our strategy also includes the possible acquisition of additional intellectual property assets in the future to develop , commercialize , license or otherwise monetize such intellectual property . in addition , we may enter into strategic relationships with third parties to develop , commercialize , license or otherwise monetize their intellectual property . the form of such relationships may differ depending upon the opportunity and may include , among other things , a strategic investment in such third party , the provision of financing to such third party or the formation of a joint venture with such third party for the purpose of monetizing its intellectual property assets . in september 2011 , we initiated patent litigation against 16 data networking equipment manufacturers in the united states district court for the eastern district of texas , tyler division , for infringement of our remote power patent . named as defendants in the lawsuit , excluding related parties , were alcatel-lucent usa , inc. , allied telesis , inc. , avaya inc. , axis 24 communications inc. , dell , inc. , garrettcom , inc. , hewlett-packard company , huawei technologies usa , juniper networks , inx . , motorola solutions , inc. , nec corporation , polycom inc. , samsung electronics co. , ltd. , shoretel , inc. , sony electronics , inc. , and transitions networks , inc. network-1 seeks monetary damages based upon reasonable royalties . several of the defendants ( samsung , polycom , alcatel , shortel and allied telesis ) have filed motions to dismiss the complaint for failure to state a cause of action . network-1 has filed opposition in response to the motions to dismiss . all such motions are pending . in july 2010 , we announced that we had agreed to settle our patent litigation pending in the united states district court for the eastern district of texas , tyler division , against adtran , inc , cisco systems , inc. and cisco-linksys , llc , ( collectively , “ cisco ” ) , enterasys networks , inc. , extreme networks , inc. , foundry networks , inc. , and 3com corporation , inc. as part of the settlement , adtran , cisco , enterasys , extreme networks and foundry networks each entered into a settlement agreement with us and entered into non-exclusive licenses for our remote power patent ( the “ licensed defendants ” ) . under the terms of the licenses , the licensed defendants paid us aggregate upfront payments of approximately $ 32 million and also agreed to license the remote power patent for its full term , which expires in march 2020. in accordance with our settlement and license agreement , dated may 25 , 2011 , which expanded upon the july 2010 agreement , cisco is obliged to pay us royalties ( which began in the first quarter of 2011 ) based on its sales of poe products up to maximum royalty payments per year of $ 8 million through 2015 and $ 9 million per year thereafter for the remaining term of the patent . the royalty payments are subject to certain conditions including the continued validity of our remote power patent , and the actual royalty amounts received may be less than the caps stated above , as was the case in 2011. due to our annual royalty rate structure with cisco which includes declining rates as the volume of poe product sales increase during the year , annual royalties from cisco are anticipated to be highest in the first quarter and decline for each of the remaining quarters of the year . under the terms of the agreement , if we grant other licenses with lower royalty rates to third parties ( as defined in the agreement ) , cisco shall be entitled to the benefit of the lower royalty rates provided it agrees to the material terms of such other license . under the terms of the agreement , we have certain obligations to cisco and if we materially breach such terms , cisco will be entitled to stop paying royalties to us . this would have a material adverse effect on our business , financial condition and results of operations . for more details about the july 2010 settlement , please see our current reports on form 8-k filed with the securities and exchange commission on july 20 , 2010 and june 1 , 2011. for the years ended 2011 and 2010 , our royalty revenue from cisco constituted 87 % and 79 % of our revenue , respectively . due to our annual royalty rate structure with cisco which includes declining rates as the volume of poe product sales increase during the year , royalties from cisco