline in sales . gross profit . gross profit for fiscal 2014 was $ 18.2 million , or 38 % of net revenue , a decrease of approximately $ 3.4 million , or 16 % , as compared with gross profit of $ 21.5 million , or 38 % of net revenue , for fiscal 2013. gross profit for fiscal 2014 , as a percentage of net revenue , was consistent with fiscal 2013. operating expenses . operating expenses for fiscal 2014 were $ 36.1 million , or 76 % of net revenue , an increase of approximately $ 3.6 million , or 11 % , as compared with $ 32.5 million , or 58 % of net revenue , for fiscal 2013. we expect that operating expenses as a percentage of net revenue will decrease for the year ending december 31 , 2015 ( “ fiscal 2015 ” ) . the year-over-year increase in expense is explained in the following expense categories : 45 sales and marketing expense . sales and marketing expenses for fiscal 2014 decreased by $ 2.3 million , or 12 % , to $ 16.4 million , or 34 % of net revenue , as compared with $ 18.7 million , or 33 % of net revenue , for fiscal 2013. the decrease was primarily a result of decreased convention related expenses of $ 1.3 million , decreased commission expenses of $ 938,000 , and decreased media and advertising expenses of $ 923,000 , partially offset by increased payroll and consulting related expenses of $ 699,000. the mid-year shareholder litigation brought distractions and disruptions within management and the marketplace in connection with such litigation , as well as a lack of sales management . due to the working capital required for legal expenditures and professional fees in connection with the shareholder litigation , management made the decision to reduce sales and marketing expenditures . beginning in the second half of 2014 , we appointed new key personnel to lead our sales and marketing department , including a new senior vice president of worldwide sales and account management as well as a new vice president and chief marketing officer . furthermore , in the fourth quarter of 2014 , we enhanced our sales force domestically and internationally . as we continue to transform and sustain growth , we expect sales and marketing expenses to increase in fiscal 2015. general and administrative expense . general and administrative expenses for fiscal 2014 increased by $ 5.5 million , or 58 % , to $ 14.9 million , or 31 % of net revenue , as compared with $ 9.4 million , or 17 % of net revenue , for fiscal 2013. the increase to general and administrative expenses was primarily due to increased legal expenses and professional fees of $ 4.2 million , increased payroll and consulting related expenses of $ 520,000 , and an increase to our provision for doubtful accounts of $ 1.0 million , partially offset by decreased patent and patent defense costs of $ 297,000. we incurred legal expenses and professional fees of approximately $ 4.3 million at the direction of our former chairman and ceo in the shareholder litigation brought by oracle to resolve the dispute over our corporate governance and the composition of our board , as well as the proxy contest and new litigation , brought by the former chairman and ceo in july 2014 , which litigation was subsequently dismissed . we believe that the legal expenses and professional fees we incurred in 2014 are atypical and expect these expenses to decrease in fiscal 2015. engineering and development expense . engineering and development expenses for fiscal 2014 increased by $ 548,000 , or 14 % , to $ 4.6 million , or 10 % of net revenue , as compared with $ 4.0 million , or 7 % of net revenue , for fiscal 2013. the increase was primarily related to increased payroll , consulting and temporary labor expenses of $ 524,000 resulting from our efforts to accelerate innovation of our products and technologies beginning in the third quarter of fiscal 2014. we expect to increase our investment in engineering and development as we continue our efforts in new product development in the future . excise tax expense . beginning in 2013 , the affordable care act imposed a 2.3 % medical device excise tax on certain product sales to customers located in the u.s. excise tax expenses for fiscal 2014 was $ 307,000 , or 1 % of net revenue , as compared with $ 438,000 , or 1 % of net revenue , for fiscal 2013. the decrease of $ 131,000 , or 30 % , was directly associated with our decreased sales in the u.s. non-operating income ( loss ) ( loss ) gain on foreign currency transactions . we recognized a $ 415,000 loss on foreign currency transactions for fiscal 2014 compared to a $ 50,000 loss for fiscal 2013 due to exchange rate fluctuations primarily between the u.s. dollar and the euro . during fiscal 2014 , the euro fell approximately 12 % in translation value against the u.s. dollar . interest expense , net . interest expense consists primarily of interest on our revolving credit facilities , amortization of debt issuance costs and

