other information story_separator_special_tag the following discussion and analysis should be read in conjunction with our audited financial statements and notes thereto that appear elsewhere in this report . this discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties . actual results may differ materially from those discussed in these forward-looking statements due to a number of factors , including those set forth in the section entitled “ risk factors ” and elsewhere in this report . the statements contained in this annual report on form 10-k , including statements under this section titled “ management 's discussion and analysis of financial condition and results of operations , ” include forward-looking statements within the meaning of section 27a of the securities act of 1933 , as amended , and section 21e of the securities exchange act of 1934 , as amended , including , without limitation , statements regarding our management 's expectations , hopes , beliefs , intentions or strategies regarding the future . the words “ believe , ” “ may , ” “ will , ” “ estimate , ” “ continue , ” “ anticipate , ” “ intend , ” “ expect , ” “ plan ” and similar expressions may identify forward-looking statements , but the absence of these words does not mean that a statement is not forward-looking . the forward-looking statements contained in this annual report on form 10-k is based on our current expectations and beliefs concerning future developments and their potential effects on us . there can be no assurance that future developments affecting us will be those that we anticipated . these forward-looking statements involve a number of risks , uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements . these risks and uncertainties include those factors described in greater detail in item 1a of part i , “ risk factors ” . should one or more of these risks or uncertainties materialize , or should any of our assumptions prove incorrect , actual results may vary in material respects from those anticipated in these forward-looking statements . we undertake no obligation to update or revise any forward-looking statements , whether as a result of new information , future events or otherwise , except as may be required under applicable securities laws . overview management 's discussion and analysis provides additional insight into the company and is provided as a supplement to , and should be read in conjunction with , our audited financial statements and accompanying footnotes thereto . our proprietary hypothermosol ® , cryostor ® , and generic bloodstor ® biopreservation media products are marketed to cell therapy companies , pharmaceutical companies , cord blood banks , hair transplant surgeons , and suppliers of cells to the toxicology testing and diagnostic markets . all of our products are serum-free and protein-free , fully defined , and are manufactured under current good manufacturing practices using united states pharmacopeia ( “ usp ” ) or the highest available grade components . our products are formulated to reduce preservation-induced , delayed-onset cell damage and death . this platform enabling technology provides academic and clinical researchers significant extension in biologic source material shelf life and also improved post-preservation cell , tissue , and organ viability and function . the discoveries made by our scientists and consultants relate to how cells , tissues , and organs respond to the stress of hypothermic storage , cryopreservation , and the thawing process , and enabled the formulation of truly innovative biopreservation media products that protect biologic material from preservation related cellular injury , much of which is not apparent immediately post-thaw . our enabling technology provides significant improvement in post-preservation viability and function of biologic material . this yield improvement can reduce research , development , and commercialization costs of new cell and tissue based clinical therapies . critical accounting policies and significant judgments and estimates management 's discussion and analysis of our financial condition and results of operations is based on our financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as reported revenues and expenses during the reporting periods . on an ongoing basis , we evaluate estimates , including , but not limited to those related to accounts receivable allowances , determination of fair value of share-based compensation , contingencies , income taxes , and expense accruals . we base our estimates on historical experience and on other factors that we believes are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ materially from these estimates under different assumptions or conditions . 15 share-based compensation we account for share-based compensation by estimating the fair value of share-based compensation using the black-scholes option pricing model on the date of grant . we utilize assumptions related to stock price volatility , stock option term and forfeiture rates that are based upon both historical factors as well as management 's judgment . non-cash compensation expense is recognized on a straight-line basis over the applicable requisite service period of one to four years , based on the fair value of such share-based awards on the grant date . story_separator_special_tag income taxes we follow the asset and liability method of accounting for income taxes . under this method , deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and on the expected future tax benefits to be derived from net operating loss carryforwards measured using current tax rates . a valuation allowance is established if it is more likely than not that some portion or all of the deferred tax assets will not be realized . we have not recorded any liabilities for uncertain tax positions or any related interest and penalties . our tax returns are open to audit for the years ending december 31 , 2009 to 2011. results of operations summary of 2011 achievements ● revenue and customer base continued to grow with shipments of cryostor® , hypothermosol® , and bloodstor® , to dozens of new and most existing customers in strategic direct markets of regenerative medicine , biobanking , and drug discovery . our