under the terms of the merger agreement , upon completion of the merger , ( i ) each share of then-outstanding common stock of innovate/protect , par value $ 0.0001 per share ( “ innovate/protect common stock ” ) ( other than shares held by us , innovate/protect or any of our and their subsidiaries , which will be cancelled at the completion of the merger ) will be automatically converted into the right to receive the number of shares of our common stock , par value $ 0.01 per share ( “ vringo common stock ” ) equal to the common stock exchange ratio ( as defined below ) and ( ii ) each share of then-outstanding series a convertible preferred stock of innovate/protect , par value $ 0.0001 per share ( total 6,968 shares outstanding ) ( “ innovate/protect series a stock ” and together with the innovate/protect common stock , “ innovate/protect capital stock ” ) ( other than shares held by us , innovate/protect or any of our and their subsidiaries , which will be cancelled at the completion of the merger ) will be automatically converted into the right to receive the same number of shares of vringo series a convertible preferred stock ( “ vringo preferred stock ” ) , which 6,968 shares shall be convertible into an aggregate of 21,026,637 shares of vringo common stock . the vringo preferred stock will have the powers , designations , preferences and other rights as will be set forth in a certificate of designations , preferences and rights of series a convertible preferred stock to be filed by us prior to closing . the common stock exchange ratio initially is 3.0176 , subject to adjustment as set forth in the merger agreement . in addition , at the effective time of the merger , vringo will issue to the holders of innovate/protect capital stock and the holder of innovate/protect 's issued and outstanding warrant ( on a pro rata as-converted basis ) an aggregate of 15,959,838 warrants to purchase an aggregate of 15,959,838 shares of vringo common stock with an exercise price of $ 1.76 per share . the issued and outstanding warrant to purchase innovate/protect common stock shall be exchanged for 250,000 shares of vringo common stock and 850,000 warrants to purchase 850,000 shares of vringo common stock with an exercise price of $ 1.76 per share . in addition , at the effective time of the merger , each outstanding and unexercised option to purchase innovate/protect common stock ( each a “ innovate/protect stock option ” ) , whether vested or unvested will be converted into and become an option to purchase vringo common stock and we will assume such innovate/protect stock option in accordance with the terms of the innovate/protect 2011 equity incentive plan . after the effective time of the merger , ( a ) each innovate/protect stock option assumed by us may be exercised solely for shares of vringo common stock and ( b ) the number of shares of vringo common stock and the exercise price subject to each innovate/protect stock option assumed by us shall be determined by the common stock exchange ratio . immediately following the completion of the merger , the former stockholders of innovate/protect are expected to own approximately 55.41 % of the outstanding common stock of the combined company , and our current stockholders are expected to own approximately 44.59 % of the outstanding common stock of the combined company . on a fully diluted basis , the former stockholders of innovate/protect are expected to own approximately 67.55 % of the outstanding common stock of the combined company , and our current stockholders are expected to own approximately 32.45 % of the outstanding common stock of the combined company . we have expended significant effort and management attention on the proposed transaction . there is no assurance that the transaction contemplated by the merger agreement will be consummated . if the transaction is not consummated for any reason , our business and operations , as well as the market price of our stock and warrants may be adversely affected . we are currently evaluating the effect of the proposed merger on our financial statements . we believe such effect will be material . 