although the company 's management has used available information to make judgments on the appropriate estimates to account for the above matters , there can be no assurance that future events will not significantly affect the estimated amounts related to these areas where estimates are required . however , historically , actual results have not been materially different than original estimates : revenue recognition . the company recognizes revenue from the sales of its products when ownership transfers to the customers , which occurs either at the time of shipment or upon delivery based upon contractual terms with the customer . the company recognizes customer program costs , including rebates , cooperative advertising , slotting fees and other sales related discounts , as a reduction to sales . allowance for doubtful accounts . the company provides an allowance for doubtful accounts based upon a review of outstanding accounts receivable , historical collection information and existing economic conditions . the allowance for doubtful accounts represents estimated uncollectible accounts receivables associated with potential customer defaults on contractual obligations , usually due to potential insolvencies . the allowance includes amounts for certain customers where a risk of default has been specifically identified . in addition , the allowance includes a provision for customer defaults based on historical experience . the company actively monitors its accounts receivable balances and its historical experience of annual accounts receivable write offs has been negligible . customer rebates . customer rebates and incentives are a common practice in the office products industry . we incur customer rebate costs to obtain favorable product placement , to promote sell-through of products and to maintain competitive pricing . customer rebate costs and incentives , including volume rebates , promotional funds , catalog allowances and slotting fees , are accounted for as a reduction to gross sales . these costs are recorded at the time of sale and are based on individual customer contracts . management periodically reviews accruals for these rebates and allowances , and adjusts accruals when appropriate . obsolete and slow moving inventory . inventories are stated at the lower of cost , determined on the first-in , first-out method , or market . an allowance is established to adjust the cost of inventory to its net realizable value . inventory allowances are recorded for obsolete or slow moving inventory based on assumptions about future demand and marketability of products , the impact of new product introductions and specific identification of items , such as discontinued products . these estimates could vary significantly from actual requirements if future economic conditions , customer inventory levels or competitive conditions differ from expectations . income taxes . deferred income tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse . a valuation allowance is recorded to reduce deferred income tax assets to an amount that is more likely than not to be realized . 13 intangible assets . intangible assets with finite useful lives are recorded at cost upon acquisition and amortized over the term of the related contract , if any , or useful life , as applicable . intangible assets held by the company with finite useful lives include patents and trademarks . the weighted average amortization period for intangible assets at december 31 , 2011 was 14 years . the company periodically reviews the values recorded for intangible assets to assess recoverability from future operations whenever events or changes in circumstances indicate that its carrying amount may not be recoverable . at december 31 , 2011 and 2010 , the company assessed the recoverability of its long-lived assets and believed that there were no events or circumstances present that would that would require a test of recoverability on those assets . as a result , there was no impairment of the carrying amounts of such assets and no reduction in their estimated useful lives . the net book value of the company 's intangible assets increased to $ 3,284,663 as of december 31 , 2011 , from $ 1,866,231 as of december 31 , 2010 primarily as a result of the pac-kit acquisition . refer to note 17 – business combinations - in the notes to consolidated financial statements in this report for a more detailed discussion . pension obligation . the pension benefit obligation is based on various assumptions used by third-party actuaries in calculating this amount . these assumptions include discount rates , expected