estimated direct and indirect customer base now totals more than 400 . ● revenue from distributors grew more than 150 % over 2010 and was 20 % of total revenue . ● the company executed a significant confidential multi-year contract manufacturing services agreement to perform aseptic media formulation , fill , and finish of several biopreservation solutions for a new multinational customer . comparison of annual results of operations percentage comparisons have been omitted within the following table where they are not considered meaningful . revenue and gross margin replace_table_token_2_th 16 product sales and cost of sales . our products are sold through both direct and indirect channels . product sales in 2011 increased compared to 2010 primarily due to significantly higher sales to our network of distributors in 2011 and increased sales to our contract manufacturing partners . sales to our direct customers increased 19 % in 2011 compared to 2010. sales to distributors in 2011 increased 159 % over sales to distributors in 2010. in addition , product sales increased due to sales to direct customers at higher selling prices in 2011 compared to 2010 for our family of products . cost of product sales consists of raw materials , labor and overhead expenses . cost of sales in 2011 increased compared to 2010 due to increased product sales . gross margin as a percentage of revenue increased in 2011 compared to 2010 , primarily due to increased utilization of our manufacturing facility . increased utilization resulted in lower overhead costs per unit manufactured being included in cost of sales . this is offset partially by certain non-recurring costs related to employee transition that occurred in the first quarter of 2011. licensing revenue . we have entered into license agreements with one customer that provides this customer with limited access to our intellectual property under certain conditions . this customer paid upfront fees for the specific rights and we recognize license revenue ratably over the term of the agreements . revenue concentration . we have focused our sales efforts on diversification of our customers in order to reduce the concentration of our revenue with a small number of customers . as of december 31 , 2011 , we estimate over 400 direct and indirect customers . in 2011 , no individual customer made up more than 10 % of sales . in 2010 , sales to individual customers representing more than 10 % of total revenue totaled approximately $ 535,000. this was the result of sales to two customers , one which totaled $ 322,000 , representing 16 % of total product sales , and the other which totaled $ 213,000 , representing 10 % of total product sales . operating expenses our operating expenses for the years ended december 31 , 2011 and 2010 were : replace_table_token_3_th research and development . research and development expenses consist primarily of salaries and other personnel expenses , consulting and other outside services , laboratory supplies , and other costs . we expense all r & d costs as incurred . r & d expenses for the year ended december 31 , 2011 increased compared to 2010 primarily due to higher personnel expenses related to new employees in 2011 and reclassification of one employee from marketing to research and development in january 2011. additional increases were due to higher legal and consulting expenses as the company continues to explore uses for its products . 17 sales and marketing . sales and marketing expenses consist primarily of salaries and other personnel-related expenses , consulting , trade shows and advertising . the 38 % decrease in 2011 sales and marketing expenses compared to 2010 was due primarily to lower personnel related costs due to a reclassification of one employee from marketing to research and development in january 2011 and to reduced spending on marketing materials in 2011. general and administrative expenses . general and administrative expenses consist primarily of salaries and other personnel-related expenses , non-cash stock-based compensation for administrative personnel and non-employee members of the board of directors , professional fees , such as accounting and legal , corporate insurance and facilities costs . the 16 % increase in general and administrative expenses in 2011 compared to 2010 was due to higher personnel costs in 2011 , higher stock compensation costs recorded for options granted in the first quarter of 2011 and an increase in legal fees in 2011 , offset somewhat by a reduction in consulting expenses due to the termination of one consulting agreement in the third quarter of 2011. other income ( expenses ) interest expense . the increase in interest expense in 2011 compared to 2010 was due to a higher average debt balance . amortization of deferred financing costs . amortization of deferred financing costs represents the cost of warrants issued in the fourth quarter of 2010 and the third quarter of 2011 which are being amortized over the life of the warrants . outlook in 2012

liquidity at december 31 , 2011 , we had cash and cash equivalents of $ 16,864 compared to cash and cash equivalents of $ 3,211 at december 31 , 2010. at december 31 , 2011 , we had working capital of $ 581,159 , compared to working capital of $ 474,271 at december 31 , 2010. we have been unable to generate sufficient income from operations in order to meet our operating needs and have an accumulated deficit of approximately $ 54 million at december 31 , 2011. this raises substantial doubt about our ability to continue as a going concern . net cash used in operating activities during the year ended december 31 , 2011 , net cash used in operating activities was $ 989,917 compared to net cash used by operating activities of $ 1,252,526 for the year ended december 31 , 2010. cash used in operating activities relates primarily to funding net losses and changes in operating assets and liabilities , offset by non-cash compensation related to stock options and depreciation . 18 net cash used in investing activities net cash used in investing activities totaled $ 91,430 during the year ended december 31 , 2011 , and $ 28,414 during the year ended december 31 , 2010. cash used in investing activities was due to purchase of property and equipment .


