we anticipate that our gross profit margins will be favorably impacted by revenue from calcitriol once we obtain fda approval for manufacturing changes , but we do not expect to begin selling calcitriol until late in 2012. we may experience changes in our customer and product mix in future quarters that could impact gross profit , since we sell a wide range of products with varying profit margins and to customers with varying order patterns . these changes in mix may cause our gross profit and our gross profit margins to vary period to period . the majority of our business is with domestic clinics who order routinely . we renewed our supply agreement with our largest domestic chain customer through the end of 2013. certain major distributors of our products internationally have not ordered consistently , however , resulting in variation in our sales from period to period . we anticipate that we will realize substantial orders from time to time from our largest international distributors but we expect the size and frequency of these orders to fluctuate from period to period . these orders may increase in future periods or may not recur at all . 25 results of operations for the year ended december 31 , 2011 compared to the year ended december 31 , 2010 sales in 2011 , our sales were $ 49.0 million compared to $ 59.6 million in 2010. sales decreased $ 10.6 million or 17.8 % with $ 7.6 million due to lower international sales and $ 2.8 million due to lower domestic sales and $ 0.2 million due to a government research grant received in 2010 that did not recur in 2011. international sales decreased due to lower sales to a single international distributor . domestic sales decreased due to a change in product mix and due to lower sales volumes with approximately half of the sales decrease due to a loss of certain customers following their acquisition by competitors or by chains that buy product from our competitors . over the last year , customers have continued to convert to our dri-sate dry acid concentrate product line , which lowers providers ' cost per treatment and reduces our sales , but improves our gross profit margins due to a reduction in shipping costs . our dri-sate dry acid concentrate displaced liquid acid concentrate volume , increasing to 58 % of 2011 acid concentrate equivalent treatment gallons from 49 % in 2010. we also experienced some downward pricing pressure with the implementation of the bundled reimbursement program by cms ( medicare ) in 2011. gross profit our gross profit in 2011 was $ 5.6 million compared to $ 9.9 million in 2010. gross profit margins were 11.5 % in 2011 compared to 16.6 % in 2010. the decreases in gross profit and margin were primarily due to lower sales volumes , increased sales incentives and inflationary cost increases to fuel , material and labor costs . approximately $ 2.3 million of the decrease was due to the lower sales volumes generally and another $ 0.8 million was due to sales incentives net of other price changes and other product mix changes . cost increases for fuel , material and labor net of operating expense decreases reduced gross profit approximately $ 1.1 million . selling , general and administrative expenses selling , general and administrative expenses were $ 9.5 million in 2011 compared to $ 9.3 million in 2010. the increase of $ 0.2 million was primarily due to an increase in non-cash charges for equity compensation , partially offset by lower information technology costs and related depreciation . non-cash equity compensation aggregated $ 4.4 million in 2011 compared to $ 4.0 million in 2010. research and development we incurred product development and research costs related to the commercial development , patent approval and regulatory approval of new products , including sfp , aggregating approximately $ 17.8 million and $ 3.4 million in 2011 and 2010 , respectively . costs incurred in both 2011 and 2010 were primarily for conducting human clinical trials of sfp and other sfp testing and development activities . our spending increased considerably in 2011 as we initiated our phase iii clinical trial program which consists of several concurrent clinical studies . interest and investment income , net net interest and investment income in 2011 increased by $ 57,000 compared to 2010 primarily due to an increase in interest income from our cash investments net of realized losses on investments . income tax expense we have substantial tax loss carryforwards from our earlier losses . we have not recorded a federal income tax benefit from either our prior losses or our current year losses because we might not realize the carryforward benefit of the remaining losses . 