we increased our cash balance by $ 8,449,595 during fiscal 2011 through positive cash flow from operating activities and the exercise of warrants . future cash flows from operating activities are expected to fluctuate based on working capital requirements , operating expense levels and other factors . we believe we have adequate financial resources to fund operations for the next twelve months . in fiscal 2008 , we completed the development and introduced a new generation of lrad products called the lrad-x . our lrad-x product line uses directionality and focused acoustic output to clearly transmit critical information , instructions and warnings 1,500 meters and beyond . the lrad-x product line features improved voice intelligibility and is available in a number of packages that meet the military 's stringent environmental requirements in a number of packages and form factors . through the use of powerful voice commands and deterrent tones , large safety zones can be created while determining the intent and influencing the behavior of an intruder . our lrad-x product line provides a complete range of systems from single man portable to permanently installed , remotely operated . our lrad products have been competitively selected over other commercially available systems by the u.s. and certain foreign military . our new product line includes the following : lrad 1000xselected by the u.s. navy as its ahd for block 0 of the shipboard protection systemcan be manually operated to provide long distance hailing and warning with highly intelligible communication . this unit is available in both fully-integrated and remotely-operated electronics . lrad 500xselected by the u.s. navy and u.s. army as their ahd for small vessels and vehiclesis lightweight and can be easily transported to provide security personnel long-range communications and a highly effective hailing and warning capability where needed . lrad 300x is a lightweight mid-range ahd developed for small vessels and manned and unmanned vehicles and aircraft . this unit is available in both fully-integrated and remotely-operated electronics . lrad 100x is a self-contained , battery powered , portable system designed for use in a variety of mass notification , law enforcement and commercial security applications . this unit is ideally suited for short-range perimeter security and communications . lrad-rxselected by the u.s. navy in 2010 in a competitive bid process for block 2 of the shipboard protection systemis our prescription for remotely controlled security . it enables system 19 operators to detect and communicate with an intruder over long distances . lrad-rx features an lrad 1000x emitter head , integrated camera , high-intensity searchlight and a newly developed , robust , and internet protocol-addressable full pan and tilt drive system for precise aiming and tracking . lrad-rx can also be integrated with radar to provide automated intruder alerts . because of its automated capabilities , lrad-rx reduces manpower and false alarms while providing an intelligent , cost-effective security solution . we incurred $ 2,483,938 of research and development expense during fiscal 2011 , which was an increase of 20 % over $ 2,062,158 incurred in fiscal 2010. during 2011 , we developed a wireless version of the lrad 100x and are expanding this wireless capability across the product line . we also completed the development of the lrad 2000x , our loudest product to date , to meet the requirements of larger security applications . the lrad 2000x was released for sale in the first fiscal quarter of 2012. in addition , we focused on product cost reductions , feature enhancements and customized applications of existing products , and increased our product certifications . we believe these products provide increased opportunities in government and commercial markets and allow us to continue as the leader in this market . we intend to continue to innovate during fiscal 2012 with consistent levels of research and development expenditures . business outlook we are experiencing positive response and increased acceptance of our products . we believe we have a solid technology and product foundation with our lrad-x product line , and we have expanded our product line to service new markets for business growth . we have strong market opportunities within the worldwide government and military sector , as well as increased commercial applications as a result of continued global threats to governments , commerce and law enforcement and in wildlife preservation and control applications . our selling network has expanded to include a number of key integrators and sales representatives within the united states and in a number of worldwide locations . however , we may face challenges in fiscal 2012 from extreme international economic and geopolitical conditions . a further and continued deterioration in financial markets and confidence in major economies could disrupt the operation of our business . we anticipate continued uncertainty with u.s. military spending due to ongoing budget delays and expected spending reductions . in addition , we had a single large order