the project has received permits in accordance with the california environmental quality act ( `` ceqa `` ) which allow the capture and conservation of 2.5 million acre-feet of groundwater over 50 years under the terms of a groundwater management plan approved by san bernardino county , which is responsible for groundwater use at the project area . our 2017 working capital requirements relate largely to the final development activities associated with the water project and those activities consistent with the water project related to further development of our land and agricultural assets . while we continue to believe that the ultimate implementation of the water project will provide the primary source of our future cash flow , we also believe there is significant additional value in our underlying agricultural assets . demand for agricultural land with water rights is at an all-time high ; therefore , in addition to our water project proposal , we are engaged in agricultural joint ventures at the cadiz/fenner property that put some of the groundwater currently being lost to evaporation from the underlying aquifer system to immediate beneficial use . we have farmed portions of the cadiz/fenner property since the late 1980s relying on groundwater from the aquifer system for irrigation and have found the site is well suited for various permanent and seasonal crops . presently , the property has 2,100 acres leased to third parties for a variety of crops , including citrus , dried-on-the-vine raisins and seasonal vegetables . we also continue to explore additional uses of our land and water resource assets , including renewable energy development , the marketing of our approved desert tortoise land conservation bank , which is located on our properties outside the water project area , and other long-term legacy uses of our properties , such as habitat conservation and cultural development . w ater resource development the water project is designed to supply , capture and conserve billions of gallons of renewable native groundwater currently being lost annually to evaporation from the aquifer system underlying our cadiz/fenner property , and provide a new reliable water supply for approximately 400,000 people in southern california . the total quantity of groundwater to be recovered and conveyed to water project participants will not exceed a long-term annual average of 50,000 acre-feet per year for 50 years . the water project also offers participants the ability to carry-over their annual supply and store it in the groundwater basin from year to year . a second phase of the water project , phase ii , will offer up to one million acre-feet of storage capacity that can be used to hold imported water supplies at the water project area . 25 water project facilities required for phase i primarily include , among other things : · high-yield wells designed to efficiently recover available native groundwater from beneath the water project area ; · a water conveyance pipeline to deliver water from the well-field to the cra for further delivery to project participants ; and · an energy source to provide power to the well-field , pipeline and pumping facilities . if an imported water storage component of the project is ultimately implemented in phase ii , the following additional facilities would be required , among other things : · facilities to pump water through the conveyance pipeline from the cra to the water project well-field and or through the company 's pipeline from cadiz to barstow , ca ; and · spreading basins , which are shallow settling ponds that will be configured to efficiently percolate water from the ground surface down to the water table using subsurface storage capacity for the storage of water . in 2016 , the company focused on completing the remaining steps to implement the project , including clearance to use an existing railroad right-of-way for its conveyance pipeline and defending the water project 's ceqa permits in the california court of appeal . prior to construction , the water project must ( 1 ) complete efforts to secure its pipeline right-of-way , ( 2 ) finalize contracts with project participating agencies and secure transportation arrangements to deliver water into each participant 's service area , and ( 3 ) secure private construction financing . below is a discussion of present activities to advance these objectives . ( 1 ) water conveyance pipeline right-of-way pipeline from cadiz to cra in september 2008 , we secured a right-of-way for the water project 's water conveyance pipeline by entering into a lease agreement with the arizona & california railroad company ( `` arzc `` ) , which operated an active shortline railroad extending from cadiz to matthie , arizona . the agreement allows for the use of a portion of the railroad 's right-of-way to construct and operate a water conveyance pipeline for a period up to 99 years . the buried pipeline would be constructed parallel to the railroad tracks and be used to convey water between our cadiz valley property and the cra in freda , california . our lease agreement with the arzc also expressly requires that the project further several railroad purposes and , under the terms of the lease agreement , the arzc reserved water supplies from the project for its operational needs as well as access to project facilities , such as roads and power appurtenances , for the benefit of its railroad operation . in september 2013 , we also entered into a trackage rights agreement with the arzc that would enable the operation of steam-powered , passenger excursion trains on the line powered by water made available from the pipeline . story_separator_special_tag credits sold by the fenner bank will fund our permanent preservation of the land as well as research by outside entities , including san diego zoo global , into desert tortoise health and species protection . 