our customers include celebrities and other influencers who support our brand through postings made on an uncompensated and unsolicited basis . 28 we currently market and sell our products through 91 showrooms at top tier malls , lifestyle centers and street locations in 35 states in the u.s. our modern , efficient showrooms are designed to appeal to millennials and other purchasers looking for comfortable , enduring , premium furniture . they showcase the different sizes of our sacs , the myriad forms into which our sactionals can be configured , and the large variety of fabrics that can be used to cover our products . our retail showrooms are technology driven and focused on educating prospective customers about the many benefits of our unique products , enabling us to require just 498 to 1,794 square feet for each showroom . as part of our direct to consumer sales approach , we also sell our products through our ecommerce platform . we believe our products are uniquely suited to this channel . our foam-based sacs can be reduced to one-eighth of their normal size and each of our sactionals components weighs less than 50 pounds upon shipping . with furniture especially suited to ecommerce applications , our sales completed through this channel accounted for 23.9 % and 19.9 % of our total sales for fiscal 2020 and 2019 , respectively . our showrooms and other direct advertising and marketing efforts work in concert to drive customer conversion in ecommerce . despite the increase in sales , net losses were $ 15.2 million and $ 6.7 million for fiscal 2020 and 2019 primarily due to increased spending on showrooms , advertising , marketing and financing related costs . product overview we challenge the notion that a piece of furniture is static by offering a dynamic product line built to last and evolve throughout a customer 's life . our products serve as a set of building blocks that can be rearranged , restyled and re-upholstered with any new setting , mitigating constant changes in fashion and style . ● sactionals . we believe our sactionals platform is unlike competing products in its adaptability yet is comparable aesthetically to similarly priced premium couches and sectionals . our sactional products include a number of patented features relating to their geometry and modularity , coupling mechanisms and other features . utilizing only two , standardized pieces , “ seats ” and “ sides , ” and over 250 high quality , tight-fitting covers that are removable , washable , and changeable , customers can create numerous permutations of a sectional couch with minimal effort . customization is further enhanced with our specialty-shaped modular offerings , such as our wedge seat and roll arm side . our custom features and accessories can be added easily and quickly to a sactional to meet endless design , style and utility preferences , reflecting our designed for life philosophy . sactionals are built to meet the highest durability and structural standards applicable to fixed couches . sactionals are comprised of standardized units and we guarantee their compatibility over time , which we believe is a major pillar of their value proposition to the consumer . ● sacs . we believe that our sacs product line is a category leader in oversized beanbags . the sac product line offers 6 different sizes ranging from 22 pounds to 95 pounds with capacity to seat 3+ people on the larger model sacs . filled with durafoam , a blend of shredded foam , sacs provide serene comfort and guaranteed durability . their removable covers are machine washable and may be easily replaced with a wide selection of cover offerings . ● accessories . our accessories complement our sacs and sactionals by increasing their adaptability to meet evolving consumer demands and preferences . our current product line offers sactional-specific drink holders , footsac blankets , decorative pillows , fitted seat tables and ottomans in varying styles and finishes and our unique sactionals power hub , providing our customers with the flexibility to customize their furnishings with decorative and practical add-ons to meet evolving style preferences . sales channels we offer our products through an omni-channel platform that provides a seamless and meaningful experience to our customers online and in-store . compared to traditional retailers , our showrooms require significantly less square footage because of our need to have only a few in-store sample configurations for display and our ability to stack our inventory for immediate sale . our retail showrooms are technology driven and focused on educating prospective customers about the many benefits of our unique products , enabling us to require just 498 to 1,794 square feet for each showroom . the small footprint requirement provides a cost advantage and flexibility in locating our showrooms strategically in a-rated malls and street locations in our target markets . these logistical advantages underlie our broader tech-driven , internet-based business model , where we leverage our showrooms as both a traditional retail channel to purchase our products and an educational center for prospective online customers to learn about and interact with our products in real time . 