 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 at december 31 , 2011 , we had cash and cash equivalents of $ 16,864 compared to cash and cash equivalents of $ 3,211 at december 31 , 2010. at december 31 , 2011 , we had working capital of $ 581,159 , compared to working capital of $ 474,271 at december 31 , 2010. we have been unable to generate sufficient income from operations in order to meet our operating needs and have an accumulated deficit of approximately $ 54 million at december 31 , 2011. this raises substantial doubt about our ability to continue as a going concern . net cash used in operating activities during the year ended december 31 , 2011 , net cash used in operating activities was $ 989,917 compared to net cash used by operating activities of $ 1,252,526 for the year ended december 31 , 2010. cash used in operating activities relates primarily to funding net losses and changes in operating assets and liabilities , offset by non-cash compensation related to stock options and depreciation . 18 net cash used in investing activities net cash used in investing activities totaled $ 91,430 during the year ended december 31 , 2011 , and $ 28,414 during the year ended december 31 , 2010. cash used in investing activities was due to purchase of property and equipment .
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 Suspicious Activity Report : other information story_separator_special_tag the following discussion and analysis should be read in conjunction with our audited financial statements and notes thereto that appear elsewhere in this report . this discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties . actual results may differ materially from those discussed in these forward-looking statements due to a number of factors , including those set forth in the section entitled “ risk factors ” and elsewhere in this report . the statements contained in this annual report on form 10-k , including statements under this section titled “ management 's discussion and analysis of financial condition and results of operations , ” include forward-looking statements within the meaning of section 27a of the securities act of 1933 , as amended , and section 21e of the securities exchange act of 1934 , as amended , including , without limitation , statements regarding our management 's expectations , hopes , beliefs , intentions or strategies regarding the future . the words “ believe , ” “ may , ” “ will , ” “ estimate , ” “ continue , ” “ anticipate , ” “ intend , ” “ expect , ” “ plan ” and similar expressions may identify forward-looking statements , but the absence of these words does not mean that a statement is not forward-looking . the forward-looking statements contained in this annual report on form 10-k is based on our current expectations and beliefs concerning future developments and their potential effects on us . there can be no assurance that future developments affecting us will be those that we anticipated . these forward-looking statements involve a number of risks , uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements . these risks and uncertainties include those factors described in greater detail in item 1a of part i , “ risk factors ” . should one or more of these risks or uncertainties materialize , or should any of our assumptions prove incorrect , actual results may vary in material respects from those anticipated in these forward-looking statements . we undertake no obligation to update or revise any forward-looking statements , whether as a result of new information , future events or otherwise , except as may be required under applicable securities laws . overview management 's discussion and analysis provides additional insight into the company and is provided as a supplement to , and should be read in conjunction with , our audited financial statements and accompanying footnotes thereto . our proprietary hypothermosol ® , cryostor ® , and generic bloodstor ® biopreservation media products are marketed to cell therapy companies , pharmaceutical companies , cord blood banks , hair transplant surgeons , and suppliers of cells to the toxicology testing and diagnostic markets . all of our products are serum-free and protein-free , fully defined , and are manufactured under current good manufacturing practices using united states pharmacopeia ( “ usp ” ) or the highest available grade components . our products are formulated to reduce preservation-induced , delayed-onset cell damage and death . this platform enabling technology provides academic and clinical researchers significant extension in biologic source material shelf life and also improved post-preservation cell , tissue , and organ viability and function . the discoveries made by our scientists and consultants relate to how cells , tissues , and organs respond to the stress of hypothermic storage , cryopreservation , and the thawing process , and enabled the formulation of truly innovative biopreservation media products that protect biologic material from preservation related cellular injury , much of which is not apparent immediately post-thaw . our enabling technology provides significant improvement in post-preservation viability and function of biologic material . this yield improvement can reduce research , development , and commercialization costs of new cell and tissue based clinical therapies . critical accounting policies and significant judgments and estimates management 's discussion and analysis of our financial condition and results of operations is based on our financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as reported revenues and expenses during the reporting periods . on an ongoing basis , we evaluate estimates , including , but not limited to those related to accounts receivable allowances , determination of fair value of share-based compensation , contingencies , income taxes , and expense accruals . we base our estimates on historical experience and on other factors that we believes are reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ materially from these estimates under different assumptions or conditions . 