in december 2012 , we received a royalty statement from this entity and recorded $ 1.1 million of income on a separate line of the consolidated statements of comprehensive income entitled “ income from patent arrangement . ” based on information provided to us by the third party , we may receive additional income from this arrangement in the first quarter of 2013. we estimate that income could be in the range of $ 400,000 to $ 800,000 depending on a variety of factors . beyond the first quarter of 2013 , we are unable to predict how much more income we might receive from this arrangement , if any , because we do not know whether any patent monetization efforts by the third party will be successful . iv ) in january 2012 , our board of directors approved the shutdown of our dsl service assurance hardware product line which was previously a component of our dsl service assurance segment . during 2012 , we completed the shutdown and determined that we will no longer have any significant continuing involvement with or cash flows from this product line . accordingly , the results of our dsl service assurance hardware product line have been reported as discontinued operations . income ( loss ) from discontinued operations attributable to the dsl service assurance hardware product line was ( in thousands ) : replace_table_token_5_th 24 summary of financial results for the year ended december 31 , 2012 , we had net income of $ 72.3 million , or $ 3.28 per share . for the year ended december 31 , 2011 , we had net income of $ 2.6 million , or $ 0.12 per share . for the year ended december 31 , 2010 , we had net income of $ 180,000 , or $ 0.01 per share . 2012 compared to 2011 . the increase in net income in 2012 compared to 2011 was primarily due to significant patent related income we received in 2012. excluding patent related income , operating income increased by $ 1.0 million from $ 3.3 million in 2011 to $ 4.3 million in 2012. the $ 1.0 million increase was primarily due to : i ) increased revenue and profitability in our biometrics and imaging business ; and ii ) lower general and administrative expenses , which were partially offset by higher losses in our dsl service assurance software business . net income also benefited from the shutdown of our discontinued dsl service assurance hardware business which produced a net gain of $ 0.4 million in 2012 as compared to a loss of $ 0.8 million in 2011 . 2011 compared to 2010 . the increase in net income in 2011 compared to 2010 was primarily attributable to : i ) significantly higher revenue and profitability in our biometrics and imaging business ; and ii ) lower general and administrative expenses . increased profitability related to these sources was partially offset by : i ) higher losses in our dsl service assurance software business ; ii ) higher losses in our discontinued dsl service assurance hardware business ; and iii ) a decline in other income . software licenses software licenses were previously included as a component of a revenue category we called “ product sales . ” software licenses consist of revenue from the sale of software licenses for biometrics and imaging , and dsl service assurance applications . software license revenue increased 9 % from $ 10.3 million in 2011 to $ 11.3 million in 2012. as a percentage of total revenue , software license revenue increased from 53 % in 2011 to 57 % in 2012. the dollar increase in software license revenue was primarily due to a $ 1.7 million increase in revenue from the sale of biometrics and imaging software , which was offset by $ 0.7 million decrease in revenue from the sale of dsl service assurance software . the $ 1.7 million increase in revenue from the sale of biometrics and imaging software licenses was primarily due to increased sales of biometrics software products . the increase in biometrics product sales was primarily due to the following factors : i ) license purchases by legacy and new system integrator customers for large projects in which they were engaged ; ii ) a large direct sale to a u.s. government agency ; iii ) the addition of new sales representatives ; and iv ) the expanded use of non-employee sales agents outside the united states . we also believe that our license sales may be benefitting from recent consolidation in the biometrics industry that has left relatively few u.s. suppliers of biometrics software . we believe the u.s. government and its agencies