as the commercial aerospace and defense industries continue to consolidate and major contractors seek to streamline supply chains by buying more complete sub-assemblies from fewer suppliers , we have sought to remain competitive not only by providing cost-effective world class service but also by increasing our ability to produce more complex and complete assemblies for our customers . we are currently focused on positioning our business to obtain profitability , achieve positive cash flow and we remain resolute on meeting customers ' needs . we believe that an unyielding focus on our customers will allow us to execute on our existing backlog in a timely fashion . in 2018 and 2019 , we consolidated the operations of our complex machining segment in our main campus located in bay shore , new york . in 2020 , in order to take advantage of the long-term growth opportunities we see in our markets , we made significant capital investments in new equipment . additionally , we expanded our operations and manufacturing cells located in our connecticut facility where our turbine engine segment is located . we believe these investments will increase the volume and efficiency of production , increase the size of product we can make and allow us to offer additional services to our customers . we are pleased with the positive responses received from our customers to date . our ability to operate profitably is determined by our ability to win new contracts and renewals of existing contracts , and then fulfill these contracts on a timely basis at costs that enable us to generate a profit based upon the agreed upon contract price . winning a contract generally requires that we submit a bid containing a fixed price for the product or products covered by the contract for an agreed upon period of time . thus , when submitting bids , we are required to estimate our future costs of production and , since we often rely upon subcontractors , the prices we can obtain from our subcontractors . while our revenues are largely determined by the number of contracts we are awarded , the volume of product delivered and price of product under each contract , our costs are determined by a number of factors . the principal factors impacting our costs are the cost of materials and supplies , labor , financing and the efficiency at which we can produce our products . the cost of materials used in the aerospace industry is highly volatile . in addition , the market for the skilled labor we require to operate our plants is highly competitive . the profit margin of the various products we sell varies based upon a number of factors , including the complexity of the product , the intensity of the competition for such product and , in some cases , the ability to deliver replacement parts on short notice . thus , in assessing our performance from one period to another , a reader must understand that changes in profit margin can be the result of shifts in the mix of products sold . our operations have a large percentage of fixed factory overhead . as a result , our profit margins are also highly variable with sales volumes as under-absorption of factory overhead decreases profits . 14 a very large percentage of the products we produce are used on military as opposed to civilian aircraft . these products can be replacements for aircraft already in the fleet of the armed services or for the production of new aircraft . reductions to the defense department budget and decreased usage of aircraft reduces the demand for both new production and replacement spares . recent increases in defense department spending have increased orders for our products . reductions to the defense department budget or decreased usage of aircraft reduces the demand for both new production and replacement spares and could adversely impact our business and our revenues . we are focusing greater efforts on the civilian aircraft market though we still remain dependent upon the military for an overwhelming portion of our revenues . covid -19 on march 11 , 2020 , the world health organization announced that infections caused by the coronavirus disease of 2019 ( “ covid-19 ” ) had become pandemic , and on march 13 , 2020 , the u.s. president announced a national emergency relating to the disease . national , state and local authorities have adopted various regulations and orders , including mandates on the number of people that may gather in one location and closing non-essential businesses . to date , we have been deemed an essential business and have not curtailed our operations . the measures adopted by various governments and agencies , as well as the decision by many individuals and businesses to voluntarily shut down or self-quarantine , had and are expected to continue to have serious adverse impacts on domestic and foreign economies of uncertain severity and duration . the effectiveness of economic stabilization efforts adopted by governments and their willingness to adopt further measures is uncertain . the overall economic impact of the covid-19 pandemic has been highly negative to the general economy and has been particularly negative on the commercial travel industry and commercial aerospace industries . in accordance with the department of defense guidance issued in march 2020 designating the defense industrial base as a critical infrastructure workforce , our facilities have continued to operate in support of essential products and services required to meet national security commitments to the u.s. government and the u.s. military , however , facility closures or work slowdowns or temporary stoppages could occur . story_separator_special_tag the formula to determine the amounts of revolving advances permitted to be borrowed under the snb revolving line of credit is based on a percentage of eligible receivables and inventory ( as defined in the snb facility ) . prior to the increase in the snb term loan described below , the snb term loan provided for monthly principal installments in the amount of $ 45,238 , payable on the first business day of each month , beginning on february 1 , 2020 , with a final payment of any unpaid balance of principal and interest payable on december 30 , 2022. in addition , for so long as