in 2009 , 2010 , and 2011 , we recognized additional gains of $ 0.2 million , $ 0.3 million , and $ 0.2 million , respectively , which were recorded in cost of revenue . we will continue to record additional gain in the future contingent upon attainment of certain earnout provisions . critical accounting policies and estimates management 's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements , which have been prepared in accordance with generally accepted accounting principles in the united states of america . the preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets , liabilities , revenue and expenses , and related disclosure of contingent assets and liabilities . the policies discussed below are considered by management to be critical because changes in such estimates can materially affect the amount of our reported net income or loss . for all of these policies , management cautions that actual results may differ materially from these estimates under different assumptions or conditions . revenue recognition we recognize revenue when the earnings process is complete . we recognize product revenue upon shipment of product under contractual terms which transfer title to customers upon shipment , under normal credit terms , net of estimated sales returns and allowances at the time of shipment . revenue is deferred if there are significant post-delivery obligations or if the fees are not fixed or determinable . when significant post-delivery obligations exist , revenue is deferred until such obligations are fulfilled . our arrangements generally do not have any significant post-delivery obligations . if our arrangements include customer acceptance provisions , revenue is recognized upon obtaining the signed acceptance certificate from the customer , unless we can objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement prior to obtaining the signed acceptance . in those instances where revenue is recognized prior to obtaining the signed acceptance certificate , we use successful completion of customer testing as the basis to objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement . we also consider historical acceptance experience with the customer , as well as the payment terms specified in the arrangement , when revenue is recognized prior to obtaining the signed acceptance certificate . when collectability is not reasonably assured , revenue is recognized when cash is collected . we make certain sales to product distributors . these customers are given certain privileges to return a portion of inventory . return privileges generally allow distributors to return inventory based on a percent of purchases made within a specific period of time . we recognize revenue on sales to distributors that have contractual return rights when the products have been sold by the distributors , unless there is sufficient customer specific sales and sales returns history to support revenue recognition upon shipment . in those instances when revenue is recognized upon shipment to distributors , we use historical rates of return from the distributors to provide for estimated product returns . we accrue for warranty costs , sales returns and other allowances at the time of shipment based on historical experience and expected future costs . in october 2009 , the financial accounting standards board , or fasb , amended the accounting standards for multiple deliverable revenue arrangements to : ( i ) provide updated guidance on whether multiple deliverables exist , how the deliverables in an arrangement should be separated , and how the consideration should be allocated ; ( ii ) require an entity to allocate revenue in an arrangement using a best estimate of selling prices , or bsp , for deliverables if a vendor does not have vendor-specific objective evidence of selling price , or vsoe , or third-party evidence of selling price , or tpe ; and ( iii ) eliminate the use of the residual method and require an entity to allocate revenue using the relative selling price method . 28 we adopted the updated accounting standards on january 1 , 2011 on a prospective basis for applicable transactions originating or materially modified after december 31 , 2010. this guidance does not change the units of accounting for revenue transactions . our products and services qualify as separate units of accounting and are deemed to be non-contingent deliverables as our arrangements typically do not have any significant performance , cancellation , termination and refund type provisions . products are typically considered delivered upon shipment . revenue from services is recognized ratably over the period during which the services are to be performed . prior to the adoption of accounting standards update , or asu , 2009-13 , revenue recognition ( topic 605 ) : multiple-deliverable revenue arrangements , we established the fair value or tpe of services in multiple-element arrangements based primarily on sales prices when the products and services were sold separately . as such , we applied the residual method to allocate the arrangement fee between products and services . in limited circumstances , if fair value could not be established for undelivered elements , all of the revenue under the arrangement was deferred until those elements were delivered . upon adoption of asu 2009-13 , on january 1 , 2011 , we allocated revenue to products and services in such arrangements using the relative selling price method to recognize revenue when the basic revenue recognition criteria for each deliverable are met . we derive revenue primarily from stand-alone sales of our products . in certain cases , our products are sold along with services , which include education , training , installation , and or extended warranty services . we have established tpe for our training , education and installation services . story_separator_special_tag after determining there were indicators of impairment , we proceeded to test for impairment and concluded that an impairment charge was required . the impairment charges were incurred to write-down the value of our fixed assets to fair value , as discussed in note 4 of the consolidated financial statements . there were no similar impairment charges incurred in 2010. interest expense interest expense for 2011 decreased by $ 1.0 million to zero compared to $ 1.0 million in 2010 , primarily due to a decrease in outstanding debt balances and continued low interest rates during 2011. this includes the effect of our september 2010 extinguishment of debt associated with the sale of our oakland , california campus as discussed in note 7 of the consolidated financial statements . interest income interest income for 2011 remained consistent with 2010 due to low average balances of cash and cash equivalents and the continued low interest rates during 2011. other income other income for 2011 increased by $ 0.1 million to $ 0.1 million compared to zero in 2010 due to an increased foreign exchange gain from prior period . 34 income tax provision during the years ended december 31 , 2011 and 2010 , we recorded an income tax provision of $ 0.1 million and an income tax benefit of $ 0.1 million , respectively , related to foreign and state taxes . no material provision or benefit for income taxes was recorded in 2011 and 2010 , due to our recurring operating losses and the significant uncertainty regarding the realization of our net deferred tax assets , against which we have continued to record a full valuation allowance . 2010 compared with 2009 net revenue information about our net revenue for products and services for 2010 and 2009 is summarized below ( in millions ) : replace_table_token_6_th information about our net revenue for north america and international markets for 2010 and 2009 is summarized below ( in millions ) : replace_table_token_7_th net revenue increased 2 % or $ 2.5 million to $ 129.0 million for 2010 compared to $ 126.5 million for 2009. the increase in net revenue was primarily attributable to an increase in product revenue , which in 2010 increased 3 % or $ 3.7 million compared to 2009. the increase was primarily due to increased sales in our slms product portfolio related to the continued success of our mxk product launch . service revenue decreased 21 % or $ 1.2 million compared to 2009 , primarily due to a decrease in gross sales accompanied by the timing of services performed and revenue earned . service revenue represents revenue from maintenance and other services associated with product shipments . international net revenue increased 11 % or $ 7.9 million to $ 78.8 million in 2010 and represented 61 % of total net revenue compared with 56 % in 2009. the increase in international net revenue was primarily due to higher demand in latin america as a result of recent growth in demand for our products . in addition to the growth experienced in latin america , we experienced continued growth associated with one customer in the middle east ( etisalat ) that accounted for 24 % of net revenue in 2010. the increase in international net revenue was partially offset by a decrease in domestic net revenue of 10 % or $ 5.4 million to $ 50.2 million in 2010 compared to $ 55.6 million in 2009. the decrease was primarily the result of the continued weak economic conditions in the united states during 2010 . 35 etisalat accounted for 24 % and 19 % of net revenue in 2010 and 2009 , respectively . cost of revenue and gross profit total cost of revenue , including stock-based compensation , decreased $ 1.2 million or 2 % to $ 79.9 million for 2010 , compared to $ 81.1 million for 2009. total cost of revenue was 62 % of net revenue for 2010 , compared to 64 % of net revenue for 2009 , which resulted in an increase in gross profit percentage from 36 % in 2009 to 38 % in 2010. the gross margin increased as compared with prior periods primarily due to increased sales volume and the reduction in cost of revenue for the period resulting from greater sales of products with higher gross margin , such as our mxk products . research and product development expenses research and product development expenses decreased 4 % or $ 0.9 million to $ 21.2 million for 2010 compared to $ 22.1 million for 2009. the decrease was primarily due to a reduction in non-personnel expenses resulting from the introduction of our mxk product to the market mid-year 2009 causing a decrease in prototype and rework expenses of $ 0.7 million in 2010. sales and marketing expenses sales and marketing expenses increased 9 % or $ 2.0 million to $ 24.0 million for 2010 compared to $ 22.0 million for 2009. the increase was primarily attributable to increases in marketing expenses of $ 1.3 million as we continue to grow our brand awareness which included increases of $ 0.5 million in personnel-related costs and $ 0.8 million in non-personnel costs . in addition , overall sales and customer service expenses increased $ 0.7 million compared to 2009 , mainly due to increased personnel-related expenses , including $ 0.3 million of additional headcount expenses incurred to support operations in the middle east . general and administrative expenses general and administrative expenses remained flat at $ 9.9 million for both 2010 and 2009. there were continued reductions made in personnel-related costs of $ 0.3 million in 2010 compared to 2009 and $ 0.4 million in cost savings related to decreased property taxes resulting from our september 2010 sale of the oakland , california campus . these decreases were offset by a $ 0.2 million increase in software maintenance expenses , and $ 0.5 million increase in other miscellaneous expenses .