liquidity and capital resources at december 31 , 2014 , we had approximately $ 31.6 million in cash and cash equivalents . management defines cash and cash equivalents as highly liquid deposits with original maturities of 90 days or less when purchased . the increase in our cash and cash equivalents by $ 30.1 million from december 31 , 2013 was primarily due to cash provided by financing activities of $ 46.8 million , partially offset by net cash used in operating and investing activities of $ 16.2 million and $ 197,000 , respectively , and the effect of exchange rates on cash of $ 234,000. at december 31 , 2014 , we had approximately $ 38.6 million in working capital . our principal sources of liquidity at december 31 , 2014 , consisted of approximately $ 31.6 million in cash and cash equivalents and $ 9.0 million of net accounts receivable . on november 7 , 2014 , we completed a private placement with several institutional and individual investors , including certain of our directors and officers , under which we agreed to sell an aggregate of 14,162,873 unregistered shares of our common stock at the price of $ 2.39 per share , the closing price of our common stock on november 3 , 2014 , and warrants to purchase up to an aggregate of 9,205,862 unregistered shares of our common stock at an exercise price of $ 4.00 per share . gross proceeds from the sale were $ 35.0 million , and net proceeds , after offering expenses of approximately $ 235,000 , were approximately $ 34.8 million . the warrants become exercisable on may 7 , 2015 , six months after the closing of the private placement , and have a term of three years from the date of issuance . the proceeds are being used for working capital and general corporate purposes . on july 22 , 2014 , we entered into a private placement with several institutional and individual investors , and several of our directors and officers , wherein we sold 6,250,000 unregistered shares of common stock at a price of $ 1.92 per share .


 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 at december 31 , 2014 , we had approximately $ 31.6 million in cash and cash equivalents . management defines cash and cash equivalents as highly liquid deposits with original maturities of 90 days or less when purchased . the increase in our cash and cash equivalents by $ 30.1 million from december 31 , 2013 was primarily due to cash provided by financing activities of $ 46.8 million , partially offset by net cash used in operating and investing activities of $ 16.2 million and $ 197,000 , respectively , and the effect of exchange rates on cash of $ 234,000. at december 31 , 2014 , we had approximately $ 38.6 million in working capital . our principal sources of liquidity at december 31 , 2014 , consisted of approximately $ 31.6 million in cash and cash equivalents and $ 9.0 million of net accounts receivable . on november 7 , 2014 , we completed a private placement with several institutional and individual investors , including certain of our directors and officers , under which we agreed to sell an aggregate of 14,162,873 unregistered shares of our common stock at the price of $ 2.39 per share , the closing price of our common stock on november 3 , 2014 , and warrants to purchase up to an aggregate of 9,205,862 unregistered shares of our common stock at an exercise price of $ 4.00 per share . gross proceeds from the sale were $ 35.0 million , and net proceeds , after offering expenses of approximately $ 235,000 , were approximately $ 34.8 million . the warrants become exercisable on may 7 , 2015 , six months after the closing of the private placement , and have a term of three years from the date of issuance . the proceeds are being used for working capital and general corporate purposes . on july 22 , 2014 , we entered into a private placement with several institutional and individual investors , and several of our directors and officers , wherein we sold 6,250,000 unregistered shares of common stock at a price of $ 1.92 per share .