return on plan assets , mortality rates and other factors . revisions in assumptions and actual results that differ from the assumptions affect future expenses , cash funding requirements and obligations . our funding policy is to fund the plan in accordance with applicable requirements of the internal revenue code and regulations . these assumptions are reviewed annually and updated as required . the company has a frozen defined benefit pension plan . two assumptions , the discount rate and the expected return on plan assets , are important elements of expense and liability measurement . we determine the discount rate used to measure plan liabilities as of the december 31 measurement date . the discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year . in estimating this rate , we look at rates of return on fixed-income investments of similar duration to the liabilities in the plan that receive high , investment grade ratings by recognized ratings agencies . story_separator_special_tag using these methodologies , we determined a discount rate of 3.99 % to be appropriate as of december 31 , 2011 , which is a decrease of 0.43 percentage points from the rate used as of december 31 , 2010. an increase of 1.0 % in the discount rate would have decreased our plan liabilities as of december 31 , 2011 by $ 0.1 million . the expected long-term rate of return on assets considers the company 's historical results and projected returns for similar allocations among asset classes . in accordance with generally accepted accounting principles , actual results that differ from the company 's assumptions are accumulated and amortized over future periods and , therefore , affect expense and obligation in future periods . for the u.s. pension plan , our assumption for the expected return on plan assets was 8.25 % for 2011. for more information concerning these costs and obligations , see the discussion in note 6 – pension and profit sharing , in the notes to the company 's consolidated financial statements . accounting for stock-based compensation . stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period . the company uses the black-scholes option - pricing model to determine fair value of the awards , which involves certain subjective assumptions . these assumptions include estimating the length of time employees will retain their vested stock options before exercising them ( “ expected term ” ) , the estimated volatility of the company 's common stock price over the expected term ( “ volatility ” ) and the number of options for which vesting requirements will not be completed ( “ forfeitures ” ) . changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation , and the related amount recognized on the consolidated statements of operations . refer to note 11 - stock option plans - in the notes to consolidated financial statements in this report for a more detailed discussion . results of operations 2011 compared with 2010 on february 28 , 2011 , the company purchased substantially all of the assets of the pac-kit safety equipment company , a leading manufacturer of first aid kits for the industrial , safety , transportation and marine markets . the company purchased the accounts receivable , inventory , equipment and intangible assets of pac-kit for approximately $ 3.4 million using funds borrowed under its revolving loan agreement with wells fargo . the pac-kit line of products consist of high quality , unitized first aid kits sold to a broad range of customers and distributors . 14 the company recorded approximately $ 1.9 million for assets acquired including accounts receivable , inventory and fixed assets , as well as approximately $ 1.5 million for intangible assets , consisting of customer relationships and the pac-kit trade name . in 2011 , the company incurred approximately $ 125,000 of integration and transaction costs associated with the acquisition . these costs were recorded in selling , general and administrative expenses . net sales in 2011 , sales increased by $ 10,152,931 or 16 % ( 14 % in constant currency ) to $ 73,301,864 compared to $ 63,148,933 in 2010. the u.s. segment sales increased by $ 9,480,000 or 20 % in 2011 compared to 2010. sales in canada increased by $ 794,000 or 10 % ( 5 % in local currency ) in 2011 compared to 2010. european sales decreased by $ 120,000 or 2 % in u.s. dollars ( 8 % in local currency ) in 2011 compared to 2010. the decline in european net sales is primarily related to the timing of shipments to mass market customers . the increase in net sales for the twelve months ended december 31 , 2011 in the u.s. segment