research and development expenses our research and development expenses consist mainly of costs associated with the clinical trials of our product candidates that have not yet received regulatory approval for marketing and for which no alternative future use has been identified . this includes the salaries , benefits and stock-based compensation of research and development personnel , raw materials , such as insulin purchases , laboratory supplies and materials , facility costs , costs for consultants and related contract research , licensing fees , and depreciation of equipment . we track research and development costs by the type of cost incurred . we partially offset research and development expenses with the recognition of estimated amounts receivable from the state of connecticut pursuant to a program under which we can exchange qualified research and development income tax credits for cash . our research and development staff conducts our internal research and development activities , which include research , product development , clinical development , manufacturing and related activities . this staff is located in our facilities in valencia , california ; paramus , new jersey ; and danbury , connecticut . we expense research and development costs as we incur them . clinical development timelines , likelihood of success and total costs vary widely . we are focused primarily on advancing afrezza through regulatory filings . at this time , due to the risks inherent in the clinical trial process and given the early stage of development of our product candidates other than afrezza , we are unable to estimate with any certainty the costs that we will incur in the continued development of our product candidates for commercialization . the costs required to complete the development of afrezza will be largely dependent on the cost and efficiency of our clinical trial operations and discussions with the fda regarding its requirements . during the first quarter of 2011 , we implemented a restructuring to streamline operations , reduce operating expenses , extend our cash runway and focus our resources on securing fda approval of the nda for afrezza . in connection with the restructuring , we recorded charges to research and development expenses of approximately $ 4.7 million for employee severance and other related termination benefits . the restructuring 42 resulted in research and development operating cost savings of approximately $ 9.5 million in 2011. these savings were partially offset by increased costs associated with the additional trials required by the fda . general and administrative expenses our general and administrative expenses consist primarily of salaries , benefits and stock-based compensation for administrative , finance , business development , human resources , legal and information systems support personnel . in addition , general and administrative expenses include professional service fees and business insurance costs . in connection with the restructuring , we recorded charges to general and administrative expenses of approximately $ 1.6 million for employee severance and other related termination benefits . the restructuring resulted in general and administrative operating cost savings of approximately $ 2.8 million in 2011. these savings were offset primarily by increased professional fees . critical accounting policies we have based our discussion and analysis of our financial condition and results of operations on our financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities and expenses . we evaluate our estimates and judgments on an ongoing basis . we base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances , the results of which form the basis for making estimates of expenses such as stock option expenses and judgments about the carrying values of assets and liabilities . actual results may differ from these estimates under different assumptions or conditions . the significant accounting policies that are critical to the judgments and estimates used in the preparation of our financial statements are described in more detail below . impairment of long-lived assets assessing long-lived assets for impairment requires us to make assumptions and judgments regarding the carrying value of these assets . we evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable . the assets are considered to be impaired if we determine that the carrying value may not be recoverable based upon our assessment of the following events or changes in circumstances : significant changes in our strategic business objectives and utilization of the assets ; a determination that the carrying value of such assets can not be recovered through undiscounted cash flows ; loss of legal ownership or title to the assets ; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset ( asset group ) , including an adverse action or assessment by a regulator ; or the impact of significant negative industry or economic trends . if we believe our assets to be impaired , the impairment we recognize is the amount by which the carrying value of the assets exceeds the fair value of the assets . any write-downs would be treated as permanent reductions in the carrying amount of the asset and an operating loss would be recognized . in addition , we base the useful lives and related amortization or depreciation expense on our estimate of the useful lives of the assets . if a change were to occur in any of the above-mentioned factors or estimates , our reported results could materially change . to date , we have had recurring operating losses , and the recoverability of our long-lived assets is contingent upon executing our business plan . story_separator_special_tag accordingly , we will need to raise additional capital , either through the sale of equity or debt securities , the entry into a strategic business collaboration with a pharmaceutical or biotechnology company , the establishment of other funding facilities , licensing arrangements , asset sales or other means , and or refinance our indebtedness under the 2013 notes , in order to continue the development and commercialization of afrezza and other product candidates and to support our other ongoing activities . there can be no assurance that we will be able to do so on favorable terms by the applicable repayment date , or at all . in addition , if we undergo a fundamental change , as that term is defined in the indentures governing the terms of the 2013 notes , each holder of 2013 notes will have the option to require us to repurchase all or any portion of such holder 's notes at a repurchase price of 100 % of the principal amount of such notes to be repurchased plus accrued and unpaid interest , if any . any of these events could have a material adverse effect on our business , results of operations and financial condition , up to and including the noteholders initiating bankruptcy proceedings or causing us to cease operations altogether . this raises substantial doubt about our ability to continue as a going concern . 