our revenues typically fluctuate due to the seasonality of our industry , customer buying patterns , product innovation , the nature and level of competition for health and fitness products , our ability to procure products to meet customer demand , the level of spending on , and effectiveness of , our media and advertising programs and our ability to attract new customers and maintain existing sales relationships . in addition , our revenues are highly susceptible to economic factors , including , among other things , the overall condition of the economy and the availability of consumer credit in both the united states and canada . our profit margins may vary in response to the aforementioned factors and our ability to manage product costs . profit margins may also be affected by fluctuations in the costs or availability of materials used to manufacture our products , product warranty costs , higher or lower fuel prices , and changes in costs of other distribution or manufacturing-related services . our operating profits or losses may also be affected by the efficiency and effectiveness of our organization . historically , our operating expenses have been influenced by media costs to produce and air television advertisements of our products , facility costs , operating costs of our information and communications systems , product supply chain management , customer support and new product development activities . in addition , our operating expenses have been affected from time-to-time by asset impairment charges , restructuring charges and other significant unusual or infrequent expenses . as a result of the above and other factors , our period-to-period operating results may not be indicative of future performance . you should not place undue reliance on our operating results and should consider our prospects in light of the risks , expenses and difficulties typically encountered by us and other companies , both within and outside our industry . we may not be able to successfully address these risks and difficulties and , consequently , we can not assure you of any future growth or profitability . for more information , see our discussion of risk factors located at part i , item 1a of this report . overview we are committed to providing innovative , quality solutions to help people achieve a fit and healthy lifestyle . our principal business activities include designing , developing , sourcing and marketing high-quality cardiovascular and strength fitness products and related accessories for consumer home use , primarily in the united states and canada . our products are sold under some of the most recognized brand names in the fitness industry : nautilus ® , bowflex ® , schwinn ® , schwinn fitness and universal ® . we market our products through two distinct distribution channels , direct and retail , which we consider to be separate business segments . our direct business offers products directly to consumers through television advertising , the internet and catalogs . our retail business offers our products through a network of third-party retailers with stores and websites located in the united states and internationally . our net sales in 2011 were $ 180.4 million , an increase of $ 12.0 million , or 7.1 % , compared to net sales of $ 168.5 million in 2010 , largely due to the continued strong demand for our treadclimber products . this increase was partially offset by comparably lower sales for home gyms and other strength products . growth in treadclimber sales continues to be driven by consumer acceptance , more effective media advertising and improving consumer credit approval rates . in september 2010 , we completed our transition to a new consumer credit program with a new primary third-party financing provider , ge capital retail bank , formerly ge money bank ( `` ge `` ) . the relationship with ge has expanded the ability of our customers to obtain third-party consumer financing for buying our products . in addition , we added one secondary third-party consumer credit financing provider during the third quarter of 2010 and another in early 2011 , both of which offer credit to certain qualified consumers whose credit applications have been declined by ge . as a result of these actions , combined consumer credit approvals by our primary and secondary u.s. third-party financing providers increased from 15 % in 2010 to 25 % in 2011. income from continuing operations was $ 2.5 million for 2011 , compared to a loss from continuing operations of $ 9.8 million for 2010 . diluted income per share from continuing operations for 2011 was $ 0.08 , compared to diluted loss per share of $ ( 0.32 ) for 2010 . the significant improvement in results of continuing operations for 2011 was largely attributable to 13 increased sales and a 13.3 % reduction in operating expenses achieved primarily through more cost efficient media advertising expenditures . selling and marketing expenses as a percent of net sales declined to 30.2 % for 2011 from 38.0 % for 2010 . during 2011 , we allocated a larger portion