$ 216,000 ) ; ● lower salary and related expneses ( $ 206,000 ) due to the shut down of our laboratory ; ● lower external development expenses ( $ 107,000 ) ; and ● other net decreases in research spending ( $ 120,000 ) . product costs for mugard in the united states were $ 267,000 for the year ended december 31 , 2012 as compared to $ 148,000 for the same period in 2011 , an increase of $ 119,000 due to the increased sales of our product . total selling , general and administrative expenses were $ 6,024,000 for the year ended december 31 , 2012 , an increase of $ 269,000 compared to the same period in 2011 of $ 5,755,000. the increase in expenses was due primarily to the following : ● increased mugard product selling expenses ( $ 1,343,000 ) ; ● increased professional fees ( $ 235,000 ) ; ● decreased general business consulting expenses due to the higher use of outside consultants in 2011 ( $ 821,000 ) versus the same period in 2012 ; ● decreased sock compensation expense due to lower expense of option grants for selling , general and administrative employees and directors ( $ 395,000 ) ; and ● decreased net other general and administrative expenses ( $ 93,000 ) . 25 depreciation and amortization was $ 419,000 for the year ended december 31 , 2012 as compared to $ 233,000 for 2011 , an increase of $ 186,000. patents related to the 2012 terminated thiarabine project were further amortized $ 291,000. assets related to the laboratory which was shut down in 2012 were further depreciated $ 29,000. all of the patents have been fully amortized and most of the assets are fully depreciated . total operating expenses for the year ended december 31 , 2012 were $ 8,720,000 as compared to total operating expenses of $ 9,715,000 for 2011 , a decrease of $ 995,000 for the reasons listed above . interest and miscellaneous income was $ 242,000 for the year ended december 31 , 2012 as compared to $ 1,334,000 for 2011 , a decrease of $ 1,092,000. miscellaneous income was higher in 2011 due to negotiated payables and write-offs of other accounts payable that occurred in 2011. interest and other expense was $ 608,000 for the year ended december 31 , 2012 as compared to $ 963,000 in 2011 , a decrease of $ 355,000. the decrease in interest and other expense was due to the repayment in full of the secured promissory note of $ 2.75 million plus accrued interest . we recorded an expense of $ 2,316,000 in the first quarter of 2012 for amendment agreements for 4,581,816 currently outstanding warrants which extended the expiration dates of such warrants to february 16 , 2015 for 3,818,180 warrants ; to october 24 , 2015 for 386,364 warrants ; and to december 6 , 2015 for 377,272 warrants . the holders of such warrants include unaffiliated warrant holders as well as sco capital partners llc , lake end capital llc and beach capital llc . such holders may be deemed to be affiliates of jeffrey b. davis and steven h. rouhandeh , our chief executive officer and a director , respectively . the warrants that were amended were for the purchase of an aggregate of 4,581,816 shares of our common stock . in connection with the amendments , the holders of such warrants agreed to waive any damages that they may have incurred relating to the company 's inability to register the shares of common stock issuable upon exercise of the warrants , other than liquidated damages that may have already accrued relating to such inability to register such shares . we recorded a gain related to warrants classified as derivative liabilities of $ 1,236,000 for the year ended december 31 , 2012 as compared to $ 3,580,000 for the same period of 2011. we recorded a derivative for warrants in 2009 when the fair value of the warrants that were issued with our series a convertible preferred stock were reclassified from equity per the requirements of accounting guidance as a result of the repricing feature . we recorded a loss for the derivative liability related to preferred stock of $ 4,770,000 for the year ended december 31 , 2012 and a gain of $ 1,410,000 for the same period of 2011. we recorded a derivative in 2010 per the requirements of accounting guidance due to the possibility of repricing our series a convertible preferred stock if we sold our common stock at a price below the original conversion price . preferred stock dividends of $ 1,999,000 were accrued for the year ended december 31 , 2012 and $ 1,774,000 for 2011 , an increase of $ 225,000. net loss allocable to common stockholders for the year ended december 31 , 2012 was $ 12,531,000 , or a $ 0.52 basic and diluted loss per common share , compared with net loss of $ 4,306,000 , or a $ 0.22 basic and diluted loss per common share for the same period in 2011 , an increased loss of $ 8,225,000. story_separator_special_tag font-size : 12pt ; font-family : times new roman `` width= `` 100 % `` > · the cost of manufacturing and scale-up ; · the ability to establish and maintain effective commercialization arrangements and activities ; and · successful regulatory filings . we have devoted substantially all of our efforts and resources to research and development conducted on our own behalf . story_separator_special_tag the following table summarizes research and development spending by project category , which spending includes , but is not limited to , payroll and personnel expense , lab supplies , preclinical expense , development cost , clinical trial expense , outside manufacturing expense and consulting expense : replace_table_token_2_th 27 ( 1 ) cumulative spending from inception of the company or project through december 31 , 2012 . ( 2 ) includes : coboral , cobacyte and other projects . due to uncertainties and certain of the risk factors described above , including those relating to our ability to successfully commercialize our drug candidates , our ability to obtain necessary additional capital to fund operations in the future , our ability to successfully manufacture our products and our product candidates in clinical quantities or for commercial purposes , government regulation to which we are subject , the uncertainty associated with preclinical