26 for the year ended december 31 , 2010 compared to the year ended december 31 , 2009 sales in 2010 , our sales were $ 59.6 million , an increase of $ 4.8 million or 8.8 % over 2009. this increase was primarily due to increased international sales of $ 7.4 million or 113 % partially offset by a $ 2.8 million or 5.8 % decrease in domestic sales . our international sales in 2010 were 23 % of total sales compared to 12 % of sales in 2009. the increase in our international sales was primarily due to increased sales to a single distributor . our domestic sales were negatively impacted by customer conversions to lower cost formulations and conversions to dri-sate dry acid product line resulting in lower sales but at higher gross profit levels . customers continue to migrate from liquid to dry acid concentrate with unit volumes up 28 % in 2010 over 2009. in 2010 , we received a research grant of $ 0.25 million from the u.s. government for sfp related research and testing which was recorded in sales . story_separator_special_tag gross profit our gross profit in 2010 was $ 9.9 million , an increase of $ 2.0 million or 25 % over 2009. our gross profit margins increased to 16.6 % in 2010 compared to 14.4 % in 2009. the improvement in our gross profit was primarily due to significant changes to our product mix over the last two years coupled with lower operating and procurement costs along with higher selling prices . our product mix was favorably impacted by the continued conversion of customers to our dri-sate product line and to lower cost formulations of our dialysis concentrates . we also realized increased sales volumes in 2010 which contributed to the increase in our overall gross profit . these gains were partially offset by moderate increases in material , fuel and other operational costs over 2009. selling , general and administrative expenses selling , general and administrative expenses were $ 9.3 million in 2010 compared to $ 6.9 million in 2009 , an increase of $ 2.4 million , which was primarily due to increases in non-cash charges for equity compensation ( $ 1.7 million ) , compensation ( $ 0.5 million ) and other operating expenses ( $ 0.2 million ) . non-cash equity compensation aggregated $ 4.0 million in 2010 compared to $ 2.35 million in 2009 with approximately $ 0.25 million of the increase due to non-employee equity compensation . research and development we incurred product development and research costs related to the commercial development , patent approval and regulatory approval of new products , including sfp , aggregating approximately $ 3.4 million and $ 6.5 million in 2010 and 2009 , respectively . costs incurred in both 2010 and 2009 were primarily for conducting human clinical trials of sfp and other sfp testing and development activities . during 2009 , we conducted a phase iib study , which was completed in late 2009. our sfp phase iii clinical program commenced in early 2011. interest income and expense , net net interest income in 2010 increased by $ 205,000 compared to 2009 primarily due to a $ 190,000 increase in interest income from our cash investments as a result of higher investable funds resulting from the proceeds of the october 2009 equity offering . income tax expense we have substantial tax loss carryforwards from our earlier losses . we have not recorded a federal income tax benefit from either our prior losses or our current year losses because we might not realize the carryforward benefit of the remaining losses . 27 critical accounting estimates and judgments our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the united states of america . these accounting principles require us to make estimates , judgments and assumptions that affect the reported amounts of revenues , expenses , assets , liabilities , and contingencies . all significant estimates , judgments and assumptions are developed based on the best information available to us at the time made and are regularly reviewed and updated when necessary . actual results will generally differ from these estimates . changes in estimates are reflected in our financial statements in the period of change based upon on-going actual experience , trends , or subsequent realization depending on the nature and predictability of the estimates and contingencies . interim changes in estimates are generally applied prospectively within annual periods . certain accounting estimates , including those concerning revenue recognition , allowance for doubtful accounts , impairments of long-lived assets , and accounting for income taxes , are considered to be critical in evaluating and understanding our financial results because they involve inherently uncertain matters and their application requires the most difficult and complex judgments and estimates . these are described below . for further information on our accounting policies , see note 2 to our consolidated financial statements . revenue recognition we recognize revenue at the time we transfer title to our products to our customers consistent with generally accepted accounting principles . our products are generally sold domestically on a