for $ 12.1 million in fiscal 2011 that will be a challenge to replace with similar orders in fiscal 2012. critical accounting policies and estimates we have identified the policies below as critical to our business operations and to understanding our results of operations . our accounting policies are more fully described in our financial statements and related notes located in item 8. financial statements and supplementary data. the impact and any associated risks related to these policies on our business operations are discussed in item 1a . risk factors and throughout management 's discussion and analysis of financial condition and results of operations when such policies affect our reported and expected financial results . story_separator_special_tag we incurred non-cash share-based compensation expenses of $ 335,796 and $ 380,688 in selling , general and administrative expenses in the fiscal years ended september 30 , 2011 and 2010 , respectively . the decrease in expenses is due to a number of options becoming fully vested . we may expend additional resources on marketing our products in future periods which may increase selling , general and administrative expenses . also , commission expense will fluctuate based on the level of commissionable sales incurred . research and development expenses research and development expenses increased $ 421,780 to $ 2,483,938 , or 9 % of total revenues , for the year ended september 30 , 2011 , compared to $ 2,062,158 , or 12 % of total revenues , for the year ended september 30 , 2010. this increase was primarily due to $ 309,782 in bonus expense for meeting annual performance targets , and $ 140,356 for staffing , partially offset by a $ 25,299 decrease in the impairment of intangible assets . included in research and development expenses for the year ended september 30 , 2011 was $ 60,919 of non-cash share-based compensation expenses , compared to $ 53,143 for the year ended september 30 , 2010. the increase is due to new option grants . during fiscal years 2011 and 2010 , we reviewed the ongoing value of our capitalized intangible assets and identified some of these assets as being no longer consistent with our business strategy . as a result of this review , we reduced the value of these patents by $ 22,551 and $ 47,850 for the fiscal years ended september 30 , 2011 and 2010 , respectively . research and development expenses vary period to period due to the timing of projects , the availability of funds , and the timing , extent and use of outside consulting , design and development firms . in fiscal 2011 , research and development expenses were primarily for in-house development , but we have , in the past , supplemented our in-house development with third-party consulting resulting in higher expenses . based on current plans and engineering staffing , we expect fiscal year 2012 research and development expenses to be comparable to expenditures made in fiscal year 2011. income from operations income from operations was $ 4,981,671 for the year ended september 30 , 2011 , compared to income from operations of $ 2,452,190 for the year ended september 30 , 2010 , primarily from increased revenue and improved margins . other income ( expense ) during the year ended september 30 , 2011 , we earned $ 32,354 of interest income on our cash balances compared to $ 903 in the year ended september 30 , 2010. the higher interest is due to transferring higher cash balances to interest bearing accounts during the current year . we also recorded other income of $ 14,721 in the 24 year ended september 30 , 2011 for proceeds from an insurance claim . in the year ended september 30 , 2010 , we recorded a $ 747,917 unrealized , non-cash gain on derivative revaluation related to changes in the estimated fair value of common stock warrant instruments that were classified as derivative liabilities , pursuant to asc 815-40. we did not have a similar gain during the year ended september 30 , 2011 , and we do not anticipate any gain or loss in future years because we no longer have common stock warrant instruments that are classified as derivative liabilities . net income our net income increased $ 2,039,289 to $ 5,022,902 , or $ 0.15 per diluted share for the year ended september 30 , 2011 , compared to net income of $ 2,983,613 , or $ 0.10 per diluted share , for the year ended september 30 , 2010. we recorded a tax provision of $ 75,190 and $ 166,771 for the years ended september 30 , 2011 and 2010 , respectively , as a result of taxable income generated during the year . we generated a federal tax liability due to the federal alternative minimum tax , but were able to use r & d credits in california to offset state tax obligations . liquidity and capital resources cash and cash equivalents at september 30 , 2011 was $ 13,870,762 , compared to $ 5,421,167 at september 30 , 2010. in addition , at september 30 , 2011 , we had $ 606,250 of cash which we pledged to support a bank guarantee related to a customer maintenance contract that was previously included as cash and cash equivalents and reclassified as restricted cash in the quarter ended december 31 , 2010. the