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 Suspicious Activity Report : we have also formed a new dental professional advisory board , made up of four founding members , who have made significant contributions to the specialties of periodontics , implantology , oral surgery , multi-stage restorative therapy , and peri-implantitis therapy . our goal is to refocus our energies on strengthening leadership , worldwide competitiveness and our professional customers and their patients . we completed two private placements in the latter half of 2014 totaling in net proceeds after offering expenses , of approximately $ 46.3 million . we used a portion of the proceeds to repay our lines of credit in july 2014. the remainder of the proceeds is being used for working capital and general corporate purposes . prior to these infusions of capital , the available borrowing capacity on our lines of credit with comerica bank and the net proceeds from the february 2014 equity transaction have been principal sources of liquidity during the first half of 2014. on april 10 , 2014 , we entered into a forbearance agreement that reduced our total aggregate available borrowings to $ 4.0 million . on may 5 , 2014 , june 3 , 2014 and july 9 , 2014 , we amended the forbearance agreement to extend the forbearance periods and paid fees associated with such amendments . on july 28 , 2014 , we paid in full all amounts due under the revolving lines of credit , including principal , accrued interest , and fees which totaled , in the aggregate , approximately $ 2.9 million , and the credit agreements were terminated . further discussion of the amendments is included in note 5 to the consolidated financial statements in part iv , item 15 of this annual report on form 10-k , which is incorporated herein by reference . 40 critical accounting policies the preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the united states requires us to make judgments , assumptions , and estimates that affect the amounts reported . the following is a summary of those accounting policies that we believe are necessary to understand and evaluate our reported financial results . revenue recognition . we sell our products in north america directly to customers through our direct sales force and through non-exclusive distributors . we sell our products internationally through exclusive and non-exclusive distributors as well as directly to customers in certain countries . sales are recorded upon shipment from our facility and payment of our invoices is generally due within 90 days or less . internationally , we primarily sell products through independent distributors . we record revenue based on four basic criteria that must be met before revenue can be recognized : ( i ) persuasive evidence of an arrangement exists ; ( ii ) delivery has occurred and title and the risks and rewards of ownership have been transferred to our customer , or services have been rendered ; ( iii ) the price is fixed or determinable ; and ( iv ) collectability is reasonably assured . revenue is recorded for all sales upon shipment assuming all other revenue recognition criteria are met . sales of our laser systems include separate deliverables consisting of the product , disposables used with the laser systems , installation , and training . we apply the relative selling price method , which requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method . this requires us to use estimated selling prices of each of the deliverables in the total arrangement . the sum of those prices is then compared to the arrangement , and any difference is applied to the separate deliverable ratably . this method also establishes a selling price hierarchy for determining the selling price of a deliverable , which includes : ( i ) vendor-specific objective evidence ( “ vsoe ” ) , if available , ( ii ) third-party evidence if vsoe is not available , and ( iii ) estimated selling price if neither vsoe nor third-party evidence is available . vsoe is determined based on the value we sell the undelivered element to a customer as a stand-alone product . revenue attributable to the undelivered elements is included in deferred revenue when the product is shipped and is recognized when the related service is performed . disposables not shipped at time of sale and installation services are typically shipped or installed within 30 days . training is included in deferred revenue when the product is shipped and is recognized when the related service is performed or upon the approximate expiration of time offered under the agreement . the adoption of the relative selling price method does not significantly change the value of revenue recognized . key judgments related to our revenue recognition include the collectability of payment from the customer , the satisfaction of all elements of the arrangement having been delivered , and that no additional customer credits and discounts are needed . we evaluate a customer 's credit-worthiness prior to the shipment of the product . based on our assessment of the available credit information , we may determine the credit risk is higher than normally acceptable , and we will either decline the purchase or defer the revenue until payment is reasonably assured . future obligations required at the time of sale may also cause us to defer the revenue until the obligation is satisfied . although all sales are final , we accept returns of products in certain , limited circumstances and record a provision for sales returns based on historical experience concurrent with the recognition of revenue . the sales returns allowance is