the snb term loan remains outstanding , if excess cash flow ( as defined ) is a positive number for any fiscal year , beginning with the year ending december 31 , 2020 , we shall pay to snb an amount equal to the lesser of ( i ) twenty-five percent ( 25 % ) of the excess cash flow for such fiscal year and ( ii ) the outstanding principal balance of the term loan . such payment shall be made to snb and applied to the outstanding principal balance of the term loan , on or prior to the april 15 immediately following such fiscal year . the terms of the snb facility require that , among other things , we maintain a specified fixed charge coverage ratio of 1.25 to 1.00 at the end of each fiscal quarter beginning with the fiscal quarter ending march 31 , 2020. in addition , we are limited in the amount of capital expenditures we can make . in accordance with the snb facility by september 30 , 2020 , we were required to cause the holders of certain subordinated convertible notes to either ( i ) extend the maturity date of such notes to a date more than six months after december 31 , 2022 , or ( ii ) convert the notes into common stock of the company . as of december 31 , 2020 , we were in compliance with all loan covenants . the snb facility also restricts the amount of dividends we may pay to our stockholders . substantially all of our assets are pledged as collateral under the snb facility . 20 2 ) increased term loan to modernize equipment - on november 6 , 2020 , we entered into the first amendment to loan and security agreement , increasing the term loan to $ 5,685,000. this allowed us to finance the acquisition of the new equipment at what we believe to be a reasonable interest rate . the repayment terms of the term loan were amended to provide monthly principal installments in the amount of $ 67,679 beginning on december 1 , 2020 , with a final payment of any unpaid balance of principal and interest payable on december 30 , 2022. we have paid an amendment fee of $ 20,000. as of december 31 , 2020 , our debt to snb in the amount of $ 21,207,000 consisted of the snb revolving line of credit note in the amount of $ 15,649,000 and the snb term loan in the amount of $ 5,558,000. because we believe our fiscal 2021 sales will be higher than the amount achieved in fiscal 2020 , we believe our liquidity in 2021 will improve . nevertheless , our liquidity may be adversely impacted by various risks and uncertainties , including , but not limited to future effects of the covid-19 pandemic and other risks detailed in part1 , item 1a of this annual report . changes in our cash flow during fiscal 2020 and 2019 are discussed further below . cash flow the following table summarizes our net cash flow from operating , investing and financing activities for the periods indicated ( in thousands ) : replace_table_token_7_th the above cash flows include the cash flows from our continuing and discontinued operations . story_separator_special_tag of consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets , liabilities , revenues , expenses and related disclosures . some of those estimates are subjective and complex , and consequently , actual results could differ from those estimates . the following accounting policies and estimates have been highlighted as significant because changes to certain judgements and assumptions inherent in these policies could affect our consolidated financial statements : ● going concern ● inventory valuation ● revenue recognition ● income taxes ● stock-based compensation ● goodwill recently issued accounting pronouncements in august 2020 , the fasb issued asu no . 2020-06 , debt – debt with conversion and other options ( subtopic 470-20 ) and derivatives and hedging – contracts in entity 's own equity ( subtopic 815-40 ) ( “ asu 2020-06 ) , which is intended to address issues identified as a result of the complexity associated with applying gaap for certain financial instruments with characteristics of liabilities and equity . for convertible instruments , asu 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock , and enhances information transparency by making targeted improvements to the disclosures for convertible instruments and earnings-per-share guidance on the basis of feedback from financial statement users . asu 2020-06 is effective for fiscal years , and interim periods in those fiscal years , beginning after december 15 , 2021. early adoption is permitted , but no earlier than fiscal years beginning after december 15 , 2020 , including interim periods with those fiscal years . the company is evaluating the effect of adopting this new accounting guidance on its financial statements . in december 2019 , the fasb issued asu no . 2019-12 , “ income taxes ( topic 740 ) : simplifying the accounting for income taxes ” ( “ asu 2019-12 ” ) , which is intended to simplify various aspects related to accounting for income taxes . asu 2019-12 removes certain exceptions to the

cash used in operating activities cash used in operating activities reflects our net income ( loss ) adjusted for certain non-cash items and changes to working capital items . for the year ended december 31 , 2020 , net income of $ 1,096,000 and $ 1,990,000 of non-cash items , consisting primarily of employees and directors stock based compensation of $ 519,000 , amortization of right-of-use assets of $ 482,000 , depreciation of property and equipment of $ 2,570,000 and amortization of debt discount on convertible notes payable of $ 233,000 , were partially offset by the forgiveness of notes payable – sba loan and non-cash other income recognized in the amounts of $ 2,414,000 and $ 402,000 , respectively . operating assets and liabilities used cash in the net amount of $ 4,611,000 , consisting primarily of the net increases in accounts receivable and inventory of $ 1,045,000 and $ 3,474,000 , and net decreases in operating lease liabilities and deferred revenue in the amounts of $ 673,000 and $ 94,000 , which were partially offset primarily by increases in accounts payable and accrued expenses in the amounts of $ 275,000 and by decreases in prepaid expenses and other current assets and deposits and other assets in the amounts of $ 274,000 and $ 168,000 , respectively .