increase in cash and cash equivalents was primarily the result of the exercise during the fiscal year ended september 30 , 2011 of certain warrants to purchase common stock , which generated $ 4,346,613 in cash , and $ 3,886,017 generated from operating activities from continuing operations in the year ended september 30 , 2011 , which includes $ 606,250 reclassified to restricted cash as described above . other than cash and cash equivalents and our balance of accounts receivable at september 30 , 2011 and expected future cash flows from operating activities in subsequent periods , we have no other unused sources of liquidity at this time . principal factors that could affect the availability of our internally generated funds include : ability to meet sales projections ; government spending levels ; introduction of competing technologies ; product mix and effect on margins ; ability to reduce and manage inventory levels ; and product acceptance in new markets . principal factors that could affect our ability to obtain cash from external sources include : volatility in the capital markets ; and market price and trading volume of our common stock . based on our current cash position , our order backlog , and assuming the accuracy of our currently planned expenditures ,

cash flows operating activities our net cash generated from operating activities from continuing operations was $ 3,886,017 for the fiscal year ended september 30 , 2011 compared to $ 4,765 for the fiscal year ended september 30 , 2010. cash generated from operating activities for the fiscal year ended september 30 , 2011 included the $ 5,022,902 net income reduced by expenses not requiring the use of cash of $ 641,654 , a decrease in inventory of $ 64,830 , an increase of accounts payable of $ 75,155 and an increase in accrued liabilities , primarily for bonus accrual , of $ 1,334,094. cash used in operating activities included $ 606,250 for transfers to restricted cash , a $ 910,149 increase in accounts receivable , $ 1,218,750 for prepaid expenses  non-current , and $ 400,649 for increased current prepaid expenses and other , both of which include prepaid warranty services to support our foreign government contract , and $ 47,366 in warranty settlements . cash generated from operating activities for the fiscal year ended september 30 , 2010 included the $ 2,983,613 net income , reduced by expenses not requiring the use of cash of $ 113,326 and a $ 9,401 increase in accounts payable . cash used in operating activities included $ 2,754,687 increase in accounts receivable , $ 199,679 increase in inventory , $ 113,429 decrease in accrued liabilities , $ 72,605 of warranty settlements and $ 10,236 increase in prepaid expenses and other . at september 30 , 2011 , we had accounts receivable of $ 5,098,148 , compared to $ 4,187,999 at september 30 , 2010. the level of trade accounts receivable at september 30 , 2011 represented approximately 70 days of revenues for the year compared to 92 days of revenues at september 30 , 2010. the decrease in days was due to comparable receivables balances , but with higher revenues in the year ended september 30 , 2011 compared to september 30 , 2010.


 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.
     ```cash flows operating activities our net cash generated from operating activities from continuing operations was $ 3,886,017 for the fiscal year ended september 30 , 2011 compared to $ 4,765 for the fiscal year ended september 30 , 2010. cash generated from operating activities for the fiscal year ended september 30 , 2011 included the $ 5,022,902 net income reduced by expenses not requiring the use of cash of $ 641,654 , a decrease in inventory of $ 64,830 , an increase of accounts payable of $ 75,155 and an increase in accrued liabilities , primarily for bonus accrual , of $ 1,334,094. cash used in operating activities included $ 606,250 for transfers to restricted cash , a $ 910,149 increase in accounts receivable , $ 1,218,750 for prepaid expenses  non-current , and $ 400,649 for increased current prepaid expenses and other , both of which include prepaid warranty services to support our foreign government contract , and $ 47,366 in warranty settlements . cash generated from operating activities for the fiscal year ended september 30 , 2010 included the $ 2,983,613 net income , reduced by expenses not requiring the use of cash of $ 113,326 and a $ 9,401 increase in accounts payable . cash used in operating activities included $ 2,754,687 increase in accounts receivable , $ 199,679 increase in inventory , $ 113,429 decrease in accrued liabilities , $ 72,605 of warranty settlements and $ 10,236 increase in prepaid expenses and other . at september 30 , 2011 , we had accounts receivable of $ 5,098,148 , compared to $ 4,187,999 at september 30 , 2010. the level of trade accounts receivable at september 30 , 2011 represented approximately 70 days of revenues for the year compared to 92 days of revenues at september 30 , 2010. the decrease in days was due to comparable receivables balances , but with higher revenues in the year ended september 30 , 2011 compared to september 30 , 2010.