delivered basis and as a result we do not recognize revenue until delivered to the customer with title transferring upon completion of the delivery . for our international sales , we recognize revenue upon the transfer of title as defined by standard shipping terms and conventions uniformly recognized in international trade . allowance for doubtful accounts accounts receivable are stated at invoice amounts . the carrying amount of trade accounts receivable is reduced by an allowance for doubtful accounts that reflects our best estimate of accounts that may not be collected . we review outstanding trade account receivable balances and based on our assessment of expected collections , we estimate the portion , if any , of the balance that may not be collected as well as a general valuation allowance for other accounts receivable based primarily on historical experience . all accounts or portions thereof deemed to be uncollectible are written off to the allowance for doubtful accounts . if we underestimate the allowance , we would incur a current period expense which could have a material adverse effect on earnings . impairments of long-lived assets we account for impairment of long-lived assets , which include property and equipment , amortizable and non-amortizable intangible assets and goodwill , in accordance with authoritative accounting pronouncements . an impairment review is performed annually or whenever a change in condition occurs which indicates that the carrying amounts of assets may not be recoverable . such changes may include changes in our business strategies and plans , changes to our customer contracts , changes to our product lines and changes in our operating practices . we use a variety of factors to assess the realizable value of long-lived assets depending on their nature and use . goodwill is not amortized ; however , it must be tested for impairment at least annually . the goodwill impairment analysis is based on the fair

liquidity and capital resources our strategy is centered on obtaining regulatory approval to market sfp and developing other high potential drug candidates , while also expanding our dialysis products business . we expect to expend substantial amounts in support of our clinical development plan and regulatory approval of sfp and its extensions and other product development opportunities . these initiatives will require the expenditure of substantial cash resources . we expect our cash needs for research and development spending to be significant over the next two years as we execute our clinical development program for sfp . we will invest in our phase iii clinical development program for sfp as well as other development initiatives over the next two years . we are also required to make an additional cash payment of $ 550,000 in connection with our acquisition of the right to market calcitriol and funding will be necessary to obtain fda approval for our contract manufacturer to manufacture the product for us . however , these expenditures are not expected to have a material effect on our liquidity or financial position . our cash resources include cash generated from our business operations and from proceeds of equity offerings . as of december 31 , 2011 , we had $ 17.5 million in cash and investments . in february 2012 , we completed a common stock offering for $ 17.5 million in gross proceeds and approximately $ 16.2 million in net proceeds .


 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 our strategy is centered on obtaining regulatory approval to market sfp and developing other high potential drug candidates , while also expanding our dialysis products business . we expect to expend substantial amounts in support of our clinical development plan and regulatory approval of sfp and its extensions and other product development opportunities . these initiatives will require the expenditure of substantial cash resources . we expect our cash needs for research and development spending to be significant over the next two years as we execute our clinical development program for sfp . we will invest in our phase iii clinical development program for sfp as well as other development initiatives over the next two years . we are also required to make an additional cash payment of $ 550,000 in connection with our acquisition of the right to market calcitriol and funding will be necessary to obtain fda approval for our contract manufacturer to manufacture the product for us . however , these expenditures are not expected to have a material effect on our liquidity or financial position . our cash resources include cash generated from our business operations and from proceeds of equity offerings . as of december 31 , 2011 , we had $ 17.5 million in cash and investments . in february 2012 , we completed a common stock offering for $ 17.5 million in gross proceeds and approximately $ 16.2 million in net proceeds .
