decrease in revenue of $297,932 is due to the rescoping of project milestones, affecting the amount and timing of the achievement of these milestones.
Operating Expenses.
Operating expenses consist of research and development, sales and marketing, and general and
administrative expenses. Operating expenses for the years ended December 31, 2017 and 2016 were $50,541,837 and $47,282,661, respectively.
Research and Development Expenses.
Research and development expenses include costs for developing our technology, such as IC design
costs, salaries, software and facility costs. Research and development costs for the years ended December 31, 2017 and 2016 were $33,230,668 and $32,832,677, respectively. The $397,991 increase in research and development expenses is primarily
due to a $5,939,073 increase in compensation, including a $4,296,494 increase in stock-based compensation and a $1,642,579 increase in payroll and related compensation expense, from a greater average headcount and the issuance of additional
restricted stock unit (RSU) awards, and a $390,072 increase in depreciation due to a higher asset base in lab equipment and perpetual engineering software licenses, partially offset by a $3,966,298 decrease in chip development, manufacturing and
engineering component costs due to more transmitter and receiver chip development work being done in house, a $973,467 decrease in term-based engineering software licenses and $931,834 decrease in consulting costs.
Sales and Marketing Expenses.
Sales and marketing expenses for the years ended December 31, 2017 and 2016 were $5,207,746 and
$3,201,549, respectively. The $2,006,197 increase in sales and marketing expenses is primarily due to an increase of $1,753,758 in compensation, including a $969,398 increase in payroll and related expense and a $784,360 increase in stock-based
compensation, due to a higher average headcount and the issuance of additional RSU grants and a $235,506 increase in tradeshow expenses.
General and Administrative Expenses.
General and administrative expenses include costs for general and corporate functions, including
facility fees, travel, telecommunications, insurance, professional fees, consulting fees and other overhead. General and administrative costs for the years ended December 31, 2017 and 2016 were $12,103,423 and $11,248,435, respectively. The
$854,988 increase in general and administrative expense is primarily due to a $1,180,146 increase in compensation, including a $1,213,790 increase in stock-based compensation and a $33,644 decrease in payroll costs, a $136,122 decrease in general
office expenses, and a $117,692 decrease in consulting and third party service costs.
Loss from Operations.
Loss from
operations for the years ended December 31, 2017 and 2016 was $49,387,828 and $45,830,720, respectively.
Interest Income.
Interest income for the year ended December 31, 2017 was $11,679, compared to $13,326 for the year ended December 31, 2016.
Net Loss.
As a result of the above, net loss for the year ended December 31, 2017 was $49,376,875, compared to $45,817,394 for the
year ended December 31, 2016.
For the Years Ended December 31, 2016 and 2015
Revenues.
During the years ended December 31, 2016 and 2015, we recorded revenue of $1,451,941 and $2,500,000, respectively, upon
the achievement of milestones under a development and licensing agreement. The decrease in revenue of $1,048,059 is due to the rescoping of project milestones, affecting the amount and timing of the achievement of these milestones.
Operating Expenses.
During 2016 and 2015, operating expenses are made up of research and development, sales and marketing,
and general and administrative expenses. Operating expenses for the years ended December 31, 2016 and 2015 were $47,282,661 and $30,077,339, respectively.
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