although the company believes that its plans , intentions , expectations and estimates reflected or implied in such forward-looking statements are reasonable , the company can not assure you that such plans , intentions , expectations or estimates will be achieved in whole or in part , that the company has identified all potential risks , or that the company can successfully avoid or mitigate such risks in whole or in part . you should carefully review the risk factors described above ( see item 1a – risk factors , above ) and any other cautionary statements contained or incorporated by reference in this annual report . all forward-looking and other statements attributable to the company or persons acting on its behalf are expressly subject to and qualified by all such risk factors and other cautionary statements . you should not place undue reliance on the company 's forward-looking statements because the matters they describe are subject to known and unknown risks , uncertainties and other unpredictable factors , many of which are beyond its control . the company 's forward-looking statements , risk factors and other cautionary statements ( whether contained in this annual report , the 2013 proxy statement or any other applicable sec report ) are based on the information currently available to the company and speak only as of the date specifically referenced , or if no date is referenced , then as of december 31 , 2012 , in the case of this annual report or the 2013 proxy statement or the last day of the period covered by any other applicable sec report . new risks and uncertainties arise from time to time , and it is impossible for the company to predict these matters or how they may arise or affect the company . over time , the company 's actual assets , business , capital , cash flow , credit , expenses , financial condition , income , liabilities , liquidity , locations , marketing , operations , prospects , sales , strategies , taxation or other achievements , results , risks or condition will likely differ from those expressed or implied by the company 's forward-looking statements , and such difference could be significant and materially adverse to the company and the value of your investment in the company 's common stock . the company does not intend or promise , and the company expressly disclaims any obligation , to publicly update or revise any forward-looking statements , risk factors or other cautionary statements ( in whole or in part ) , whether as a result of new information , future events or recognition or otherwise , except as and to the extent required by applicable law . overview spar group , inc. ( `` sgrp `` ) , and its subsidiaries ( together with sgrp , the `` spar group `` or the `` company `` ) , is a diversified international merchandising and marketing services company and provides a broad array of services worldwide to help companies improve their sales , operating efficiency and profits at retail locations . the company provides merchandising and other marketing services to manufacturers , distributors and retailers worldwide , primarily in mass merchandisers , office supply , grocery , drug store , independent , convenience and electronics stores , as well as providing furniture and other product assembly services in stores , homes and offices . the company has supplied these project and product services in the united states since certain of its predecessors were formed in 1979 and internationally since the company acquired its first international subsidiary in japan in may of 2001. today the company operates in 10 countries that encompass approximately 50 % of the total world population through operations in the united states , canada , japan , south africa , india , romania , china , australia , mexico and turkey . -25- critical accounting policies & estimates the company 's critical accounting policies , including the assumptions and judgments underlying them , are disclosed in the note 2 to the consolidated financial statements . these policies have been consistently applied in all material respects and address such matters as revenue recognition , depreciation methods , asset impairment recognition , consolidation of subsidiaries and other companies . while the estimates and judgments associated with the application of these policies may be affected by different assumptions or conditions , the company believes the estimates and judgments associated with the reported amounts are appropriate in the circumstances . four critical accounting policies are consolidation of subsidiaries , revenue recognition , allowance for doubtful accounts , and internal use software development costs . consolidation of subsidiaries the company consolidates its 100 % owned subsidiaries . the company also consolidates all of its 