49 we intend to use our capital resources to continue the development and commercialization of afrezza , if approved . we are expending a portion of our capital to scale up our manufacturing capabilities in our danbury facilities . we also intend to use our capital resources for general corporate purposes . we have held extensive discussions with a number of pharmaceutical companies concerning a potential strategic business collaboration for afrezza . we can not predict when , if ever , we could conclude an agreement with a partner . there can be no assurance that any such collaboration will be available to us on a timely basis or on acceptable terms , if at all . if we enter into a strategic business collaboration with a pharmaceutical or biotechnology company , we would expect , as part of the transaction , to receive additional capital . in addition , we expect to pursue the sale of equity and or debt securities , or the establishment of other funding facilities . issuances of debt or additional equity could impact the rights of our existing stockholders , dilute the ownership percentages of our existing stockholders and may impose restrictions on our operations . these restrictions could include limitations on additional borrowing , specific restrictions on the use of our assets as well as prohibitions on our ability to create liens , pay dividends , redeem our stock or make investments . we also may seek to raise additional capital by pursuing opportunities for the licensing , sale or divestiture of certain intellectual property and other assets , including our technosphere technology platform . there can be no assurance , however , that any strategic collaboration , sale of securities or sale or license of assets will be available to us on a timely basis or on acceptable terms , if at all . if we are unable to raise additional capital , we may be required to enter into agreements with third parties to develop or commercialize products or technologies that we otherwise would have sought to develop independently , and any such agreements may not be on terms as commercially favorable to us . however , we can not provide assurances that our plans will not change or that changed circumstances will not result in the depletion of our capital resources more rapidly than we currently anticipate . if planned operating results are not achieved or we are not successful in raising additional capital through equity or debt financing or entering a business collaboration , we may be required to reduce expenses through the delay , reduction or curtailment of our projects , including afrezza development activities , or further reduction of costs for facilities and administration , and there will continue to be substantial doubt about our ability to continue as a going concern . off-balance sheet arrangements as of december 31 , 2012 , we did not have any off-balance sheet arrangements . commitments and contingencies our contractual obligations represent future cash commitments and liabilities under agreements with third parties , and exclude contingent liabilities for which we can not reasonably predict future payments . accordingly , the table below excludes contractual obligations relating to milestone and royalty payments due to third parties , all of which are contingent upon certain future events . the expected timing of payment of the obligations presented below is estimated based on current information . future payments relate to operating lease obligations , the senior convertible notes , and open purchase order and supply commitments consisted of the following at december 31 , 2012 ( in thousands ) : replace_table_token_7_th ( 1 ) the amounts included in open purchase order and supply commitments are subject to performance under the purchase order or contract by the supplier of the goods or services and do not become our obligation until such performance is rendered . the amount shown is principally for the purchase of materials for our clinical trials , the acquisition of manufacturing equipment , and commitments related to the expansion of our manufacturing plant . 50 ( 2 ) the senior convertible notes obligations include the 2013 notes and the 2015 notes . the amounts include future interest payments at fixed rates of 3.75 % and 5.75 % , respectively , and payment of the notes in full upon maturity in 2013 and 2015 , respectively . ( 3 ) the obligation for the note payable to the principal stockholder includes future principal and interest payments related to the $ 119.6 million of borrowings as of december

liquidity and capital resources we have funded our operations primarily through the sale of equity securities and convertible debt securities and borrowings under our loan arrangement with our principal stockholder . in october 2007 , we entered into a $ 350.0 million loan arrangement with our principal stockholder . in february 2009 , as a result of our principal stockholder being licensed as a finance lender under the california finance lenders law , the promissory note underlying the loan arrangement was revised to reflect the lender as the mann group llc , an entity controlled by our principal stockholder . until january 1 , 2013 , interest on outstanding principal amounts accrued at a fixed rate equal to the one-year london interbank offered rate ( libor ) rate as reported by the wall street journal on the date of such advance plus 3 % per annum . the borrowing rate was 4.5 % at december 31 , 2012. we amended the promissory note underlying the loan arrangement at various dates during 2012. the most recent amendment occurred in october 2012 to extend the maturity date to january 1 , 2014 , extend the date through which we can borrow under the promissory note to 47 september 30 , 2013 , and adjust the annual interest rate on all outstanding principal to the one-year libor rate on december 31 , 2012 plus 5 % , effective beginning on january 1 , 2013. as of december 31 , 2012 , the total principal amount outstanding under the credit facility was $ 119.6 million , and the amount available for future borrowings was $ 125.4 million . interest is due and payable quarterly in arrears on the first day of each calendar quarter for the preceding quarter , or at such other time as we and the mann group mutually agree . all or any portion of accrued and unpaid interest that becomes due and payable may be paid-in-kind and capitalized at any time upon mutual agreement of both parties . the mann group can require us to prepay up to $ 200.0 million in advances that have been outstanding for at least 12 months .