15 as of december 31 , 2011 , we had approximately $ 1.2 million in cash and cash equivalents . we believe that current cash levels will be sufficient to support our activity into the fourth quarter of 2012. the continuation of our business , as a going concern is dependent upon the successful consummation of our merger with innovate/protect , or similar merger or acquisition , financing , and upon the further development of our products . there can be no assurance , however , that any such opportunities will materialize . all of our audited consolidated financial statements since inception have contained a “ going concern ” reference by our auditors , expressing substantial doubt about our ability to continue as a going concern . our financial statements were prepared using principles applicable to a going concern , which contemplate the realizations of assets and liquidation of liabilities in the normal course of business for the foreseeable future , and do not include any adjustments to reflect the possible effects on the recoverability and classification of assets , or the amounts and classification of liabilities that may result if we are not able to continue as a going concern . revenue we recognize revenue from monthly subscription from carriers , development projects and content sales when all the conditions for revenue recognition are met : ( i ) persuasive evidence of an arrangement exists , ( ii ) collection of the fee is probable , ( iii ) the sales price is fixed and determinable and ( iv ) delivery has occurred or services have been rendered . story_separator_special_tag during 2010 , we recorded non-operating expense , net in the amount of $ 3.4 million , primarily due to the recording of the bridge notes , issued on december 29 , 2009 , at their residual value at the closing of bridge financing , pursuant to which we recorded additional interest costs for the bridge notes of $ 1.1 million . in addition , as a result of the conversion of the bridge notes we recorded an additional interest expense of approximately $ 1.1 million on account of the beneficial conversion feature from the loan and an additional $ 0.1 million on account of the additional special bridge warrants issued to investors in the bridge financing , in addition to the original 795,200 such warrants issued upon the closing of bridge financing . additional interest expense on account of the loan amortization of $ 0.3 million in addition to the interest expense recorded for the venture loan was also recorded in this period . in connection with the granting of the lead investor warrants we recorded additional interest expense of $ 1.3 million . we also recorded approximately $ 0.1 million of interest expense for bridge notes and approximately $ 0.4 million of interest expense for the venture loan . in addition , we recorded $ 1.0 million income in connection with the adjustment of the fair value of the special bridge warrants and conversion warrants . during 2009 , we recorded non-operating expenses primarily in connection with interest on venture loan . in addition , we recorded a loss of $ 0.18 million on extinguished debt from the modification of the terms of the venture loan in december 2009. from inception through december 31 , 2011 , non-operating expense totaled approximately $ 5.2 million . this amount included : income from interest on deposits of $ 0.2 million , interest expense on venture loan of $ 1.6 million , $ 0.1 million of debt extinguishment expense related to the series b convertible preferred stock , $ 0.2 million of debt extinguishment expenses as a result of the loan modification agreement with svb/gold hill , $ 1.0 million of additional interest expense as a result of the conversion of the convertible loan , $ 0.3 million of warrant amortization and $ 1.1 million of additional interest expense from the bridge notes , $ 1.3 million as additional interest expense for warrants granted to lead investors of the bridge financing , $ 1.0 million income in connection with the settlement of the venture loan , and non-operating income of $ 0.6 million for the adjustment of the fair value of the special bridge warrants and the conversion warrants , and $ 1.3 million expense recorded in connection with amortization of discount on convertible notes . 19 we expect that our non-operating expenses will remain high and volatile , as we continue to fund our operations through additional financing . in particular , non-operating expenses will be affected by the adjustments to fair value of our derivative instruments . fair value of these derivative instruments depends on variety of assumptions , such as estimations regarding triggering of down-round protection and estimated future share price . an estimated increase in the price of our common stock increases the value of the warrants and thus results in a loss on our statement of operations . in addition , high estimated probability of a down round protection , increases the value of the warrants and again results in a loss on our statement of operations . also see note 11 to the accompanying financial statements . taxes on income replace_table_token_9_th during the year ended december 31 , 2011 , we recorded income tax expense in the total amount of $ 90 thousand , which reflects an increase of $ 55 thousand compared to tax expense of $ 35 thousand recorded in the year ended december 31 , 2010. in addition , income tax expense