 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 operating activities cash used in operating activities reflects our net income ( loss ) adjusted for certain non-cash items and changes to working capital items . for the year ended december 31 , 2020 , net income of $ 1,096,000 and $ 1,990,000 of non-cash items , consisting primarily of employees and directors stock based compensation of $ 519,000 , amortization of right-of-use assets of $ 482,000 , depreciation of property and equipment of $ 2,570,000 and amortization of debt discount on convertible notes payable of $ 233,000 , were partially offset by the forgiveness of notes payable – sba loan and non-cash other income recognized in the amounts of $ 2,414,000 and $ 402,000 , respectively . operating assets and liabilities used cash in the net amount of $ 4,611,000 , consisting primarily of the net increases in accounts receivable and inventory of $ 1,045,000 and $ 3,474,000 , and net decreases in operating lease liabilities and deferred revenue in the amounts of $ 673,000 and $ 94,000 , which were partially offset primarily by increases in accounts payable and accrued expenses in the amounts of $ 275,000 and by decreases in prepaid expenses and other current assets and deposits and other assets in the amounts of $ 274,000 and $ 168,000 , respectively .
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 Suspicious Activity Report : as the commercial aerospace and defense industries continue to consolidate and major contractors seek to streamline supply chains by buying more complete sub-assemblies from fewer suppliers , we have sought to remain competitive not only by providing cost-effective world class service but also by increasing our ability to produce more complex and complete assemblies for our customers . we are currently focused on positioning our business to obtain profitability , achieve positive cash flow and we remain resolute on meeting customers ' needs . we believe that an unyielding focus on our customers will allow us to execute on our existing backlog in a timely fashion . in 2018 and 2019 , we consolidated the operations of our complex machining segment in our main campus located in bay shore , new york . in 2020 , in order to take advantage of the long-term growth opportunities we see in our markets , we made significant capital investments in new equipment . additionally , we expanded our operations and manufacturing cells located in our connecticut facility where our turbine engine segment is located . we believe these investments will increase the volume and efficiency of production , increase the size of product we can make and allow us to offer additional services to our customers . we are pleased with the positive responses received from our customers to date . our ability to operate profitably is determined by our ability to win new contracts and renewals of existing contracts , and then fulfill these contracts on a timely basis at costs that enable us to generate a profit based upon the agreed upon contract price . winning a contract generally requires that we submit a bid containing a fixed price for the product or products covered by the contract for an agreed upon period of time . thus , when submitting bids , we are required to estimate our future costs of production and , since we often rely upon subcontractors , the prices we can obtain from our subcontractors . while our revenues are largely determined by the number of contracts we are awarded , the volume of product delivered and price of product under each contract , our costs are determined by a number of factors . the principal factors impacting our costs are the cost of materials and supplies , labor , financing and the efficiency at which we can produce our products . the cost of materials used in the aerospace industry is highly volatile . in addition , the market for the skilled labor we require to operate our plants is highly competitive . the profit margin of the various products we sell varies based upon a number of factors , including the complexity of the product , the intensity of the competition for such product and , in some cases , the ability to deliver replacement parts on short notice . thus , in assessing our performance from one period to another , a reader must understand that changes in profit margin can be the result of shifts in the mix of products sold . our operations have a large percentage of fixed factory overhead . as a result , our profit margins are also highly variable with sales volumes as under-absorption of factory overhead decreases profits . 14 a very large percentage of the products we produce are used on military as opposed to civilian aircraft . these products can be replacements for aircraft already in the fleet of the armed services or for the production of new aircraft . reductions to the defense department budget and decreased usage of aircraft reduces the demand for both new production and replacement spares . recent increases in defense department spending have increased orders for our products . reductions to the defense department budget or decreased usage of aircraft reduces the demand for both new production and replacement spares and could adversely impact our business and our revenues . we are focusing greater efforts on the civilian aircraft market though we still remain dependent upon the military for an overwhelming portion of our revenues . covid -19 on march 11 , 2020 , the world health organization announced that infections caused by the coronavirus disease of 2019 ( “ covid-19 ” ) had become pandemic , and on march 13 , 2020 , the u.s. president announced a national emergency relating to the disease . national , state and local authorities have adopted various regulations and orders , including mandates on the number of people that may gather in one location and closing non-essential businesses . to date , we have been deemed an essential business and have not curtailed our operations . the measures adopted by various governments and agencies , as well as the decision by many individuals and businesses to voluntarily shut down or self-quarantine , had and are expected to continue to have serious adverse impacts on domestic and foreign economies of uncertain severity and duration . the effectiveness of economic