```    
 Suspicious Activity Report : we increased our cash balance by $ 8,449,595 during fiscal 2011 through positive cash flow from operating activities and the exercise of warrants . future cash flows from operating activities are expected to fluctuate based on working capital requirements , operating expense levels and other factors . we believe we have adequate financial resources to fund operations for the next twelve months . in fiscal 2008 , we completed the development and introduced a new generation of lrad products called the lrad-x . our lrad-x product line uses directionality and focused acoustic output to clearly transmit critical information , instructions and warnings 1,500 meters and beyond . the lrad-x product line features improved voice intelligibility and is available in a number of packages that meet the military 's stringent environmental requirements in a number of packages and form factors . through the use of powerful voice commands and deterrent tones , large safety zones can be created while determining the intent and influencing the behavior of an intruder . our lrad-x product line provides a complete range of systems from single man portable to permanently installed , remotely operated . our lrad products have been competitively selected over other commercially available systems by the u.s. and certain foreign military . our new product line includes the following : lrad 1000xselected by the u.s. navy as its ahd for block 0 of the shipboard protection systemcan be manually operated to provide long distance hailing and warning with highly intelligible communication . this unit is available in both fully-integrated and remotely-operated electronics . lrad 500xselected by the u.s. navy and u.s. army as their ahd for small vessels and vehiclesis lightweight and can be easily transported to provide security personnel long-range communications and a highly effective hailing and warning capability where needed . lrad 300x is a lightweight mid-range ahd developed for small vessels and manned and unmanned vehicles and aircraft . this unit is available in both fully-integrated and remotely-operated electronics . lrad 100x is a self-contained , battery powered , portable system designed for use in a variety of mass notification , law enforcement and commercial security applications . this unit is ideally suited for short-range perimeter security and communications . lrad-rxselected by the u.s. navy in 2010 in a competitive bid process for block 2 of the shipboard protection systemis our prescription for remotely controlled security . it enables system 19 operators to detect and communicate with an intruder over long distances . lrad-rx features an lrad 1000x emitter head , integrated camera , high-intensity searchlight and a newly developed , robust , and internet protocol-addressable full pan and tilt drive system for precise aiming and tracking . lrad-rx can also be integrated with radar to provide automated intruder alerts . because of its automated capabilities , lrad-rx reduces manpower and false alarms while providing an intelligent , cost-effective security solution . we incurred $ 2,483,938 of research and development expense during fiscal 2011 , which was an increase of 20 % over $ 2,062,158 incurred in fiscal 2010. during 2011 , we developed a wireless version of the lrad 100x and are expanding this wireless capability across the product line . we also completed the development of the lrad 2000x , our loudest product to date , to meet the requirements of larger security applications . the lrad 2000x was released for sale in the first fiscal quarter of 2012. in addition , we focused on product cost reductions , feature enhancements and customized applications of existing products , and increased our product certifications . we believe these products provide increased opportunities in government and commercial markets and allow us to continue as the leader in this market . we intend to continue to innovate during fiscal 2012 with consistent levels of research and development expenditures . business outlook we are experiencing positive response and increased acceptance of our products . we believe we have a solid technology and product foundation with our lrad-x product line , and we have expanded our product line to service new markets for business growth . we have strong market opportunities within the worldwide government and military sector , as well as increased commercial applications as a result of continued global threats to governments , commerce and law enforcement and in wildlife preservation and control applications . our selling network has expanded to include a number of key integrators and sales representatives within the united states and in a number of worldwide locations . however , we may face challenges in fiscal 2012 from extreme international economic and geopolitical conditions . a further and continued deterioration in financial markets and confidence in major economies could disrupt the operation of our business . we anticipate continued uncertainty with u.s. military spending due to ongoing budget delays and expected spending reductions . in addition , we had a single large order for $ 12.1 million in fiscal 2011 that will be a challenge to replace with similar orders in fiscal 2012. critical accounting policies and estimates we have identified the policies below as critical to our business operations and to understanding our results of operations . our accounting policies are more fully described in our financial statements and related notes located in item 8. financial statements and supplementary data. the impact and any associated risks related to these policies on our business operations are discussed in item 1a . risk factors and throughout management 's discussion and analysis of