15 share-based compensation we account for share-based compensation by estimating the fair value of share-based compensation using the black-scholes option pricing model on the date of grant . we utilize assumptions related to stock price volatility , stock option term and forfeiture rates that are based upon both historical factors as well as management 's judgment . non-cash compensation expense is recognized on a straight-line basis over the applicable requisite service period of one to four years , based on the fair value of such share-based awards on the grant date . story_separator_special_tag income taxes we follow the asset and liability method of accounting for income taxes . under this method , deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and on the expected future tax benefits to be derived from net operating loss carryforwards measured using current tax rates . a valuation allowance is established if it is more likely than not that some portion or all of the deferred tax assets will not be realized . we have not recorded any liabilities for uncertain tax positions or any related interest and penalties . our tax returns are open to audit for the years ending december 31 , 2009 to 2011. results of operations summary of 2011 achievements ● revenue and customer base continued to grow with shipments of cryostor® , hypothermosol® , and bloodstor® , to dozens of new and most existing customers in strategic direct markets of regenerative medicine , biobanking , and drug discovery . our estimated direct and indirect customer base now totals more than 400 . ● revenue from distributors grew more than 150 % over 2010 and was 20 % of total revenue . ● the company executed a significant confidential multi-year contract manufacturing services agreement to perform aseptic media formulation , fill , and finish of several biopreservation solutions for a new multinational customer . comparison of annual results of operations percentage comparisons have been omitted within the following table where they are not considered meaningful . revenue and gross margin replace_table_token_2_th 16 product sales and cost of sales . our products are sold through both direct and indirect channels . product sales in 2011 increased compared to 2010 primarily due to significantly higher sales to our network of distributors in 2011 and increased sales to our contract manufacturing partners . sales to our direct customers increased 19 % in 2011 compared to 2010. sales to distributors in 2011 increased 159 % over sales to distributors in 2010. in addition , product sales increased due to sales to direct customers at higher selling prices in 2011 compared to 2010 for our family of products . cost of product sales consists of raw materials , labor and overhead expenses . cost of sales in 2011 increased compared to 2010 due to increased product sales . gross margin as a percentage of revenue increased in 2011 compared to 2010 , primarily due to increased utilization of our manufacturing facility . increased utilization resulted in lower overhead costs per unit manufactured being included in cost of sales . this is offset partially by certain non-recurring costs related to employee transition that occurred in the first quarter of 2011. licensing revenue . we have entered into license agreements with one customer that provides this customer with limited access to our intellectual property under certain conditions . this customer paid upfront fees for the specific rights and we recognize license revenue ratably over the term of the agreements . revenue concentration . we have focused our sales efforts on diversification of our customers in order to reduce the concentration of our revenue with a small number of customers . as of december 31 , 2011 , we estimate over 400 direct and indirect customers . in 2011 , no individual customer made up more than 10 % of sales . in 2010 , sales to individual customers representing more than 10 % of total revenue totaled approximately $ 535,000. this was the result of sales to two customers , one which totaled $ 322,000 , representing 16 % of total product sales , and the other which totaled $ 213,000 , representing 10 % of total product sales . operating expenses our operating expenses for the years ended december 31 , 2011 and 2010 were : replace_table_token_3_th research and development . research and development expenses consist primarily of salaries and other personnel expenses , consulting and other outside services , laboratory supplies , and other costs . we expense all r & d costs as incurred . r & d expenses for the year ended december 31 , 2011 increased compared to 2010 primarily due to higher personnel expenses related to new employees in 2011 and reclassification of one employee from marketing to research and development in january 2011. additional increases were due to higher legal and consulting expenses as the company continues to explore uses for its products . 17 sales and marketing . sales and marketing expenses consist primarily of salaries and other personnel-related expenses , consulting , trade shows and advertising . the 38 % decrease in 2011 sales and marketing expenses compared to 2010 was due primarily to lower personnel related costs due to a reclassification of one employee from marketing to research and development in january 2011 and to reduced spending on marketing materials in 2011. general and administrative expenses . general and administrative expenses consist primarily of salaries and other personnel-related expenses , non-cash stock-based compensation for administrative personnel and non-employee members of the board of directors , professional fees , such as accounting and legal , corporate insurance and facilities costs . the 16 % increase in general and administrative expenses in 2011 compared to 2010 was due to higher personnel costs in 2011 , higher stock compensation costs recorded for options granted in the first quarter of 2011 and an increase in legal fees in 2011 , offset somewhat by a reduction in consulting expenses due to the termination of one consulting agreement in the third quarter of 2011. other income ( expenses ) interest expense . the increase in interest expense in 2011 compared to 2010 was due to a higher average debt balance . amortization of deferred financing costs . amortization of deferred financing costs represents the cost of warrants issued in the fourth quarter of 2010 and the third quarter of 2011 which are being amortized over the life of the warrants . outlook in 2012

