examples of smart devices include set-top boxes , home gateways , point-of-sale terminals , kiosks , voting machines , gaming platforms , tablets , handheld data collection devices , personal media players , smart phones and devices targeted at automotive applications . we focus on smart devices that utilize embedded versions of the microsoft windows family of operating systems , specifically windows embedded compact , windows embedded standard and windows mobile as well as devices running other popular operating systems such as android , linux , and qnx . we have been providing software solutions to the smart device marketplace since our inception . our customers include world class original equipment manufacturers ( oems ) , original design manufacturers ( odms ) and enterprises , as well as silicon vendors ( svs ) and peripheral vendors which purchase our software solutions for purposes of facilitating processor and peripheral sales to the aforementioned customer categories . in the case of enterprises , our customers include those which develop , market and distribute smart devices on their own behalf as well as those that purchase devices from oems or odms and require additional device software or testing . the software solutions we provide are utilized and deployed throughout various phases of our customers ' device life cycle , including design , development , customization , quality assurance and deployment . critical accounting judgments use of estimates the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the united states requires us to make estimates and assumptions that affect the amounts reported and disclosed in our financial statements and the accompanying notes . actual results could differ materially from these estimates . on an ongoing basis , we evaluate our estimates , including those related to the allowance for doubtful accounts , percentage of completion on fixed-price service contracts , fair values of financial instruments , deferred tax asset allowances , useful lives and fair value of intangible assets and property and equipment , fair values of stock-based awards , income tax accruals , fair values of acquired assets and liabilities and the fair value of contingent purchase consideration , among other estimates . we base our estimates on historical experience and on various other assumptions that we believe to be reasonable , the results of which form the basis for making judgments about the carrying value of our assets and liabilities . revenue recognition we recognize revenue from software and engineering service sales when the following four revenue recognition criteria are met : persuasive evidence of an arrangement exists ; delivery has occurred or services have been rendered ; the selling price is fixed or determinable ; and collectability is reasonably assured . contracts and customer purchase orders are generally used to determine the existence of an arrangement . shipping documents 25 and time records are generally used to verify delivery . we assess whether the selling price is fixed or determinable based on the contract and or customer purchase order and payment terms associated with the transaction and whether the sales price is subject to refund or adjustment . we assess collectability based primarily on the creditworthiness of the customer as determined by credit checks and analysis , as well as the customer 's payment history . periodically , we will begin work on engineering service engagements prior to having a signed contract and , in some cases , the contract is signed in a quarter after which service delivery costs are incurred . we do not defer costs associated with such engagements before we have received a signed contract . we recognize software revenue upon shipment provided that no significant obligations remain on our part , substantive acceptance conditions , if any , have been met and the other revenue recognition criteria have been met . service revenue from time and materials contracts , and training service agreements , is recognized as services are performed . fixed-price service agreements , and certain time and materials service agreements with capped fee structures , are accounted for using the percentage-of-completion method . we use the percentage-of-completion method of accounting because we believe it is the most accurate method to recognize revenue based on the nature and scope of these engineering service contracts ; we believe it is a better measure of periodic income results than other methods and better matches revenue recognized with the costs incurred . percentage of completion is measured based primarily on input measures such as hours incurred to date compared to total estimated hours to complete , with consideration given to output measures , such as contract milestones , when applicable . significant judgment is required when estimating total hours and progress to completion on these arrangements which determines the amount of revenue we recognize as well as whether a loss is recognized if one is expected to be incurred for the remainder of the project . revisions to hour and cost estimates are incorporated in the period in which the facts that give rise to the revision become known . we also enter into arrangements in which a customer purchases a combination of software licenses , engineering services and post-contract customer support and or maintenance ( pcs ) . as a result , contract interpretation is sometimes required to determine the appropriate accounting , including how the price should be allocated among the deliverable elements if there are multiple elements . pcs may include rights to upgrades , when and if available , telephone support , updates and enhancements . when vendor specific objective evidence ( vsoe ) of fair value exists for all elements in a multiple element arrangement , revenue is allocated to each element based on the relative fair value of each of the elements . story_separator_special_tag ford contributed $ 9.7 million in service revenue in 2011 , a decline of $ 3.2 million from 2010. the number of engineers working on the myford touch declined since initial project completion in the third quarter of 2010 as we are no longer in the development stage of the myford touch platform . total service revenue increased $ 818,000 , or 3 % , in 2011 compared to 2010 due to growth inside and outside of north america from