and clinical testing , intense competition that we face , market acceptance of our products and protection of our intellectual property , it is not possible to reliably predict future spending or time to completion by project or product category or the period in which material net cash inflows from significant projects are expected to commence . if we are unable to timely complete a particular project , our research and development efforts could be delayed or reduced , our business could suffer depending on the significance of the project and we might need to raise additional capital to fund operations , as discussed in the risk factors above , including without limitation those relating to the uncertainty of the success of our research and development activities and our ability to obtain necessary additional capital to fund operations in the future . as discussed in such risk factors , delays in our research and development efforts and any inability to raise additional funds could cause us to eliminate one or more of our research and development programs . we plan to continue our policy of investing any available funds in certificates of deposit , money market funds , government securities and investment-grade interest-bearing securities . we do not invest in derivative financial instruments . we do not believe inflation or changing prices have had a material impact on our revenue or operating income in the past three years . climate change we do not believe there is anything unique to our business which would result in climate change regulations having a disproportional effect on us as compared to u.s. industry overall . critical accounting policies and estimates the preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the u.s. requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities , disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period . in applying our accounting principles , we must often make individual estimates and assumptions regarding expected outcomes or uncertainties . as you might expect , the actual results or outcomes are often different than the estimated or assumed amounts . these differences are usually minor and are included in our consolidated financial statements as soon as they are known . our estimates , judgments and assumptions are continually evaluated based on available information and experience . because of the use of estimates inherent in the financial reporting process , actual results could differ from those estimates . asset impairment our intangible assets at december 31 , 2012 were fully amortized or impaired . at december 31 , 2011 they consisted primarily of patents acquired in acquisitions and licenses which were recorded at fair value on the acquisition date . receivables receivables are reported in the balance sheets at the outstanding amount net of an allowance for doubtful accounts . we continually evaluate the creditworthiness of our customers and their financial condition and generally do not require collateral . the allowance for doubtful accounts is based upon reviews of specific customer balances , historic losses , and general economic conditions . as of december 31 , 2012 and 2011 , no allowance was recorded as all accounts are considered collectible . 28 product sales and allowances we sell mugard to wholesalers , and specialty and retail pharmacies . we began shipping to customers in september 2010. we recognize product sales allowances as a reduction of product sales in the same period the related revenue is recognized . product sales allowances are based on amounts owed or to be claimed on the related sales . these estimates take into consideration the terms of our agreements with customers , rebates or discounts taken . if actual future results vary from our estimates , we may need to adjust these estimates , which could have an effect on product sales and earnings in the period of adjustment . our product sales allowances include : · wholesaler and specialty and retail pharmacy discounts – we offer contractually determined discounts to certain wholesale distributors and specialty and retail pharmacies that purchase directly from us . these discounts are either taken off the invoice at the time of shipment or paid to the customer on a monthly or quarterly basis . · prompt pay discounts – we offer cash discounts to our customers , generally 2 % of the sales price , as an incentive for prompt payment . based on our experience many of the customers comply with the payment terms to earn the cash discount . · patient discount programs – we offer discount card programs in which patients receive certain discounts off their prescription . · managed care rebates – we offer discounts under contracts with certain managed care providers who do not purchase directly from us . we believe our estimates related to gross-to-net sales adjustments for mugard do not have a high degree of estimation complexity or uncertainty as the related amounts are settled within

liquidity and capital resources we have funded our operations primarily through private sales of common stock , preferred stock , convertible notes and through licensing agreements . our principal source of liquidity is cash and cash equivalents . product sales and royalty revenues provided limited funding for operations during the year ended december 31 , 2012. as of december 31 , 2012 , our cash and cash equivalents were $ 396,000 and our net cash burn rate for the year ended december 31 , 2012 , was approximately $ 331,000 per month . as of december 31 , 2012 , our working capital deficit was $ 4,948,000. our working capital deficit at december 31 , 2012 represented an increase of $ 3,929,000 as compared to our working capital deficit as of december 31 , 2011 of $ 8,877,000. the increase in the working capital deficit at december 31 , 2012 reflects twelve months of net operating costs , repayment of $ 2.75 million of the outstanding loan offset by $ 4,654,000 net proceeds from the october 2012 private placement of series b preferred stock . 26 as of march 18 , 2013 , we did not have enough capital to achieve our long-term goals .