51 % owned subsidiaries as the company believes it is the primary beneficiary and controls the economic activities in accordance with accounting standards codification ( asc ) 810-10 , consolidation of variable interest entity . revenue recognition the company 's services are provided to its clients under contracts or agreements . the company bills its clients based upon service fee and per unit fee billing arrangements . revenues under service fee billing arrangements are recognized when the service is performed . the company 's per unit fee arrangements provide for fees to be earned based on the retail sales of a client 's products to consumers . the company recognizes per unit fees in the period such amounts become determinable and are reported to the company . allowance for doubtful accounts the company continually monitors the validity of its accounts receivable based upon current client credit information and financial condition . story_separator_special_tag selling , general and administrative expenses were approximately $ 22.1 million and $ 18.5 million for the years ended december 31 , 2012 and 2011 , respectively . replace_table_token_5_th domestic selling , general and administrative expenses totaled $ 9.8 million for the year ended december 31 , 2012 , compared to $ 8.9 million for the same period in 2011 . the increase of approximately $ 900,000 was due primarily to payroll related expenses , legal and accounting services , as well as expenses from the newly acquired merchandising company . international selling , general and administrative expenses totaled $ 12.3 million for the year ended december 31 , 2012 , compared to $ 9.6 million for the same period in 2011. the increase of approximately $ 2.7 million was primarily attributable to the new subsidiaries in romania and south africa , and a full year impact from fourth quarter 2011 acquisitions in mexico and turkey , partially offset by lower expenses in australia and india . depreciation and amortization depreciation and amortization expenses totaled $ 1.2 million for the year ended december 31 , 2012 , compared to $ 1.1 million for the same period in 2011. the increase was primarily due to higher capital expenditures related to software development compared to prior year . interest expense , net the company 's net interest expense was $ 129,000 and $ 197,000 for the years ended december 31 , 2012 and 2011 , respectively . the decrease in interest expense was directly attributable to reduced borrowings and lower interest rates . income taxes the income tax provision for the years ended december 31 , 2012 and 2011 was $ 550,000 and $ 362,000 , respectively . the tax provision resulted primarily from domestic state taxes and for tax provisions related to certain international profits . the company recognizes minimum federal tax provisions as the company anticipates utilizing operating loss carry forwards in 2012. the company has established over time and currently has a valuation allowance reserve of approximately $ 4.2 million against its deferred tax asset balance at december 31 , 2012. the reduction of that reserve and the corresponding realization of these deferred tax assets is contingent upon the realization of future taxable profits over several years . the company does not believe such future profits are certain , and thus the requirements of asc 740-10 for reducing that reserve are not currently met , due to the subjective nature of forecasting profits and the risks the company faces on a daily basis as noted in item 1a of this report , including ( without limitation ) the risks related to dependence on the trend of both clients and retailers towards outsourcing merchandising and marketing services , the competitive nature of the this industry , economic and retail uncertainty , reliance on the internet and dependence upon cost of services provided by affiliates . non-controlling interest net operating profits from the non-controlling interests , respecting the company 's 51 % owned subsidiaries , resulted in a reduction of the company 's net income of $ 521,000 and $ 123,000 for the years ended december 31 , 2012 and 2011 , respectively . net income the company reported a net income of $ 2.9 million for the year ended december 31 , 2012 , or $ 0.14 per diluted share , compared to a net income of $ 2.2 million , or $ 0.10 per diluted share , for the corresponding period last year , based on diluted shares outstanding of 21.6 million and 21.3 million at december 31 , 2012 , and 2011 , respectively . off balance sheet arrangements none . -28- story_separator_special_tag domestic subsidiaries , and their respective equity and assets ) . as of the effective date of the second sterling amendment , the basic interest rate under the sterling credit facility was reduced by three