the adequacy of this allowance is reviewed each reporting period and adjusted as necessary . our allowance for doubtful accounts was approximately $ 93,000 and $ 73,000 at december 31 , 2013 and 2012 , respectively , which was approximately 2.1 % and 2.4 % , respectively , of gross accounts receivable . if the financial condition of our customers were to deteriorate , resulting in an impairment of their ability to make payments , or if unexpected events or significant future changes in trends were to occur , additional allowances may be required , resulting in increased bad debt expense . inventories inventories primarily are composed of raw materials and finished goods and are stated at the lower of cost or market , using the first-in , first-out method . we maintain a reserve for slow moving and obsolete inventory to reduce the carrying value of our inventories to reflect the diminution of value resulting from product obsolescence , damage or other issues affecting marketability by an amount equal to the difference between the cost of the inventory and its estimated market value . the adequacy of this reserve is reviewed each reporting period and adjusted as necessary . we regularly compare inventory quantities on hand against historical usage or forecasts related to specific items in order to evaluate obsolescence and excessive quantities . in assessing historical usage , we also qualitatively assess business trends to evaluate the reasonableness of using historical information as an estimate of future usage . a complete physical count of the inventory is conducted annually . our slow moving and obsolete inventory reserve was $ 302,296 and $ 271,994 at december 31 , 2013 and december 31 , 2012 , respectively . income taxes income taxes are accounted for under the asset and liability method . under this method , deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be recovered or settled . the temporary differences are attributable to differing methods of financial statement and income tax depreciation and reserves for trade accounts receivable and inventories . the likelihood of a material change in the company 's expected realization of deferred tax assets is dependent on , among other factors , future taxable income and settlements with tax authorities . while management believes that its judgments and interpretations regarding income taxes are appropriate , significant differences in actual experience may require future adjustments to our tax assets and liabilities , which could be material . we are also required to assess the realizability of our deferred tax assets . we evaluate positive and negative evidence and use judgments regarding past and future events , including operating results and available tax planning strategies that could be implemented to realize the deferred tax assets . based on this assessment , we determine when it is more likely than not that all or some portion of our deferred tax assets may not be realized , in which case we would be required to apply a valuation allowance to offset our deferred tax assets in an amount equal to future tax benefits that may not be realized . we currently do not apply a valuation allowance to our deferred tax assets . however , if facts and circumstances change in the future , a valuation allowance may be required . significant judgment is required in determining income tax provisions and in evaluating tax positions . we establish additional provisions for income taxes when , despite the belief that tax positions are fully supportable , there remain certain positions that do not meet the minimum probability threshold , which is a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority . in the normal course of business , we and our subsidiaries are examined by various federal and state tax authorities . we regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes . we adjust the income tax provision , the current tax liability and deferred taxes in any period in which facts that give rise to an adjustment become known . the ultimate outcomes of the examinations of our income tax returns could result in increases or decreases to our recorded tax liabilities , which could affect our financial results . 7 trademarks , trade names , royalty rights , and patents - we acquired the rights to the star brite ® trademark and related products for the united states and canada in conjunction with our initial public offering during march 1981 for $ 880,000. through december 31 , 2001 , the cost of these intangible assets was amortized on a straight-line basis over an estimated useful life of 40 years . effective january 1 , 2002 and pursuant to statement of financial accounting standards no . 