its product portfolio includes avance ® nerve graft , which axogen believes is the first and only commercially available allograft nerve for bridging nerve discontinuities ( a gap created when the nerve is severed ) , axoguard ® nerve connector , a coaptation aid allowing for close approximation of severed nerves , and axoguard ® nerve protector , an implant that protects nerves during the body 's healing process after surgery . revenue from the distribution of these products is the main contributor to axogen 's total reported sales and has been the key component of its growth to date . axogen revenues increased in the fourth quarter and the twelve months of 2011 compared to the fourth quarter and the twelve months of 2010 , respectively , as a result of increased penetration into key accounts and establishing new accounts through both its direct sales force and independent distributors . axogen has continued to broaden its sales and marketing focus which is expected to have a positive contribution to its revenue growth in the long term , even though in the near term revenue growth may lag behind expense increase . from may 2009 to december 2010 , axogen temporarily stopped the manufacturing of avance nerve graft due to adequate inventory . in january 2011 , axogen resumed the manufacturing of avance nerve graft , and as a result has incurred higher processing and testing fees , travel costs and temporary labor costs compared to the same periods last year . in addition , to adequately reflect the amount of inventory , axogen reviewed and adjusted inventories and established reserves . in reviewing inventory expiration axogen wrote off inventory for products manufactured in early 2009. axogen believes that it has the necessary inventories and manufacturing capabilities for its anticipated sales growth . 45 results of operations comparison of the years ended december 31 , 2011 and 2010 revenues revenues for the year ended december 31 , 2011 increased 61.4 % to approximately $ 4,849,000 as compared to approximately $ 3,004,000 for the year ended december 31 , 2010 principally due to increased sales penetration into key accounts . gross profit gross profit for the year ended december 31 , 2011 increased 49.0 % to approximately $ 2,423,000 as compared to approximately $ 1,626,000 for the year ended december 31 , 2010 , primarily attributable to the increased revenues in 2011 , partially offset by a $ 614,000 inventory write-off for expiring inventory and a $ 214,000 write-off for raw material obsolescence in 2011 , and higher processing and testing fees , travel costs and temporary labor costs due to the resumption of the manufacturing of avance ® nerve graft since january 2011. costs and expenses total cost and expenses increased 53.8 % to approximately $ 9,392,000 for the year ended december 31 , 2011 as compared to approximately $ 6,107,000 for the year ended december 31 , 2010. these increases were primarily due to increasing sales and marketing activities , increases in salaries as axogen hires to meet growth needs and increased general and administrative costs associated with securing additional funding prior to the merger and in connection with the merger . as a percentage of revenues , total operating expenses were 193.7 % for the year ended december 31 , 2011 compared to 203.3 % for the year ended december 31 , 2010. such lower total costs and expenses a percentage of revenue were a result of such increased expenses being absorbed by increased revenues . sales and marketing expenses increased 45.6 % to approximately $ 4,379,000 for the year ended december 31 , 2011 as compared to approximately $ 3,007,000 for the year ended december 31 , 2010. this increase was primarily due to expansion of the direct sales force and increased support for both its direct sales force and independent distributors . as a percentage of revenues , sales and marketing expenses were 90.3 % for the year ended december 31 , 2011 compared to 100.1 % for the year ended december 31 , 2010. such lower sales and marketing expenses as a percentage of revenue were a result of such increase in expenses being outpaced by the increase in revenues . general and administrative expenses increased 62.0 % to approximately $ 4,316,000 for the year ended december 31 , 2011 as compared to approximately $ 2,664,000 for the year ended december 31 , 2010. as a percentage of revenues , general and administrative expenses were 89.0 % for the year ended december 31 , 2011 compared to 88.7 % the year ended december 31 , 2010. these increases were principally a result of an increase in consulting , accounting and legal services and other expenses associated with securing additional funding and the merger . research and development expenses increased approximately 60 % to approximately $ 697,000 in the year ended december 31 , 2011 as compared to approximately $ 436,000 for the year ended december 31 , 2010. development includes axogen 's clinical efforts and substantially all of the increase in research and development expenses from 2010 to 2011 related to expenditures for such clinical activity . because axogen 's products are developed for sale in their current use , it conducts limited direct research and product development , but intends to pursue new products and new applications for existing products in the future that may result in increased spending . 