29 through our fast growing mobile and ecommerce channel , we are able to significantly enhance the consumer shopping experience for home furnishings , driving deeper brand engagement and loyalty , while simultaneously driving favorable margin expansion . our technology capabilities are robust , and we are well positioned to benefit from the growing consumer preference to transact via mobile devices . we leverage our strong social media presence and showroom footprint to drive traffic toward our ecommerce platform , where product testimonials and inspirational stories from our lovesac community create a more engaging consumer experience for our customers . additionally , our products ' compact packaging facilitates consistent production scheduling , outsourcing of delivery and lower shipping costs , allowing us to quickly and cost-effectively deliver online orders . story_separator_special_tag the decrease in gross margin was partially offset by reduced costs of our sactionals products . the decrease in costs of our sactionals products was primarily related to cost savings from a change in the sourcing of our lovesoft and down blend fills in addition to an ongoing shift of manufacturing to vietnam and other countries . selling , general and administrative expenses selling , general and administrative expenses increased $ 21.7 million , or 28.4 % , to $ 98.1 million for the fiscal year ended february 2 , 2020 compared to $ 76.4 million for the fiscal year ended february 3 , 2019. the increase in selling , general and administrative expenses was primarily related to an increase in employment costs of $ 5.1 million , $ 3.4 million of increased rent associated with our net addition of 16 showrooms , $ 5.9 million of expenses related to the increase in sales such as $ 2.8 million of credit card fees , $ 0.7 million of web related selling expenses , $ 0.8 million of web affiliate program and web platform hosting commissions and $ 1.6 million of pop-up shop sales agent fees . overhead expenses increased $ 7.3 million consisting of an increase of $ 6.8 million in headquarters operating expenses as well as infrastructure investments , an increase in insurance expense of $ 0.7 million related to the growth of the company and an increase of $ 1.9 million in stock compensation offset by a decrease in ipo and financing related expense of $ 2.1 million . selling , general and administrative expenses were 42.1 % of net sales for fiscal year ended february 2 , 2020 compared to 46.1 % of net sales for fiscal year ended february 3 , 2019. the decrease in selling , general and administrative expenses of 4.0 % of net sales was driven largely by leverage in employment costs , rent expense , and financing related costs . the leverage in these expenses was partially offset by increases in stock compensation headquarters operating expenses and infrastructure investments . advertising and marketing advertising and marketing expenses increased $ 10.8 million , or 59.0 % , to $ 29.2 million for the fiscal year ended february 2 , 2020 compared to $ 18.4 million for the fiscal year ended february 3 , 2019. the increase in advertising and marketing costs relates to increased media and direct to consumer programs which are expected to drive revenue beyond the period of the expense . we expect to continue to maintain our advertising and marketing investments at 10 % -12 % of net sales on an annual basis . the investment by quarter may vary . advertising and marketing expenses were 12.5 % of net sales in fiscal 2020 compared to 11.1 % of net sales in fiscal 2019. the increase in advertising and marketing expenses of 1.4 % of net sales was driven largely by a shift to national media with a focus on holiday media and the introduction of 15 second sport into our television – advertising mix . depreciation and amortization expenses depreciation and amortization expenses increased $ 2.0 million or 65.6 % in fiscal 2020 to $ 5.2 million compared to $ 3.1 million in fiscal 2019. the increase in depreciation and amortization expense is principally related to capital investments for new and remodeled showrooms . 33 interest income , net interest income was $ 0.6 million which reflects earnings related to the net proceeds from the ipo and primary share offerings of $ 0.8 million net of interest expense of $ 0.2 million relating to unused line fees , interest on borrowings and amortization of deferred financing fees on the asset based loan for the fiscal year ended february 2 , 2020. provision for income taxes income tax expense was less than 0.02 % of sales for both fiscal 2020 and fiscal 2019. repeat customers repeat customers accounted for approximately 35 % of all transactions in fiscal 2020 compared to 38 % in fiscal 2019. we expect this shift into new customer transactions to continue as we focus on driving acquisition due to our favorable cac/clv ratio . quarterly results and seasonality the following table sets forth our historical quarterly consolidated statements of income for each of the last eight fiscal quarters for the period ended february 2 , 2020. this unaudited quarterly information has been prepared on the same basis as our annual audited financial statements appearing elsewhere in this annual report on form 10-k and includes all adjustments , consisting of only normal recurring adjustments that we consider necessary to present fairly the financial information for the fiscal quarters presented . the unaudited quarterly data should be read in conjunction with our audited consolidated financial statements and the related notes appearing elsewhere in this annual report on form 10-k. replace_table_token_7_th replace_table_token_8_th 34 non-gaap quarterly results