 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 private sales of common stock , preferred stock , convertible notes and through licensing agreements . our principal source of liquidity is cash and cash equivalents . product sales and royalty revenues provided limited funding for operations during the year ended december 31 , 2012. as of december 31 , 2012 , our cash and cash equivalents were $ 396,000 and our net cash burn rate for the year ended december 31 , 2012 , was approximately $ 331,000 per month . as of december 31 , 2012 , our working capital deficit was $ 4,948,000. our working capital deficit at december 31 , 2012 represented an increase of $ 3,929,000 as compared to our working capital deficit as of december 31 , 2011 of $ 8,877,000. the increase in the working capital deficit at december 31 , 2012 reflects twelve months of net operating costs , repayment of $ 2.75 million of the outstanding loan offset by $ 4,654,000 net proceeds from the october 2012 private placement of series b preferred stock . 26 as of march 18 , 2013 , we did not have enough capital to achieve our long-term goals .
```    
 Suspicious Activity Report : $ 216,000 ) ; ● lower salary and related expneses ( $ 206,000 ) due to the shut down of our laboratory ; ● lower external development expenses ( $ 107,000 ) ; and ● other net decreases in research spending ( $ 120,000 ) . product costs for mugard in the united states were $ 267,000 for the year ended december 31 , 2012 as compared to $ 148,000 for the same period in 2011 , an increase of $ 119,000 due to the increased sales of our product . total selling , general and administrative expenses were $ 6,024,000 for the year ended december 31 , 2012 , an increase of $ 269,000 compared to the same period in 2011 of $ 5,755,000. the increase in expenses was due primarily to the following : ● increased mugard product selling expenses ( $ 1,343,000 ) ; ● increased professional fees ( $ 235,000 ) ; ● decreased general business consulting expenses due to the higher use of outside consultants in 2011 ( $ 821,000 ) versus the same period in 2012 ; ● decreased sock compensation expense due to lower expense of option grants for selling , general and administrative employees and directors ( $ 395,000 ) ; and ● decreased net other general and administrative expenses ( $ 93,000 ) . 25 depreciation and amortization was $ 419,000 for the year ended december 31 , 2012 as compared to $ 233,000 for 2011 , an increase of $ 186,000. patents related to the 2012 terminated thiarabine project were further amortized $ 291,000. assets related to the laboratory which was shut down in 2012 were further depreciated $ 29,000. all of the patents have been fully amortized and most of the assets are fully depreciated . total operating expenses for the year ended december 31 , 2012 were $ 8,720,000 as compared to total operating expenses of $ 9,715,000 for 2011 , a decrease of $ 995,000 for the reasons listed above . interest and miscellaneous income was $ 242,000 for the year ended december 31 , 2012 as compared to $ 1,334,000 for 2011 , a decrease of $ 1,092,000. miscellaneous income was higher in 2011 due to negotiated payables and write-offs of other accounts payable that occurred in 2011. interest and other expense was $ 608,000 for the year ended december 31 , 2012 as compared to $ 963,000 in 2011 , a decrease of $ 355,000. the decrease in interest and other expense was due to the repayment in full of the secured promissory note of $ 2.75 million plus accrued interest . we recorded an expense of $ 2,316,000 in the first quarter of 2012 for amendment agreements for 4,581,816 currently outstanding warrants which extended the expiration dates of such warrants to february 16 , 2015 for 3,818,180 warrants ; to october 24 , 2015 for 386,364 warrants ; and to december 6 , 2015 for 377,272 warrants . the holders of such warrants include unaffiliated warrant holders as well as sco capital partners llc , lake end capital llc and beach capital llc . such holders may be deemed to be affiliates of jeffrey b. davis and steven h. rouhandeh , our chief executive officer and a director , respectively . the warrants that were amended were for the purchase of an aggregate of 4,581,816 shares of our common stock . in connection with the amendments , the holders of such warrants agreed to waive any damages that they may have incurred relating to the company 's inability to register the shares of common stock issuable upon exercise of the warrants , other than liquidated damages that may have already accrued relating to such inability to register such shares . we recorded a gain related to warrants classified as derivative liabilities of $ 1,236,000 for the year ended december 31 , 2012 as compared to $ 3,580,000 for the same period of 2011. we recorded a derivative for warrants in 2009 when the fair value of the warrants that were issued with our series a convertible preferred stock were reclassified from equity per the requirements of accounting guidance as a result of the repricing feature . we recorded a loss for the derivative liability related to preferred stock of $ 4,770,000 for the year ended december 31 , 2012 and a gain of $ 1,410,000 for the same period of 2011. we recorded a derivative in 2010 per the requirements of accounting guidance due to the possibility of repricing our series a convertible preferred stock if we sold our common stock at a price below the original conversion price . preferred stock dividends of $ 1,999,000 were accrued for the year ended december 31 , 2012 and $ 1,774,000 for 2011 , an increase of $ 225,000. net loss allocable to common stockholders for the year ended december 31 , 2012 was $ 12,531,000 , or a $ 0.52 basic and diluted loss per common share , compared with net loss of $ 4,306,000 , or a $ 0.22 basic and diluted loss per common share for the same period in 2011 , an increased loss of $ 8,225,000. story_separator_special_tag font-size : 12pt ; font-family : times new roman `` width= `` 100 % `` > · the cost of manufacturing and scale-up ; · the ability to establish and maintain effective commercialization arrangements