of our media expenditures toward our treadclimber product line , compared to 2010. in addition , we began implementing a lower cost internet-based advertising strategy for our home gyms in 2011 , which is designed to capitalize on the extensive product awareness that currently exists among consumers for our bowflex rod-based home gyms . story_separator_special_tag some expenses may be incurred in 2012 in connection with the settlement of contingencies arising from and directly related to our commercial business prior to its disposal . liquidity and capital resources as of december 31 , 2011 , we had $ 17.4 million of cash and cash equivalents , compared to $ 14.3 million as of december 31 , 2010 . the principal source of this increase in liquidity was cash provided by operating activities of $ 4.6 million in 2011 , compared to cash used in operating activities of $ 10.7 million in 2010 . management believes that sufficient funds will be 18 available to meet our expected cash needs for at least the next twelve months , based on cash currently on hand and anticipated cash flows from operations . cash provided by operating activities of $ 4.6 million in 2011 consisted primarily of income from continuing operations , partially offset by loss from discontinued operation , as adjusted for non-cash items . cash provided by a $ 4.0 million increase in trade payables was more than offset by a $ 4.6 million increase in trade receivables and a $ 1.3 million increase in inventories . cash used in operating activities of $ 10.7 million in 2010 consisted primarily of losses from continuing and discontinued operations of $ 22.8 million and reductions in trade payables and accrued liabilities of $ 12.6 million and $ 6.3 million , respectively , partially offset by $ 12.4 million from income tax refunds , net of payments , $ 7.2 million from the reduction of trade receivables and $ 6.3 million from the reduction of inventories . significant reductions in trade receivables , trade payables and accrued liabilities in 2010 largely resulted from winding down our discontinued commercial business . the following table presents comparative cash flows related to trade receivables and inventories for the years ended december 31 , 2011 and 2010 ( in thousands ) : replace_table_token_4_th story_separator_special_tag on july 19 , 2011 , beneficial interest in the notes was assigned by the sherborne purchasers pro-rata to their respective investors in the manner permitted by the purchase agreement . such assignment was made in connection with the resignation , of messrs. bramson and mckibben from their respective positions with nautilus on may 26 , 2011 , and the subsequent pro-rata distribution by certain sherborne-affiliated entities to their respective investors of the common stock of the company owned by such entities . the notes are subordinated to the loan agreement . the purchase agreement includes certain negative covenants , including restrictions on the incurrence of additional indebtedness , liens , liquidation of assets , capital expenditures , payment of dividends , changes in our business operations and change of control transactions . the purchase agreement includes customary events of default , including nonpayment , insolvency , breach of warranty or covenant , cross-default of the loan agreement , material adverse changes and other events . upon the occurrence of an event of default all outstanding obligations under the notes may be declared due and payable . the accretion rate of the notes may be increased by 2 % per annum during the continuance of an event of default . non-cancelable contractual obligations our operating cash flows include the effect of certain non-cancelable , contractual obligations . a summary of such obligations as of december 31 , 2011 , including those related to our discontinued commercial operation , is as follows ( in thousands ) : 20 replace_table_token_5_th ( 1 ) our purchase obligations are comprised primarily of inventory purchase commitments . because substantially all of our inventory is sourced from asia , we have long lead times and therefore need to secure factory capacity from our vendors in advance . due to uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits at december 31 , 2011 , we are unable to make reasonably reliable estimates of the timing of any cash settlements with the respective taxing authorities . therefore , approximately $ 5.9 million of unrecognized tax benefits , including interest and penalties on uncertain tax positions , have been excluded from the contractual table above . for further information , refer to note 11 , income taxes , to our consolidated financial statements in part ii , item 8 of this report . off-balance sheet arrangements prior to its divestiture , our discontinued commercial business would , from time-to-time , involve a third-party with lease and financing arrangements to assist customers in purchasing products . while most of these financings were without recourse , in certain cases we offered a guarantee or other recourse