replace_table_token_9_th our business is seasonal and we have historically realized a higher portion of our net sales and net income in the fourth fiscal quarter due primarily to the holiday selling season . working capital requirements are typically higher in the third fiscal quarter due to inventory built-up in advance of the holiday selling season . during these peak periods we have historically increased our borrowings under our line of credit . as such , results of a period shorter than a full year may not be indicative of results expected for the entire year , and the seasonal nature of our business may affect comparisons between periods . liquidity and capital resources general our business relies on cash flows from operations , our revolving line of credit ( see “ revolving line of credit ” below ) and securities issuances as our primary sources of liquidity . our primary cash needs are for marketing and advertising , inventory , payroll , showroom rent , capital expenditures associated with opening new showrooms and updating existing showrooms , as well as infrastructure and information

cash flow analysis a summary of operating , investing , and financing activities during the periods indicated are shown in the following table : replace_table_token_10_th net cash used in operating activities cash from operating activities consists primarily of net loss adjusted for certain non-cash items , including depreciation , amortization , ( gain ) loss on disposal of property and equipment , equity-based compensation , non-cash interest expense , deferred rent and the effect of changes in working capital and other activities . in fiscal 2020 , net cash used by operating activities was $ 11.2 million and consisted of changes in operating assets and liabilities of $ 7.8 million , a net loss of $ 15.2 million , and non-cash items of $ 11.8 million . working capital and other activities consisted primarily of increases in inventory of $ 10.2 million , accounts receivable of $ 3.2 million , and prepaid expenses of $ 2.2 million , partially offset by increases in accrued liabilities and accounts payable of $ 7.2 million , and other current liabilities of $ 0.6 million . 35 net cash used in investing activities investing activities consist primarily of investment in supply chain and systems infrastructure and capital expenditures related to new showroom openings and the remodeling of existing showrooms . for fiscal 2020 , capital expenditures were $ 10.7 million as a result of investments in new and remolded showrooms and intangibles which included $ 0.3 million in proceeds from the disposal of property and equipment . for fiscal 2019 , capital expenditures were $ 11.4 million as a result of investments in new and remolded showrooms and intangibles . net cash provided by financing activities financing activities consist primarily of the net proceeds from public offerings , borrowings and repayments related to the existing revolving line of credit and capital contributions from securities issuances . for fiscal 2020 , net cash provided by financing activities was $ 21.3 million , primarily due to $ 25.6 million of net proceeds from a primary share offering net of $ 4.3 million of taxes paid for net share settlement of equity awards .


 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 flow analysis a summary of operating , investing , and financing activities during the periods indicated are shown in the following table : replace_table_token_10_th net cash used in operating activities cash from operating activities consists primarily of net loss adjusted for certain non-cash items , including depreciation , amortization , ( gain ) loss on disposal of property and equipment , equity-based compensation , non-cash interest expense , deferred rent and the effect of changes in working capital and other activities . in fiscal 2020 , net cash used by operating activities was $ 11.2 million and consisted of changes in operating assets and liabilities of $ 7.8 million , a net loss of $ 15.2 million , and non-cash items of $ 11.8 million . working capital and other activities consisted primarily of increases in inventory of $ 10.2 million , accounts receivable of $ 3.2 million , and prepaid expenses of $ 2.2 million , partially offset by increases in accrued liabilities and accounts payable of $ 7.2 million , and other current liabilities of $ 0.6 million . 35 net cash used in investing activities investing activities consist primarily of investment in supply chain and systems infrastructure and capital expenditures related to new showroom openings and the remodeling of existing showrooms . for fiscal 2020 , capital expenditures were $ 10.7 million as a result of investments in new and remolded showrooms and intangibles which included $ 0.3 million in proceeds from the disposal of property and equipment . for fiscal 2019 , capital expenditures were $ 11.4 million as a result of investments in new and remolded showrooms and intangibles . net cash provided by financing activities financing activities consist primarily of the net proceeds from public offerings , borrowings and repayments related to the existing revolving line of credit and capital contributions from securities issuances . for fiscal 2020 , net cash provided by financing activities was $ 21.3 million , primarily due to $ 25.6 million of net proceeds from a primary share offering net of $ 4.3 million of taxes paid for net share settlement of equity awards .