 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 we have funded our operations primarily through the sale of equity securities and convertible debt securities and borrowings under our loan arrangement with our principal stockholder . in october 2007 , we entered into a $ 350.0 million loan arrangement with our principal stockholder . in february 2009 , as a result of our principal stockholder being licensed as a finance lender under the california finance lenders law , the promissory note underlying the loan arrangement was revised to reflect the lender as the mann group llc , an entity controlled by our principal stockholder . until january 1 , 2013 , interest on outstanding principal amounts accrued at a fixed rate equal to the one-year london interbank offered rate ( libor ) rate as reported by the wall street journal on the date of such advance plus 3 % per annum . the borrowing rate was 4.5 % at december 31 , 2012. we amended the promissory note underlying the loan arrangement at various dates during 2012. the most recent amendment occurred in october 2012 to extend the maturity date to january 1 , 2014 , extend the date through which we can borrow under the promissory note to 47 september 30 , 2013 , and adjust the annual interest rate on all outstanding principal to the one-year libor rate on december 31 , 2012 plus 5 % , effective beginning on january 1 , 2013. as of december 31 , 2012 , the total principal amount outstanding under the credit facility was $ 119.6 million , and the amount available for future borrowings was $ 125.4 million . interest is due and payable quarterly in arrears on the first day of each calendar quarter for the preceding quarter , or at such other time as we and the mann group mutually agree . all or any portion of accrued and unpaid interest that becomes due and payable may be paid-in-kind and capitalized at any time upon mutual agreement of both parties . the mann group can require us to prepay up to $ 200.0 million in advances that have been outstanding for at least 12 months .
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 Suspicious Activity Report : research and development expenses our research and development expenses consist mainly of costs associated with the clinical trials of our product candidates that have not yet received regulatory approval for marketing and for which no alternative future use has been identified . this includes the salaries , benefits and stock-based compensation of research and development personnel , raw materials , such as insulin purchases , laboratory supplies and materials , facility costs , costs for consultants and related contract research , licensing fees , and depreciation of equipment . we track research and development costs by the type of cost incurred . we partially offset research and development expenses with the recognition of estimated amounts receivable from the state of connecticut pursuant to a program under which we can exchange qualified research and development income tax credits for cash . our research and development staff conducts our internal research and development activities , which include research , product development , clinical development , manufacturing and related activities . this staff is located in our facilities in valencia , california ; paramus , new jersey ; and danbury , connecticut . we expense research and development costs as we incur them . clinical development timelines , likelihood of success and total costs vary widely . we are focused primarily on advancing afrezza through regulatory filings . at this time , due to the risks inherent in the clinical trial process and given the early stage of development of our product candidates other than afrezza , we are unable to estimate with any certainty the costs that we will incur in the continued development of our product candidates for commercialization . the costs required to complete the development of afrezza will be largely dependent on the cost and efficiency of our clinical trial operations and discussions with the fda regarding its requirements . during the first quarter of 2011 , we implemented a restructuring to streamline operations , reduce operating expenses , extend our cash runway and focus our resources on securing fda approval of the nda for afrezza . in connection with the restructuring , we recorded charges to research and development expenses of approximately $ 4.7 million for employee severance and other related termination benefits . the restructuring 42 resulted in research and development operating cost savings of approximately $ 9.5 million in 2011. these savings were partially offset by increased costs associated with the additional trials required by the fda . general and administrative expenses our general and administrative expenses consist primarily of salaries , benefits and stock-based compensation for administrative , finance , business development , human resources , legal and information systems support personnel . in addition , general and administrative expenses include professional service fees and business insurance costs . in connection with the restructuring , we recorded charges to general and administrative expenses of approximately $ 1.6 million for employee severance and other related termination benefits . the restructuring resulted in general and administrative operating cost savings of approximately $ 2.8 million in 2011. these savings were offset primarily by increased professional fees . critical accounting policies we have based our discussion and analysis of our financial condition and results of operations on our financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets , liabilities and expenses . we evaluate our estimates and judgments on an ongoing basis . we base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances , the results of which form the basis for making estimates of expenses such as stock option expenses and judgments about the carrying values of assets and liabilities . actual results may differ from these estimates under different assumptions or conditions . the significant accounting policies that are critical to the judgments and estimates used in the preparation of our financial statements are described in more detail below . impairment of long-lived assets assessing long-lived assets for impairment requires us to make assumptions and judgments regarding the carrying value of these assets . we evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable . the assets are considered to be impaired if we determine that the carrying value may not be recoverable based upon our assessment of the following events or changes in circumstances : significant changes in our strategic business objectives and utilization of the assets ; a determination that the carrying value of such assets can not be recovered through undiscounted cash flows ; loss