was primarily due to the additional sales resulting from the acquisition of the pac-kit company of approximately $ 5.2 million , strong sales of first aid products and market share gains in the mass market channel . the increase in net sales in canada for the twelve months ended december 31 , 2011 was primarily due to the introduction of new products including the company 's new line of airshoc lawn and garden tools , sold to a major retail hardware chain . gross profit gross profit was 36 % of net sales in 2011 compared to 37 % in 2010. the anticipated decline in gross profit as a percentage of sales for 2011 was primarily related to the addition of the pac-kit line of products , which in general , yield a lower gross profit than the company 's historical average gross margins . the sales of pac-kit products reduced the overall gross profit percentage by approximately 80 basis points . selling , general and administrative selling , general and administrative expenses were $ 22,040,000 in 2011 compared with $ 20,385,000 in 2010 , an increase of $ 1,655,000 or 8 % . sg & a expenses were 30 % of net sales in 2011 compared to 32 % in 2010. the increase in sg & a expenses was primarily the result of incremental expenses from the addition of pac-kit , higher delivery costs and sales commissions as a result of higher sales as well as higher personnel related expenses . operating income operating income was $ 4,285,000 in 2011 , compared with $ 2,980,000 in 2010 , an increase of $ 1,305,000. operating income in the u.s. and canadian segments increased by approximately $ 825,000 and $ 117,000 , respectively , principally due to higher sales . the european operating loss declined by $ 363,000 principally due to cost cutting measures initiated in 2011 and improvement in the gross margin . interest expense , net net interest expense for 2011 was $ 255,000 , compared with $ 142,000 for 2010 , an increase of $ 113,000. the increase in

liquidity and capital resources during 2011 , working capital increased by approximately $ 4.4 million compared to december 31 , 2011. inventory increased by approximately $ 2.2 million . the company purchased approximately $ 1.2 million of inventory as part of the acquisition of pac-kit and spent an additional $ 1.0 million on inventory in anticipation of new business in 2012. inventory turnover , calculated using a twelve month average inventory balance , decreased to 2.0 from 2.1 at december 31 , 2010. receivables increased approximately $ 600,000 at december 31 , 2011 compared to december 31 , 2010. the average number of days sales outstanding in accounts receivable was 65 days in both 2011 and 2010. the company 's working capital , current ratio and long-term debt to equity ratio follow : replace_table_token_4_th during 2011 , total debt outstanding under the company 's revolving credit facility ( referred to below ) increased by approximately $ 4.0 million compared to total debt at december 31 , 2010. the increase in debt outstanding is primarily related to the financing of the acquisition of substantially all of the assets of the pac-kit company for $ 3.4 million . as of december 31 , 2011 , $ 17,568,484 was outstanding and $ 2,431,516 was available for borrowing under the revolving credit facility .


 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 during 2011 , working capital increased by approximately $ 4.4 million compared to december 31 , 2011. inventory increased by approximately $ 2.2 million . the company purchased approximately $ 1.2 million of inventory as part of the acquisition of pac-kit and spent an additional $ 1.0 million on inventory in anticipation of new business in 2012. inventory turnover , calculated using a twelve month average inventory balance , decreased to 2.0 from 2.1 at december 31 , 2010. receivables increased approximately $ 600,000 at december 31 , 2011 compared to december 31 , 2010. the average number of days sales outstanding in accounts receivable was 65 days in both 2011 and 2010. the company 's working capital , current ratio and long-term debt to equity ratio follow : replace_table_token_4_th during 2011 , total debt outstanding under the company 's revolving credit facility ( referred to below ) increased by approximately $ 4.0 million compared to total debt at december 31 , 2010. the increase in debt outstanding is primarily related to the financing of the acquisition of substantially all of the assets of the pac-kit company for $ 3.4 million . as of december 31 , 2011 , $ 17,568,484 was outstanding and $ 2,431,516 was available for borrowing under the revolving credit facility .