46 other income and expenses interest expense increased 34.3 % to approximately $ 1,095,000 in 2011 as compared to approximately $ 815,000 for the year ended december 31 , 2010. this increase was primarily due to the interest accrued related to the [ 2010 convertible debt ( see note 7 to the consolidated financial statements included in this form 10-k ) ] and the increase in the stated interest rate during 2011 pursuant to the amendment to axogen 's loan and security agreement originally entered into in april 2008 ( see liquidity and capital story_separator_special_tag its product portfolio includes avance ® nerve graft , which axogen believes is the first and only commercially available allograft nerve for bridging nerve discontinuities ( a gap created when the nerve is severed ) , axoguard ® nerve connector , a coaptation aid allowing for close approximation of severed nerves , and axoguard ® nerve protector , an implant that protects nerves during the body 's healing process after surgery . revenue from the distribution of these products is the main contributor to axogen 's total reported sales and has been the key component of its growth to date . axogen revenues increased in the fourth quarter and the twelve months of 2011 compared to the fourth quarter and the twelve months of 2010 , respectively , as a result of increased penetration into key accounts and establishing new accounts through both its direct sales force and independent distributors . axogen has continued to broaden its sales and marketing focus which is expected to have a positive contribution to its revenue growth in the long term , even though in the near term revenue growth may lag behind expense increase . from may 2009 to december 2010 , axogen temporarily stopped the manufacturing of avance nerve graft due to adequate inventory . in january 2011 , axogen resumed the manufacturing of avance nerve graft , and as a result has incurred higher processing and testing fees , travel costs and temporary labor costs compared to the same periods last year . in addition , to adequately reflect the amount of inventory , axogen reviewed and adjusted inventories and established reserves . in reviewing inventory expiration axogen wrote off inventory for products manufactured in early 2009. axogen believes that it has the necessary inventories and manufacturing capabilities for its anticipated sales growth . 45 results of operations comparison of the years ended december 31 , 2011 and 2010 revenues revenues for the year ended december 31 , 2011 increased 61.4 % to approximately $ 4,849,000 as compared to approximately $ 3,004,000 for the year ended december 31 , 2010 principally due to increased sales penetration into key accounts . gross profit gross profit for the year ended december 31 , 2011 increased 49.0 % to approximately $ 2,423,000 as compared to approximately $ 1,626,000 for the year ended december 31 , 2010 , primarily attributable to the increased revenues in 2011 , partially offset by a $ 614,000 inventory write-off for expiring inventory and a $ 214,000 write-off for raw material obsolescence in 2011 , and higher processing and testing fees , travel costs and temporary labor costs due to the resumption of the manufacturing of avance ® nerve graft since january 2011. costs and expenses total cost and expenses increased 53.8 % to approximately $ 9,392,000 for the year ended december 31 , 2011 as compared to approximately $ 6,107,000 for the year ended december 31 , 2010. these increases were primarily due to increasing sales and marketing activities , increases in salaries as axogen hires to meet growth needs and increased general and administrative costs associated with securing additional funding prior to the merger and in connection with the merger . as a percentage of revenues , total operating expenses were 193.7 % for the year ended december 31 , 2011 compared to 203.3 % for the year ended december 31 , 2010. such lower total costs and expenses a percentage of revenue were a result of such increased expenses being absorbed by increased revenues . sales and marketing expenses increased 45.6 % to approximately $ 4,379,000 for the year ended december 31 , 2011 as compared to approximately $ 3,007,000 for the year ended december 31 , 2010. this increase was primarily due to expansion of the direct sales force and increased support for both its direct sales force and independent distributors . as a percentage of revenues , sales and marketing expenses were 90.3 % for the year ended december 31 , 2011 compared to 100.1 % for the year ended december 31 , 2010. such lower sales and marketing expenses as a percentage of revenue were a result of such increase in expenses being outpaced by the increase in revenues . general and administrative expenses increased 62.0 % to approximately $ 4,316,000 for the year ended december 31 , 2011 as compared to approximately $ 2,664,000 for the year ended december 31 , 2010. as a percentage of revenues , general