would prefer to procure biometrics software from u.s. based and owned suppliers , if feasible , because of national security concerns . the $ 0.7 million decrease in dsl service assurance software license revenue was primarily due to lower license revenue from several telecom suppliers that use our core dr. dsl technology in their products , and , to a lesser degree , lower sales of our ldp software product . software license revenue decreased 1 % from $ 10.4 million in 2010 to $ 10.3 million in 2011. as a percentage of total revenue , software license revenue decreased from 61 % in 2010 to 53 % in 2011. the dollar decrease in software license revenue was primarily due to a $ 1.0 million decrease in revenue from the sale of dsl service assurance software , which was partially offset by a $ 0.9 million increase in revenue from the sale of biometrics and imaging software . the $ 1.0 million decrease in dsl service assurance software license revenue was primarily due to lower sales of our ldp software . story_separator_special_tag the transaction closed on september 21 , 2012 and resulted in a gain of $ 15.2 million . the majority of the remaining patents in our patent portfolio pertain to our biometrics and imaging and dsl service assurance software product lines . at the current time , we do not intend to pursue patent monetization alternatives for these patents . 29 income from patent arrangement in december 2010 , we entered into an arrangement with an unaffiliated third party under which we assigned certain patents in return for royalties on proceeds from patent monetization efforts by the third party . in december 2012 , we received a royalty statement from this entity and recorded $ 1.1 million of income . based on information provided to us by the third party , we may receive additional income from this arrangement in the first quarter of 2013. we estimate that income could be in the range of $ 400,000 to $ 800,000 depending on a variety of factors . beyond the first quarter of 2013 , we are unable to predict how much more income we might receive from this arrangement , if any , because we do not know whether any patent monetization efforts by the third party will be successful . other income we recorded $ 85,000 of other income in the year ended december 31 , 2012. this amount represented realized gains on the sale of high yield bond investments . we recorded $ 425,000 of other income in the year ended december 31 , 2010. this amount represents proceeds from a legal settlement with a former customer . interest income interest income increased 175 % , or $ 144,000 , from $ 83,000 in 2011 to $ 227,000 in 2012. the dollar increase was primarily due : i ) interest income from high yield bonds ; and ii ) higher cash balances as a result of the patent sales in 2012. interest income decreased 8 % , or $ 7,000 , from $ 90,000 in 2010 to $ 83,000 in 2011. the dollar decrease in interest income was primarily due to a decline in money market interest rates during 2011. income taxes we are subject to income taxes in the united states and we use estimates in determining our provisions for income taxes . we account for income taxes using the asset and liability method for accounting and reporting income taxes . deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates . we made a provision for income taxes related to continuing operations in the year ended 2012 of $ 20.2 million . we made no provision for income taxes in the years ended 2011 and 2010 , except for $ 2,000 of state excise taxes in each year . gains on the sale of patent assets were primarily responsible for generating $ 92.1 million of pre-tax income from continuing operations in the year ended december 31 , 2012. we used a significant portion of our available deferred tax assets to reduce income taxes on pre-tax income . a substantial portion of the deferred tax assets we utilized comprised cumulative deductions for stock options in excess of book expense . under income tax accounting rules , the portion of tax benefits attributable to such deductions must be recorded as an adjustment to equity versus a reduction of income tax expense . in the year ended december 31 , 2012 , the tax benefits from such stock-based awards were $ 14.4 million , which we recorded as an equity adjustment to additional paid-in capital . total income tax expense for the year ended december 31 , 2012 was $ 20.4 million , including $ 20.2 million that was recorded in continuing operations and $ 0.2 million that was recorded in discontinued operations . the company 's actual tax liability for 2012 was $ 7.8 million as taxes that are currently payable were reduced by the $ 14.4 million equity adjustment mentioned above . 