are anticipated to be highest in the first quarter of the year and decline for each of the remaining quarters of the year . at december 31 , 2011 , we had net operating loss carryforwards ( nols ) totaling approximately $ 27,000,000 expiring through 2029 , with a future tax benefit of approximately $ 9,450,000. during 2011 , as a result of the company 's recent results and projected future operating results , management determined that a portion of the nol was more likely than not to be utilized resulting in the recording of a one-time , non-cash tax benefit . accordingly , at december 31 , 2011 , $ 6,903,000 has been recorded as a deferred tax benefit on the company 's balance sheet and $ 6,903,000 ( or $ 0.22 per share on a diluted basis ) has also been recorded as income for the year ended december 31 , 2011. to the extent that we earn income in the future , we will report income tax expense and such expenseattributable to 25 federal income taxes will reduce the recorded income tax benefit asset reflected on the balance sheet . story_separator_special_tag management will continue to evaluate the recoverability of the nol and adjust the deferred tax asset appropriately . utilization of nol credit carryforwards can be subject to a substantial annual limitation due to ownership change limitations that could occur in the future , as required by section 382 of the internal revenue code of 1986 , as amended , as well as similar state provisions . results of operations : year ended december 31 , 2011 compared to year ended december 31 , 2010 revenue . we had revenue of $ 7,398,000 for the year ended december 31 , 2011 ( “ 2011 ” ) as compared to revenue of $ 33,037,000 for the year ended december 31 , 2010 ( “ 2010 ” ) . all such revenue was related to the receipt of royalties pursuant to license agreements for our remote power patent . the revenue for 2010 includes $ 32,320,000 received from the settlement of our patent litigation in july 2010 ( see note j [ 2 ] to our financial statements included in this annual report ) . excluding the july 2010 settlement payments of $ 32,320,000 , royalty revenue was $ 717,000 for 2010 as compared to royalty revenue of $ 7,398,000 for 2011. cost of revenue . we had a cost of revenue of $ 2,160,000 and $ 9,595,000 for 2011 and 2010 , respectively . included in the cost of revenue for 2010 were significant costs associated with the settlement of our patent litigation in july 2010 ( see note j [ 2 ] to our financial statements included in this annual report ) including contingent legal fees of $ 7,471,000 payable to our patent litigation counsel ( see note e [ 2 ] to our financial statements included in this annual report ) and $ 1,651,000 of bonus compensation payable to our chairman and chief executive officer pursuant to his employment agreement ( see note i to our financial statements included in this annual report ) . included in the cost of revenue for 2011 were contingent legal fees of $ 1,736,000 incurred to our patent litigation counsel and $ 370,000 of bonus compensation payable to our chairman and chief executive officer pursuant to his employment agreement . gross profit . the gross profit for 2011 was $ 5,292,000 or 71.5 % of our revenue as compared to $ 23,442,000 or 70.9 % of our revenue . the decrease in gross profit of $ 18,150,000 for 2011 was largely attributable to our patent litigation settlement in july 2010. general and administrative expenses . general and administrative expenses include overhead expenses , and finance , accounting , legal and other professional services incurred by us . general and administrative expenses decreased by $ 1,315,000 from $ 3,771,000 for 2010 to $ 2,456,000 for 2011 , due primarily to decreased legal fees and expenses as compared to such fees and expenses associated with our july 2010 patent litigation settlement ( see note e [ 2 ] to our financial statements included in this annual report ) . general and administrative expenses for 2011 include a payment of $ 250,000 to our chairman and chief executive officer to reduce certain royalty bonus compensation ( see note h [ 2 ] to our financial statements included in this annual report ) . we also incurred additional patent expenses of $ 1,000,000 in 2011 relating to net royalties due with respect to our purchase of the remote power patent ( see note c to our financial statements included in this annual report ) . interest income . interest income for 2011 was $ 48,000 as compared to interest income of $ 41,000 for 2010 . 