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 Suspicious Activity Report : our customers include celebrities and other influencers who support our brand through postings made on an uncompensated and unsolicited basis . 28 we currently market and sell our products through 91 showrooms at top tier malls , lifestyle centers and street locations in 35 states in the u.s. our modern , efficient showrooms are designed to appeal to millennials and other purchasers looking for comfortable , enduring , premium furniture . they showcase the different sizes of our sacs , the myriad forms into which our sactionals can be configured , and the large variety of fabrics that can be used to cover our products . our retail showrooms are technology driven and focused on educating prospective customers about the many benefits of our unique products , enabling us to require just 498 to 1,794 square feet for each showroom . as part of our direct to consumer sales approach , we also sell our products through our ecommerce platform . we believe our products are uniquely suited to this channel . our foam-based sacs can be reduced to one-eighth of their normal size and each of our sactionals components weighs less than 50 pounds upon shipping . with furniture especially suited to ecommerce applications , our sales completed through this channel accounted for 23.9 % and 19.9 % of our total sales for fiscal 2020 and 2019 , respectively . our showrooms and other direct advertising and marketing efforts work in concert to drive customer conversion in ecommerce . despite the increase in sales , net losses were $ 15.2 million and $ 6.7 million for fiscal 2020 and 2019 primarily due to increased spending on showrooms , advertising , marketing and financing related costs . product overview we challenge the notion that a piece of furniture is static by offering a dynamic product line built to last and evolve throughout a customer 's life . our products serve as a set of building blocks that can be rearranged , restyled and re-upholstered with any new setting , mitigating constant changes in fashion and style . ● sactionals . we believe our sactionals platform is unlike competing products in its adaptability yet is comparable aesthetically to similarly priced premium couches and sectionals . our sactional products include a number of patented features relating to their geometry and modularity , coupling mechanisms and other features . utilizing only two , standardized pieces , “ seats ” and “ sides , ” and over 250 high quality , tight-fitting covers that are removable , washable , and changeable , customers can create numerous permutations of a sectional couch with minimal effort . customization is further enhanced with our specialty-shaped modular offerings , such as our wedge seat and roll arm side . our custom features and accessories can be added easily and quickly to a sactional to meet endless design , style and utility preferences , reflecting our designed for life philosophy . sactionals are built to meet the highest durability and structural standards applicable to fixed couches . sactionals are comprised of standardized units and we guarantee their compatibility over time , which we believe is a major pillar of their value proposition to the consumer . ● sacs . we believe that our sacs product line is a category leader in oversized beanbags . the sac product line offers 6 different sizes ranging from 22 pounds to 95 pounds with capacity to seat 3+ people on the larger model sacs . filled with durafoam , a blend of shredded foam , sacs provide serene comfort and guaranteed durability . their removable covers are machine washable and may be easily replaced with a wide selection of cover offerings . ● accessories . our accessories complement our sacs and sactionals by increasing their adaptability to meet evolving consumer demands and preferences . our current product line offers sactional-specific drink holders , footsac blankets , decorative pillows , fitted seat tables and ottomans in varying styles and finishes and our unique sactionals power hub , providing our customers with the flexibility to customize their furnishings with decorative and practical add-ons to meet evolving style preferences . sales channels we offer our products through an omni-channel platform that provides a seamless and meaningful experience to our customers online and in-store . compared to traditional retailers , our showrooms require significantly less square footage because of our need to have only a few in-store sample configurations for display and our ability to stack our inventory for immediate sale . our retail showrooms are technology driven and focused on educating prospective customers about the many benefits of our unique products , enabling us to require just 498 to 1,794 square feet for each showroom . the small footprint requirement provides a cost advantage and flexibility in locating our showrooms strategically in a-rated malls and street locations in our target markets . these logistical advantages underlie our broader tech-driven , internet-based business model , where we leverage our showrooms as both a traditional retail channel to purchase our products and an educational center for prospective online customers to learn about and interact with our products in real time . 