and administrative expenses were 89.0 % for the year ended december 31 , 2011 compared to 88.7 % the year ended december 31 , 2010. these increases were principally a result of an increase in consulting , accounting and legal services and other expenses associated with securing additional funding and the merger . research and development expenses increased approximately 60 % to approximately $ 697,000 in the year ended december 31 , 2011 as compared to approximately $ 436,000 for the year ended december 31 , 2010. development includes axogen 's clinical efforts and substantially all of the increase in research and development expenses from 2010 to 2011 related to expenditures for such clinical activity . because axogen 's products are developed for sale in their current use , it conducts limited direct research and product development , but intends to pursue new products and new applications for existing products in the future that may result in increased spending . 46 other income and expenses interest expense increased 34.3 % to approximately $ 1,095,000 in 2011 as compared to approximately $ 815,000 for the year ended december 31 , 2010. this increase was primarily due to the interest accrued related to the [ 2010 convertible debt ( see note 7 to the consolidated financial statements included in this form 10-k ) ] and the increase in the stated interest rate during 2011 pursuant to the amendment to axogen 's loan and security agreement originally entered into in april 2008 ( see liquidity and capital

liquidity and capital resources long-term debt on september 30 , 2011 , the company , entered into the loan and security agreement with midcap financial sbic , lp ( midcap ) , as administrative agent , and the lenders listed on schedule 1 thereto ( the midcap loan ) . the midcap loan has a principal amount of $ 5.0 million and a term of 42 months , and is subject to prepayment penalties . under this agreement , axogen is required to make interest only payments for the first 12 months , and payments of both interest and straight line amortization of principal for the remaining 30 months . the interest rate is 9.9 % per annum , and interest is computed on the basis of a 360-day year and the actual number of days elapsed during which such interest accrues . the midcap loan contains customary affirmative and negative covenants , including , without limitation , ( i ) covenants requiring axogen to comply with applicable laws , provide to midcap copies of axogen 's 47 financial statements , maintain appropriate levels of insurance and protect , defend and maintain the validity and enforceability of axogen 's material intellectual property , ( ii ) covenants restricting axogen 's ability to dispose of all or any part of its assets ( subject to certain exceptions ) , engage in other lines of business , changes in its senior management , enter into merger or consolidation transactions , incur or assume additional indebtedness , or incur liens on its assets , and ( iii ) covenants requiring the company to meet certain minimum net invoiced revenue , as defined in the agreement , or maintain a cash balance of 80 % of the loan principal amount . the midcap loan is secured by all of axogen 's assets . the lenders also received a ten-year warrant to purchase 89,686 shares of axogen 's common stock at $ 2.23 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 long-term debt on september 30 , 2011 , the company , entered into the loan and security agreement with midcap financial sbic , lp ( midcap ) , as administrative agent , and the lenders listed on schedule 1 thereto ( the midcap loan ) . the midcap loan has a principal amount of $ 5.0 million and a term of 42 months , and is subject to prepayment penalties . under this agreement , axogen is required to make interest only payments for the first 12 months , and payments of both interest and straight line amortization of principal for the remaining 30 months . the interest rate is 9.9 % per annum , and interest is computed on the basis of a 360-day year and the actual number of days elapsed during which such interest accrues . the midcap loan contains customary affirmative and negative covenants , including , without limitation , ( i ) covenants requiring axogen to comply with applicable laws , provide to midcap copies of axogen 's 47 financial statements , maintain appropriate levels of insurance and protect , defend and maintain the validity and enforceability of axogen 's material intellectual property , ( ii ) covenants restricting axogen 's ability to dispose of all or any part of its assets ( subject to certain exceptions ) , engage in other lines of business , changes in its senior management , enter into merger or consolidation transactions , incur or assume additional indebtedness , or incur liens on its assets , and ( iii ) covenants requiring the company to meet certain minimum net invoiced revenue , as defined in the agreement , or maintain a cash balance of 80 % of the loan principal amount . the midcap loan is secured by all of axogen 's assets . the lenders also received a ten-year warrant to purchase 89,686 shares of axogen 's common stock at $ 2.23 per share .