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 Suspicious Activity Report : we anticipate that our gross profit margins will be favorably impacted by revenue from calcitriol once we obtain fda approval for manufacturing changes , but we do not expect to begin selling calcitriol until late in 2012. we may experience changes in our customer and product mix in future quarters that could impact gross profit , since we sell a wide range of products with varying profit margins and to customers with varying order patterns . these changes in mix may cause our gross profit and our gross profit margins to vary period to period . the majority of our business is with domestic clinics who order routinely . we renewed our supply agreement with our largest domestic chain customer through the end of 2013. certain major distributors of our products internationally have not ordered consistently , however , resulting in variation in our sales from period to period . we anticipate that we will realize substantial orders from time to time from our largest international distributors but we expect the size and frequency of these orders to fluctuate from period to period . these orders may increase in future periods or may not recur at all . 25 results of operations for the year ended december 31 , 2011 compared to the year ended december 31 , 2010 sales in 2011 , our sales were $ 49.0 million compared to $ 59.6 million in 2010. sales decreased $ 10.6 million or 17.8 % with $ 7.6 million due to lower international sales and $ 2.8 million due to lower domestic sales and $ 0.2 million due to a government research grant received in 2010 that did not recur in 2011. international sales decreased due to lower sales to a single international distributor . domestic sales decreased due to a change in product mix and due to lower sales volumes with approximately half of the sales decrease due to a loss of certain customers following their acquisition by competitors or by chains that buy product from our competitors . over the last year , customers have continued to convert to our dri-sate dry acid concentrate product line , which lowers providers ' cost per treatment and reduces our sales , but improves our gross profit margins due to a reduction in shipping costs . our dri-sate dry acid concentrate displaced liquid acid concentrate volume , increasing to 58 % of 2011 acid concentrate equivalent treatment gallons from 49 % in 2010. we also experienced some downward pricing pressure with the implementation of the bundled reimbursement program by cms ( medicare ) in 2011. gross profit our gross profit in 2011 was $ 5.6 million compared to $ 9.9 million in 2010. gross profit margins were 11.5 % in 2011 compared to 16.6 % in 2010. the decreases in gross profit and margin were primarily due to lower sales volumes , increased sales incentives and inflationary cost increases to fuel , material and labor costs . approximately $ 2.3 million of the decrease was due to the lower sales volumes generally and another $ 0.8 million was due to sales incentives net of other price changes and other product mix changes . cost increases for fuel , material and labor net of operating expense decreases reduced gross profit approximately $ 1.1 million . selling , general and administrative expenses selling , general and administrative expenses were $ 9.5 million in 2011 compared to $ 9.3 million in 2010. the increase of $ 0.2 million was primarily due to an increase in non-cash charges for equity compensation , partially offset by lower information technology costs and related depreciation . non-cash equity compensation aggregated $ 4.4 million in 2011 compared to $ 4.0 million in 2010. research and development we incurred product development and research costs related to the commercial development , patent approval and regulatory approval of new products , including sfp , aggregating approximately $ 17.8 million and $ 3.4 million in 2011 and 2010 , respectively . costs incurred in both 2011 and 2010 were primarily for conducting human clinical trials of sfp and other sfp testing and development activities . our spending increased considerably in 2011 as we initiated our phase iii clinical trial program which consists of several concurrent clinical studies . interest and investment income , net net interest and investment income in 2011 increased by $ 57,000 compared to 2010 primarily due to an increase in interest income from our cash investments net of realized losses on investments . income tax expense we have substantial tax loss carryforwards from our earlier losses . we have not recorded a federal income tax benefit from either our prior losses or our current year losses because we might not realize the carryforward benefit of the remaining losses . 26 for the year ended december 31 , 2010 compared to the year ended december 31 , 2009 sales in 2010 , our sales were $ 59.6 million , an increase of $ 4.8 million or 8.8 % over 2009. this increase was primarily due to increased international sales of $ 7.4 million or 113 % partially offset by a $ 2.8 million or 5.8 % decrease in domestic sales . our international sales in 2010 were 23 % of total sales compared to 12 % of sales in 2009. the increase in our international sales was primarily due to increased sales to a single distributor . our domestic sales were negatively impacted by customer conversions to lower cost formulations and conversions to dri-sate dry acid product line resulting in lower sales but at higher gross profit levels . customers continue to migrate from liquid to dry acid concentrate with unit volumes up 28 % in 2010 over 2009. in 2010 , we received a research grant of $ 0.25 million from the u.s. government for sfp related research and testing which was recorded in sales . story_separator_special_tag gross profit our gross profit in 2010 was $ 9.9 million , an increase of $ 2.0 million or 25 % over 2009. our gross profit margins increased