provisions , whereby a third-party financing provider reviewed customer credit information in evaluating the risk of default prior to extending credit to a customer and we relied on the quality of this review and our own risk assessment in determining whether to proceed with the recourse transaction . as of december 31 , 2011 , the maximum contingent liability under all recourse provisions was approximately $ 0.8 million . for further information , refer to note 15 , commitments and contingencies , to our consolidated financial statements in part ii , item 8 of this report . in the ordinary course of business , we enter into agreements that require us to indemnify counterparties against third-party claims . these may include : agreements with vendors and suppliers , under which we may indemnify them against claims arising from our use of their products or services ; agreements with customers , under which we may indemnify them against claims arising from their use or sale of our products ; real estate and equipment leases , under which we may indemnify lessors against third party claims relating to the use of their property ; agreements with licensees or licensors , under which we may indemnify the licensee or licensor against claims arising from their use of our intellectual property or

cash used in investing activities of $ 0.9 million in 2011 included $ 2.5 million used to purchase computer software and production tooling , partially offset by $ 1.3 million in proceeds from the sale of portions of our discontinued commercial business and $ 0.4 million from a decrease in the amount of restricted cash collateralizing our outstanding letters of credit . cash provided by investing activities of $ 11.6 million in 2010 included $ 7.3 million in proceeds from the sale of portions of our discontinued commercial business and $ 4.6 million from a decrease in the amount of restricted cash collateralizing our outstanding letters of credit . cash used in financing activities in 2011 was less than $ 0.1 million for payment of bank financing costs . cash provided by financing activities in 2010 of $ 4.7 million consisted of $ 5.0 million in long-term borrowings , partially offset by $ 0.3 million paid for financing costs related to our new bank agreement and long-term borrowings . financing arrangements we have a loan and security agreement ( the “ loan agreement ” ) with bank of the west , which provides a revolving secured credit line of up to $ 15.0 million . the amount available for borrowings varies based upon the total amount of eligible accounts receivable and inventory as of the end of the preceding month . the loan agreement is available for working capital , standby letters of credit and general corporate purposes through august 31 , 2012 , assuming we satisfy certain terms and conditions at the time borrowings are requested . the interest rate on future borrowings , if any , under the loan agreement will be based on the bank 's base rate plus 150 to 225 basis points or libor plus 225 to 325 basis points and our financial condition at the time we elect to borrow ( our borrowing rate was 3.01 % as of december 31 , 2011 ) .


 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 used in investing activities of $ 0.9 million in 2011 included $ 2.5 million used to purchase computer software and production tooling , partially offset by $ 1.3 million in proceeds from the sale of portions of our discontinued commercial business and $ 0.4 million from a decrease in the amount of restricted cash collateralizing our outstanding letters of credit . cash provided by investing activities of $ 11.6 million in 2010 included $ 7.3 million in proceeds from the sale of portions of our discontinued commercial business and $ 4.6 million from a decrease in the amount of restricted cash collateralizing our outstanding letters of credit . cash used in financing activities in 2011 was less than $ 0.1 million for payment of bank financing costs . cash provided by financing activities in 2010 of $ 4.7 million consisted of $ 5.0 million in long-term borrowings , partially offset by $ 0.3 million paid for financing costs related to our new bank agreement and long-term borrowings . financing arrangements we have a loan and security agreement ( the “ loan agreement ” ) with bank of the west , which provides a revolving secured credit line of up to $ 15.0 million . the amount available for borrowings varies based upon the total amount of eligible accounts receivable and inventory as of the end of the preceding month . the loan agreement is available for working capital , standby letters of credit and general corporate purposes through august 31 , 2012 , assuming we satisfy certain terms and conditions at the time borrowings are requested . the interest rate on future borrowings , if any , under the loan agreement will be based on the bank 's base rate plus 150 to 225 basis points or libor plus 225 to 325 basis points and our financial condition at the time we elect to borrow ( our borrowing rate was 3.01 % as of december 31 , 2011 ) .