142 , `` goodwill and other intangible assets `` ( now codified in financial accounting standards board accounting standards codification topic 350 , `` intangibles - goodwill and other `` ) , we determined that these intangible assets have indefinite lives and therefore , we no longer recognize amortization expense . in addition , our 50 % owned joint venture , odorstar technology , llc , owns patents we use in our business . the company amortizes these patents over their remaining life on a straight line basis . story_separator_special_tag on august 6 , 2013 , the company purchased for $ 160,000 royalty rights ( previously owned by an unaffiliated company that owned the patents ultimately acquired by odorstar ) relating to sales of products encompassing odorstar 's patented technology . the company is amortizing the royalty rights over their remaining life on a straight line basis . we review the carrying values of the trademarks and patents periodically for possible impairment . our impairment review is based on a discounted cash flow approach that requires significant judgment with respect to unit volume , revenue and expense growth rates , and the selection of an appropriate discount rate . management uses estimates based on expected trends in making these assumptions . all impairment charges would be recorded for the difference between the carrying value and the net present value of estimated future cash flows , which represents the estimated fair value of the asset . management uses its judgment in assessing whether assets may have become impaired between annual valuations . indicators such as unexpected adverse economic factors , unanticipated technological change , distribution losses , competitive activities and acts by governments and courts may indicate that an asset has become impaired . results of operations : net sales were approximately $ 32,703,000 in 2013 compared to $ 31,039,000 in 2012 , an increase of $ 1,664,000 or 5.4 % . the increase in sales principally results from the resumption by our largest customer of normal buying practices following completion of its inventory reduction program related to products in our sector , which was in effect during 2012 , and increased sales to affiliated companies ( see note 9 to the consolidated financial statements included in this report ) , in addition to increased sales of marine products including star tron ® , private label products , and winterizing products . cost of goods sold and gross profit – cost of goods sold during 2013 increased approximately $ 1,403,000 or 6.9 % , to approximately $ 21,815,000 from approximately $ 20,412,000 in 2012. the increase in cost of goods sold reflects the increase in net sales and an increase in raw material costs and manufacturing overhead expenses . gross profit increased by approximately $ 262,000 or 2.5 % to approximately $ 10,889,000 in 2013 , from approximately $ 10,627,000 during 2012 , as the result of the factors described above . our gross profit percentage ( gross profit as a percentage of net sales ) decreased approximately 0.9 % , from 34.2 % in 2012 to 33.3 % in 2013. this decrease is the result of higher raw material costs , and increased manufacturing overhead expenses . advertising and promotion expense was approximately $ 2,648,000 in 2013 , an increase of approximately $ 230,000 or 9.5 % from approximately $ 2,418,000 in 2012. as a percentage of net sales , advertising and promotion expense increased from 7.8 % in 2012 to 8.1 % in 2013. the increase is primarily a result of increased promotional and marketing expenses , including our increased presence at industry trade shows . the company anticipates in 2014 that advertising and promotion expense will approximate the 2013 amount . selling and administrative expenses increased by approximately $ 803,000 or 15.7 % , from approximately $ 5,126,000 in 2012 to approximately $ 5,929,000 in 2013. the increase is principally due to an increase in stock -based compensation , legal expenses with regard to patent litigation involving odorstar ( see item 3 in this report ) , and increased selling expenses associated with our higher sales . as a percentage of net sales , selling and administrative expenses increased from 16.5 % in 2012 to 18.1 % in 2013. operating income – as a result of the foregoing , operating income decreased to approximately $ 2,312,000 in 2013 , compared to approximately $ 3,083,000 in 2012 , a decrease of $ 771,000 or 25.0 % . interest expense decreased approximately $ 31,000 to $ 67,000 in 2013 , compared to $ 98,000 in 2012. the decrease reflects lower average borrowings under our revolving line of credit , and continued reduction of our long-term debt during 2013. income taxes – we had a tax expense of approximately $ 816,000 in 2013 or 36.2 % of pretax income , compared to approximately $ 1,055,000 in 2012 or 35.3 % of pretax income . the increased rate is almost entirely due to the effect of the increased stock-based compensation . for additional information , see note 8 to the consolidated financial statements included in this report . net income and net income attributable to ocean bio-chem , inc. as a result of the items described above , net income decreased approximately 25.8 % or approximately $ 499,000 to $ 1,435,000 in 2013 from $ 1,934,000 in 2012. net income attributable to ocean bio-chem , inc. ( excluding the loss attributable to non-controlling interests ) was approximately $ 1,461,000 in 2013 , a decrease of approximately $ 501,000 or 25.5 % from approximately $ 1,962,000 in 2012 . 