critical accounting policies revenue recognitionthe company recognizes revenue for sales and billing for freight charges upon delivery of the product to the customer at a fixed or determinable price with a reasonable assurance of collection , passage of title to the customer as indicated by shipping terms and fulfillment of all significant obligations , pursuant to the guidance provided by accounting standards codification topic 605. for sales to all customers , 17 including manufacturer representatives , distributors or their third-party customers , these criteria are met at the time product is shipped . when other significant obligations remain after products are delivered , revenue is recognized only after such obligations are fulfilled . in addition , judgments are required in evaluating the credit worthiness of our customers . credit is not extended to customers and revenue is not recognized until we have determined that collectability is reasonably assured . allowance for doubtful accountsour policy is to maintain allowances for estimated losses resulting from the inability of our customers to make required payments . credit limits for all customers are established based upon several factors , including but not limited to financial condition and stability , payment history , published credit reports and use of credit references . on a monthly basis , management performs various analyses to evaluate accounts receivable balances to ensure recorded amounts reflect estimated net realizable value . this review includes accounts receivable agings , other operating trends and relevant business conditions , including general economic factors , as they relate to the company 's domestic and international customers . when a customer 's account balance becomes past due , we initiate dialogue with the customer to determine the cause . if it is determined that the customer will be unable to meet its financial obligation to us , such as in the case of a bankruptcy filing , we record a specific allowance to reduce the related receivable to the amount we expect to recover given all of the information presently available . inventoriesas a designer and manufacturer of high technology systems , we are exposed to a number of economic and industry factors that could result in portions of our inventories becoming either obsolete or in excess of anticipated usage . these factors include , but are not limited to , technological changes in our markets , our ability to meet changing customer requirements , competitive pressures in products and prices , and the availability of key components from our suppliers . our policy is to record inventory write-downs when conditions exist that suggest our inventories may be in excess of anticipated demand for our products and market conditions . we regularly evaluate the ability to realize the value of our inventories based upon a combination of factors including the following : historical usage rates , forecasted sales or usage , product end of life dates , estimated current and future market values and new product introductions . purchasing requirements and alternative usage avenues are explored within these processes to mitigate inventory exposure . when recorded , our write-downs are intended to reduce the carrying value of our inventories to their net realizable value and establish a new cost basis . deferred taxesthe company applies the asset and liability method in recording income taxes , under which deferred income tax assets and liabilities are determined , based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using currently enacted tax rates and laws . additionally , deferred tax assets are evaluated and a valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized . management continues to review the level of the valuation allowance on a quarterly basis . there can be no assurance that the company 's future operations will produce sufficient earnings so that the deferred tax assets can be fully utilized . intangible assetsthere is a periodic review of intangible and other long-lived assets for impairment . this review consists of the analysis of events or changes in circumstances that would indicate the carrying amount of the assets may not be recoverable . recoverability is determined by comparing the forecasted future undiscounted net cash flows from the operations to which the assets relate , based on management 's best estimates using the appropriate assumptions and projections at the time , to the carrying amount of the assets . if the carrying value is determined to be in excess of future operating cash flows , the asset is considered impaired and a loss is recognized equal to the amount by which the carrying amount exceeds the estimated fair value of the assets . 