26 operating income . we had an operating income of $ 1,533,000 for 2011 compared with operating income of $ 19,269,000 for 2010 , which we achieved primarily as a result of our patent litigation settlement in july 2010 ( see note j [ 2 ] to our financial statements included in this annual report ) . income taxes ( benefit ) . state and local income taxes ( benefit ) of ( $ 9,000 ) and $ 74,000 were recorded for 2011 and 2010 , respectively . deferred tax benefit/nols . at december 31 , 2011 , we had net operating loss carryforwards ( nols ) totaling approximately $ 27,000,000 expiring through 2029 , with a future tax benefit of approximately $ 9,450,000. during 2011 , as a result of the company 's recent results and projected future operating results , management determined that a portion of the nol was more likely than not to be utilized resulting in the recording of a one-time , non-cash tax benefit . accordingly , at december 31 , 2011 , $ 6,903,000 has been recorded as a deferred tax benefit on the company 's balance sheet and $ 6,903,000 ( or $ 0.22 per share on a diluted basis ) has also been recorded as income for the year ended december 31 , 2011. to the extent we earn income in the future , we will report income tax expense and such expense attributable to federal income taxes will reduce the recorded income tax benefit asset reflected on the balance sheet . management will continue to evaluate the recoverability of the nol and adjust the deferred tax asset appropriately . utilization of nol credit carryforwards can be subject to a substantial annual limitation due to ownership change limitations that could occur in the future , as required by section 382 of the internal revenue code of 1986 , as amended , as well as similar state provisions . net income . as a result of the foregoing , we realize net income of $ 8,493,000 or $ 0.33 per share ( basic ) and $ 0.27 per share ( diluted ) for 2011 compared with net income of $ 19,236,000 or $ 0.79 per share ( basic ) and $ 0.67 per share (

liquidity and capital resources we have financed our operations primarily from royalty revenue from licensing our remote power patent . in accordance with our patent litigation settlement achieved in july 2010 , we received aggregate upfront payments of approximately $ 32 million and cisco agreed to pay us quarterly royalties ( which began for the first quarter of 2011 ) ( see note j [ 2 ] to our financial statements included in this annual report ) . as of december 31 , 2011 our principal sources of liquidity consisted of working capital of approximately of $ 20,402,000 which includes cash and cash equivalents of approximately $ 20,661,000. as of march 1 , 2012 , we had cash and cash equivalents of approximately $ 20,500,000. we believe based on our current cash position and projected licensing revenue from our existing licensing agreements that we will have sufficient cash to fund our operations for the foreseeable future , although this may not be the case . we maintain our cash primarily in savings accounts . we do not have any derivative financial instruments . accordingly , we do not believe that our investments have significant exposure to interest rate risk .


 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 financed our operations primarily from royalty revenue from licensing our remote power patent . in accordance with our patent litigation settlement achieved in july 2010 , we received aggregate upfront payments of approximately $ 32 million and cisco agreed to pay us quarterly royalties ( which began for the first quarter of 2011 ) ( see note j [ 2 ] to our financial statements included in this annual report ) . as of december 31 , 2011 our principal sources of liquidity consisted of working capital of approximately of $ 20,402,000 which includes cash and cash equivalents of approximately $ 20,661,000. as of march 1 , 2012 , we had cash and cash equivalents of approximately $ 20,500,000. we believe based on our current cash position and projected licensing revenue from our existing licensing agreements that we will have sufficient cash to fund our operations for the foreseeable future , although this may not be the case . we maintain our cash primarily in savings accounts . we do not have any derivative financial instruments . accordingly , we do not believe that our investments have significant exposure to interest rate risk .