to 16.6 % in 2010 compared to 14.4 % in 2009. the improvement in our gross profit was primarily due to significant changes to our product mix over the last two years coupled with lower operating and procurement costs along with higher selling prices . our product mix was favorably impacted by the continued conversion of customers to our dri-sate product line and to lower cost formulations of our dialysis concentrates . we also realized increased sales volumes in 2010 which contributed to the increase in our overall gross profit . these gains were partially offset by moderate increases in material , fuel and other operational costs over 2009. selling , general and administrative expenses selling , general and administrative expenses were $ 9.3 million in 2010 compared to $ 6.9 million in 2009 , an increase of $ 2.4 million , which was primarily due to increases in non-cash charges for equity compensation ( $ 1.7 million ) , compensation ( $ 0.5 million ) and other operating expenses ( $ 0.2 million ) . non-cash equity compensation aggregated $ 4.0 million in 2010 compared to $ 2.35 million in 2009 with approximately $ 0.25 million of the increase due to non-employee equity compensation . research and development we incurred product development and research costs related to the commercial development , patent approval and regulatory approval of new products , including sfp , aggregating approximately $ 3.4 million and $ 6.5 million in 2010 and 2009 , respectively . costs incurred in both 2010 and 2009 were primarily for conducting human clinical trials of sfp and other sfp testing and development activities . during 2009 , we conducted a phase iib study , which was completed in late 2009. our sfp phase iii clinical program commenced in early 2011. interest income and expense , net net interest income in 2010 increased by $ 205,000 compared to 2009 primarily due to a $ 190,000 increase in interest income from our cash investments as a result of higher investable funds resulting from the proceeds of the october 2009 equity offering . income tax expense we have substantial tax loss carryforwards from our earlier losses . we have not recorded a federal income tax benefit from either our prior losses or our current year losses because we might not realize the carryforward benefit of the remaining losses . 27 critical accounting estimates and judgments our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the united states of america . these accounting principles require us to make estimates , judgments and assumptions that affect the reported amounts of revenues , expenses , assets , liabilities , and contingencies . all significant estimates , judgments and assumptions are developed based on the best information available to us at the time made and are regularly reviewed and updated when necessary . actual results will generally differ from these estimates . changes in estimates are reflected in our financial statements in the period of change based upon on-going actual experience , trends , or subsequent realization depending on the nature and predictability of the estimates and contingencies . interim changes in estimates are generally applied prospectively within annual periods . certain accounting estimates , including those concerning revenue recognition , allowance for doubtful accounts , impairments of long-lived assets , and accounting for income taxes , are considered to be critical in evaluating and understanding our financial results because they involve inherently uncertain matters and their application requires the most difficult and complex judgments and estimates . these are described below . for further information on our accounting policies , see note 2 to our consolidated financial statements . revenue recognition we recognize revenue at the time we transfer title to our products to our customers consistent with generally accepted accounting principles . our products are generally sold domestically on a delivered basis and as a result we do not recognize revenue until delivered to the customer with title transferring upon completion of the delivery . for our international sales , we recognize revenue upon the transfer of title as defined by standard shipping terms and conventions uniformly recognized in international trade . allowance for doubtful accounts accounts receivable are stated at invoice amounts . the carrying amount of trade accounts receivable is reduced by an allowance for doubtful accounts that reflects our best estimate of accounts that may not be collected . we review outstanding trade account receivable balances and based on our assessment of expected collections , we estimate the portion , if any , of the balance that may not be collected as well as a general valuation allowance for other accounts receivable based primarily on historical experience . all accounts or portions thereof deemed to be uncollectible are written off to the allowance for doubtful accounts . if we underestimate the allowance , we would incur a current period expense which could have a material adverse effect on earnings . impairments of long-lived assets we account for impairment of long-lived assets , which include property and equipment , amortizable and non-amortizable intangible assets and goodwill , in accordance with authoritative accounting pronouncements . an impairment review is performed annually or whenever a change in condition occurs which indicates that the carrying amounts of assets may not be recoverable . such changes may include changes in our business strategies and plans , changes to our customer contracts , changes to our product lines and changes in our operating practices . we use a variety of factors to assess the realizable value of long-lived assets depending on their nature and use . goodwill is not amortized ; however , it must be tested for impairment at least annually . the goodwill impairment analysis is based on the fair