recorded during the year ended december 31 , 2010 , which reflects a decrease of $ 38 thousand compared to tax expense of $ 73 thousand recorded in the year ended december 31 , 2009. taxes on income are mainly due to taxable profits generated by our subsidiary , as a result of the intercompany cost plus agreement between us and the subsidiary , whereby the subsidiary performs development and other services for us and is reimbursed for its expenses plus 8 % . in addition , during the year ended december 31 , 2011 and 2010 , we recorded income tax expense of $ 35 thousand and $ 5 thousand , respectively , in connection with tax withheld at source by our partner in malaysia , which we do not expect to be reclaimed . from inception through december 31 , 2011 , income tax expense totaled $ 119 thousand . we expect tax expense to increase as our business grows and as our subsidiary continues to profit from the cost plus agreement . story_separator_special_tag amount of $ 2.5 million , plus , receipt of proceeds from december 2011 financing in the total amount of $ 0.85 million , on the other . see also notes 8 , 9 and 11 , to the accompanying financial statements . during the year ended december 31 , 2010 , net cash provided by financing activities totaled $ 8.5 million , which relates to the net proceeds received as a result of our ipo , partially offset by repayment of principal on the venture loan , in the total amount of $ 0.8 million . during the year ended december 31 , 2009 , net cash provided by financing activities totaled $ 2.2 million , which relates to issuance of bridge notes , in the total amount of $ 2.98 million , partially offset by repayment of principal on the venture loan , in the total amount of $ 0.8 million . until we reach profitability , we expect we will continue

liquidity and capital resources as of december 31 , 2011 , we had a cash balance of $ 1.2 million and $ 1million in net working capital . the decrease of $ 4.2 million in our cash balance from december 31 , 2010 , was mainly due to cash used by us in our business operations ( $ 5.4million ) and venture loan repayment ( $ 2.1 million ) , offset by the receipt of the funds from the convertible notes ( $ 2.5 million ) and the december 2011 financing ( $ 0.85 million ) . as of december 31 , 2011 , our total deficit in stockholders ' equity was $ 1.2 million , mainly due to continued operating deficits from inception to date , and partially due to the classification of the special bridge warrants and the conversion warrants as derivative liabilities rather than equity securities . during february 2012 , approximately 90 % of the then outstanding special bridge and conversion warrants , previously classified as a long-term liability , were exercised for an aggregate amount of $ 3.6 million . in addition , as part of the transaction , certain holders of the exercised warrants were granted with additional warrants to purchase approximately 2.66 million of our shares . according to a preliminary estimation , the total effect , including the offsetting impact of classification of some of above-mentioned warrants as a long-term liability ( see note 17 to the accompanying financial statements ) , is an increase of approximately $ 4.1 million in our total stockholder 's equity .


 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 as of december 31 , 2011 , we had a cash balance of $ 1.2 million and $ 1million in net working capital . the decrease of $ 4.2 million in our cash balance from december 31 , 2010 , was mainly due to cash used by us in our business operations ( $ 5.4million ) and venture loan repayment ( $ 2.1 million ) , offset by the receipt of the funds from the convertible notes ( $ 2.5 million ) and the december 2011 financing ( $ 0.85 million ) . as of december 31 , 2011 , our total deficit in stockholders ' equity was $ 1.2 million , mainly due to continued operating deficits from inception to date , and partially due to the classification of the special bridge warrants and the conversion warrants as derivative liabilities rather than equity securities . during february 2012 , approximately 90 % of the then outstanding special bridge and conversion warrants , previously classified as a long-term liability , were exercised for an aggregate amount of $ 3.6 million . in addition , as part of the transaction , certain holders of the exercised warrants were granted with additional warrants to purchase approximately 2.66 million of our shares . according to a preliminary estimation , the total effect , including the offsetting impact of classification of some of above-mentioned warrants as a long-term liability ( see note 17 to the accompanying financial statements ) , is an increase of approximately $ 4.1 million in our total stockholder 's equity .
