in recent years we have experienced comparatively greater success in product markets characterized by low or limited competition , for example the markets for biologic patches and valvulotome devices . in the biologic patch market , we believe that we have been able to increase market share . in the valvulotome market , we believe that we have been able to increase selling prices without compromising market share . there can be no assurance that we will not meet resistance to increased selling prices in the future . in contrast , we have experienced comparatively lesser success in highly competitive product markets such as such as prosthetic polyester and eptfe grafts , where we face stronger competition from larger companies with greater resources . while we believe that these challenging market dynamics can be mitigated by our strong relationships with our vascular surgeon customers , there can be no assurance that we will be successful in highly competitive markets . because we believe that direct-to-hospital sales engender closer customer relationships , and allow for higher selling prices and gross margins , we periodically enter into transactions with our distributors to transition their sales of our medical devices to our direct sales organization : in october 2012 , we entered into a definitive agreement with schaublin medica sa ( schaublin ) to terminate its distribution of our products in switzerland effective january 1 , 2013. the agreement required us to pay approximately $ 0.2 million in exchange for the purchase of their customer list for our products , certain customer contracts , sales and marketing transition services , and minimal inventory . in december 2012 , we entered into a definitive agreement with trytech corporation to terminate its distribution of our products in a certain japanese territory effective as of april 1 , 2013. the agreement required us to pay approximately $ 0.1 million in exchange for the purchase of their customer list for our products , certain customer contracts , sales and marketing transition services , and minimal inventory . in march 2013 , we began shipping directly to our canadian customers from our sales office in toronto , canada . we anticipate that the expansion of our direct sales organization in canada and switzerland will result in increased sales and marketing expenses during 2013 . 40 our strategy for growing our business includes the acquisition of complementary product lines and companies and occasionally the discontinuance or divestiture of products or activities that are no longer complementary : in november 2010 , we acquired our lifespan eptfe vascular graft from angiotech pharmaceuticals , inc. for $ 2.8 million and related assets from edwards lifesciences for $ 1.2 million . in june 2011 , we divested our taarget and unifit stent grafts to duke vascular , inc. for $ 0.6 million . in addition , duke vascular , inc. assumed our future obligations for the associated unite and entrust clinical trials . in august 2011 , we terminated our distribution of endologix 's aortic stent graft products in europe in exchange for $ 1.3 million . in november 2012 , we acquired the manufacturing rights manufacturing and distribution rights of the xenosure biologic vascular patch from neovasc , inc. for $ 4.6 million , having previously been an exclusive distributor of the xenosure biologic vascular patch since 2008. in addition to relying upon acquisitions to grow our business , we also rely on our product development efforts to bring differentiated technology and next-generation products to market . these efforts have led to the following recent product developments : in december 2011 , we launched the over-the-wire lemaitre valvulotome . in december 2012 , we completed first-in-man procedures with the multitasc device and the 1.5mm lemaitre valvulotome . these two products are scheduled to launch in mid-2013 . in addition to our sales growth strategies , we have also executed several operational initiatives designed to consolidate and streamline manufacturing within our burlington , ma facilities . we expect that these plant consolidations will result in improved control over our production capacity as well as reduced costs over the long-term . our most recent manufacturing transitions included : in october 2010 , we adopted a reorganization plan that was designed to eliminate redundant costs resulting from our 2007 acquisition of biomateriali and to improve efficiencies in manufacturing operations . we have completed the transition of albograft vascular graft manufacturing into our existing corporate headquarters in burlington , massachusetts . in may 2011 , we adopted a reorganization plan that was designed to eliminate redundant costs resulting from our 2010 acquisition