18 recently issued accounting pronouncements refer to note 1 of the notes to consolidated financial statements for a discussion of recently issued accounting pronouncements . discussion of operating results replace_table_token_3_th sales sales in the balancer segment increased $ 3.3 million , or 71.5 % , to $ 8.0 million for fiscal 2011 compared to $ 4.7 million for fiscal 2010. this increase is primarily due to higher unit sales volumes in asia , north america and europe during the year . asia sales increased $ 1.8 million , or 93.5 % , in fiscal 2011 compared to fiscal 2010. north american sales increased $ 1.4 million , or 77.9 % , in fiscal 2011 compared to the prior year . european sales increased $ 108,000 , or 13.5 % , in fiscal 2011 compared to fiscal 2010. the increases across all geographies are primarily due to higher volumes of shipments as the worldwide automotive and industrial markets in these regions have begun to recover from the previous low levels due to the global economic downturn . story_separator_special_tag sales in the measurement segment increased $ 1.3 million , or 63.1 % , to $ 3.5 million in fiscal 2011 compared to $ 2.1 million in fiscal 2010. sales of laser-based distance measurement and dimensional sizing products increased $ 1.1 million , or 67.1 % , primarily due to the higher volume of shipments in the current fiscal year resulting from the economic recovery in the commercial and industrial markets . sales of laser-based surface measurement products increased $ 160,000 , or 32.3 % , primarily due to the sale of a casi scatterometer and the september 30 , 2009 acquisition of optical dimensions which resulted in product sales of $ 202,000 during fiscal 2011. during fiscal 2011 , we started to ship our xact ultrasonic measurement product which resulted in $ 102,000 of revenues . sales in the balancer segment decreased $ 2.3 million , or 33.0 % , to $ 4.7 million for fiscal 2010 compared to $ 7.0 million for fiscal 2009. this decrease is primarily due to lower unit sales volumes in asia , north america and europe during the year . north american sales decreased $ 1.2 million , or 40.6 % , in fiscal 2010 compared to the prior year . asia sales decreased $ 601,000 , or 23.3 % , in fiscal 2010 compared to fiscal 2009. european sales decreased $ 372,000 , or 31.7 % , in fiscal 2010 compared to fiscal 2009. the decreases across all geographies are primarily due to lower volumes of shipments caused by continuing weaknesses in the global economy and the 19 softening of the worldwide automotive , bearing and aircraft industries which has impacted the machine tool industry . the levels of demand in our geographic markets can not be forecasted with any certainty given the recent weaknesses in the global economy . sales in the measurement segment decreased $ 395,000 , or 15.6 % , to $ 2.1 million in fiscal 2010 compared to $ 2.5 million in fiscal 2009. sales of laser-based dimensional sizing products decreased $ 455,000 , or 21.8 % , primarily due to the lower unit sales volumes in north america . sales of laser-based surface measurement products increased $ 50,000 , or 11.3 % , primarily due to the september 30 , 2009 acquisition of optical dimensions which resulted in product sales of $ 114,000 ; these sales were partially offset by a decrease in sales to disk drive and silicon wafer manufacturers of $ 64,000. gross margin gross margin in fiscal 2011 increased to 48.8 % compared to 44.7 % in fiscal 2010. this increase is primarily due to a shift in product sales mix with sales increasing in the measurement segment , which typically have higher gross margins than the balancer segment , and sales in the balancer segment rebounding positively in the north american markets , which generally have slightly higher margins than asia due the channel and distributor discounts required in asia . gross margin for fiscal 2010 increased to 44.7 % compared to 43.6 % for fiscal 2009. this increase is primarily due to lower increases to reserves for excess and obsolete inventory in the current year offset by a shift in the sales product mix to lower margin products and the impact of significantly lower sales volumes . operating expenses operating expenses increased $ 1.0 million , or 21.7 % , to $ 5.8 million for fiscal 2011 compared to $ 4.8 million in fiscal 2010. general , administrative and sales expenses increased $ 1.1 million , or 26.6 % , to $ 5.3 million in fiscal 2011 compared to $ 4.2 million in the prior year . this increase is due primarily to higher commissions related to the increase in sales , higher stock-based compensation and higher expenses associated with an international trade show that occurs every two years . research and development expenses decreased $ 80,000 , or 13.7 % , to $ 504,000 in fiscal 2011 as compared to $ 585,000 in fiscal 2010. research and development expenses decreased primarily due to lower material costs associated with new product development . operating expenses decreased $ 1.3 million , or 21.2 % , to $ 4.8 million for fiscal 2010 compared to $ 6.1 million in fiscal 2009. general , administrative and sales expenses decreased $ 850,000 , or 16.9 % , to $ 4.2 million in fiscal 2010 compared to $ 5.0 million in the prior year . this decrease is due primarily to lower personnel costs resulting from both salary reductions and mandatory furloughs and lower stock-based compensation , lower commissions related to the decrease in sales and the expense and spending controls put in place due to the significant decline in revenue , offset by higher bad debt expense in the current year . research and development expenses decreased $ 435,000 , or 42.7 % , to $ 585,000 in fiscal 2010 compared to $ 1.0 million in fiscal 2009. the decrease in research and development expense is primarily due to lower material costs associated with new product development related to technologies acquired from xtero and to existing product lines and lower personnel costs associated with salary reductions . other income other income consists of interest income , foreign currency exchange gain ( loss ) and other income ( expense ) . interest income was $ 4,000 , $ 11,000 and $ 74,000 in fiscal 2011 , 2010 and 2009 , respectively . interest income has decreased due to lower cash and investment balances and lower interest rates . foreign currency exchange loss was $ 10,000 and $ 24,000 in fiscal 2011 and 2009 , respectively . foreign currency exchange gain was $ 19,000 in fiscal 2010. income tax provision the effective tax rate on consolidated net loss was ( 0.8 ) % for fiscal 2011. the company 's effective tax rate on consolidated net loss differs from the federal statutory rate primarily due to the amount of

liquidity and capital resources the company 's working capital increased $ 152,000 to $ 7.5 million as of may 31 , 2011 compared to $ 7.3 million as of may 31 , 2010. cash and cash equivalents decreased $ 785,000 to $ 2.8 million as of may 31 , 2011 from $ 3.5 million as of may 31 , 2010. cash used in operating activities was $ 559,000 in fiscal 2011 as compared to $ 417,000 in fiscal 2010. the increase is primarily due to decreases in net loss , income taxes receivable , and accounts payable , offset by increases in stock-based compensation , accounts receivable and inventories . at may 31 , 2011 , accounts receivable increased $ 687,000 to $ 1.8 million compared to $ 1.1 million as of may 31 , 2010. the increase in accounts receivable is due to the increase in sales during fiscal 2011. inventories increased $ 501,000 to $ 4.1 million as of may 31 , 2011 compared to $ 3.6 million at may 31 , 2010 due to higher purchasing levels necessary to support the higher sales volumes . at may 31 , 2011 , total current liabilities increased $ 204,000 to $ 1.4 million as compared to $ 1.2 million at may 31 , 2010. the increase is primarily due to increases in accounts payable associated with the increased inventories and accrued commissionsrelated to higher sales volumes offset by lower accrued payroll liabilities as compared to the prior year .


 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 the company 's working capital increased $ 152,000 to $ 7.5 million as of may 31 , 2011 compared to $ 7.3 million as of may 31 , 2010. cash and cash equivalents decreased $ 785,000 to $ 2.8 million as of may 31 , 2011 from $ 3.5 million as of may 31 , 2010. cash used in operating activities was $ 559,000 in fiscal 2011 as compared to $ 417,000 in fiscal 2010. the increase is primarily due to decreases in net loss , income taxes receivable , and accounts payable , offset by increases in stock-based compensation , accounts receivable and inventories . at may 31 , 2011 , accounts receivable increased $ 687,000 to $ 1.8 million compared to $ 1.1 million as of may 31 , 2010. the increase in accounts receivable is due to the increase in sales during fiscal 2011. inventories increased $ 501,000 to $ 4.1 million as of may 31 , 2011 compared to $ 3.6 million at may 31 , 2010 due to higher purchasing levels necessary to support the higher sales volumes . at may 31 , 2011 , total current liabilities increased $ 204,000 to $ 1.4 million as compared to $ 1.2 million at may 31 , 2010. the increase is primarily due to increases in accounts payable associated with the increased inventories and accrued commissionsrelated to higher sales volumes offset by lower accrued payroll liabilities as compared to the prior year .