of legal ownership or title to the assets ; a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset ( asset group ) , including an adverse action or assessment by a regulator ; or the impact of significant negative industry or economic trends . if we believe our assets to be impaired , the impairment we recognize is the amount by which the carrying value of the assets exceeds the fair value of the assets . any write-downs would be treated as permanent reductions in the carrying amount of the asset and an operating loss would be recognized . in addition , we base the useful lives and related amortization or depreciation expense on our estimate of the useful lives of the assets . if a change were to occur in any of the above-mentioned factors or estimates , our reported results could materially change . to date , we have had recurring operating losses , and the recoverability of our long-lived assets is contingent upon executing our business plan . story_separator_special_tag accordingly , we will need to raise additional capital , either through the sale of equity or debt securities , the entry into a strategic business collaboration with a pharmaceutical or biotechnology company , the establishment of other funding facilities , licensing arrangements , asset sales or other means , and or refinance our indebtedness under the 2013 notes , in order to continue the development and commercialization of afrezza and other product candidates and to support our other ongoing activities . there can be no assurance that we will be able to do so on favorable terms by the applicable repayment date , or at all . in addition , if we undergo a fundamental change , as that term is defined in the indentures governing the terms of the 2013 notes , each holder of 2013 notes will have the option to require us to repurchase all or any portion of such holder 's notes at a repurchase price of 100 % of the principal amount of such notes to be repurchased plus accrued and unpaid interest , if any . any of these events could have a material adverse effect on our business , results of operations and financial condition , up to and including the noteholders initiating bankruptcy proceedings or causing us to cease operations altogether . this raises substantial doubt about our ability to continue as a going concern . 49 we intend to use our capital resources to continue the development and commercialization of afrezza , if approved . we are expending a portion of our capital to scale up our manufacturing capabilities in our danbury facilities . we also intend to use our capital resources for general corporate purposes . we have held extensive discussions with a number of pharmaceutical companies concerning a potential strategic business collaboration for afrezza . we can not predict when , if ever , we could conclude an agreement with a partner . there can be no assurance that any such collaboration will be available to us on a timely basis or on acceptable terms , if at all . if we enter into a strategic business collaboration with a pharmaceutical or biotechnology company , we would expect , as part of the transaction , to receive additional capital . in addition , we expect to pursue the sale of equity and or debt securities , or the establishment of other funding facilities . issuances of debt or additional equity could impact the rights of our existing stockholders , dilute the ownership percentages of our existing stockholders and may impose restrictions on our operations . these restrictions could include limitations on additional borrowing , specific restrictions on the use of our assets as well as prohibitions on our ability to create liens , pay dividends , redeem our stock or make investments . we also may seek to raise additional capital by pursuing opportunities for the licensing , sale or divestiture of certain intellectual property and other assets , including our technosphere technology platform . there can be no assurance , however , that any strategic collaboration , sale of securities or sale or license of assets will be available to us on a timely basis or on acceptable terms , if at all . if we are unable to raise additional capital , we may be required to enter into agreements with third parties to develop or commercialize products or technologies that we otherwise would have sought to develop independently , and any such agreements may not be on terms as commercially favorable to us . however , we can not provide assurances that our plans will not change or that changed circumstances will not result in the depletion of our capital resources more rapidly than we currently anticipate . if planned operating results are not achieved or we are not successful in raising additional capital through equity or debt financing or entering a business collaboration , we may be required to reduce expenses through the delay , reduction or curtailment of our projects , including afrezza development activities , or further reduction of costs for facilities and administration , and there will continue to be substantial doubt about our ability to continue as a going concern . off-balance sheet arrangements as of december 31 , 2012 , we did not have any off-balance sheet arrangements . commitments and contingencies our contractual obligations represent future cash commitments and liabilities under agreements with third parties , and exclude contingent liabilities for which we can not reasonably predict future payments . accordingly , the table below excludes contractual obligations relating to milestone and royalty payments due to third parties , all of which are contingent upon certain future events . the expected timing of payment of the obligations presented below is estimated based on current information . future payments relate to operating lease obligations , the senior convertible notes , and open purchase order and supply commitments consisted of the following at december 31 , 2012 ( in thousands ) : replace_table_token_7_th ( 1 ) the amounts included in open purchase order and supply commitments are subject to performance under the purchase order or contract by the supplier of the goods or services and do not become our obligation until such performance is rendered . the amount shown is principally for the purchase of materials for our clinical trials , the acquisition of manufacturing equipment , and commitments related to the expansion of our manufacturing plant . 50 ( 2 ) the senior convertible notes obligations include the 2013 notes and the 2015 notes . the amounts include future interest payments at fixed rates of 3.75 % and 5.75 % , respectively , and payment of the notes in full upon maturity in 2013 and 2015 , respectively . ( 3 ) the obligation for the note payable to the principal stockholder includes future principal and interest payments related to the $ 119.6 million of borrowings as of december