8 story_separator_special_tag margin-left : 0pt ; margin-right : 0pt `` > our sales in the canadian market are subject to currency fluctuations relating to the canadian dollar . we do not engage in currency hedging and address currency risk as a pricing issue . in the year ended december 31 , 2013 , we recorded approximately $ 5,000 in foreign currency translation adjustments ( decreasing shareholders equity by $ 5,000 ) . during the past few years , we have introduced a number of new products . at times , new product introductions have required us to increase our overall inventory and have resulted in lower inventory turnover rates . the effects of reduced inventory turnover have not been material to our overall operations . we believe that all required capital to maintain such increases will continue to be provided by operations and , if necessary , our current revolving line of credit or

liquidity and capital resources : our cash balance was approximately $ 3,072,000 at december 31 , 2013 compared to approximately $ 1,508,000 at december 31 , 2012. at december 31 , 2013 and december 31 , 2012 , we had no borrowings under our revolving line of credit . cash provided by operating activities for the year ended december 31 , 2013 was approximately $ 2,565,000 compared to about $ 2,775,000 for the year ended december 31 , 2012. the decrease in cash provided by operations principally results from the approximately $ 499,000 decrease in net income as compared to 2012 , offset in large part by increases in non-cash items of approximately $ 178,000 and net favorable changes in working capital of approximately $ 112,000. inventories were approximately $ 7,368,000 and $ 9,257,000 at december 31 , 2013 and 2012 , respectively , representing a decrease of approximately $ 1,889,000 or 20.4 % in 2013. the lower levels of 2013 inventories compared to 2013 levels reflect high sales volume late in 2013. net trade accounts receivable aggregated approximately $ 4,414,000 at december 31 , 2013 an increase of approximately $ 1,483,000 or 50.6 % over net trade accounts receivable of $ 2,931,000 at december 31 , 2012. the increase in accounts receivable is due to increased sales in december 2013 as compared to december 2012. cash used in investing activities for the year ended december 31 , 2013 was approximately $ 673,000 compared to $ 771,000 in 2012. during 2013 , purchases of property , plant , and equipment decreased by approximately $ 258,000. in 2013 , we also acquired for $ 160,000 royalty rights relating to sales of products encompassing odorstar 's patented technology .


 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 cash balance was approximately $ 3,072,000 at december 31 , 2013 compared to approximately $ 1,508,000 at december 31 , 2012. at december 31 , 2013 and december 31 , 2012 , we had no borrowings under our revolving line of credit . cash provided by operating activities for the year ended december 31 , 2013 was approximately $ 2,565,000 compared to about $ 2,775,000 for the year ended december 31 , 2012. the decrease in cash provided by operations principally results from the approximately $ 499,000 decrease in net income as compared to 2012 , offset in large part by increases in non-cash items of approximately $ 178,000 and net favorable changes in working capital of approximately $ 112,000. inventories were approximately $ 7,368,000 and $ 9,257,000 at december 31 , 2013 and 2012 , respectively , representing a decrease of approximately $ 1,889,000 or 20.4 % in 2013. the lower levels of 2013 inventories compared to 2013 levels reflect high sales volume late in 2013. net trade accounts receivable aggregated approximately $ 4,414,000 at december 31 , 2013 an increase of approximately $ 1,483,000 or 50.6 % over net trade accounts receivable of $ 2,931,000 at december 31 , 2012. the increase in accounts receivable is due to increased sales in december 2013 as compared to december 2012. cash used in investing activities for the year ended december 31 , 2013 was approximately $ 673,000 compared to $ 771,000 in 2012. during 2013 , purchases of property , plant , and equipment decreased by approximately $ 258,000. in 2013 , we also acquired for $ 160,000 royalty rights relating to sales of products encompassing odorstar 's patented technology .