quarters of one percent ( 3/4 % ) per annum to the sum of the fluctuating prime rate of interest published in the wall street journal from time to time plus three quarters of one percent ( 3/4 % ) percent per annum , which automatically changes with each change in such rate . -29- effective january 1 , 2013 the sterling credit facility was amended ( the `` third sterling amendment `` ) to reduce the interest rate to the prime rate ( as that term is defined in the loan agreement ) plus one quarter of one percent ( 1/4 % ) per annum . due to the requirement to maintain a lock box arrangement with the agent and the lenders ' ability to invoke a subjective acceleration clause at its discretion , borrowings under the sterling credit facility will be classified as current . the sterling credit facility contains certain financial and other restrictive covenants and also limits certain expenditures by the borrowers , including , but not limited to , capital expenditures and other investments . at december 31 , 2012 , the company was in compliance with such covenants . international credit facilities : in october 2011 , sparfacts australia pty . ltd. , replaced the commonwealth bank line of credit with a new receivables based secured line of credit facility with oxford funding pty ltd. for $ 1.2 million ( australian ) or approximately $ 1.2 million ( based upon the exchange rate at december 31 , 2012 ) . the facility provides for borrowing based upon a formula as defined in the agreement ( principally 80 % of eligible accounts receivable less certain deductions ) . the agreement expired on october 31 , 2012. sparfacts is in the process of renegotiating a new agreement . spar canada company , a wholly owned subsidiary , has a secured credit agreement with royal bank of canada providing for a demand operating loan for a maximum borrowing of $ 750,000 ( canadian ) or approximately $ 753,000 ( based upon the exchange rate at december 31

liquidity and capital resources the company had net income before non-controlling interest of $ 3.5 million and $ 2.3 million for the years ended december 31 , 2012 , and december 31 , 2011 , respectively . the company 's cash provided by operating activities for the year ended december 31 , 2012 , was $ 3.4 million , compared to net cash provided by operating activities of $ 3.5 million in 2011. the net cash provided by operating activities was primarily due to a reported net income , depreciation and an increase in accounts payable , accrued expenses and other liabilities , partially offset by an increase in accounts receivable . net cash used by the company in investing activities was $ 1.8 million for the year ended december 31 , 2012 , and $ 1.3 million for the year ended december 31 , 2011 , respectively . the net cash used in investing activities was a result of capitalization of software development costs , the purchase of computer equipment , the purchase of non-controlling interest in new subsidiaries and the final payment for the purchase of the mexican subsidiary . net cash used by the company in financing activities for the year ended december 31 , 2012 , was $ 1.4 million compared with net cash used in financing activities of $ 1.5 million for the year ended december 31 , 2011. the cash used in financing activities was primarily a result of the company 's net payments on its lines of credit .


 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 had net income before non-controlling interest of $ 3.5 million and $ 2.3 million for the years ended december 31 , 2012 , and december 31 , 2011 , respectively . the company 's cash provided by operating activities for the year ended december 31 , 2012 , was $ 3.4 million , compared to net cash provided by operating activities of $ 3.5 million in 2011. the net cash provided by operating activities was primarily due to a reported net income , depreciation and an increase in accounts payable , accrued expenses and other liabilities , partially offset by an increase in accounts receivable . net cash used by the company in investing activities was $ 1.8 million for the year ended december 31 , 2012 , and $ 1.3 million for the year ended december 31 , 2011 , respectively . the net cash used in investing activities was a result of capitalization of software development costs , the purchase of computer equipment , the purchase of non-controlling interest in new subsidiaries and the final payment for the purchase of the mexican subsidiary . net cash used by the company in financing activities for the year ended december 31 , 2012 , was $ 1.4 million compared with net cash used in financing activities of $ 1.5 million for the year ended december 31 , 2011. the cash used in financing activities was primarily a result of the company 's net payments on its lines of credit .