financial condition and results of operations when such policies affect our reported and expected financial results . story_separator_special_tag we incurred non-cash share-based compensation expenses of $ 335,796 and $ 380,688 in selling , general and administrative expenses in the fiscal years ended september 30 , 2011 and 2010 , respectively . the decrease in expenses is due to a number of options becoming fully vested . we may expend additional resources on marketing our products in future periods which may increase selling , general and administrative expenses . also , commission expense will fluctuate based on the level of commissionable sales incurred . research and development expenses research and development expenses increased $ 421,780 to $ 2,483,938 , or 9 % of total revenues , for the year ended september 30 , 2011 , compared to $ 2,062,158 , or 12 % of total revenues , for the year ended september 30 , 2010. this increase was primarily due to $ 309,782 in bonus expense for meeting annual performance targets , and $ 140,356 for staffing , partially offset by a $ 25,299 decrease in the impairment of intangible assets . included in research and development expenses for the year ended september 30 , 2011 was $ 60,919 of non-cash share-based compensation expenses , compared to $ 53,143 for the year ended september 30 , 2010. the increase is due to new option grants . during fiscal years 2011 and 2010 , we reviewed the ongoing value of our capitalized intangible assets and identified some of these assets as being no longer consistent with our business strategy . as a result of this review , we reduced the value of these patents by $ 22,551 and $ 47,850 for the fiscal years ended september 30 , 2011 and 2010 , respectively . research and development expenses vary period to period due to the timing of projects , the availability of funds , and the timing , extent and use of outside consulting , design and development firms . in fiscal 2011 , research and development expenses were primarily for in-house development , but we have , in the past , supplemented our in-house development with third-party consulting resulting in higher expenses . based on current plans and engineering staffing , we expect fiscal year 2012 research and development expenses to be comparable to expenditures made in fiscal year 2011. income from operations income from operations was $ 4,981,671 for the year ended september 30 , 2011 , compared to income from operations of $ 2,452,190 for the year ended september 30 , 2010 , primarily from increased revenue and improved margins . other income ( expense ) during the year ended september 30 , 2011 , we earned $ 32,354 of interest income on our cash balances compared to $ 903 in the year ended september 30 , 2010. the higher interest is due to transferring higher cash balances to interest bearing accounts during the current year . we also recorded other income of $ 14,721 in the 24 year ended september 30 , 2011 for proceeds from an insurance claim . in the year ended september 30 , 2010 , we recorded a $ 747,917 unrealized , non-cash gain on derivative revaluation related to changes in the estimated fair value of common stock warrant instruments that were classified as derivative liabilities , pursuant to asc 815-40. we did not have a similar gain during the year ended september 30 , 2011 , and we do not anticipate any gain or loss in future years because we no longer have common stock warrant instruments that are classified as derivative liabilities . net income our net income increased $ 2,039,289 to $ 5,022,902 , or $ 0.15 per diluted share for the year ended september 30 , 2011 , compared to net income of $ 2,983,613 , or $ 0.10 per diluted share , for the year ended september 30 , 2010. we recorded a tax provision of $ 75,190 and $ 166,771 for the years ended september 30 , 2011 and 2010 , respectively , as a result of taxable income generated during the year . we generated a federal tax liability due to the federal alternative minimum tax , but were able to use r & d credits in california to offset state tax obligations . liquidity and capital resources cash and cash equivalents at september 30 , 2011 was $ 13,870,762 , compared to $ 5,421,167 at september 30 , 2010. in addition , at september 30 , 2011 , we had $ 606,250 of cash which we pledged to support a bank guarantee related to a customer maintenance contract that was previously included as cash and cash equivalents and reclassified as restricted cash in the quarter ended december 31 , 2010. the increase in cash and cash equivalents was primarily the result of the exercise during the fiscal year ended september 30 , 2011 of certain warrants to purchase common stock , which generated $ 4,346,613 in cash , and $ 3,886,017 generated from operating activities from continuing operations in the year ended september 30 , 2011 , which includes $ 606,250 reclassified to restricted cash as described above . other than cash and cash equivalents and our balance of accounts receivable at september 30 , 2011 and expected future cash flows from operating activities in subsequent periods , we have no other unused sources of liquidity at this time . principal factors that could affect the availability of our internally generated funds include : ability to meet sales projections ; government spending levels ; introduction of competing technologies ; product mix and effect on margins ; ability to reduce and manage inventory levels ; and product acceptance in new markets . principal factors that could affect our ability to obtain cash from external sources include : volatility in the capital markets ; and market price and trading volume of our common stock . based on our current cash position , our order backlog , and assuming the accuracy of our currently planned expenditures ,