30 income tax expense in 2012 was reduced by a $ 1.8 million reversal of the valuation allowance on our remaining deferred tax assets at december 31 , 2012. we reversed the valuation allowance because based on all the available evidence , we believed that it is more likely than not that our deferred tax assets will be realizable . in reaching this determination , we evaluated : i ) our most recent years operating results ; ii ) our future financial plans ; and iii ) the nature of the components comprising deferred tax assets at december 31 , 2012. we will continue to assess the level of valuation allowance required in future periods . should evidence regarding the realizability of tax assets change at a future point in time , the valuation allowance will be adjusted accordingly . income ( loss ) from discontinued operation , net of income taxes . income ( loss ) from discontinued operations , net of income taxes reflects operating results from our dsl service assurance hardware product line that we shutdown during 2012. liquidity and capital resources in recent years , we have financed the company with our cash balances , cash generated from operations , and cash received from the sale of patent assets . equity financing has not been a meaningful source of financing for us in recent years . cash flows from operating , investing and financing activities are described below . story_separator_special_tag roman ; font-size : 10pt `` > year ended december 31 , 2010. cash used by investing activities of $ 0.3 million in 2010 was primarily the result of $ 0.1 million of capital expenditures , $ 0.1 million used to purchase other assets , and $ 0.1 million of expenses related to the sale of our dsl silicon intellectual property product line . we have no material commitments for capital expenditures . cash flow

cash flow from operating activities in the years ended december 31 , 2011 and 2010 , our operating activities provided net cash of $ 6.8 million and $ 0.7 million , respectively . in the year ended december 31 , 2012 , our operating activities used net cash of $ 15.3 million . a discussion of cash flow from operations for each of the last three years follows : year ended december 31 , 2012. cash used by operating activities of $ 15.3 million in 2012 was primarily the result of : i ) cash provided by on-going operations of $ 6.7 million ; less ii ) income tax items on patent sales of $ 22.0 million . a discussion of each of these factors follows : ● cash provided by on-going operations of $ 6.7 million was the result of : i ) operating income before patent related income of $ 4.3 million ; ii ) income from discontinued operations of $ 0.4 million ; iii ) interest income and other income of $ 0.3 million ; iv ) adjustments for non-cash items related to depreciation and stock-based compensation of $ 0.5 million and $ 0.3 million , respectively ; and v ) changes in working capital components that increased cash by $ 0.9 million .


 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.
     ```cash flow from operating activities in the years ended december 31 , 2011 and 2010 , our operating activities provided net cash of $ 6.8 million and $ 0.7 million , respectively . in the year ended december 31 , 2012 , our operating activities used net cash of $ 15.3 million . a discussion of cash flow from operations for each of the last three years follows : year ended december 31 , 2012. cash used by operating activities of $ 15.3 million in 2012 was primarily the result of : i ) cash provided by on-going operations of $ 6.7 million ; less ii ) income tax items on patent sales of $ 22.0 million . a discussion of each of these factors follows : ● cash provided by on-going operations of $ 6.7 million was the result of : i ) operating income before patent related income of $ 4.3 million ; ii ) income from discontinued operations of $ 0.4 million ; iii ) interest income and other income of $ 0.3 million ; iv ) adjustments for non-cash items related to depreciation and stock-based compensation of $ 0.5 million and $ 0.3 million , respectively ; and v ) changes in working capital components that increased cash by $ 0.9 million .