non-ford customers . north american service revenue declined $ 1.4 million , or 6 % , to $ 23.6 million in 2011 , primarily due to the $ 3.2 million decline related to ford offset in part by revenue increases related to other customers . service revenue in europe , the middle east , and africa ( the emea region ) increased by $ 1.3 million , to $ 1.7 million in 2011 , primarily driven by mpc which contributed $ 1.4 million to emea revenue in 2011 since its acquisition in september 2011. service revenue from the apac region increased $ 880,000 , or 37 % , to $ 3.3 million in 2011 from $ 2.4 million in 2010 , primarily related to a new customer in japan as well as contributions from china and korea resulting from our sales expansion in those areas . gross profit and gross margin cost of revenue related to software revenue consists primarily of the cost of third-party software products payable to third-party vendors . cost of revenue related to service revenue consists primarily of salaries and benefits , contractor costs and re-billable expenses , related facilities and depreciation costs , and amortization of certain intangible assets related to acquisitions . gross profit on the sale of third-party software products was also positively affected by rebate credits of $ 746,000 in 2011 and $ 804,000 in 2010 from microsoft which we earned through the achievement of defined objectives . the following table outlines software , services and total gross profit ( dollars in thousands ) : replace_table_token_9_th 31 software gross profit and gross margin software gross profit decreased by $ 652,000 , or 5 % , in 2011 , compared to 2010 , while software gross margin decreased by one percentage point to 19 % . this decline was primarily due to a $ 518,000 impairment charge related to the acquired technology from testquest in 2008 which we recognized in the fourth quarter of 2011 as software cost of revenue . the intangible assets associated with the acquired technology were deemed to be impaired as this technology is no longer used in any of our product offerings . during the fourth quarter of 2011 , we completed development of tq10 , the next generation of our automated testing software . tq10 replaces both of our legacy testquest products , countdown and tq pro , in what we will offer to our customers and provide technical support for in the future . although tq10 is similar in concept to countdown and tq pro , tq10 was developed on a new code base and architecture . as no significant future cash flows are expected to be generated from these legacy technologies , we deemed the intangible assets associated with them to be impaired . without the impairment charge , software gross margin would have been consistent with the 20 % gross margin in the prior year . service gross profit and gross margin service gross profit decreased by $ 418,000 , or 6 % , in 2011 as compared to 2010 , while service gross margin decreased by two percentage points to 22 % in 2011 , from 24 % in 2010. the decline in service gross margin was primarily the result of higher engineering headcount in the current year largely resulting from our international expansion which resulted in a 10 % increase in available hours and increased our cost of sales by $ 1.2 million compared to 2010. however , our actual billable hours only increased 2 % year-over-year as our utilization fell by eight percentage points in 2011 compared to 2010 , most of which resulted from start-up time associated with new personnel and new development centers . this decline in service margin was partially offset by a 4 % increase in our realized rate per hour in 2011 compared to 2010. operating expenses selling , general and administrative selling , general and administrative expenses consist primarily of salaries and related benefits , commissions and bonuses for our sales , marketing and administrative personnel and related facilities and depreciation costs , as well as professional services fees ( e.g . , consulting , legal and audit ) . selling , general and administrative expenses increased $ 3.8 million , or 30 % , to $ 16.7 million in 2011 , from $ 12.9 million in 2010. selling , general and administrative expenses represented 17 % of our total revenue in 2011 compared to 13 % of revenue in 2010. the increase was due in part to $ 934,000 higher stock compensation expense in the current year , as well as a $ 1.8 million increase in sales and marketing expenses , which was driven by growth in our sales capacity in asia and europe , as well as our corporate rebranding in the current year . general and administrative expenses were also higher in the current year as we added headcount to support our international growth . the current period was also negatively affected by higher employee fringe rates as health insurance premiums increased during the year , and $ 193,000 in transaction-related expenses associated with the mpc acquisition . research and development research and development expenses consist primarily of salaries and benefits for software development and quality assurance personnel , contractor and consultant costs and related facilities and depreciation costs . research and development expenses increased $ 454,000 , or 13 % , to $ 3.8 million in 2011 , from $

liquidity and capital resources as of december 31 , 2011 , we had $ 19.0 million of cash , cash equivalents , short-term and long-term investments and restricted cash , compared to $ 23.1 million at december 31 , 2010. this $ 4.1 million decline was primarily the result of our mpc acquisition which utilized $ 4.8 million of cash , net of cash acquired . restricted cash is classified as long term and was $ 875,000 at both december 31 , 2011 and 2010. this cash is restricted under the terms of our headquarters operating lease which will continue to secure that obligation through its expiration in 2014. our working capital was $ 18.0 million at december 31 , 2011 , compared to $ 20.0 million at december 31 , 2010. cash and cash equivalents were $ 8.5 million at december 31 , 2011 , a decrease of $ 2.3 million from $ 10.8 million at december 31 , 2010. net cash provided by operating activities was $ 1.1 million in 2011 , primarily due to $ 3.1 million of non-cash expenses , a $ 1.8 million decrease in our accounts receivable , and a $ 518,000 impairment charge on our intangible assets associated with testquest acquired technology .