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 Suspicious Activity Report : although the company believes that its plans , intentions , expectations and estimates reflected or implied in such forward-looking statements are reasonable , the company can not assure you that such plans , intentions , expectations or estimates will be achieved in whole or in part , that the company has identified all potential risks , or that the company can successfully avoid or mitigate such risks in whole or in part . you should carefully review the risk factors described above ( see item 1a – risk factors , above ) and any other cautionary statements contained or incorporated by reference in this annual report . all forward-looking and other statements attributable to the company or persons acting on its behalf are expressly subject to and qualified by all such risk factors and other cautionary statements . you should not place undue reliance on the company 's forward-looking statements because the matters they describe are subject to known and unknown risks , uncertainties and other unpredictable factors , many of which are beyond its control . the company 's forward-looking statements , risk factors and other cautionary statements ( whether contained in this annual report , the 2013 proxy statement or any other applicable sec report ) are based on the information currently available to the company and speak only as of the date specifically referenced , or if no date is referenced , then as of december 31 , 2012 , in the case of this annual report or the 2013 proxy statement or the last day of the period covered by any other applicable sec report . new risks and uncertainties arise from time to time , and it is impossible for the company to predict these matters or how they may arise or affect the company . over time , the company 's actual assets , business , capital , cash flow , credit , expenses , financial condition , income , liabilities , liquidity , locations , marketing , operations , prospects , sales , strategies , taxation or other achievements , results , risks or condition will likely differ from those expressed or implied by the company 's forward-looking statements , and such difference could be significant and materially adverse to the company and the value of your investment in the company 's common stock . the company does not intend or promise , and the company expressly disclaims any obligation , to publicly update or revise any forward-looking statements , risk factors or other cautionary statements ( in whole or in part ) , whether as a result of new information , future events or recognition or otherwise , except as and to the extent required by applicable law . overview spar group , inc. ( `` sgrp `` ) , and its subsidiaries ( together with sgrp , the `` spar group `` or the `` company `` ) , is a diversified international merchandising and marketing services company and provides a broad array of services worldwide to help companies improve their sales , operating efficiency and profits at retail locations . the company provides merchandising and other marketing services to manufacturers , distributors and retailers worldwide , primarily in mass merchandisers , office supply , grocery , drug store , independent , convenience and electronics stores , as well as providing furniture and other product assembly services in stores , homes and offices . the company has supplied these project and product services in the united states since certain of its predecessors were formed in 1979 and internationally since the company acquired its first international subsidiary in japan in may of 2001. today the company operates in 10 countries that encompass approximately 50 % of the total world population through operations in the united states , canada , japan , south africa , india , romania , china , australia , mexico and turkey . -25- critical accounting policies & estimates the company 's critical accounting policies , including the assumptions and judgments underlying them , are disclosed in the note 2 to the consolidated financial statements . these policies have been consistently applied in all material respects and address such matters as revenue recognition , depreciation methods , asset impairment recognition , consolidation of subsidiaries and other companies . while the estimates and judgments associated with the application of these policies may be affected by different assumptions or conditions , the company believes the estimates and judgments associated with the reported amounts are appropriate in the circumstances . four critical accounting policies are consolidation of subsidiaries , revenue recognition , allowance for doubtful accounts , and internal use software development costs . consolidation of subsidiaries the company consolidates its 100 % owned subsidiaries . the company also consolidates all of its 51 % owned subsidiaries as the company believes it is the primary beneficiary and controls the economic activities in accordance with accounting standards codification ( asc ) 810-10 , consolidation of variable interest entity . revenue recognition the company 's services are provided to its clients under contracts or agreements . the company bills its clients based upon service fee and per unit fee billing arrangements . revenues under service fee billing arrangements are recognized when the service is performed . the company 's per unit fee arrangements provide for fees to be earned based on the retail sales of a client 's products to consumers . the company recognizes per unit fees in the period such amounts become determinable and are reported to the company . allowance for doubtful accounts the company continually monitors the validity of its accounts receivable based upon current client credit information and financial