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 Suspicious Activity Report : in december 2012 , we received a royalty statement from this entity and recorded $ 1.1 million of income on a separate line of the consolidated statements of comprehensive income entitled “ income from patent arrangement . ” based on information provided to us by the third party , we may receive additional income from this arrangement in the first quarter of 2013. we estimate that income could be in the range of $ 400,000 to $ 800,000 depending on a variety of factors . beyond the first quarter of 2013 , we are unable to predict how much more income we might receive from this arrangement , if any , because we do not know whether any patent monetization efforts by the third party will be successful . iv ) in january 2012 , our board of directors approved the shutdown of our dsl service assurance hardware product line which was previously a component of our dsl service assurance segment . during 2012 , we completed the shutdown and determined that we will no longer have any significant continuing involvement with or cash flows from this product line . accordingly , the results of our dsl service assurance hardware product line have been reported as discontinued operations . income ( loss ) from discontinued operations attributable to the dsl service assurance hardware product line was ( in thousands ) : replace_table_token_5_th 24 summary of financial results for the year ended december 31 , 2012 , we had net income of $ 72.3 million , or $ 3.28 per share . for the year ended december 31 , 2011 , we had net income of $ 2.6 million , or $ 0.12 per share . for the year ended december 31 , 2010 , we had net income of $ 180,000 , or $ 0.01 per share . 2012 compared to 2011 . the increase in net income in 2012 compared to 2011 was primarily due to significant patent related income we received in 2012. excluding patent related income , operating income increased by $ 1.0 million from $ 3.3 million in 2011 to $ 4.3 million in 2012. the $ 1.0 million increase was primarily due to : i ) increased revenue and profitability in our biometrics and imaging business ; and ii ) lower general and administrative expenses , which were partially offset by higher losses in our dsl service assurance software business . net income also benefited from the shutdown of our discontinued dsl service assurance hardware business which produced a net gain of $ 0.4 million in 2012 as compared to a loss of $ 0.8 million in 2011 . 2011 compared to 2010 . the increase in net income in 2011 compared to 2010 was primarily attributable to : i ) significantly higher revenue and profitability in our biometrics and imaging business ; and ii ) lower general and administrative expenses . increased profitability related to these sources was partially offset by : i ) higher losses in our dsl service assurance software business ; ii ) higher losses in our discontinued dsl service assurance hardware business ; and iii ) a decline in other income . software licenses software licenses were previously included as a component of a revenue category we called “ product sales . ” software licenses consist of revenue from the sale of software licenses for biometrics and imaging , and dsl service assurance applications . software license revenue increased 9 % from $ 10.3 million in 2011 to $ 11.3 million in 2012. as a percentage of total revenue , software license revenue increased from 53 % in 2011 to 57 % in 2012. the dollar increase in software license revenue was primarily due to a $ 1.7 million increase in revenue from the sale of biometrics and imaging software , which was offset by $ 0.7 million decrease in revenue from the sale of dsl service assurance software . the $ 1.7 million increase in revenue from the sale of biometrics and imaging software licenses was primarily due to increased sales of biometrics software products . the increase in biometrics product sales was primarily due to the following factors : i ) license purchases by legacy and new system integrator customers for large projects in which they were engaged ; ii ) a large direct sale to a u.s. government agency ; iii ) the addition of new sales representatives ; and iv ) the expanded use of non-employee sales agents outside the united states . we also believe that our license sales may be benefitting from recent consolidation in the biometrics industry that has left relatively few u.s. suppliers of biometrics software . we believe the u.s. government and its agencies would prefer to procure biometrics software from u.s. based and owned suppliers , if feasible , because of national security concerns . the $ 0.7 million decrease in dsl service assurance software license revenue was primarily due to lower license revenue from several telecom suppliers that use our core dr. dsl technology in their products , and , to a lesser degree , lower sales of our ldp software product . software license revenue decreased 1 % from $ 10.4 million in 2010 to $ 10.3 million in 2011. as a percentage of total revenue , software license revenue decreased from 61 % in 2010 to 53 % in 2011. the dollar decrease in software license revenue was primarily due to a $ 1.0 million decrease in revenue from the sale of dsl service assurance software , which was partially offset by a $ 0.9 million increase in revenue from the sale of biometrics and imaging software . the $ 1.0 million decrease in dsl service assurance software license revenue was primarily due to lower sales of our ldp software . story_separator_special_tag the transaction closed on september 21 , 2012 and resulted in a gain of $ 15.2 million . the majority of the remaining patents in our patent portfolio pertain to our biometrics and imaging and dsl service assurance software product lines . at the current time , we do not intend to pursue patent monetization alternatives for these patents . 