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 Suspicious Activity Report : our strategy also includes the possible acquisition of additional intellectual property assets in the future to develop , commercialize , license or otherwise monetize such intellectual property . in addition , we may enter into strategic relationships with third parties to develop , commercialize , license or otherwise monetize their intellectual property . the form of such relationships may differ depending upon the opportunity and may include , among other things , a strategic investment in such third party , the provision of financing to such third party or the formation of a joint venture with such third party for the purpose of monetizing its intellectual property assets . in september 2011 , we initiated patent litigation against 16 data networking equipment manufacturers in the united states district court for the eastern district of texas , tyler division , for infringement of our remote power patent . named as defendants in the lawsuit , excluding related parties , were alcatel-lucent usa , inc. , allied telesis , inc. , avaya inc. , axis 24 communications inc. , dell , inc. , garrettcom , inc. , hewlett-packard company , huawei technologies usa , juniper networks , inx . , motorola solutions , inc. , nec corporation , polycom inc. , samsung electronics co. , ltd. , shoretel , inc. , sony electronics , inc. , and transitions networks , inc. network-1 seeks monetary damages based upon reasonable royalties . several of the defendants ( samsung , polycom , alcatel , shortel and allied telesis ) have filed motions to dismiss the complaint for failure to state a cause of action . network-1 has filed opposition in response to the motions to dismiss . all such motions are pending . in july 2010 , we announced that we had agreed to settle our patent litigation pending in the united states district court for the eastern district of texas , tyler division , against adtran , inc , cisco systems , inc. and cisco-linksys , llc , ( collectively , “ cisco ” ) , enterasys networks , inc. , extreme networks , inc. , foundry networks , inc. , and 3com corporation , inc. as part of the settlement , adtran , cisco , enterasys , extreme networks and foundry networks each entered into a settlement agreement with us and entered into non-exclusive licenses for our remote power patent ( the “ licensed defendants ” ) . under the terms of the licenses , the licensed defendants paid us aggregate upfront payments of approximately $ 32 million and also agreed to license the remote power patent for its full term , which expires in march 2020. in accordance with our settlement and license agreement , dated may 25 , 2011 , which expanded upon the july 2010 agreement , cisco is obliged to pay us royalties ( which began in the first quarter of 2011 ) based on its sales of poe products up to maximum royalty payments per year of $ 8 million through 2015 and $ 9 million per year thereafter for the remaining term of the patent . the royalty payments are subject to certain conditions including the continued validity of our remote power patent , and the actual royalty amounts received may be less than the caps stated above , as was the case in 2011. due to our annual royalty rate structure with cisco which includes declining rates as the volume of poe product sales increase during the year , annual royalties from cisco are anticipated to be highest in the first quarter and decline for each of the remaining quarters of the year . under the terms of the agreement , if we grant other licenses with lower royalty rates to third parties ( as defined in the agreement ) , cisco shall be entitled to the benefit of the lower royalty rates provided it agrees to the material terms of such other license . under the terms of the agreement , we have certain obligations to cisco and if we materially breach such terms , cisco will be entitled to stop paying royalties to us . this would have a material adverse effect on our business , financial condition and results of operations . for more details about the july 2010 settlement , please see our current reports on form 8-k filed with the securities and exchange commission on july 20 , 2010 and june 1 , 2011. for the years ended 2011 and 2010 , our royalty revenue from cisco constituted 87 % and 79 % of our revenue , respectively . due to our annual royalty rate structure with cisco which includes declining rates as the volume of poe product sales increase during the year , royalties from cisco are anticipated to be highest in the first quarter of the year and decline for each of the remaining quarters of the year . at december 31 , 2011 , we had net operating loss carryforwards ( nols ) totaling approximately $ 27,000,000 expiring through 2029 , with a future tax benefit of approximately $ 9,450,000. during 2011 , as a result of the company 's recent results and projected future operating results , management determined that a portion of the nol was more likely than not to be utilized resulting in the recording of a one-time , non-cash tax benefit . accordingly , at december 31 , 2011 , $ 6,903,000 has been recorded as a deferred tax benefit on the company 's balance sheet and $ 6,903,000 ( or $ 0.22 per share on a diluted basis ) has also been recorded as income for the year ended december 31 , 2011. to the extent that we earn income in the future , we will report income tax expense and such expenseattributable to 25 federal income taxes will reduce the recorded income tax