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 Suspicious Activity Report : our revenues typically fluctuate due to the seasonality of our industry , customer buying patterns , product innovation , the nature and level of competition for health and fitness products , our ability to procure products to meet customer demand , the level of spending on , and effectiveness of , our media and advertising programs and our ability to attract new customers and maintain existing sales relationships . in addition , our revenues are highly susceptible to economic factors , including , among other things , the overall condition of the economy and the availability of consumer credit in both the united states and canada . our profit margins may vary in response to the aforementioned factors and our ability to manage product costs . profit margins may also be affected by fluctuations in the costs or availability of materials used to manufacture our products , product warranty costs , higher or lower fuel prices , and changes in costs of other distribution or manufacturing-related services . our operating profits or losses may also be affected by the efficiency and effectiveness of our organization . historically , our operating expenses have been influenced by media costs to produce and air television advertisements of our products , facility costs , operating costs of our information and communications systems , product supply chain management , customer support and new product development activities . in addition , our operating expenses have been affected from time-to-time by asset impairment charges , restructuring charges and other significant unusual or infrequent expenses . as a result of the above and other factors , our period-to-period operating results may not be indicative of future performance . you should not place undue reliance on our operating results and should consider our prospects in light of the risks , expenses and difficulties typically encountered by us and other companies , both within and outside our industry . we may not be able to successfully address these risks and difficulties and , consequently , we can not assure you of any future growth or profitability . for more information , see our discussion of risk factors located at part i , item 1a of this report . overview we are committed to providing innovative , quality solutions to help people achieve a fit and healthy lifestyle . our principal business activities include designing , developing , sourcing and marketing high-quality cardiovascular and strength fitness products and related accessories for consumer home use , primarily in the united states and canada . our products are sold under some of the most recognized brand names in the fitness industry : nautilus ® , bowflex ® , schwinn ® , schwinn fitness and universal ® . we market our products through two distinct distribution channels , direct and retail , which we consider to be separate business segments . our direct business offers products directly to consumers through television advertising , the internet and catalogs . our retail business offers our products through a network of third-party retailers with stores and websites located in the united states and internationally . our net sales in 2011 were $ 180.4 million , an increase of $ 12.0 million , or 7.1 % , compared to net sales of $ 168.5 million in 2010 , largely due to the continued strong demand for our treadclimber products . this increase was partially offset by comparably lower sales for home gyms and other strength products . growth in treadclimber sales continues to be driven by consumer acceptance , more effective media advertising and improving consumer credit approval rates . in september 2010 , we completed our transition to a new consumer credit program with a new primary third-party financing provider , ge capital retail bank , formerly ge money bank ( `` ge `` ) . the relationship with ge has expanded the ability of our customers to obtain third-party consumer financing for buying our products . in addition , we added one secondary third-party consumer credit financing provider during the third quarter of 2010 and another in early 2011 , both of which offer credit to certain qualified consumers whose credit applications have been declined by ge . as a result of these actions , combined consumer credit approvals by our primary and secondary u.s. third-party financing providers increased from 15 % in 2010 to 25 % in 2011. income from continuing operations was $ 2.5 million for 2011 , compared to a loss from continuing operations of $ 9.8 million for 2010 . diluted income per share from continuing operations for 2011 was $ 0.08 , compared to diluted loss per share of $ ( 0.32 ) for 2010 . the significant improvement in results of continuing operations for 2011 was largely attributable to 13 increased sales and a 13.3 % reduction in operating expenses achieved primarily through more cost efficient media advertising expenditures . selling and marketing expenses as a percent of net sales declined to 30.2 % for 2011 from 38.0 % for 2010 . during 2011 , we allocated a larger portion of our media expenditures toward our treadclimber product line , compared to 2010. in addition , we began implementing a lower cost internet-based advertising strategy for our home gyms in 2011 , which is designed to capitalize on the extensive product awareness that currently exists among consumers for our bowflex rod-based home gyms . story_separator_special_tag some expenses may be incurred in 2012 in connection with the settlement of contingencies arising from and directly related to our commercial business prior to its disposal . liquidity and capital resources as of december 31 , 2011 , we had $ 17.4 