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 Suspicious Activity Report : although the company 's management has used available information to make judgments on the appropriate estimates to account for the above matters , there can be no assurance that future events will not significantly affect the estimated amounts related to these areas where estimates are required . however , historically , actual results have not been materially different than original estimates : revenue recognition . the company recognizes revenue from the sales of its products when ownership transfers to the customers , which occurs either at the time of shipment or upon delivery based upon contractual terms with the customer . the company recognizes customer program costs , including rebates , cooperative advertising , slotting fees and other sales related discounts , as a reduction to sales . allowance for doubtful accounts . the company provides an allowance for doubtful accounts based upon a review of outstanding accounts receivable , historical collection information and existing economic conditions . the allowance for doubtful accounts represents estimated uncollectible accounts receivables associated with potential customer defaults on contractual obligations , usually due to potential insolvencies . the allowance includes amounts for certain customers where a risk of default has been specifically identified . in addition , the allowance includes a provision for customer defaults based on historical experience . the company actively monitors its accounts receivable balances and its historical experience of annual accounts receivable write offs has been negligible . customer rebates . customer rebates and incentives are a common practice in the office products industry . we incur customer rebate costs to obtain favorable product placement , to promote sell-through of products and to maintain competitive pricing . customer rebate costs and incentives , including volume rebates , promotional funds , catalog allowances and slotting fees , are accounted for as a reduction to gross sales . these costs are recorded at the time of sale and are based on individual customer contracts . management periodically reviews accruals for these rebates and allowances , and adjusts accruals when appropriate . obsolete and slow moving inventory . inventories are stated at the lower of cost , determined on the first-in , first-out method , or market . an allowance is established to adjust the cost of inventory to its net realizable value . inventory allowances are recorded for obsolete or slow moving inventory based on assumptions about future demand and marketability of products , the impact of new product introductions and specific identification of items , such as discontinued products . these estimates could vary significantly from actual requirements if future economic conditions , customer inventory levels or competitive conditions differ from expectations . income taxes . deferred income tax liabilities or assets are established for temporary differences between financial and tax reporting bases and are subsequently adjusted to reflect changes in tax rates expected to be in effect when the temporary differences reverse . a valuation allowance is recorded to reduce deferred income tax assets to an amount that is more likely than not to be realized . 13 intangible assets . intangible assets with finite useful lives are recorded at cost upon acquisition and amortized over the term of the related contract , if any , or useful life , as applicable . intangible assets held by the company with finite useful lives include patents and trademarks . the weighted average amortization period for intangible assets at december 31 , 2011 was 14 years . the company periodically reviews the values recorded for intangible assets to assess recoverability from future operations whenever events or changes in circumstances indicate that its carrying amount may not be recoverable . at december 31 , 2011 and 2010 , the company assessed the recoverability of its long-lived assets and believed that there were no events or circumstances present that would that would require a test of recoverability on those assets . as a result , there was no impairment of the carrying amounts of such assets and no reduction in their estimated useful lives . the net book value of the company 's intangible assets increased to $ 3,284,663 as of december 31 , 2011 , from $ 1,866,231 as of december 31 , 2010 primarily as a result of the pac-kit acquisition . refer to note 17 – business combinations - in the notes to consolidated financial statements in this report for a more detailed discussion . pension obligation . the pension benefit obligation is based on various assumptions used by third-party actuaries in calculating this amount . these assumptions include discount rates , expected return on plan assets , mortality rates and other factors . revisions in assumptions and actual results that differ from the assumptions affect future expenses , cash funding requirements and obligations . our funding policy is to fund the plan in accordance with applicable requirements of the internal revenue code and regulations . these assumptions are reviewed annually and updated as required . the company has a frozen defined benefit pension plan . two assumptions , the discount rate and the expected return on plan assets , are important elements of expense and liability measurement . we determine the discount rate used to measure plan liabilities as of the december 31 measurement date . the discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year . in estimating this rate , we look at rates of return on fixed-income investments of similar duration to the liabilities in the plan that receive