liquidity and capital resources our operations are financed through a combination of our existing cash , cash equivalents , available credit facilities , and sales of equity and debt instruments , based on our operating requirements and market conditions . at december 31 , 2011 , cash and cash equivalents were $ 18.2 million compared to $ 21.2 million at december 31 , 2010. the decrease in cash and cash equivalents of $ 3.0 million was attributable to net cash used in operating activities and investing activities of $ 6.8 million and $ 1.4 million , respectively , offset by net cash provided by financing activities of $ 5.2 million . operating activities for fiscal year 2011 , net cash used in operating activities consisted of a net loss of $ 11.7 million , adjusted for non-cash charges totaling $ 9.6 million and an increase in operating assets totaling $ 4.7 million . the most significant components of the changes in net operating assets were an increase in accounts receivable of $ 3.8 million and a decrease in accrued and other liabilities of $ 4.4 million , partially offset by a decrease in inventories of $ 3.7 million . the increase in accounts receivable related to the timing of cash collections . the main driver for the decrease in accrued and other liabilities related to a decrease of $ 1.9 million related to payments made under the largo lease liability , as well as , a non-cash decrease of $ 0.8 million due to the continued amortization of our deferred gain and leasehold improvement liabilities in connection with our oakland campus . lastly , the decrease in inventories was primarily due to better utilization of inventory during 2011. for fiscal year 2010 , net cash provided by operating activities consisted of a net loss of $ 4.8 million , adjusted for non-cash charges totaling $ 2.7 million and a decrease in operating assets totaling $ 4.2 million . the most significant components of the changes in net operating assets were a decrease in accounts receivable of $ 6.6 million partially offset by a decrease in accounts payable of $ 3.1 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.
     ```liquidity and capital resources our operations are financed through a combination of our existing cash , cash equivalents , available credit facilities , and sales of equity and debt instruments , based on our operating requirements and market conditions . at december 31 , 2011 , cash and cash equivalents were $ 18.2 million compared to $ 21.2 million at december 31 , 2010. the decrease in cash and cash equivalents of $ 3.0 million was attributable to net cash used in operating activities and investing activities of $ 6.8 million and $ 1.4 million , respectively , offset by net cash provided by financing activities of $ 5.2 million . operating activities for fiscal year 2011 , net cash used in operating activities consisted of a net loss of $ 11.7 million , adjusted for non-cash charges totaling $ 9.6 million and an increase in operating assets totaling $ 4.7 million . the most significant components of the changes in net operating assets were an increase in accounts receivable of $ 3.8 million and a decrease in accrued and other liabilities of $ 4.4 million , partially offset by a decrease in inventories of $ 3.7 million . the increase in accounts receivable related to the timing of cash collections . the main driver for the decrease in accrued and other liabilities related to a decrease of $ 1.9 million related to payments made under the largo lease liability , as well as , a non-cash decrease of $ 0.8 million due to the continued amortization of our deferred gain and leasehold improvement liabilities in connection with our oakland campus . lastly , the decrease in inventories was primarily due to better utilization of inventory during 2011. for fiscal year 2010 , net cash provided by operating activities consisted of a net loss of $ 4.8 million , adjusted for non-cash charges totaling $ 2.7 million and a decrease in operating assets totaling $ 4.2 million . the most significant components of the changes in net operating assets were a decrease in accounts receivable of $ 6.6 million partially offset by a decrease in accounts payable of $ 3.1 million .