of the lifespan vascular graft and to improve efficiencies in manufacturing operations . we have completed the transition of lifespan vascular graft manufacturing into our existing corporate headquarters in burlington , massachusetts . in november 2012 , we initiated a project to build a third clean room for our newly acquired xenosure biologic patch . we expect this transition to our burlington facility to continue into the second half of 2013 resulting in a negative impact to our gross profit . once the transition is complete , we expect the gross margins on our xenosure biologic vascular patch to improve beginning in 2014 ; however , there can be no assurance that these results will be achieved , if at all . further , the production of the xenosure biological patch will be our first experience in manufacturing biological tissues . there can be no assurance that we will not experience delays or additional expenses associated with the transfer of this patch and there can be no assurance that our current supply agreement with neovasc will be sufficient to meet sales demand during the transition . story_separator_special_tag we have assessed the need for a valuation allowance against our deferred tax assets and concluded that as of december 31 , 2012 , we will continue to carry a valuation allowance against $ 3.1 million of deferred tax assets , principally foreign net operating loss carry-forwards , which based on the weight of available evidence , we believe it is more likely than not that such assets will not be realized . we expect that our effective tax rate in 2013 will be comparable to our effective tax rate in 2012. we will be able to utilize federal research and development tax credits in 2013 from both 2012 and 2013 as a result of legislation enacted in january 2013. comparison of the year ended december 31 , 2011 , to the year ended december 31 , 2010 the following tables set forth , for the periods indicated , our results of operations and the change between the specified periods expressed as a percent increase or decrease : replace_table_token_10_th net sales . net sales increased 3 % to $ 57.7 million in 2011 from $ 56.1 million in 2010. acquisitions , primarily the lifespan vascular graft , increased sales 2 % compared to 2010. divestitures , primarily of the taarget and unifit stent graft product lines as well as the termination of the endologix aortic stent graft distribution agreement , decreased sales 4 % from the prior year . changes in foreign currency exchange rates added 2 % to year over year sales growth . sales increases in 2011 were largely driven by higher average selling prices across nearly all product lines , as well as stronger sales of biologic patches of $ 0.9 million , catheters of $ 0.6 million and vessel closure systems of $ 0.5 million , in addition to full-year lifespan vascular graft sales and favorable changes in foreign currency exchange rates . these gains were partially offset by a $ 2.6 million decrease in stent grafts , primarily due to the decline of , and subsequent exit from , these product lines . direct-to-hospital net sales were 93 % in 2011 and 2010 . 46 net sales by geography . net sales in the americas increased $ 2.4 million to $ 37.0 million in 2011. the increase was largely the result of higher average selling prices across nearly all product lines as well as increased sales of biologic patches and vessel closure systems . international net sales decreased to $ 20.7 million in 2011. the decrease was primarily driven by the divestitures of the taarget and unifit stent graft product lines and the termination of the endologix aortic stent graft distribution agreement . sales of these products decreased to $ 4.0 million in 2011 compared to $ 6.8 million in 2010. the decrease in international sales was partially offset by full-year lifespan sales of $ 1.2 million and $ 1.1 million of favorable changes in foreign currency exchange rates . international direct-to-hospital net sales were 82 % in 2011 and 2010. replace_table_token_11_th * not applicable gross profit . gross profit decreased 4 % to $ 40.2 million in 2011 from $ 41.7 million in 2010 , while our gross margin decreased 4.7 % to 69.7 % . the gross margin decrease was the result of manufacturing inefficiencies in burlington , massachusetts largely related to the albograft product line and its transfer from italy to the united states , as well as a $ 0.2 million charge related to a voluntary recall of two albograft production lots in the fourth quarter of 2011. the gross margin decrease was partially offset by higher average selling prices across nearly all product lines and improved product mix due to the termination of the endologix distribution agreement . replace_table_token_12_th * not a meaningful percentage . sales and marketing . sales and marketing expenses were $ 19.4 million in 2011 , flat versus 2010. as a percentage of net sales , sales and marketing expenses were 34 % in 2011 , down 1 % from the prior year . compared to 2010 , sales and marketing expenses were negatively affected by increases in foreign currency exchange rates of $ 0.5 million , transition services related to business development activities of $ 0.3 million , and recruiting expenses of $ 0.2 million , which were offset by a decrease in sales personnel compensation of $ 1.0 million . at december 31 , 2011 , we employed 78 sales representatives worldwide , compared to 67 in the prior year period . general and administrative . general and administrative expense increased 7 % to $ 11.2 million in 2011 from $ 10.5 million in 2010. the increase was largely the result of higher administrative costs associated with our french and spanish subsidiaries of $ 0.5 million , higher amortization costs of $ 0.3 million related to the lifespan vascular graft acquisition and our spanish distributor buy-out , and changes in foreign currency exchange rates of $ 0.2 million , partially offset by a reduction in administrative costs associated with our closure of the biomateriali subsidiary of $ 0.2 million . as a percentage of net sales , general and administrative expenses were 19 % in both 2011 and 2010 . 47 research and development . research and development expenses decreased 19 % to $ 4.4 million in 2011 from $ 5.5 million in 2010. as a percentage of net sales , research and development expenses decreased to 8 % in 2011 from 10 % in 2010. the decrease was largely driven by a reduction in regulatory and clinical affairs costs of $ 0.8 million in 2011 , related to the suspension of our unite and entrust trials in october 2010. in addition , product development costs decreased $ 0.4 million in 2011 as we reduced animal testing associated with new products approvals . on june 30 , 2011 , duke vascular , inc. assumed all future obligations of the unite and entrust trials as

liquidity and capital resources at december 31 , 2012 , our cash , cash equivalents and marketable securities were $ 16.4 million as compared to $ 20.1 million at december 31 , 2011. our cash and cash equivalents are highly liquid investments with maturities of 90 days or less at the date of purchase and consist of money market funds , and are stated at cost , which approximates fair value . we did not hold any marketable securities nor any mortgage asset-backed or auction-rate securities in our investment portfolio as of december 31 , 2012. all of our cash held outside of the united states is available for corporate use . operating and capital expenditure requirements we require cash to pay our operating expenses , make capital expenditures , fund acquisitions , and pay our long-term liabilities . since our inception , we have funded our operations through private and public placements of equity securities , short-term borrowings , and funds generated from our operations . for the year ended december 31 , 2012 , we recognized operating income of $ 4.2 million . for the year ended december 31 , 2011 , we recognized operating income of $ 3.7 million . we expect to fund any increased costs and expenditures from our existing cash and cash equivalents and marketable securities , though our future capital requirements depend on numerous factors .


 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 at december 31 , 2012 , our cash , cash equivalents and marketable securities were $ 16.4 million as compared to $ 20.1 million at december 31 , 2011. our cash and cash equivalents are highly liquid investments with maturities of 90 days or less at the date of purchase and consist of money market funds , and are stated at cost , which approximates fair value . we did not hold any marketable securities nor any mortgage asset-backed or auction-rate securities in our investment portfolio as of december 31 , 2012. all of our cash held outside of the united states is available for corporate use . operating and capital expenditure requirements we require cash to pay our operating expenses , make capital expenditures , fund acquisitions , and pay our long-term liabilities . since our inception , we have funded our operations through private and public placements of equity securities , short-term borrowings , and funds generated from our operations . for the year ended december 31 , 2012 , we recognized operating income of $ 4.2 million . for the year ended december 31 , 2011 , we recognized operating income of $ 3.7 million . we expect to fund any increased costs and expenditures from our existing cash and cash equivalents and marketable securities , though our future capital requirements depend on numerous factors .