```    
 Suspicious Activity Report : the adequacy of this allowance is reviewed each reporting period and adjusted as necessary . our allowance for doubtful accounts was approximately $ 93,000 and $ 73,000 at december 31 , 2013 and 2012 , respectively , which was approximately 2.1 % and 2.4 % , respectively , of gross accounts receivable . if the financial condition of our customers were to deteriorate , resulting in an impairment of their ability to make payments , or if unexpected events or significant future changes in trends were to occur , additional allowances may be required , resulting in increased bad debt expense . inventories inventories primarily are composed of raw materials and finished goods and are stated at the lower of cost or market , using the first-in , first-out method . we maintain a reserve for slow moving and obsolete inventory to reduce the carrying value of our inventories to reflect the diminution of value resulting from product obsolescence , damage or other issues affecting marketability by an amount equal to the difference between the cost of the inventory and its estimated market value . the adequacy of this reserve is reviewed each reporting period and adjusted as necessary . we regularly compare inventory quantities on hand against historical usage or forecasts related to specific items in order to evaluate obsolescence and excessive quantities . in assessing historical usage , we also qualitatively assess business trends to evaluate the reasonableness of using historical information as an estimate of future usage . a complete physical count of the inventory is conducted annually . our slow moving and obsolete inventory reserve was $ 302,296 and $ 271,994 at december 31 , 2013 and december 31 , 2012 , respectively . income taxes income taxes are accounted for under the asset and liability method . under this method , deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be recovered or settled . the temporary differences are attributable to differing methods of financial statement and income tax depreciation and reserves for trade accounts receivable and inventories . the likelihood of a material change in the company 's expected realization of deferred tax assets is dependent on , among other factors , future taxable income and settlements with tax authorities . while management believes that its judgments and interpretations regarding income taxes are appropriate , significant differences in actual experience may require future adjustments to our tax assets and liabilities , which could be material . we are also required to assess the realizability of our deferred tax assets . we evaluate positive and negative evidence and use judgments regarding past and future events , including operating results and available tax planning strategies that could be implemented to realize the deferred tax assets . based on this assessment , we determine when it is more likely than not that all or some portion of our deferred tax assets may not be realized , in which case we would be required to apply a valuation allowance to offset our deferred tax assets in an amount equal to future tax benefits that may not be realized . we currently do not apply a valuation allowance to our deferred tax assets . however , if facts and circumstances change in the future , a valuation allowance may be required . significant judgment is required in determining income tax provisions and in evaluating tax positions . we establish additional provisions for income taxes when , despite the belief that tax positions are fully supportable , there remain certain positions that do not meet the minimum probability threshold , which is a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority . in the normal course of business , we and our subsidiaries are examined by various federal and state tax authorities . we regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes . we adjust the income tax provision , the current tax liability and deferred taxes in any period in which facts that give rise to an adjustment become known . the ultimate outcomes of the examinations of our income tax returns could result in increases or decreases to our recorded tax liabilities , which could affect our financial results . 7 trademarks , trade names , royalty rights , and patents - we acquired the rights to the star brite ® trademark and related products for the united states and canada in conjunction with our initial public offering during march 1981 for $ 880,000. through december 31 , 2001 , the cost of these intangible assets was amortized on a straight-line basis over an estimated useful life of 40 years . effective january 1 , 2002 and pursuant to statement of financial accounting standards no . 142 , `` goodwill and other intangible assets `` ( now codified in financial accounting standards board accounting standards codification topic 350 , `` intangibles - goodwill and other `` ) , we determined that these intangible assets have indefinite lives and therefore , we no longer recognize amortization expense . in addition , our 50 % owned joint venture , odorstar technology , llc , owns patents we use in our business . the company amortizes these patents over their remaining life on a straight line basis . story_separator_special_tag on august 6 , 2013 , the company purchased for $ 160,000 royalty rights ( previously owned by an unaffiliated company that owned the patents ultimately acquired by odorstar ) relating to sales of products encompassing odorstar 's patented technology . the company is amortizing the royalty rights over their