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 Suspicious Activity Report : critical accounting policies revenue recognitionthe company recognizes revenue for sales and billing for freight charges upon delivery of the product to the customer at a fixed or determinable price with a reasonable assurance of collection , passage of title to the customer as indicated by shipping terms and fulfillment of all significant obligations , pursuant to the guidance provided by accounting standards codification topic 605. for sales to all customers , 17 including manufacturer representatives , distributors or their third-party customers , these criteria are met at the time product is shipped . when other significant obligations remain after products are delivered , revenue is recognized only after such obligations are fulfilled . in addition , judgments are required in evaluating the credit worthiness of our customers . credit is not extended to customers and revenue is not recognized until we have determined that collectability is reasonably assured . allowance for doubtful accountsour policy is to maintain allowances for estimated losses resulting from the inability of our customers to make required payments . credit limits for all customers are established based upon several factors , including but not limited to financial condition and stability , payment history , published credit reports and use of credit references . on a monthly basis , management performs various analyses to evaluate accounts receivable balances to ensure recorded amounts reflect estimated net realizable value . this review includes accounts receivable agings , other operating trends and relevant business conditions , including general economic factors , as they relate to the company 's domestic and international customers . when a customer 's account balance becomes past due , we initiate dialogue with the customer to determine the cause . if it is determined that the customer will be unable to meet its financial obligation to us , such as in the case of a bankruptcy filing , we record a specific allowance to reduce the related receivable to the amount we expect to recover given all of the information presently available . inventoriesas a designer and manufacturer of high technology systems , we are exposed to a number of economic and industry factors that could result in portions of our inventories becoming either obsolete or in excess of anticipated usage . these factors include , but are not limited to , technological changes in our markets , our ability to meet changing customer requirements , competitive pressures in products and prices , and the availability of key components from our suppliers . our policy is to record inventory write-downs when conditions exist that suggest our inventories may be in excess of anticipated demand for our products and market conditions . we regularly evaluate the ability to realize the value of our inventories based upon a combination of factors including the following : historical usage rates , forecasted sales or usage , product end of life dates , estimated current and future market values and new product introductions . purchasing requirements and alternative usage avenues are explored within these processes to mitigate inventory exposure . when recorded , our write-downs are intended to reduce the carrying value of our inventories to their net realizable value and establish a new cost basis . deferred taxesthe company applies the asset and liability method in recording income taxes , under which deferred income tax assets and liabilities are determined , based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using currently enacted tax rates and laws . additionally , deferred tax assets are evaluated and a valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized . management continues to review the level of the valuation allowance on a quarterly basis . there can be no assurance that the company 's future operations will produce sufficient earnings so that the deferred tax assets can be fully utilized . intangible assetsthere is a periodic review of intangible and other long-lived assets for impairment . this review consists of the analysis of events or changes in circumstances that would indicate the carrying amount of the assets may not be recoverable . recoverability is determined by comparing the forecasted future undiscounted net cash flows from the operations to which the assets relate , based on management 's best estimates using the appropriate assumptions and projections at the time , to the carrying amount of the assets . if the carrying value is determined to be in excess of future operating cash flows , the asset is considered impaired and a loss is recognized equal to the amount by which the carrying amount exceeds the estimated fair value of the assets . 18 recently issued accounting pronouncements refer to note 1 of the notes to consolidated financial statements for a discussion of recently issued accounting pronouncements . discussion of operating results replace_table_token_3_th sales sales in the balancer segment increased $ 3.3 million , or 71.5 % , to $ 8.0 million for fiscal 2011 compared to $ 4.7 million for fiscal 2010. this increase is primarily due to higher unit sales volumes in asia , north america and europe during the year . asia sales increased $ 1.8 million , or 93.5 % , in fiscal 2011 compared to fiscal 2010. north american sales increased $ 1.4 million , or 77.9 % , in fiscal 2011 compared to the prior year . european sales increased $ 108,000 , or 13.5 % , in fiscal 2011 compared to fiscal 2010. the increases across all geographies are primarily due to higher volumes of shipments as the worldwide automotive and industrial markets in these regions have