29 income from patent arrangement in december 2010 , we entered into an arrangement with an unaffiliated third party under which we assigned certain patents in return for royalties on proceeds from patent monetization efforts by the third party . in december 2012 , we received a royalty statement from this entity and recorded $ 1.1 million of income . based on information provided to us by the third party , we may receive additional income from this arrangement in the first quarter of 2013. we estimate that income could be in the range of $ 400,000 to $ 800,000 depending on a variety of factors . beyond the first quarter of 2013 , we are unable to predict how much more income we might receive from this arrangement , if any , because we do not know whether any patent monetization efforts by the third party will be successful . other income we recorded $ 85,000 of other income in the year ended december 31 , 2012. this amount represented realized gains on the sale of high yield bond investments . we recorded $ 425,000 of other income in the year ended december 31 , 2010. this amount represents proceeds from a legal settlement with a former customer . interest income interest income increased 175 % , or $ 144,000 , from $ 83,000 in 2011 to $ 227,000 in 2012. the dollar increase was primarily due : i ) interest income from high yield bonds ; and ii ) higher cash balances as a result of the patent sales in 2012. interest income decreased 8 % , or $ 7,000 , from $ 90,000 in 2010 to $ 83,000 in 2011. the dollar decrease in interest income was primarily due to a decline in money market interest rates during 2011. income taxes we are subject to income taxes in the united states and we use estimates in determining our provisions for income taxes . we account for income taxes using the asset and liability method for accounting and reporting income taxes . deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates . we made a provision for income taxes related to continuing operations in the year ended 2012 of $ 20.2 million . we made no provision for income taxes in the years ended 2011 and 2010 , except for $ 2,000 of state excise taxes in each year . gains on the sale of patent assets were primarily responsible for generating $ 92.1 million of pre-tax income from continuing operations in the year ended december 31 , 2012. we used a significant portion of our available deferred tax assets to reduce income taxes on pre-tax income . a substantial portion of the deferred tax assets we utilized comprised cumulative deductions for stock options in excess of book expense . under income tax accounting rules , the portion of tax benefits attributable to such deductions must be recorded as an adjustment to equity versus a reduction of income tax expense . in the year ended december 31 , 2012 , the tax benefits from such stock-based awards were $ 14.4 million , which we recorded as an equity adjustment to additional paid-in capital . total income tax expense for the year ended december 31 , 2012 was $ 20.4 million , including $ 20.2 million that was recorded in continuing operations and $ 0.2 million that was recorded in discontinued operations . the company 's actual tax liability for 2012 was $ 7.8 million as taxes that are currently payable were reduced by the $ 14.4 million equity adjustment mentioned above . 30 income tax expense in 2012 was reduced by a $ 1.8 million reversal of the valuation allowance on our remaining deferred tax assets at december 31 , 2012. we reversed the valuation allowance because based on all the available evidence , we believed that it is more likely than not that our deferred tax assets will be realizable . in reaching this determination , we evaluated : i ) our most recent years operating results ; ii ) our future financial plans ; and iii ) the nature of the components comprising deferred tax assets at december 31 , 2012. we will continue to assess the level of valuation allowance required in future periods . should evidence regarding the realizability of tax assets change at a future point in time , the valuation allowance will be adjusted accordingly . income ( loss ) from discontinued operation , net of income taxes . income ( loss ) from discontinued operations , net of income taxes reflects operating results from our dsl service assurance hardware product line that we shutdown during 2012. liquidity and capital resources in recent years , we have financed the company with our cash balances , cash generated from operations , and cash received from the sale of patent assets . equity financing has not been a meaningful source of financing for us in recent years . cash flows from operating , investing and financing activities are described below . story_separator_special_tag roman ; font-size : 10pt `` > year ended december 31 , 2010. cash used by investing activities of $ 0.3 million in 2010 was primarily the result of $ 0.1 million of capital expenditures , $ 0.1 million used to purchase other assets , and $ 0.1 million of expenses related to the sale of our dsl silicon intellectual property product line . we have no material commitments for capital expenditures . cash flow