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 Suspicious Activity Report : under the terms of the merger agreement , upon completion of the merger , ( i ) each share of then-outstanding common stock of innovate/protect , par value $ 0.0001 per share ( “ innovate/protect common stock ” ) ( other than shares held by us , innovate/protect or any of our and their subsidiaries , which will be cancelled at the completion of the merger ) will be automatically converted into the right to receive the number of shares of our common stock , par value $ 0.01 per share ( “ vringo common stock ” ) equal to the common stock exchange ratio ( as defined below ) and ( ii ) each share of then-outstanding series a convertible preferred stock of innovate/protect , par value $ 0.0001 per share ( total 6,968 shares outstanding ) ( “ innovate/protect series a stock ” and together with the innovate/protect common stock , “ innovate/protect capital stock ” ) ( other than shares held by us , innovate/protect or any of our and their subsidiaries , which will be cancelled at the completion of the merger ) will be automatically converted into the right to receive the same number of shares of vringo series a convertible preferred stock ( “ vringo preferred stock ” ) , which 6,968 shares shall be convertible into an aggregate of 21,026,637 shares of vringo common stock . the vringo preferred stock will have the powers , designations , preferences and other rights as will be set forth in a certificate of designations , preferences and rights of series a convertible preferred stock to be filed by us prior to closing . the common stock exchange ratio initially is 3.0176 , subject to adjustment as set forth in the merger agreement . in addition , at the effective time of the merger , vringo will issue to the holders of innovate/protect capital stock and the holder of innovate/protect 's issued and outstanding warrant ( on a pro rata as-converted basis ) an aggregate of 15,959,838 warrants to purchase an aggregate of 15,959,838 shares of vringo common stock with an exercise price of $ 1.76 per share . the issued and outstanding warrant to purchase innovate/protect common stock shall be exchanged for 250,000 shares of vringo common stock and 850,000 warrants to purchase 850,000 shares of vringo common stock with an exercise price of $ 1.76 per share . in addition , at the effective time of the merger , each outstanding and unexercised option to purchase innovate/protect common stock ( each a “ innovate/protect stock option ” ) , whether vested or unvested will be converted into and become an option to purchase vringo common stock and we will assume such innovate/protect stock option in accordance with the terms of the innovate/protect 2011 equity incentive plan . after the effective time of the merger , ( a ) each innovate/protect stock option assumed by us may be exercised solely for shares of vringo common stock and ( b ) the number of shares of vringo common stock and the exercise price subject to each innovate/protect stock option assumed by us shall be determined by the common stock exchange ratio . immediately following the completion of the merger , the former stockholders of innovate/protect are expected to own approximately 55.41 % of the outstanding common stock of the combined company , and our current stockholders are expected to own approximately 44.59 % of the outstanding common stock of the combined company . on a fully diluted basis , the former stockholders of innovate/protect are expected to own approximately 67.55 % of the outstanding common stock of the combined company , and our current stockholders are expected to own approximately 32.45 % of the outstanding common stock of the combined company . we have expended significant effort and management attention on the proposed transaction . there is no assurance that the transaction contemplated by the merger agreement will be consummated . if the transaction is not consummated for any reason , our business and operations , as well as the market price of our stock and warrants may be adversely affected . we are currently evaluating the effect of the proposed merger on our financial statements . we believe such effect will be material . 15 as of december 31 , 2011 , we had approximately $ 1.2 million in cash and cash equivalents . we believe that current cash levels will be sufficient to support our activity into the fourth quarter of 2012. the continuation of our business , as a going concern is dependent upon the successful consummation of our merger with innovate/protect , or similar merger or acquisition , financing , and upon the further development of our products . there can be no assurance , however , that any such opportunities will materialize . all of our audited consolidated financial statements since inception have contained a “ going concern ” reference by our auditors , expressing substantial doubt about our ability to continue as a going concern . our financial statements were prepared using principles applicable to a going concern , which contemplate the realizations of assets and liquidation of liabilities in the normal course of business for the foreseeable future , and do not include any adjustments to reflect the possible effects on the recoverability and classification of assets , or the amounts and classification of liabilities that may result if we are not able to continue as a going concern . revenue we recognize revenue from monthly subscription from carriers , development projects and content sales when all the conditions for revenue recognition are met : ( i ) persuasive evidence of an arrangement exists , ( ii ) collection of the fee is probable , ( iii ) the sales price is fixed and determinable