 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 as of december 31 , 2011 , we had $ 19.0 million of cash , cash equivalents , short-term and long-term investments and restricted cash , compared to $ 23.1 million at december 31 , 2010. this $ 4.1 million decline was primarily the result of our mpc acquisition which utilized $ 4.8 million of cash , net of cash acquired . restricted cash is classified as long term and was $ 875,000 at both december 31 , 2011 and 2010. this cash is restricted under the terms of our headquarters operating lease which will continue to secure that obligation through its expiration in 2014. our working capital was $ 18.0 million at december 31 , 2011 , compared to $ 20.0 million at december 31 , 2010. cash and cash equivalents were $ 8.5 million at december 31 , 2011 , a decrease of $ 2.3 million from $ 10.8 million at december 31 , 2010. net cash provided by operating activities was $ 1.1 million in 2011 , primarily due to $ 3.1 million of non-cash expenses , a $ 1.8 million decrease in our accounts receivable , and a $ 518,000 impairment charge on our intangible assets associated with testquest acquired technology .
```    
 Suspicious Activity Report : examples of smart devices include set-top boxes , home gateways , point-of-sale terminals , kiosks , voting machines , gaming platforms , tablets , handheld data collection devices , personal media players , smart phones and devices targeted at automotive applications . we focus on smart devices that utilize embedded versions of the microsoft windows family of operating systems , specifically windows embedded compact , windows embedded standard and windows mobile as well as devices running other popular operating systems such as android , linux , and qnx . we have been providing software solutions to the smart device marketplace since our inception . our customers include world class original equipment manufacturers ( oems ) , original design manufacturers ( odms ) and enterprises , as well as silicon vendors ( svs ) and peripheral vendors which purchase our software solutions for purposes of facilitating processor and peripheral sales to the aforementioned customer categories . in the case of enterprises , our customers include those which develop , market and distribute smart devices on their own behalf as well as those that purchase devices from oems or odms and require additional device software or testing . the software solutions we provide are utilized and deployed throughout various phases of our customers ' device life cycle , including design , development , customization , quality assurance and deployment . critical accounting judgments use of estimates the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the united states requires us to make estimates and assumptions that affect the amounts reported and disclosed in our financial statements and the accompanying notes . actual results could differ materially from these estimates . on an ongoing basis , we evaluate our estimates , including those related to the allowance for doubtful accounts , percentage of completion on fixed-price service contracts , fair values of financial instruments , deferred tax asset allowances , useful lives and fair value of intangible assets and property and equipment , fair values of stock-based awards , income tax accruals , fair values of acquired assets and liabilities and the fair value of contingent purchase consideration , among other estimates . we base our estimates on historical experience and on various other assumptions that we believe to be reasonable , the results of which form the basis for making judgments about the carrying value of our assets and liabilities . revenue recognition we recognize revenue from software and engineering service sales when the following four revenue recognition criteria are met : persuasive evidence of an arrangement exists ; delivery has occurred or services have been rendered ; the selling price is fixed or determinable ; and collectability is reasonably assured . contracts and customer purchase orders are generally used to determine the existence of an arrangement . shipping documents 25 and time records are generally used to verify delivery . we assess whether the selling price is fixed or determinable based on the contract and or customer purchase order and payment terms associated with the transaction and whether the sales price is subject to refund or adjustment . we assess collectability based primarily on the creditworthiness of the customer as determined by credit checks and analysis , as well as the customer 's payment history . periodically , we will begin work on engineering service engagements prior to having a signed contract and , in some cases , the contract is signed in a quarter after which service delivery costs are incurred . we do not defer costs associated with such engagements before we have received a signed contract . we recognize software revenue upon shipment provided that no significant obligations remain on our part , substantive acceptance conditions , if any , have been met and the other revenue recognition criteria have been met . service revenue from time and materials contracts , and training service agreements , is recognized as services are performed . fixed-price service agreements , and certain time and materials service agreements with capped fee structures , are accounted for using the percentage-of-completion method . we use the percentage-of-completion method of accounting because we believe it is the most accurate method to recognize revenue based on the nature and scope of these engineering service contracts ; we believe it is a better measure of periodic income results than other methods and better matches revenue recognized with the costs incurred . percentage of completion is measured based primarily on input measures such as hours incurred to date compared to total estimated hours to complete , with consideration given to output measures , such as contract milestones , when applicable . significant judgment is required when estimating total hours and progress to completion on these arrangements which determines the amount of revenue we recognize as well as whether a loss is recognized if one is expected to be incurred for the remainder of the project . revisions to hour and cost estimates are incorporated in the period in which the facts that give rise to the revision become known . we