million of cash and cash equivalents , compared to $ 14.3 million as of december 31 , 2010 . the principal source of this increase in liquidity was cash provided by operating activities of $ 4.6 million in 2011 , compared to cash used in operating activities of $ 10.7 million in 2010 . management believes that sufficient funds will be 18 available to meet our expected cash needs for at least the next twelve months , based on cash currently on hand and anticipated cash flows from operations . cash provided by operating activities of $ 4.6 million in 2011 consisted primarily of income from continuing operations , partially offset by loss from discontinued operation , as adjusted for non-cash items . cash provided by a $ 4.0 million increase in trade payables was more than offset by a $ 4.6 million increase in trade receivables and a $ 1.3 million increase in inventories . cash used in operating activities of $ 10.7 million in 2010 consisted primarily of losses from continuing and discontinued operations of $ 22.8 million and reductions in trade payables and accrued liabilities of $ 12.6 million and $ 6.3 million , respectively , partially offset by $ 12.4 million from income tax refunds , net of payments , $ 7.2 million from the reduction of trade receivables and $ 6.3 million from the reduction of inventories . significant reductions in trade receivables , trade payables and accrued liabilities in 2010 largely resulted from winding down our discontinued commercial business . the following table presents comparative cash flows related to trade receivables and inventories for the years ended december 31 , 2011 and 2010 ( in thousands ) : replace_table_token_4_th story_separator_special_tag on july 19 , 2011 , beneficial interest in the notes was assigned by the sherborne purchasers pro-rata to their respective investors in the manner permitted by the purchase agreement . such assignment was made in connection with the resignation , of messrs. bramson and mckibben from their respective positions with nautilus on may 26 , 2011 , and the subsequent pro-rata distribution by certain sherborne-affiliated entities to their respective investors of the common stock of the company owned by such entities . the notes are subordinated to the loan agreement . the purchase agreement includes certain negative covenants , including restrictions on the incurrence of additional indebtedness , liens , liquidation of assets , capital expenditures , payment of dividends , changes in our business operations and change of control transactions . the purchase agreement includes customary events of default , including nonpayment , insolvency , breach of warranty or covenant , cross-default of the loan agreement , material adverse changes and other events . upon the occurrence of an event of default all outstanding obligations under the notes may be declared due and payable . the accretion rate of the notes may be increased by 2 % per annum during the continuance of an event of default . non-cancelable contractual obligations our operating cash flows include the effect of certain non-cancelable , contractual obligations . a summary of such obligations as of december 31 , 2011 , including those related to our discontinued commercial operation , is as follows ( in thousands ) : 20 replace_table_token_5_th ( 1 ) our purchase obligations are comprised primarily of inventory purchase commitments . because substantially all of our inventory is sourced from asia , we have long lead times and therefore need to secure factory capacity from our vendors in advance . due to uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits at december 31 , 2011 , we are unable to make reasonably reliable estimates of the timing of any cash settlements with the respective taxing authorities . therefore , approximately $ 5.9 million of unrecognized tax benefits , including interest and penalties on uncertain tax positions , have been excluded from the contractual table above . for further information , refer to note 11 , income taxes , to our consolidated financial statements in part ii , item 8 of this report . off-balance sheet arrangements prior to its divestiture , our discontinued commercial business would , from time-to-time , involve a third-party with lease and financing arrangements to assist customers in purchasing products . while most of these financings were without recourse , in certain cases we offered a guarantee or other recourse provisions , whereby a third-party financing provider reviewed customer credit information in evaluating the risk of default prior to extending credit to a customer and we relied on the quality of this review and our own risk assessment in determining whether to proceed with the recourse transaction . as of december 31 , 2011 , the maximum contingent liability under all recourse provisions was approximately $ 0.8 million . for further information , refer to note 15 , commitments and contingencies , to our consolidated financial statements in part ii , item 8 of this report . in the ordinary course of business , we enter into agreements that require us to indemnify counterparties against third-party claims . these may include : agreements with vendors and suppliers , under which we may indemnify them against claims arising from our use of their products or services ; agreements with customers , under which we may indemnify them against claims arising from their use or sale of our products ; real estate and equipment leases , under which we may indemnify lessors against third party claims relating to the use of their property ; agreements with licensees or licensors , under which we may indemnify the licensee or licensor against claims arising from their use of our intellectual property or