29 through our fast growing mobile and ecommerce channel , we are able to significantly enhance the consumer shopping experience for home furnishings , driving deeper brand engagement and loyalty , while simultaneously driving favorable margin expansion . our technology capabilities are robust , and we are well positioned to benefit from the growing consumer preference to transact via mobile devices . we leverage our strong social media presence and showroom footprint to drive traffic toward our ecommerce platform , where product testimonials and inspirational stories from our lovesac community create a more engaging consumer experience for our customers . additionally , our products ' compact packaging facilitates consistent production scheduling , outsourcing of delivery and lower shipping costs , allowing us to quickly and cost-effectively deliver online orders . story_separator_special_tag the decrease in gross margin was partially offset by reduced costs of our sactionals products . the decrease in costs of our sactionals products was primarily related to cost savings from a change in the sourcing of our lovesoft and down blend fills in addition to an ongoing shift of manufacturing to vietnam and other countries . selling , general and administrative expenses selling , general and administrative expenses increased $ 21.7 million , or 28.4 % , to $ 98.1 million for the fiscal year ended february 2 , 2020 compared to $ 76.4 million for the fiscal year ended february 3 , 2019. the increase in selling , general and administrative expenses was primarily related to an increase in employment costs of $ 5.1 million , $ 3.4 million of increased rent associated with our net addition of 16 showrooms , $ 5.9 million of expenses related to the increase in sales such as $ 2.8 million of credit card fees , $ 0.7 million of web related selling expenses , $ 0.8 million of web affiliate program and web platform hosting commissions and $ 1.6 million of pop-up shop sales agent fees . overhead expenses increased $ 7.3 million consisting of an increase of $ 6.8 million in headquarters operating expenses as well as infrastructure investments , an increase in insurance expense of $ 0.7 million related to the growth of the company and an increase of $ 1.9 million in stock compensation offset by a decrease in ipo and financing related expense of $ 2.1 million . selling , general and administrative expenses were 42.1 % of net sales for fiscal year ended february 2 , 2020 compared to 46.1 % of net sales for fiscal year ended february 3 , 2019. the decrease in selling , general and administrative expenses of 4.0 % of net sales was driven largely by leverage in employment costs , rent expense , and financing related costs . the leverage in these expenses was partially offset by increases in stock compensation headquarters operating expenses and infrastructure investments . advertising and marketing advertising and marketing expenses increased $ 10.8 million , or 59.0 % , to $ 29.2 million for the fiscal year ended february 2 , 2020 compared to $ 18.4 million for the fiscal year ended february 3 , 2019. the increase in advertising and marketing costs relates to increased media and direct to consumer programs which are expected to drive revenue beyond the period of the expense . we expect to continue to maintain our advertising and marketing investments at 10 % -12 % of net sales on an annual basis . the investment by quarter may vary . advertising and marketing expenses were 12.5 % of net sales in fiscal 2020 compared to 11.1 % of net sales in fiscal 2019. the increase in advertising and marketing expenses of 1.4 % of net sales was driven largely by a shift to national media with a focus on holiday media and the introduction of 15 second sport into our television – advertising mix . depreciation and amortization expenses depreciation and amortization expenses increased $ 2.0 million or 65.6 % in fiscal 2020 to $ 5.2 million compared to $ 3.1 million in fiscal 2019. the increase in depreciation and amortization expense is principally related to capital investments for new and remodeled showrooms . 33 interest income , net interest income was $ 0.6 million which reflects earnings related to the net proceeds from the ipo and primary share offerings of $ 0.8 million net of interest expense of $ 0.2 million relating to unused line fees , interest on borrowings and amortization of deferred financing fees on the asset based loan for the fiscal year ended february 2 , 2020. provision for income taxes income tax expense was less than 0.02 % of sales for both fiscal 2020 and fiscal 2019. repeat customers repeat customers accounted for approximately 35 % of all transactions in fiscal 2020 compared to 38 % in fiscal 2019. we expect this shift into new customer transactions to continue as we focus on driving acquisition due to our favorable cac/clv ratio . quarterly results and seasonality the following table sets forth our historical quarterly consolidated statements of income for each of the last eight fiscal quarters for the period ended february 2 , 2020. this unaudited quarterly information has been prepared on the same basis as our annual audited financial statements appearing elsewhere in this annual report on form 10-k and includes all adjustments , consisting of only normal recurring adjustments that we consider necessary to present fairly the financial information for the fiscal quarters presented . the unaudited quarterly data should be read in conjunction with our audited consolidated financial statements and the related notes appearing elsewhere in this annual report on form 10-k. replace_table_token_7_th replace_table_token_8_th 34 non-gaap quarterly results replace_table_token_9_th our business is seasonal and we have historically realized a higher portion of our net sales and net income in the fourth fiscal quarter due primarily to the holiday selling season . working capital requirements are typically higher in the third fiscal quarter due to inventory built-up in advance of the holiday selling season . during these peak periods we have historically increased our borrowings under our line of credit . as such , results of a period shorter than a full year may not be indicative of results expected for the entire year , and the seasonal nature of our business may affect comparisons between periods . liquidity and capital resources general our business relies on cash flows from operations , our revolving line of credit ( see “ revolving line of credit ” below ) and securities issuances as our primary sources of liquidity . our primary cash needs are for marketing and advertising , inventory , payroll , showroom rent , capital expenditures associated with opening new showrooms and updating existing showrooms , as well as infrastructure and information