also enter into arrangements in which a customer purchases a combination of software licenses , engineering services and post-contract customer support and or maintenance ( pcs ) . as a result , contract interpretation is sometimes required to determine the appropriate accounting , including how the price should be allocated among the deliverable elements if there are multiple elements . pcs may include rights to upgrades , when and if available , telephone support , updates and enhancements . when vendor specific objective evidence ( vsoe ) of fair value exists for all elements in a multiple element arrangement , revenue is allocated to each element based on the relative fair value of each of the elements . story_separator_special_tag ford contributed $ 9.7 million in service revenue in 2011 , a decline of $ 3.2 million from 2010. the number of engineers working on the myford touch declined since initial project completion in the third quarter of 2010 as we are no longer in the development stage of the myford touch platform . total service revenue increased $ 818,000 , or 3 % , in 2011 compared to 2010 due to growth inside and outside of north america from non-ford customers . north american service revenue declined $ 1.4 million , or 6 % , to $ 23.6 million in 2011 , primarily due to the $ 3.2 million decline related to ford offset in part by revenue increases related to other customers . service revenue in europe , the middle east , and africa ( the emea region ) increased by $ 1.3 million , to $ 1.7 million in 2011 , primarily driven by mpc which contributed $ 1.4 million to emea revenue in 2011 since its acquisition in september 2011. service revenue from the apac region increased $ 880,000 , or 37 % , to $ 3.3 million in 2011 from $ 2.4 million in 2010 , primarily related to a new customer in japan as well as contributions from china and korea resulting from our sales expansion in those areas . gross profit and gross margin cost of revenue related to software revenue consists primarily of the cost of third-party software products payable to third-party vendors . cost of revenue related to service revenue consists primarily of salaries and benefits , contractor costs and re-billable expenses , related facilities and depreciation costs , and amortization of certain intangible assets related to acquisitions . gross profit on the sale of third-party software products was also positively affected by rebate credits of $ 746,000 in 2011 and $ 804,000 in 2010 from microsoft which we earned through the achievement of defined objectives . the following table outlines software , services and total gross profit ( dollars in thousands ) : replace_table_token_9_th 31 software gross profit and gross margin software gross profit decreased by $ 652,000 , or 5 % , in 2011 , compared to 2010 , while software gross margin decreased by one percentage point to 19 % . this decline was primarily due to a $ 518,000 impairment charge related to the acquired technology from testquest in 2008 which we recognized in the fourth quarter of 2011 as software cost of revenue . the intangible assets associated with the acquired technology were deemed to be impaired as this technology is no longer used in any of our product offerings . during the fourth quarter of 2011 , we completed development of tq10 , the next generation of our automated testing software . tq10 replaces both of our legacy testquest products , countdown and tq pro , in what we will offer to our customers and provide technical support for in the future . although tq10 is similar in concept to countdown and tq pro , tq10 was developed on a new code base and architecture . as no significant future cash flows are expected to be generated from these legacy technologies , we deemed the intangible assets associated with them to be impaired . without the impairment charge , software gross margin would have been consistent with the 20 % gross margin in the prior year . service gross profit and gross margin service gross profit decreased by $ 418,000 , or 6 % , in 2011 as compared to 2010 , while service gross margin decreased by two percentage points to 22 % in 2011 , from 24 % in 2010. the decline in service gross margin was primarily the result of higher engineering headcount in the current year largely resulting from our international expansion which resulted in a 10 % increase in available hours and increased our cost of sales by $ 1.2 million compared to 2010. however , our actual billable hours only increased 2 % year-over-year as our utilization fell by eight percentage points in 2011 compared to 2010 , most of which resulted from start-up time associated with new personnel and new development centers . this decline in service margin was partially offset by a 4 % increase in our realized rate per hour in 2011 compared to 2010. operating expenses selling , general and administrative selling , general and administrative expenses consist primarily of salaries and related benefits , commissions and bonuses for our sales , marketing and administrative personnel and related facilities and depreciation costs , as well as professional services fees ( e.g . , consulting , legal and audit ) . selling , general and administrative expenses increased $ 3.8 million , or 30 % , to $ 16.7 million in 2011 , from $ 12.9 million in 2010. selling , general and administrative expenses represented 17 % of our total revenue in 2011 compared to 13 % of revenue in 2010. the increase was due in part to $ 934,000 higher stock compensation expense in the current year , as well as a $ 1.8 million increase in sales and marketing expenses , which was driven by growth in our sales capacity in asia and europe , as well as our corporate rebranding in the current year . general and administrative expenses were also higher in the current year as we added headcount to support our international growth . the current period was also negatively affected by higher employee fringe rates as health insurance premiums increased during the year , and $ 193,000 in transaction-related expenses associated with the mpc acquisition . research and development research and development expenses consist primarily of salaries and benefits for software development and quality assurance personnel , contractor and consultant costs and related facilities and depreciation costs . research and development expenses increased $ 454,000 , or 13 % , to $ 3.8 million in 2011 , from $