begun to recover from the previous low levels due to the global economic downturn . story_separator_special_tag sales in the measurement segment increased $ 1.3 million , or 63.1 % , to $ 3.5 million in fiscal 2011 compared to $ 2.1 million in fiscal 2010. sales of laser-based distance measurement and dimensional sizing products increased $ 1.1 million , or 67.1 % , primarily due to the higher volume of shipments in the current fiscal year resulting from the economic recovery in the commercial and industrial markets . sales of laser-based surface measurement products increased $ 160,000 , or 32.3 % , primarily due to the sale of a casi scatterometer and the september 30 , 2009 acquisition of optical dimensions which resulted in product sales of $ 202,000 during fiscal 2011. during fiscal 2011 , we started to ship our xact ultrasonic measurement product which resulted in $ 102,000 of revenues . sales in the balancer segment decreased $ 2.3 million , or 33.0 % , to $ 4.7 million for fiscal 2010 compared to $ 7.0 million for fiscal 2009. this decrease is primarily due to lower unit sales volumes in asia , north america and europe during the year . north american sales decreased $ 1.2 million , or 40.6 % , in fiscal 2010 compared to the prior year . asia sales decreased $ 601,000 , or 23.3 % , in fiscal 2010 compared to fiscal 2009. european sales decreased $ 372,000 , or 31.7 % , in fiscal 2010 compared to fiscal 2009. the decreases across all geographies are primarily due to lower volumes of shipments caused by continuing weaknesses in the global economy and the 19 softening of the worldwide automotive , bearing and aircraft industries which has impacted the machine tool industry . the levels of demand in our geographic markets can not be forecasted with any certainty given the recent weaknesses in the global economy . sales in the measurement segment decreased $ 395,000 , or 15.6 % , to $ 2.1 million in fiscal 2010 compared to $ 2.5 million in fiscal 2009. sales of laser-based dimensional sizing products decreased $ 455,000 , or 21.8 % , primarily due to the lower unit sales volumes in north america . sales of laser-based surface measurement products increased $ 50,000 , or 11.3 % , primarily due to the september 30 , 2009 acquisition of optical dimensions which resulted in product sales of $ 114,000 ; these sales were partially offset by a decrease in sales to disk drive and silicon wafer manufacturers of $ 64,000. gross margin gross margin in fiscal 2011 increased to 48.8 % compared to 44.7 % in fiscal 2010. this increase is primarily due to a shift in product sales mix with sales increasing in the measurement segment , which typically have higher gross margins than the balancer segment , and sales in the balancer segment rebounding positively in the north american markets , which generally have slightly higher margins than asia due the channel and distributor discounts required in asia . gross margin for fiscal 2010 increased to 44.7 % compared to 43.6 % for fiscal 2009. this increase is primarily due to lower increases to reserves for excess and obsolete inventory in the current year offset by a shift in the sales product mix to lower margin products and the impact of significantly lower sales volumes . operating expenses operating expenses increased $ 1.0 million , or 21.7 % , to $ 5.8 million for fiscal 2011 compared to $ 4.8 million in fiscal 2010. general , administrative and sales expenses increased $ 1.1 million , or 26.6 % , to $ 5.3 million in fiscal 2011 compared to $ 4.2 million in the prior year . this increase is due primarily to higher commissions related to the increase in sales , higher stock-based compensation and higher expenses associated with an international trade show that occurs every two years . research and development expenses decreased $ 80,000 , or 13.7 % , to $ 504,000 in fiscal 2011 as compared to $ 585,000 in fiscal 2010. research and development expenses decreased primarily due to lower material costs associated with new product development . operating expenses decreased $ 1.3 million , or 21.2 % , to $ 4.8 million for fiscal 2010 compared to $ 6.1 million in fiscal 2009. general , administrative and sales expenses decreased $ 850,000 , or 16.9 % , to $ 4.2 million in fiscal 2010 compared to $ 5.0 million in the prior year . this decrease is due primarily to lower personnel costs resulting from both salary reductions and mandatory furloughs and lower stock-based compensation , lower commissions related to the decrease in sales and the expense and spending controls put in place due to the significant decline in revenue , offset by higher bad debt expense in the current year . research and development expenses decreased $ 435,000 , or 42.7 % , to $ 585,000 in fiscal 2010 compared to $ 1.0 million in fiscal 2009. the decrease in research and development expense is primarily due to lower material costs associated with new product development related to technologies acquired from xtero and to existing product lines and lower personnel costs associated with salary reductions . other income other income consists of interest income , foreign currency exchange gain ( loss ) and other income ( expense ) . interest income was $ 4,000 , $ 11,000 and $ 74,000 in fiscal 2011 , 2010 and 2009 , respectively . interest income has decreased due to lower cash and investment balances and lower interest rates . foreign currency exchange loss was $ 10,000 and $ 24,000 in fiscal 2011 and 2009 , respectively . foreign currency exchange gain was $ 19,000 in fiscal 2010. income tax provision the effective tax rate on consolidated net loss was ( 0.8 ) % for fiscal 2011. the company 's effective tax rate on consolidated net loss differs from the federal statutory rate primarily due to the amount of