recorded as a reduction of accounts receivable and revenue . story_separator_special_tag in connection with our initiative to measure and improve customer satisfaction , the warranty for waterlase systems purchased after january 1 , 2014 was extended from one year to two years , which added $ 519,000 to the cost of revenue during fiscal 2014. in the third quarter of fiscal 2013 , we recorded a provision of $ 1.0 million for excess and obsolete inventory related to negative market trends for certain products and the decreased velocity of certain elements of our inventory at that time . as a result , cost of revenue as a percentage of net revenue , remained consistent between fiscal 2014 and fiscal 2013 despite the decline in sales . gross profit . gross profit for fiscal 2014 was $ 18.2 million , or 38 % of net revenue , a decrease of approximately $ 3.4 million , or 16 % , as compared with gross profit of $ 21.5 million , or 38 % of net revenue , for fiscal 2013. gross profit for fiscal 2014 , as a percentage of net revenue , was consistent with fiscal 2013. operating expenses . operating expenses for fiscal 2014 were $ 36.1 million , or 76 % of net revenue , an increase of approximately $ 3.6 million , or 11 % , as compared with $ 32.5 million , or 58 % of net revenue , for fiscal 2013. we expect that operating expenses as a percentage of net revenue will decrease for the year ending december 31 , 2015 ( “ fiscal 2015 ” ) . the year-over-year increase in expense is explained in the following expense categories : 45 sales and marketing expense . sales and marketing expenses for fiscal 2014 decreased by $ 2.3 million , or 12 % , to $ 16.4 million , or 34 % of net revenue , as compared with $ 18.7 million , or 33 % of net revenue , for fiscal 2013. the decrease was primarily a result of decreased convention related expenses of $ 1.3 million , decreased commission expenses of $ 938,000 , and decreased media and advertising expenses of $ 923,000 , partially offset by increased payroll and consulting related expenses of $ 699,000. the mid-year shareholder litigation brought distractions and disruptions within management and the marketplace in connection with such litigation , as well as a lack of sales management . due to the working capital required for legal expenditures and professional fees in connection with the shareholder litigation , management made the decision to reduce sales and marketing expenditures . beginning in the second half of 2014 , we appointed new key personnel to lead our sales and marketing department , including a new senior vice president of worldwide sales and account management as well as a new vice president and chief marketing officer . furthermore , in the fourth quarter of 2014 , we enhanced our sales force domestically and internationally . as we continue to transform and sustain growth , we expect sales and marketing expenses to increase in fiscal 2015. general and administrative expense . general and administrative expenses for fiscal 2014 increased by $ 5.5 million , or 58 % , to $ 14.9 million , or 31 % of net revenue , as compared with $ 9.4 million , or 17 % of net revenue , for fiscal 2013. the increase to general and administrative expenses was primarily due to increased legal expenses and professional fees of $ 4.2 million , increased payroll and consulting related expenses of $ 520,000 , and an increase to our provision for doubtful accounts of $ 1.0 million , partially offset by decreased patent and patent defense costs of $ 297,000. we incurred legal expenses and professional fees of approximately $ 4.3 million at the direction of our former chairman and ceo in the shareholder litigation brought by oracle to resolve the dispute over our corporate governance and the composition of our board , as well as the proxy contest and new litigation , brought by the former chairman and ceo in july 2014 , which litigation was subsequently dismissed . we believe that the legal expenses and professional fees we incurred in 2014 are atypical and expect these expenses to decrease in fiscal 2015. engineering and development expense . engineering and development expenses for fiscal 2014 increased by $ 548,000 , or 14 % , to $ 4.6 million , or 10 % of net revenue , as compared with $ 4.0 million , or 7 % of net revenue , for fiscal 2013. the increase was primarily related to increased payroll , consulting and temporary labor expenses of $ 524,000 resulting from our efforts to accelerate innovation of our products and technologies beginning in the third quarter of fiscal 2014. we expect to increase our investment in engineering and development as we continue our efforts in new product development in the future . excise tax expense . beginning in 2013 , the affordable care act imposed a 2.3 % medical device excise tax on certain product sales to customers located in the u.s. excise tax expenses for fiscal 2014 was $ 307,000 , or 1 % of net revenue , as compared with $ 438,000 , or 1 % of net revenue , for fiscal 2013. the decrease of $ 131,000 , or 30 % , was directly associated with our decreased sales in the u.s. non-operating income ( loss ) ( loss ) gain on foreign currency transactions . we recognized a $ 415,000 loss on foreign currency transactions for fiscal 2014 compared to a $ 50,000 loss for fiscal 2013 due to exchange rate fluctuations primarily between the u.s. dollar and the euro . during fiscal 2014 , the euro fell approximately 12 % in translation value against the u.s. dollar . interest expense , net . interest expense consists primarily of interest on our revolving credit facilities , amortization of debt issuance costs and