and ( iv ) delivery has occurred or services have been rendered . story_separator_special_tag during 2010 , we recorded non-operating expense , net in the amount of $ 3.4 million , primarily due to the recording of the bridge notes , issued on december 29 , 2009 , at their residual value at the closing of bridge financing , pursuant to which we recorded additional interest costs for the bridge notes of $ 1.1 million . in addition , as a result of the conversion of the bridge notes we recorded an additional interest expense of approximately $ 1.1 million on account of the beneficial conversion feature from the loan and an additional $ 0.1 million on account of the additional special bridge warrants issued to investors in the bridge financing , in addition to the original 795,200 such warrants issued upon the closing of bridge financing . additional interest expense on account of the loan amortization of $ 0.3 million in addition to the interest expense recorded for the venture loan was also recorded in this period . in connection with the granting of the lead investor warrants we recorded additional interest expense of $ 1.3 million . we also recorded approximately $ 0.1 million of interest expense for bridge notes and approximately $ 0.4 million of interest expense for the venture loan . in addition , we recorded $ 1.0 million income in connection with the adjustment of the fair value of the special bridge warrants and conversion warrants . during 2009 , we recorded non-operating expenses primarily in connection with interest on venture loan . in addition , we recorded a loss of $ 0.18 million on extinguished debt from the modification of the terms of the venture loan in december 2009. from inception through december 31 , 2011 , non-operating expense totaled approximately $ 5.2 million . this amount included : income from interest on deposits of $ 0.2 million , interest expense on venture loan of $ 1.6 million , $ 0.1 million of debt extinguishment expense related to the series b convertible preferred stock , $ 0.2 million of debt extinguishment expenses as a result of the loan modification agreement with svb/gold hill , $ 1.0 million of additional interest expense as a result of the conversion of the convertible loan , $ 0.3 million of warrant amortization and $ 1.1 million of additional interest expense from the bridge notes , $ 1.3 million as additional interest expense for warrants granted to lead investors of the bridge financing , $ 1.0 million income in connection with the settlement of the venture loan , and non-operating income of $ 0.6 million for the adjustment of the fair value of the special bridge warrants and the conversion warrants , and $ 1.3 million expense recorded in connection with amortization of discount on convertible notes . 19 we expect that our non-operating expenses will remain high and volatile , as we continue to fund our operations through additional financing . in particular , non-operating expenses will be affected by the adjustments to fair value of our derivative instruments . fair value of these derivative instruments depends on variety of assumptions , such as estimations regarding triggering of down-round protection and estimated future share price . an estimated increase in the price of our common stock increases the value of the warrants and thus results in a loss on our statement of operations . in addition , high estimated probability of a down round protection , increases the value of the warrants and again results in a loss on our statement of operations . also see note 11 to the accompanying financial statements . taxes on income replace_table_token_9_th during the year ended december 31 , 2011 , we recorded income tax expense in the total amount of $ 90 thousand , which reflects an increase of $ 55 thousand compared to tax expense of $ 35 thousand recorded in the year ended december 31 , 2010. in addition , income tax expense recorded during the year ended december 31 , 2010 , which reflects a decrease of $ 38 thousand compared to tax expense of $ 73 thousand recorded in the year ended december 31 , 2009. taxes on income are mainly due to taxable profits generated by our subsidiary , as a result of the intercompany cost plus agreement between us and the subsidiary , whereby the subsidiary performs development and other services for us and is reimbursed for its expenses plus 8 % . in addition , during the year ended december 31 , 2011 and 2010 , we recorded income tax expense of $ 35 thousand and $ 5 thousand , respectively , in connection with tax withheld at source by our partner in malaysia , which we do not expect to be reclaimed . from inception through december 31 , 2011 , income tax expense totaled $ 119 thousand . we expect tax expense to increase as our business grows and as our subsidiary continues to profit from the cost plus agreement . story_separator_special_tag amount of $ 2.5 million , plus , receipt of proceeds from december 2011 financing in the total amount of $ 0.85 million , on the other . see also notes 8 , 9 and 11 , to the accompanying financial statements . during the year ended december 31 , 2010 , net cash provided by financing activities totaled $ 8.5 million , which relates to the net proceeds received as a result of our ipo , partially offset by repayment of principal on the venture loan , in the total amount of $ 0.8 million . during the year ended december 31 , 2009 , net cash provided by financing activities totaled $ 2.2 million , which relates to issuance of bridge notes , in the total amount of $ 2.98 million , partially offset by repayment of principal on the venture loan , in the total amount of $ 0.8 million . until we reach profitability , we expect we will continue