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 Suspicious Activity Report : its product portfolio includes avance ® nerve graft , which axogen believes is the first and only commercially available allograft nerve for bridging nerve discontinuities ( a gap created when the nerve is severed ) , axoguard ® nerve connector , a coaptation aid allowing for close approximation of severed nerves , and axoguard ® nerve protector , an implant that protects nerves during the body 's healing process after surgery . revenue from the distribution of these products is the main contributor to axogen 's total reported sales and has been the key component of its growth to date . axogen revenues increased in the fourth quarter and the twelve months of 2011 compared to the fourth quarter and the twelve months of 2010 , respectively , as a result of increased penetration into key accounts and establishing new accounts through both its direct sales force and independent distributors . axogen has continued to broaden its sales and marketing focus which is expected to have a positive contribution to its revenue growth in the long term , even though in the near term revenue growth may lag behind expense increase . from may 2009 to december 2010 , axogen temporarily stopped the manufacturing of avance nerve graft due to adequate inventory . in january 2011 , axogen resumed the manufacturing of avance nerve graft , and as a result has incurred higher processing and testing fees , travel costs and temporary labor costs compared to the same periods last year . in addition , to adequately reflect the amount of inventory , axogen reviewed and adjusted inventories and established reserves . in reviewing inventory expiration axogen wrote off inventory for products manufactured in early 2009. axogen believes that it has the necessary inventories and manufacturing capabilities for its anticipated sales growth . 45 results of operations comparison of the years ended december 31 , 2011 and 2010 revenues revenues for the year ended december 31 , 2011 increased 61.4 % to approximately $ 4,849,000 as compared to approximately $ 3,004,000 for the year ended december 31 , 2010 principally due to increased sales penetration into key accounts . gross profit gross profit for the year ended december 31 , 2011 increased 49.0 % to approximately $ 2,423,000 as compared to approximately $ 1,626,000 for the year ended december 31 , 2010 , primarily attributable to the increased revenues in 2011 , partially offset by a $ 614,000 inventory write-off for expiring inventory and a $ 214,000 write-off for raw material obsolescence in 2011 , and higher processing and testing fees , travel costs and temporary labor costs due to the resumption of the manufacturing of avance ® nerve graft since january 2011. costs and expenses total cost and expenses increased 53.8 % to approximately $ 9,392,000 for the year ended december 31 , 2011 as compared to approximately $ 6,107,000 for the year ended december 31 , 2010. these increases were primarily due to increasing sales and marketing activities , increases in salaries as axogen hires to meet growth needs and increased general and administrative costs associated with securing additional funding prior to the merger and in connection with the merger . as a percentage of revenues , total operating expenses were 193.7 % for the year ended december 31 , 2011 compared to 203.3 % for the year ended december 31 , 2010. such lower total costs and expenses a percentage of revenue were a result of such increased expenses being absorbed by increased revenues . sales and marketing expenses increased 45.6 % to approximately $ 4,379,000 for the year ended december 31 , 2011 as compared to approximately $ 3,007,000 for the year ended december 31 , 2010. this increase was primarily due to expansion of the direct sales force and increased support for both its direct sales force and independent distributors . as a percentage of revenues , sales and marketing expenses were 90.3 % for the year ended december 31 , 2011 compared to 100.1 % for the year ended december 31 , 2010. such lower sales and marketing expenses as a percentage of revenue were a result of such increase in expenses being outpaced by the increase in revenues . general and administrative expenses increased 62.0 % to approximately $ 4,316,000 for the year ended december 31 , 2011 as compared to approximately $ 2,664,000 for the year ended december 31 , 2010. as a percentage of revenues , general and administrative expenses were 89.0 % for the year ended december 31 , 2011 compared to 88.7 % the year ended december 31 , 2010. these increases were principally a result of an increase in consulting , accounting and legal services and other expenses associated with securing additional funding and the merger . research and development expenses increased approximately 60 % to approximately $ 697,000 in the year ended december 31 , 2011 as compared to approximately $ 436,000 for the year ended december 31 , 2010. development includes axogen 's clinical efforts and substantially all of the increase in research and development expenses from 2010 to 2011 related to expenditures for such clinical activity . because axogen 's products are developed for sale in their current use , it conducts limited direct research and product development , but intends to pursue new products and new applications for existing products in the future that may result in increased spending . 