```    
 Suspicious Activity Report : in recent years we have experienced comparatively greater success in product markets characterized by low or limited competition , for example the markets for biologic patches and valvulotome devices . in the biologic patch market , we believe that we have been able to increase market share . in the valvulotome market , we believe that we have been able to increase selling prices without compromising market share . there can be no assurance that we will not meet resistance to increased selling prices in the future . in contrast , we have experienced comparatively lesser success in highly competitive product markets such as such as prosthetic polyester and eptfe grafts , where we face stronger competition from larger companies with greater resources . while we believe that these challenging market dynamics can be mitigated by our strong relationships with our vascular surgeon customers , there can be no assurance that we will be successful in highly competitive markets . because we believe that direct-to-hospital sales engender closer customer relationships , and allow for higher selling prices and gross margins , we periodically enter into transactions with our distributors to transition their sales of our medical devices to our direct sales organization : in october 2012 , we entered into a definitive agreement with schaublin medica sa ( schaublin ) to terminate its distribution of our products in switzerland effective january 1 , 2013. the agreement required us to pay approximately $ 0.2 million in exchange for the purchase of their customer list for our products , certain customer contracts , sales and marketing transition services , and minimal inventory . in december 2012 , we entered into a definitive agreement with trytech corporation to terminate its distribution of our products in a certain japanese territory effective as of april 1 , 2013. the agreement required us to pay approximately $ 0.1 million in exchange for the purchase of their customer list for our products , certain customer contracts , sales and marketing transition services , and minimal inventory . in march 2013 , we began shipping directly to our canadian customers from our sales office in toronto , canada . we anticipate that the expansion of our direct sales organization in canada and switzerland will result in increased sales and marketing expenses during 2013 . 40 our strategy for growing our business includes the acquisition of complementary product lines and companies and occasionally the discontinuance or divestiture of products or activities that are no longer complementary : in november 2010 , we acquired our lifespan eptfe vascular graft from angiotech pharmaceuticals , inc. for $ 2.8 million and related assets from edwards lifesciences for $ 1.2 million . in june 2011 , we divested our taarget and unifit stent grafts to duke vascular , inc. for $ 0.6 million . in addition , duke vascular , inc. assumed our future obligations for the associated unite and entrust clinical trials . in august 2011 , we terminated our distribution of endologix 's aortic stent graft products in europe in exchange for $ 1.3 million . in november 2012 , we acquired the manufacturing rights manufacturing and distribution rights of the xenosure biologic vascular patch from neovasc , inc. for $ 4.6 million , having previously been an exclusive distributor of the xenosure biologic vascular patch since 2008. in addition to relying upon acquisitions to grow our business , we also rely on our product development efforts to bring differentiated technology and next-generation products to market . these efforts have led to the following recent product developments : in december 2011 , we launched the over-the-wire lemaitre valvulotome . in december 2012 , we completed first-in-man procedures with the multitasc device and the 1.5mm lemaitre valvulotome . these two products are scheduled to launch in mid-2013 . in addition to our sales growth strategies , we have also executed several operational initiatives designed to consolidate and streamline manufacturing within our burlington , ma facilities . we expect that these plant consolidations will result in improved control over our production capacity as well as reduced costs over the long-term . our most recent manufacturing transitions included : in october 2010 , we adopted a reorganization plan that was designed to eliminate redundant costs resulting from our 2007 acquisition of biomateriali and to improve efficiencies in manufacturing operations . we have completed the transition of albograft vascular graft manufacturing into our existing corporate headquarters in burlington , massachusetts . in may 2011 , we adopted a reorganization plan that was designed to eliminate redundant costs resulting from our 2010 acquisition of the lifespan vascular graft and to improve efficiencies in manufacturing operations . we have completed the transition of lifespan vascular graft manufacturing into our existing corporate headquarters in burlington , massachusetts . in november 2012 , we initiated a project to build a third clean room for our newly acquired xenosure biologic patch . we expect this transition to our burlington facility to continue into the second half of 2013 resulting in a negative impact to our gross profit . once the transition is complete , we expect the gross margins on our xenosure biologic vascular patch to improve beginning in 2014 ; however , there can be no assurance that these results will be achieved , if at all . further , the production of the xenosure biological patch will be our first experience in manufacturing biological tissues . there can be no assurance that we will not experience delays or additional expenses associated with the transfer of this patch and there can be no assurance that