and activities ; and · successful regulatory filings . we have devoted substantially all of our efforts and resources to research and development conducted on our own behalf . story_separator_special_tag the following table summarizes research and development spending by project category , which spending includes , but is not limited to , payroll and personnel expense , lab supplies , preclinical expense , development cost , clinical trial expense , outside manufacturing expense and consulting expense : replace_table_token_2_th 27 ( 1 ) cumulative spending from inception of the company or project through december 31 , 2012 . ( 2 ) includes : coboral , cobacyte and other projects . due to uncertainties and certain of the risk factors described above , including those relating to our ability to successfully commercialize our drug candidates , our ability to obtain necessary additional capital to fund operations in the future , our ability to successfully manufacture our products and our product candidates in clinical quantities or for commercial purposes , government regulation to which we are subject , the uncertainty associated with preclinical and clinical testing , intense competition that we face , market acceptance of our products and protection of our intellectual property , it is not possible to reliably predict future spending or time to completion by project or product category or the period in which material net cash inflows from significant projects are expected to commence . if we are unable to timely complete a particular project , our research and development efforts could be delayed or reduced , our business could suffer depending on the significance of the project and we might need to raise additional capital to fund operations , as discussed in the risk factors above , including without limitation those relating to the uncertainty of the success of our research and development activities and our ability to obtain necessary additional capital to fund operations in the future . as discussed in such risk factors , delays in our research and development efforts and any inability to raise additional funds could cause us to eliminate one or more of our research and development programs . we plan to continue our policy of investing any available funds in certificates of deposit , money market funds , government securities and investment-grade interest-bearing securities . we do not invest in derivative financial instruments . we do not believe inflation or changing prices have had a material impact on our revenue or operating income in the past three years . climate change we do not believe there is anything unique to our business which would result in climate change regulations having a disproportional effect on us as compared to u.s. industry overall . critical accounting policies and estimates the preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the u.s. requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities , disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period . in applying our accounting principles , we must often make individual estimates and assumptions regarding expected outcomes or uncertainties . as you might expect , the actual results or outcomes are often different than the estimated or assumed amounts . these differences are usually minor and are included in our consolidated financial statements as soon as they are known . our estimates , judgments and assumptions are continually evaluated based on available information and experience . because of the use of estimates inherent in the financial reporting process , actual results could differ from those estimates . asset impairment our intangible assets at december 31 , 2012 were fully amortized or impaired . at december 31 , 2011 they consisted primarily of patents acquired in acquisitions and licenses which were recorded at fair value on the acquisition date . receivables receivables are reported in the balance sheets at the outstanding amount net of an allowance for doubtful accounts . we continually evaluate the creditworthiness of our customers and their financial condition and generally do not require collateral . the allowance for doubtful accounts is based upon reviews of specific customer balances , historic losses , and general economic conditions . as of december 31 , 2012 and 2011 , no allowance was recorded as all accounts are considered collectible . 28 product sales and allowances we sell mugard to wholesalers , and specialty and retail pharmacies . we began shipping to customers in september 2010. we recognize product sales allowances as a reduction of product sales in the same period the related revenue is recognized . product sales allowances are based on amounts owed or to be claimed on the related sales . these estimates take into consideration the terms of our agreements with customers , rebates or discounts taken . if actual future results vary from our estimates , we may need to adjust these estimates , which could have an effect on product sales and earnings in the period of adjustment . our product sales allowances include : · wholesaler and specialty and retail pharmacy discounts – we offer contractually determined discounts to certain wholesale distributors and specialty and retail pharmacies that purchase directly from us . these discounts are either taken off the invoice at the time of shipment or paid to the customer on a monthly or quarterly basis . · prompt pay discounts – we offer cash discounts to our customers , generally 2 % of the sales price , as an incentive for prompt payment . based on our experience many of the customers comply with the payment terms to earn the cash discount . · patient discount programs – we offer discount card programs in which patients receive certain discounts off their prescription . · managed care rebates – we offer discounts under contracts with certain managed care providers who do not purchase directly from us . we believe our estimates related to gross-to-net sales adjustments for mugard do not have a high degree of estimation complexity or uncertainty as the related amounts are settled within