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 Suspicious Activity Report : in 2009 , 2010 , and 2011 , we recognized additional gains of $ 0.2 million , $ 0.3 million , and $ 0.2 million , respectively , which were recorded in cost of revenue . we will continue to record additional gain in the future contingent upon attainment of certain earnout provisions . critical accounting policies and estimates management 's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements , which have been prepared in accordance with generally accepted accounting principles in the united states of america . the preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets , liabilities , revenue and expenses , and related disclosure of contingent assets and liabilities . the policies discussed below are considered by management to be critical because changes in such estimates can materially affect the amount of our reported net income or loss . for all of these policies , management cautions that actual results may differ materially from these estimates under different assumptions or conditions . revenue recognition we recognize revenue when the earnings process is complete . we recognize product revenue upon shipment of product under contractual terms which transfer title to customers upon shipment , under normal credit terms , net of estimated sales returns and allowances at the time of shipment . revenue is deferred if there are significant post-delivery obligations or if the fees are not fixed or determinable . when significant post-delivery obligations exist , revenue is deferred until such obligations are fulfilled . our arrangements generally do not have any significant post-delivery obligations . if our arrangements include customer acceptance provisions , revenue is recognized upon obtaining the signed acceptance certificate from the customer , unless we can objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement prior to obtaining the signed acceptance . in those instances where revenue is recognized prior to obtaining the signed acceptance certificate , we use successful completion of customer testing as the basis to objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement . we also consider historical acceptance experience with the customer , as well as the payment terms specified in the arrangement , when revenue is recognized prior to obtaining the signed acceptance certificate . when collectability is not reasonably assured , revenue is recognized when cash is collected . we make certain sales to product distributors . these customers are given certain privileges to return a portion of inventory . return privileges generally allow distributors to return inventory based on a percent of purchases made within a specific period of time . we recognize revenue on sales to distributors that have contractual return rights when the products have been sold by the distributors , unless there is sufficient customer specific sales and sales returns history to support revenue recognition upon shipment . in those instances when revenue is recognized upon shipment to distributors , we use historical rates of return from the distributors to provide for estimated product returns . we accrue for warranty costs , sales returns and other allowances at the time of shipment based on historical experience and expected future costs . in october 2009 , the financial accounting standards board , or fasb , amended the accounting standards for multiple deliverable revenue arrangements to : ( i ) provide updated guidance on whether multiple deliverables exist , how the deliverables in an arrangement should be separated , and how the consideration should be allocated ; ( ii ) require an entity to allocate revenue in an arrangement using a best estimate of selling prices , or bsp , for deliverables if a vendor does not have vendor-specific objective evidence of selling price , or vsoe , or third-party evidence of selling price , or tpe ; and ( iii ) eliminate the use of the residual method and require an entity to allocate revenue using the relative selling price method . 28 we adopted the updated accounting standards on january 1 , 2011 on a prospective basis for applicable transactions originating or materially modified after december 31 , 2010. this guidance does not change the units of accounting for revenue transactions . our products and services qualify as separate units of accounting and are deemed to be non-contingent deliverables as our arrangements typically do not have any significant performance , cancellation , termination and refund type provisions . products are typically considered delivered upon shipment . revenue from services is recognized ratably over the period during which the services are to be performed . prior to the adoption of accounting standards update , or asu , 2009-13 , revenue recognition ( topic 605 ) : multiple-deliverable revenue arrangements , we established the fair value or tpe of services in multiple-element arrangements based primarily on sales prices when the products and services were sold separately . as such , we applied the residual method to allocate the arrangement fee between products and services . in limited circumstances , if fair value could not be established for undelivered elements , all of the revenue under the arrangement was deferred until those elements were delivered . upon adoption of asu 2009-13 , on january 1 , 2011 , we allocated revenue to products and services in such arrangements using the relative selling price method to recognize revenue when the basic revenue recognition criteria for each deliverable are met . we derive revenue primarily from stand-alone sales of our products . in certain cases , our products are sold along with services , which include education , training , installation , and or extended warranty services . we