high , investment grade ratings by recognized ratings agencies . story_separator_special_tag using these methodologies , we determined a discount rate of 3.99 % to be appropriate as of december 31 , 2011 , which is a decrease of 0.43 percentage points from the rate used as of december 31 , 2010. an increase of 1.0 % in the discount rate would have decreased our plan liabilities as of december 31 , 2011 by $ 0.1 million . the expected long-term rate of return on assets considers the company 's historical results and projected returns for similar allocations among asset classes . in accordance with generally accepted accounting principles , actual results that differ from the company 's assumptions are accumulated and amortized over future periods and , therefore , affect expense and obligation in future periods . for the u.s. pension plan , our assumption for the expected return on plan assets was 8.25 % for 2011. for more information concerning these costs and obligations , see the discussion in note 6 – pension and profit sharing , in the notes to the company 's consolidated financial statements . accounting for stock-based compensation . stock based compensation cost is measured at the grant date fair value of the award and is recognized as expense over the requisite service period . the company uses the black-scholes option - pricing model to determine fair value of the awards , which involves certain subjective assumptions . these assumptions include estimating the length of time employees will retain their vested stock options before exercising them ( “ expected term ” ) , the estimated volatility of the company 's common stock price over the expected term ( “ volatility ” ) and the number of options for which vesting requirements will not be completed ( “ forfeitures ” ) . changes in the subjective assumptions can materially affect estimates of fair value stock-based compensation , and the related amount recognized on the consolidated statements of operations . refer to note 11 - stock option plans - in the notes to consolidated financial statements in this report for a more detailed discussion . results of operations 2011 compared with 2010 on february 28 , 2011 , the company purchased substantially all of the assets of the pac-kit safety equipment company , a leading manufacturer of first aid kits for the industrial , safety , transportation and marine markets . the company purchased the accounts receivable , inventory , equipment and intangible assets of pac-kit for approximately $ 3.4 million using funds borrowed under its revolving loan agreement with wells fargo . the pac-kit line of products consist of high quality , unitized first aid kits sold to a broad range of customers and distributors . 14 the company recorded approximately $ 1.9 million for assets acquired including accounts receivable , inventory and fixed assets , as well as approximately $ 1.5 million for intangible assets , consisting of customer relationships and the pac-kit trade name . in 2011 , the company incurred approximately $ 125,000 of integration and transaction costs associated with the acquisition . these costs were recorded in selling , general and administrative expenses . net sales in 2011 , sales increased by $ 10,152,931 or 16 % ( 14 % in constant currency ) to $ 73,301,864 compared to $ 63,148,933 in 2010. the u.s. segment sales increased by $ 9,480,000 or 20 % in 2011 compared to 2010. sales in canada increased by $ 794,000 or 10 % ( 5 % in local currency ) in 2011 compared to 2010. european sales decreased by $ 120,000 or 2 % in u.s. dollars ( 8 % in local currency ) in 2011 compared to 2010. the decline in european net sales is primarily related to the timing of shipments to mass market customers . the increase in net sales for the twelve months ended december 31 , 2011 in the u.s. segment was primarily due to the additional sales resulting from the acquisition of the pac-kit company of approximately $ 5.2 million , strong sales of first aid products and market share gains in the mass market channel . the increase in net sales in canada for the twelve months ended december 31 , 2011 was primarily due to the introduction of new products including the company 's new line of airshoc lawn and garden tools , sold to a major retail hardware chain . gross profit gross profit was 36 % of net sales in 2011 compared to 37 % in 2010. the anticipated decline in gross profit as a percentage of sales for 2011 was primarily related to the addition of the pac-kit line of products , which in general , yield a lower gross profit than the company 's historical average gross margins . the sales of pac-kit products reduced the overall gross profit percentage by approximately 80 basis points . selling , general and administrative selling , general and administrative expenses were $ 22,040,000 in 2011 compared with $ 20,385,000 in 2010 , an increase of $ 1,655,000 or 8 % . sg & a expenses were 30 % of net sales in 2011 compared to 32 % in 2010. the increase in sg & a expenses was primarily the result of incremental expenses from the addition of pac-kit , higher delivery costs and sales commissions as a result of higher sales as well as higher personnel related expenses . operating income operating income was $ 4,285,000 in 2011 , compared with $ 2,980,000 in 2010 , an increase of $ 1,305,000. operating income in the u.s. and canadian segments increased by approximately $ 825,000 and $ 117,000 , respectively , principally due to higher sales . the european operating loss declined by $ 363,000 principally due to cost cutting measures initiated in 2011 and improvement in the gross margin . interest expense , net net interest expense for 2011 was $ 255,000 , compared with $ 142,000 for 2010 , an increase of $ 113,000. the increase in