remaining life on a straight line basis . we review the carrying values of the trademarks and patents periodically for possible impairment . our impairment review is based on a discounted cash flow approach that requires significant judgment with respect to unit volume , revenue and expense growth rates , and the selection of an appropriate discount rate . management uses estimates based on expected trends in making these assumptions . all impairment charges would be recorded for the difference between the carrying value and the net present value of estimated future cash flows , which represents the estimated fair value of the asset . management uses its judgment in assessing whether assets may have become impaired between annual valuations . indicators such as unexpected adverse economic factors , unanticipated technological change , distribution losses , competitive activities and acts by governments and courts may indicate that an asset has become impaired . results of operations : net sales were approximately $ 32,703,000 in 2013 compared to $ 31,039,000 in 2012 , an increase of $ 1,664,000 or 5.4 % . the increase in sales principally results from the resumption by our largest customer of normal buying practices following completion of its inventory reduction program related to products in our sector , which was in effect during 2012 , and increased sales to affiliated companies ( see note 9 to the consolidated financial statements included in this report ) , in addition to increased sales of marine products including star tron ® , private label products , and winterizing products . cost of goods sold and gross profit – cost of goods sold during 2013 increased approximately $ 1,403,000 or 6.9 % , to approximately $ 21,815,000 from approximately $ 20,412,000 in 2012. the increase in cost of goods sold reflects the increase in net sales and an increase in raw material costs and manufacturing overhead expenses . gross profit increased by approximately $ 262,000 or 2.5 % to approximately $ 10,889,000 in 2013 , from approximately $ 10,627,000 during 2012 , as the result of the factors described above . our gross profit percentage ( gross profit as a percentage of net sales ) decreased approximately 0.9 % , from 34.2 % in 2012 to 33.3 % in 2013. this decrease is the result of higher raw material costs , and increased manufacturing overhead expenses . advertising and promotion expense was approximately $ 2,648,000 in 2013 , an increase of approximately $ 230,000 or 9.5 % from approximately $ 2,418,000 in 2012. as a percentage of net sales , advertising and promotion expense increased from 7.8 % in 2012 to 8.1 % in 2013. the increase is primarily a result of increased promotional and marketing expenses , including our increased presence at industry trade shows . the company anticipates in 2014 that advertising and promotion expense will approximate the 2013 amount . selling and administrative expenses increased by approximately $ 803,000 or 15.7 % , from approximately $ 5,126,000 in 2012 to approximately $ 5,929,000 in 2013. the increase is principally due to an increase in stock -based compensation , legal expenses with regard to patent litigation involving odorstar ( see item 3 in this report ) , and increased selling expenses associated with our higher sales . as a percentage of net sales , selling and administrative expenses increased from 16.5 % in 2012 to 18.1 % in 2013. operating income – as a result of the foregoing , operating income decreased to approximately $ 2,312,000 in 2013 , compared to approximately $ 3,083,000 in 2012 , a decrease of $ 771,000 or 25.0 % . interest expense decreased approximately $ 31,000 to $ 67,000 in 2013 , compared to $ 98,000 in 2012. the decrease reflects lower average borrowings under our revolving line of credit , and continued reduction of our long-term debt during 2013. income taxes – we had a tax expense of approximately $ 816,000 in 2013 or 36.2 % of pretax income , compared to approximately $ 1,055,000 in 2012 or 35.3 % of pretax income . the increased rate is almost entirely due to the effect of the increased stock-based compensation . for additional information , see note 8 to the consolidated financial statements included in this report . net income and net income attributable to ocean bio-chem , inc. as a result of the items described above , net income decreased approximately 25.8 % or approximately $ 499,000 to $ 1,435,000 in 2013 from $ 1,934,000 in 2012. net income attributable to ocean bio-chem , inc. ( excluding the loss attributable to non-controlling interests ) was approximately $ 1,461,000 in 2013 , a decrease of approximately $ 501,000 or 25.5 % from approximately $ 1,962,000 in 2012 . 8 story_separator_special_tag margin-left : 0pt ; margin-right : 0pt `` > our sales in the canadian market are subject to currency fluctuations relating to the canadian dollar . we do not engage in currency hedging and address currency risk as a pricing issue . in the year ended december 31 , 2013 , we recorded approximately $ 5,000 in foreign currency translation adjustments ( decreasing shareholders equity by $ 5,000 ) . during the past few years , we have introduced a number of new products . at times , new product introductions have required us to increase our overall inventory and have resulted in lower inventory turnover rates . the effects of reduced inventory turnover have not been material to our overall operations . we believe that all required capital to maintain such increases will continue to be provided by operations and , if necessary , our current revolving line of credit or