have established tpe for our training , education and installation services . story_separator_special_tag after determining there were indicators of impairment , we proceeded to test for impairment and concluded that an impairment charge was required . the impairment charges were incurred to write-down the value of our fixed assets to fair value , as discussed in note 4 of the consolidated financial statements . there were no similar impairment charges incurred in 2010. interest expense interest expense for 2011 decreased by $ 1.0 million to zero compared to $ 1.0 million in 2010 , primarily due to a decrease in outstanding debt balances and continued low interest rates during 2011. this includes the effect of our september 2010 extinguishment of debt associated with the sale of our oakland , california campus as discussed in note 7 of the consolidated financial statements . interest income interest income for 2011 remained consistent with 2010 due to low average balances of cash and cash equivalents and the continued low interest rates during 2011. other income other income for 2011 increased by $ 0.1 million to $ 0.1 million compared to zero in 2010 due to an increased foreign exchange gain from prior period . 34 income tax provision during the years ended december 31 , 2011 and 2010 , we recorded an income tax provision of $ 0.1 million and an income tax benefit of $ 0.1 million , respectively , related to foreign and state taxes . no material provision or benefit for income taxes was recorded in 2011 and 2010 , due to our recurring operating losses and the significant uncertainty regarding the realization of our net deferred tax assets , against which we have continued to record a full valuation allowance . 2010 compared with 2009 net revenue information about our net revenue for products and services for 2010 and 2009 is summarized below ( in millions ) : replace_table_token_6_th information about our net revenue for north america and international markets for 2010 and 2009 is summarized below ( in millions ) : replace_table_token_7_th net revenue increased 2 % or $ 2.5 million to $ 129.0 million for 2010 compared to $ 126.5 million for 2009. the increase in net revenue was primarily attributable to an increase in product revenue , which in 2010 increased 3 % or $ 3.7 million compared to 2009. the increase was primarily due to increased sales in our slms product portfolio related to the continued success of our mxk product launch . service revenue decreased 21 % or $ 1.2 million compared to 2009 , primarily due to a decrease in gross sales accompanied by the timing of services performed and revenue earned . service revenue represents revenue from maintenance and other services associated with product shipments . international net revenue increased 11 % or $ 7.9 million to $ 78.8 million in 2010 and represented 61 % of total net revenue compared with 56 % in 2009. the increase in international net revenue was primarily due to higher demand in latin america as a result of recent growth in demand for our products . in addition to the growth experienced in latin america , we experienced continued growth associated with one customer in the middle east ( etisalat ) that accounted for 24 % of net revenue in 2010. the increase in international net revenue was partially offset by a decrease in domestic net revenue of 10 % or $ 5.4 million to $ 50.2 million in 2010 compared to $ 55.6 million in 2009. the decrease was primarily the result of the continued weak economic conditions in the united states during 2010 . 35 etisalat accounted for 24 % and 19 % of net revenue in 2010 and 2009 , respectively . cost of revenue and gross profit total cost of revenue , including stock-based compensation , decreased $ 1.2 million or 2 % to $ 79.9 million for 2010 , compared to $ 81.1 million for 2009. total cost of revenue was 62 % of net revenue for 2010 , compared to 64 % of net revenue for 2009 , which resulted in an increase in gross profit percentage from 36 % in 2009 to 38 % in 2010. the gross margin increased as compared with prior periods primarily due to increased sales volume and the reduction in cost of revenue for the period resulting from greater sales of products with higher gross margin , such as our mxk products . research and product development expenses research and product development expenses decreased 4 % or $ 0.9 million to $ 21.2 million for 2010 compared to $ 22.1 million for 2009. the decrease was primarily due to a reduction in non-personnel expenses resulting from the introduction of our mxk product to the market mid-year 2009 causing a decrease in prototype and rework expenses of $ 0.7 million in 2010. sales and marketing expenses sales and marketing expenses increased 9 % or $ 2.0 million to $ 24.0 million for 2010 compared to $ 22.0 million for 2009. the increase was primarily attributable to increases in marketing expenses of $ 1.3 million as we continue to grow our brand awareness which included increases of $ 0.5 million in personnel-related costs and $ 0.8 million in non-personnel costs . in addition , overall sales and customer service expenses increased $ 0.7 million compared to 2009 , mainly due to increased personnel-related expenses , including $ 0.3 million of additional headcount expenses incurred to support operations in the middle east . general and administrative expenses general and administrative expenses remained flat at $ 9.9 million for both 2010 and 2009. there were continued reductions made in personnel-related costs of $ 0.3 million in 2010 compared to 2009 and $ 0.4 million in cost savings related to decreased property taxes resulting from our september 2010 sale of the oakland , california campus . these decreases were offset by a $ 0.2 million increase in software maintenance expenses , and $ 0.5 million increase in other miscellaneous expenses .