condition . story_separator_special_tag selling , general and administrative expenses were approximately $ 22.1 million and $ 18.5 million for the years ended december 31 , 2012 and 2011 , respectively . replace_table_token_5_th domestic selling , general and administrative expenses totaled $ 9.8 million for the year ended december 31 , 2012 , compared to $ 8.9 million for the same period in 2011 . the increase of approximately $ 900,000 was due primarily to payroll related expenses , legal and accounting services , as well as expenses from the newly acquired merchandising company . international selling , general and administrative expenses totaled $ 12.3 million for the year ended december 31 , 2012 , compared to $ 9.6 million for the same period in 2011. the increase of approximately $ 2.7 million was primarily attributable to the new subsidiaries in romania and south africa , and a full year impact from fourth quarter 2011 acquisitions in mexico and turkey , partially offset by lower expenses in australia and india . depreciation and amortization depreciation and amortization expenses totaled $ 1.2 million for the year ended december 31 , 2012 , compared to $ 1.1 million for the same period in 2011. the increase was primarily due to higher capital expenditures related to software development compared to prior year . interest expense , net the company 's net interest expense was $ 129,000 and $ 197,000 for the years ended december 31 , 2012 and 2011 , respectively . the decrease in interest expense was directly attributable to reduced borrowings and lower interest rates . income taxes the income tax provision for the years ended december 31 , 2012 and 2011 was $ 550,000 and $ 362,000 , respectively . the tax provision resulted primarily from domestic state taxes and for tax provisions related to certain international profits . the company recognizes minimum federal tax provisions as the company anticipates utilizing operating loss carry forwards in 2012. the company has established over time and currently has a valuation allowance reserve of approximately $ 4.2 million against its deferred tax asset balance at december 31 , 2012. the reduction of that reserve and the corresponding realization of these deferred tax assets is contingent upon the realization of future taxable profits over several years . the company does not believe such future profits are certain , and thus the requirements of asc 740-10 for reducing that reserve are not currently met , due to the subjective nature of forecasting profits and the risks the company faces on a daily basis as noted in item 1a of this report , including ( without limitation ) the risks related to dependence on the trend of both clients and retailers towards outsourcing merchandising and marketing services , the competitive nature of the this industry , economic and retail uncertainty , reliance on the internet and dependence upon cost of services provided by affiliates . non-controlling interest net operating profits from the non-controlling interests , respecting the company 's 51 % owned subsidiaries , resulted in a reduction of the company 's net income of $ 521,000 and $ 123,000 for the years ended december 31 , 2012 and 2011 , respectively . net income the company reported a net income of $ 2.9 million for the year ended december 31 , 2012 , or $ 0.14 per diluted share , compared to a net income of $ 2.2 million , or $ 0.10 per diluted share , for the corresponding period last year , based on diluted shares outstanding of 21.6 million and 21.3 million at december 31 , 2012 , and 2011 , respectively . off balance sheet arrangements none . -28- story_separator_special_tag domestic subsidiaries , and their respective equity and assets ) . as of the effective date of the second sterling amendment , the basic interest rate under the sterling credit facility was reduced by three quarters of one percent ( 3/4 % ) per annum to the sum of the fluctuating prime rate of interest published in the wall street journal from time to time plus three quarters of one percent ( 3/4 % ) percent per annum , which automatically changes with each change in such rate . -29- effective january 1 , 2013 the sterling credit facility was amended ( the `` third sterling amendment `` ) to reduce the interest rate to the prime rate ( as that term is defined in the loan agreement ) plus one quarter of one percent ( 1/4 % ) per annum . due to the requirement to maintain a lock box arrangement with the agent and the lenders ' ability to invoke a subjective acceleration clause at its discretion , borrowings under the sterling credit facility will be classified as current . the sterling credit facility contains certain financial and other restrictive covenants and also limits certain expenditures by the borrowers , including , but not limited to , capital expenditures and other investments . at december 31 , 2012 , the company was in compliance with such covenants . international credit facilities : in october 2011 , sparfacts australia pty . ltd. , replaced the commonwealth bank line of credit with a new receivables based secured line of credit facility with oxford funding pty ltd. for $ 1.2 million ( australian ) or approximately $ 1.2 million ( based upon the exchange rate at december 31 , 2012 ) . the facility provides for borrowing based upon a formula as defined in the agreement ( principally 80 % of eligible accounts receivable less certain deductions ) . the agreement expired on october 31 , 2012. sparfacts is in the process of renegotiating a new agreement . spar canada company , a wholly owned subsidiary , has a secured credit agreement with royal bank of canada providing for a demand operating loan for a maximum borrowing of $ 750,000 ( canadian ) or approximately $ 753,000 ( based upon the exchange rate at december 31