our current supply agreement with neovasc will be sufficient to meet sales demand during the transition . story_separator_special_tag we have assessed the need for a valuation allowance against our deferred tax assets and concluded that as of december 31 , 2012 , we will continue to carry a valuation allowance against $ 3.1 million of deferred tax assets , principally foreign net operating loss carry-forwards , which based on the weight of available evidence , we believe it is more likely than not that such assets will not be realized . we expect that our effective tax rate in 2013 will be comparable to our effective tax rate in 2012. we will be able to utilize federal research and development tax credits in 2013 from both 2012 and 2013 as a result of legislation enacted in january 2013. comparison of the year ended december 31 , 2011 , to the year ended december 31 , 2010 the following tables set forth , for the periods indicated , our results of operations and the change between the specified periods expressed as a percent increase or decrease : replace_table_token_10_th net sales . net sales increased 3 % to $ 57.7 million in 2011 from $ 56.1 million in 2010. acquisitions , primarily the lifespan vascular graft , increased sales 2 % compared to 2010. divestitures , primarily of the taarget and unifit stent graft product lines as well as the termination of the endologix aortic stent graft distribution agreement , decreased sales 4 % from the prior year . changes in foreign currency exchange rates added 2 % to year over year sales growth . sales increases in 2011 were largely driven by higher average selling prices across nearly all product lines , as well as stronger sales of biologic patches of $ 0.9 million , catheters of $ 0.6 million and vessel closure systems of $ 0.5 million , in addition to full-year lifespan vascular graft sales and favorable changes in foreign currency exchange rates . these gains were partially offset by a $ 2.6 million decrease in stent grafts , primarily due to the decline of , and subsequent exit from , these product lines . direct-to-hospital net sales were 93 % in 2011 and 2010 . 46 net sales by geography . net sales in the americas increased $ 2.4 million to $ 37.0 million in 2011. the increase was largely the result of higher average selling prices across nearly all product lines as well as increased sales of biologic patches and vessel closure systems . international net sales decreased to $ 20.7 million in 2011. the decrease was primarily driven by the divestitures of the taarget and unifit stent graft product lines and the termination of the endologix aortic stent graft distribution agreement . sales of these products decreased to $ 4.0 million in 2011 compared to $ 6.8 million in 2010. the decrease in international sales was partially offset by full-year lifespan sales of $ 1.2 million and $ 1.1 million of favorable changes in foreign currency exchange rates . international direct-to-hospital net sales were 82 % in 2011 and 2010. replace_table_token_11_th * not applicable gross profit . gross profit decreased 4 % to $ 40.2 million in 2011 from $ 41.7 million in 2010 , while our gross margin decreased 4.7 % to 69.7 % . the gross margin decrease was the result of manufacturing inefficiencies in burlington , massachusetts largely related to the albograft product line and its transfer from italy to the united states , as well as a $ 0.2 million charge related to a voluntary recall of two albograft production lots in the fourth quarter of 2011. the gross margin decrease was partially offset by higher average selling prices across nearly all product lines and improved product mix due to the termination of the endologix distribution agreement . replace_table_token_12_th * not a meaningful percentage . sales and marketing . sales and marketing expenses were $ 19.4 million in 2011 , flat versus 2010. as a percentage of net sales , sales and marketing expenses were 34 % in 2011 , down 1 % from the prior year . compared to 2010 , sales and marketing expenses were negatively affected by increases in foreign currency exchange rates of $ 0.5 million , transition services related to business development activities of $ 0.3 million , and recruiting expenses of $ 0.2 million , which were offset by a decrease in sales personnel compensation of $ 1.0 million . at december 31 , 2011 , we employed 78 sales representatives worldwide , compared to 67 in the prior year period . general and administrative . general and administrative expense increased 7 % to $ 11.2 million in 2011 from $ 10.5 million in 2010. the increase was largely the result of higher administrative costs associated with our french and spanish subsidiaries of $ 0.5 million , higher amortization costs of $ 0.3 million related to the lifespan vascular graft acquisition and our spanish distributor buy-out , and changes in foreign currency exchange rates of $ 0.2 million , partially offset by a reduction in administrative costs associated with our closure of the biomateriali subsidiary of $ 0.2 million . as a percentage of net sales , general and administrative expenses were 19 % in both 2011 and 2010 . 47 research and development . research and development expenses decreased 19 % to $ 4.4 million in 2011 from $ 5.5 million in 2010. as a percentage of net sales , research and development expenses decreased to 8 % in 2011 from 10 % in 2010. the decrease was largely driven by a reduction in regulatory and clinical affairs costs of $ 0.8 million in 2011 , related to the suspension of our unite and entrust trials in october 2010. in addition , product development costs decreased $ 0.4 million in 2011 as we reduced animal testing associated with new products approvals . on june 30 , 2011 , duke vascular , inc. assumed all future obligations of the unite and entrust trials as