46 other income and expenses interest expense increased 34.3 % to approximately $ 1,095,000 in 2011 as compared to approximately $ 815,000 for the year ended december 31 , 2010. this increase was primarily due to the interest accrued related to the [ 2010 convertible debt ( see note 7 to the consolidated financial statements included in this form 10-k ) ] and the increase in the stated interest rate during 2011 pursuant to the amendment to axogen 's loan and security agreement originally entered into in april 2008 ( see liquidity and capital story_separator_special_tag its product portfolio includes avance ® nerve graft , which axogen believes is the first and only commercially available allograft nerve for bridging nerve discontinuities ( a gap created when the nerve is severed ) , axoguard ® nerve connector , a coaptation aid allowing for close approximation of severed nerves , and axoguard ® nerve protector , an implant that protects nerves during the body 's healing process after surgery . revenue from the distribution of these products is the main contributor to axogen 's total reported sales and has been the key component of its growth to date . axogen revenues increased in the fourth quarter and the twelve months of 2011 compared to the fourth quarter and the twelve months of 2010 , respectively , as a result of increased penetration into key accounts and establishing new accounts through both its direct sales force and independent distributors . axogen has continued to broaden its sales and marketing focus which is expected to have a positive contribution to its revenue growth in the long term , even though in the near term revenue growth may lag behind expense increase . from may 2009 to december 2010 , axogen temporarily stopped the manufacturing of avance nerve graft due to adequate inventory . in january 2011 , axogen resumed the manufacturing of avance nerve graft , and as a result has incurred higher processing and testing fees , travel costs and temporary labor costs compared to the same periods last year . in addition , to adequately reflect the amount of inventory , axogen reviewed and adjusted inventories and established reserves . in reviewing inventory expiration axogen wrote off inventory for products manufactured in early 2009. axogen believes that it has the necessary inventories and manufacturing capabilities for its anticipated sales growth . 45 results of operations comparison of the years ended december 31 , 2011 and 2010 revenues revenues for the year ended december 31 , 2011 increased 61.4 % to approximately $ 4,849,000 as compared to approximately $ 3,004,000 for the year ended december 31 , 2010 principally due to increased sales penetration into key accounts . gross profit gross profit for the year ended december 31 , 2011 increased 49.0 % to approximately $ 2,423,000 as compared to approximately $ 1,626,000 for the year ended december 31 , 2010 , primarily attributable to the increased revenues in 2011 , partially offset by a $ 614,000 inventory write-off for expiring inventory and a $ 214,000 write-off for raw material obsolescence in 2011 , and higher processing and testing fees , travel costs and temporary labor costs due to the resumption of the manufacturing of avance ® nerve graft since january 2011. costs and expenses total cost and expenses increased 53.8 % to approximately $ 9,392,000 for the year ended december 31 , 2011 as compared to approximately $ 6,107,000 for the year ended december 31 , 2010. these increases were primarily due to increasing sales and marketing activities , increases in salaries as axogen hires to meet growth needs and increased general and administrative costs associated with securing additional funding prior to the merger and in connection with the merger . as a percentage of revenues , total operating expenses were 193.7 % for the year ended december 31 , 2011 compared to 203.3 % for the year ended december 31 , 2010. such lower total costs and expenses a percentage of revenue were a result of such increased expenses being absorbed by increased revenues . sales and marketing expenses increased 45.6 % to approximately $ 4,379,000 for the year ended december 31 , 2011 as compared to approximately $ 3,007,000 for the year ended december 31 , 2010. this increase was primarily due to expansion of the direct sales force and increased support for both its direct sales force and independent distributors . as a percentage of revenues , sales and marketing expenses were 90.3 % for the year ended december 31 , 2011 compared to 100.1 % for the year ended december 31 , 2010. such lower sales and marketing expenses as a percentage of revenue were a result of such increase in expenses being outpaced by the increase in revenues . general and administrative expenses increased 62.0 % to approximately $ 4,316,000 for the year ended december 31 , 2011 as compared to approximately $ 2,664,000 for the year ended december 31 , 2010. as a percentage of revenues , general and administrative expenses were 89.0 % for the year ended december 31 , 2011 compared to 88.7 % the year ended december 31 , 2010. these increases were principally a result of an increase in consulting , accounting and legal services and other expenses associated with securing additional funding and the merger . research and development expenses increased approximately 60 % to approximately $ 697,000 in the year ended december 31 , 2011 as compared to approximately $ 436,000 for the year ended december 31 , 2010. development includes axogen 's clinical efforts and substantially all of the increase in research and development expenses from 2010 to 2011 related to expenditures for such clinical activity . because axogen 's products are developed for sale in their current use , it conducts limited direct research and product development , but intends to pursue new products and new applications for existing products in the future that may result in increased spending . 46 other income and expenses interest expense increased 34.3 % to approximately $ 1,095,000 in 2011 as compared to approximately $ 815,000 for the year ended december 31 , 2010. this increase was primarily due to the interest accrued related to the [ 2010 convertible debt ( see note 7 to the consolidated financial statements included in this form 10-k ) ] and the increase in the stated interest rate during 2011 pursuant to the amendment to axogen 's loan and security agreement originally entered into in april 2008 ( see liquidity and capital