stabilization efforts adopted by governments and their willingness to adopt further measures is uncertain . the overall economic impact of the covid-19 pandemic has been highly negative to the general economy and has been particularly negative on the commercial travel industry and commercial aerospace industries . in accordance with the department of defense guidance issued in march 2020 designating the defense industrial base as a critical infrastructure workforce , our facilities have continued to operate in support of essential products and services required to meet national security commitments to the u.s. government and the u.s. military , however , facility closures or work slowdowns or temporary stoppages could occur . story_separator_special_tag the formula to determine the amounts of revolving advances permitted to be borrowed under the snb revolving line of credit is based on a percentage of eligible receivables and inventory ( as defined in the snb facility ) . prior to the increase in the snb term loan described below , the snb term loan provided for monthly principal installments in the amount of $ 45,238 , payable on the first business day of each month , beginning on february 1 , 2020 , with a final payment of any unpaid balance of principal and interest payable on december 30 , 2022. in addition , for so long as the snb term loan remains outstanding , if excess cash flow ( as defined ) is a positive number for any fiscal year , beginning with the year ending december 31 , 2020 , we shall pay to snb an amount equal to the lesser of ( i ) twenty-five percent ( 25 % ) of the excess cash flow for such fiscal year and ( ii ) the outstanding principal balance of the term loan . such payment shall be made to snb and applied to the outstanding principal balance of the term loan , on or prior to the april 15 immediately following such fiscal year . the terms of the snb facility require that , among other things , we maintain a specified fixed charge coverage ratio of 1.25 to 1.00 at the end of each fiscal quarter beginning with the fiscal quarter ending march 31 , 2020. in addition , we are limited in the amount of capital expenditures we can make . in accordance with the snb facility by september 30 , 2020 , we were required to cause the holders of certain subordinated convertible notes to either ( i ) extend the maturity date of such notes to a date more than six months after december 31 , 2022 , or ( ii ) convert the notes into common stock of the company . as of december 31 , 2020 , we were in compliance with all loan covenants . the snb facility also restricts the amount of dividends we may pay to our stockholders . substantially all of our assets are pledged as collateral under the snb facility . 20 2 ) increased term loan to modernize equipment - on november 6 , 2020 , we entered into the first amendment to loan and security agreement , increasing the term loan to $ 5,685,000. this allowed us to finance the acquisition of the new equipment at what we believe to be a reasonable interest rate . the repayment terms of the term loan were amended to provide monthly principal installments in the amount of $ 67,679 beginning on december 1 , 2020 , with a final payment of any unpaid balance of principal and interest payable on december 30 , 2022. we have paid an amendment fee of $ 20,000. as of december 31 , 2020 , our debt to snb in the amount of $ 21,207,000 consisted of the snb revolving line of credit note in the amount of $ 15,649,000 and the snb term loan in the amount of $ 5,558,000. because we believe our fiscal 2021 sales will be higher than the amount achieved in fiscal 2020 , we believe our liquidity in 2021 will improve . nevertheless , our liquidity may be adversely impacted by various risks and uncertainties , including , but not limited to future effects of the covid-19 pandemic and other risks detailed in part1 , item 1a of this annual report . changes in our cash flow during fiscal 2020 and 2019 are discussed further below . cash flow the following table summarizes our net cash flow from operating , investing and financing activities for the periods indicated ( in thousands ) : replace_table_token_7_th the above cash flows include the cash flows from our continuing and discontinued operations . story_separator_special_tag of consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets , liabilities , revenues , expenses and related disclosures . some of those estimates are subjective and complex , and consequently , actual results could differ from those estimates . the following accounting policies and estimates have been highlighted as significant because changes to certain judgements and assumptions inherent in these policies could affect our consolidated financial statements : ● going concern ● inventory valuation ● revenue recognition ● income taxes ● stock-based compensation ● goodwill recently issued accounting pronouncements in august 2020 , the fasb issued asu no . 2020-06 , debt – debt with conversion and other options ( subtopic 470-20 ) and derivatives and hedging – contracts in entity 's own equity ( subtopic 815-40 ) ( “ asu 2020-06 ) , which is intended to address issues identified as a result of the complexity associated with applying gaap for certain financial instruments with characteristics of liabilities and equity . for convertible instruments , asu 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock , and enhances information transparency by making targeted improvements to the disclosures for convertible instruments and earnings-per-share guidance on the basis of feedback from financial statement users . asu 2020-06 is effective for fiscal years , and interim periods in those fiscal years , beginning after december 15 , 2021. early adoption is permitted , but no earlier than fiscal years beginning after december 15 , 2020 , including interim periods with those fiscal years . the company is evaluating the effect of adopting this new accounting guidance on its financial statements . in december 2019 , the fasb issued asu no . 2019-12 , “ income taxes ( topic 740 ) : simplifying the accounting for income taxes ” ( “ asu 2019-12 ” ) , which is intended to simplify various aspects related to accounting for income taxes . asu 2019-12 removes certain exceptions to the