benefit asset reflected on the balance sheet . story_separator_special_tag management will continue to evaluate the recoverability of the nol and adjust the deferred tax asset appropriately . utilization of nol credit carryforwards can be subject to a substantial annual limitation due to ownership change limitations that could occur in the future , as required by section 382 of the internal revenue code of 1986 , as amended , as well as similar state provisions . results of operations : year ended december 31 , 2011 compared to year ended december 31 , 2010 revenue . we had revenue of $ 7,398,000 for the year ended december 31 , 2011 ( “ 2011 ” ) as compared to revenue of $ 33,037,000 for the year ended december 31 , 2010 ( “ 2010 ” ) . all such revenue was related to the receipt of royalties pursuant to license agreements for our remote power patent . the revenue for 2010 includes $ 32,320,000 received from the settlement of our patent litigation in july 2010 ( see note j [ 2 ] to our financial statements included in this annual report ) . excluding the july 2010 settlement payments of $ 32,320,000 , royalty revenue was $ 717,000 for 2010 as compared to royalty revenue of $ 7,398,000 for 2011. cost of revenue . we had a cost of revenue of $ 2,160,000 and $ 9,595,000 for 2011 and 2010 , respectively . included in the cost of revenue for 2010 were significant costs associated with the settlement of our patent litigation in july 2010 ( see note j [ 2 ] to our financial statements included in this annual report ) including contingent legal fees of $ 7,471,000 payable to our patent litigation counsel ( see note e [ 2 ] to our financial statements included in this annual report ) and $ 1,651,000 of bonus compensation payable to our chairman and chief executive officer pursuant to his employment agreement ( see note i to our financial statements included in this annual report ) . included in the cost of revenue for 2011 were contingent legal fees of $ 1,736,000 incurred to our patent litigation counsel and $ 370,000 of bonus compensation payable to our chairman and chief executive officer pursuant to his employment agreement . gross profit . the gross profit for 2011 was $ 5,292,000 or 71.5 % of our revenue as compared to $ 23,442,000 or 70.9 % of our revenue . the decrease in gross profit of $ 18,150,000 for 2011 was largely attributable to our patent litigation settlement in july 2010. general and administrative expenses . general and administrative expenses include overhead expenses , and finance , accounting , legal and other professional services incurred by us . general and administrative expenses decreased by $ 1,315,000 from $ 3,771,000 for 2010 to $ 2,456,000 for 2011 , due primarily to decreased legal fees and expenses as compared to such fees and expenses associated with our july 2010 patent litigation settlement ( see note e [ 2 ] to our financial statements included in this annual report ) . general and administrative expenses for 2011 include a payment of $ 250,000 to our chairman and chief executive officer to reduce certain royalty bonus compensation ( see note h [ 2 ] to our financial statements included in this annual report ) . we also incurred additional patent expenses of $ 1,000,000 in 2011 relating to net royalties due with respect to our purchase of the remote power patent ( see note c to our financial statements included in this annual report ) . interest income . interest income for 2011 was $ 48,000 as compared to interest income of $ 41,000 for 2010 . 26 operating income . we had an operating income of $ 1,533,000 for 2011 compared with operating income of $ 19,269,000 for 2010 , which we achieved primarily as a result of our patent litigation settlement in july 2010 ( see note j [ 2 ] to our financial statements included in this annual report ) . income taxes ( benefit ) . state and local income taxes ( benefit ) of ( $ 9,000 ) and $ 74,000 were recorded for 2011 and 2010 , respectively . deferred tax benefit/nols . at december 31 , 2011 , we had net operating loss carryforwards ( nols ) totaling approximately $ 27,000,000 expiring through 2029 , with a future tax benefit of approximately $ 9,450,000. during 2011 , as a result of the company 's recent results and projected future operating results , management determined that a portion of the nol was more likely than not to be utilized resulting in the recording of a one-time , non-cash tax benefit . accordingly , at december 31 , 2011 , $ 6,903,000 has been recorded as a deferred tax benefit on the company 's balance sheet and $ 6,903,000 ( or $ 0.22 per share on a diluted basis ) has also been recorded as income for the year ended december 31 , 2011. to the extent we earn income in the future , we will report income tax expense and such expense attributable to federal income taxes will reduce the recorded income tax benefit asset reflected on the balance sheet . management will continue to evaluate the recoverability of the nol and adjust the deferred tax asset appropriately . utilization of nol credit carryforwards can be subject to a substantial annual limitation due to ownership change limitations that could occur in the future , as required by section 382 of the internal revenue code of 1986 , as amended , as well as similar state provisions . net income . as a result of the foregoing , we realize net income of $ 8,493,000 or $ 0.33 per share ( basic ) and $ 0.27 per share ( diluted ) for 2011 compared with net income of $ 19,236,000 or $ 0.79 per share ( basic ) and $ 0.67 per share (