31 other opportunities other opportunities in the water and agricultural or related infrastructure business complementary to our current objectives could provide new opportunities for our company . over the longer-term , we believe the population of southern california , nevada and arizona will continue to grow , and that , in time , the economics of commercial and residential development at our properties may become attractive . we remain committed to the sustainable use of our land and water assets , and will continue to explore all opportunities for environmentally responsible development of these assets . we can not predict with certainty which of these various opportunities will ultimately be utilized . results of operations ( a ) year ended december 31 , 2016 compared to year ended december 31 , 2015 we have not received significant revenues from our water resource and real estate development activity to date . our revenues have been limited to our agricultural operations . as a result , we have historically incurred a net loss from operations . we had revenues of $ 412 thousand for the year ended december 31 , 2016 , and $ 304 thousand for the year ended december 31 , 2015. the net loss totaled $ 26.3 million for the year ended december 31 , 2016 , compared with a net loss of $ 24.0 million for the year ended december 31 , 2015. the higher loss in 2016 was primarily related to a $ 2.25 million loss on extinguishment of debt . the higher 2016 loss was also related to higher interest expense on additional convertible debt issued and higher amortization expense , offset by a decrease in litigation costs related to the water project due to the timing of the appellate litigation . our primary expenses are our ongoing overhead costs associated with the development of the water project ( i.e . , general and administrative expense ) and our interest expense . we will continue to incur non-cash expense in connection with our management and director equity incentive compensation plans . revenues . revenue totaled $ 412 thousand during the year ended december 31 , 2016 , compared to $ 304 thousand during the year ended december 31 , 2015. the 2016 revenue is primarily related to rental income from the fvf lease ( see `` agricultural development `` , above ) . cost of sales . cost of sales were zero for the year ended december 31 , 2016 , compared with $ 334 thousand during the year ended december 31 , 2015 . 32 general and administrative expenses . general and administrative expenses during the year ended december 31 , 2016 , totaled $ 9.3 million compared with $ 13.7 million for the year ended december 31 , 2015. non-cash compensation costs related to stock and option awards are included in general and administrative expenses . general and administrative expenses , exclusive of stock-based compensation costs , totaled $ 8.0 million in the year ended december 31 , 2016 , compared with $ 12.6 million for the year ended december 31 , 2015. the decrease in general and administrative expense in 2016 was primarily due to lower litigation costs related to the water project due to the timing of the appellate litigation ( see item 1 . – `` business , ( a ) general development of business `` , above . ) compensation costs from stock and option awards for the year ended december 31 , 2016 , totaled $ 1.3 million compared with $ 1.1 million for the year ended december 31 , 2015. the higher 2016 expense was primarily due to higher stock-based non-cash compensation costs related to shares awarded to the brownstein law firm for certain legal and advisory services to the company . depreciation . depreciation expense totaled $ 292 thousand for the year ended december 31 , 2016 , and $ 270 thousand for the year ended december 31 , 2015. interest expense , net . net interest expense totaled $ 14.9 million during the year ended december 31 , 2016 , compared to $ 10.1 million during 2015. the following table summarizes the components of net interest expense for the two periods ( in thousands ) : replace_table_token_3_th the interest on outstanding debt increased from $ 8.2 million to $ 9.7 million due to the compounded interest on the debt facilities resulting in a higher principal balance . amortization of debt discount increased from $ 1.6 million to $ 5.0 million primarily due to the acceleration of unamortized debt discount related to the conversion of approximately $ 2.8 million in original principal amount of the 2020 notes that were issued in april 2016. see note 6 to the consolidated financial statements , `` long-term debt `` . story_separator_special_tag roman ' , times , serif ; font-variant : normal ; width : 9pt ; font-weight : bold ; font-style : italic ; display : inline-block `` > interest expense , net . net interest expense totaled $ 10.1 million during the year ended december 31 , 2015 , compared to $ 8.5 million during 2014. the following table summarizes the components of net interest expense for the two periods ( in thousands ) : replace_table_token_4_th the interest on outstanding debt increased from $ 7.7 million to $ 8.2 million due to the compounded interest on the debt facilities resulting in a higher principal balance . see note 6 to the consolidated financial statements , `` long-term debt `` . prior debt refinancings . in november 2015 , we entered into an agreement with our senior lenders which granted us the right to extend the maturity date of an original $ 30 million first tranche of our secured senior debt from march 2016

debt refinancings . in april 2016 , we entered into a note purchase agreement with new and existing investors ( the `` investors '' ) . pursuant to the agreement , we issued approximately $ 10.0 million of our 7.00 % convertible senior notes due 2020 ( `` 2020 notes ) in aggregate principal and accrued interest . the proceeds from the issuance of the 2020 notes ( such 2020 notes , the `` new notes '' ) , are used for general working capital purposes . the 2020 notes accrue interest at 7.00 % per year , with no principal or interest payments due prior to maturity on march 5 , 2020. the 2020 notes , including original principal and accrued interest , are convertible at any time into the company 's common stock at a price of $ 6.75 per share , pursuant to the terms of the indenture dated as of december 10 , 2015 , by and between the company and us bank national association ( the `` indenture '' ) , under which the new notes were issued . as a result of this transaction , we recorded a debt discount in the amount of $ 2.0 million which is the difference between the proceeds from this transaction and the principal and accrued interest of new notes on the day of the issuance . in addition , based on the conversion rate of $ 6.75 per share , the fair value of the shares receivable on conversion exceed the $ 8.0 million in net proceeds ; therefore , a beneficial conversion feature was recorded in the amount of $ 1.48 million . this amount was recorded as additional debt discount with a corresponding amount recorded as additional paid-in capital .


 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.
     ```debt refinancings . in april 2016 , we entered into a note purchase agreement with new and existing investors ( the `` investors '' ) . pursuant to the agreement , we issued approximately $ 10.0 million of our 7.00 % convertible senior notes due 2020 ( `` 2020 notes ) in aggregate principal and accrued interest . the proceeds from the issuance of the 2020 notes ( such 2020 notes , the `` new notes '' ) , are used for general working capital purposes . the 2020 notes accrue interest at 7.00 % per year , with no principal or interest payments due prior to maturity on march 5 , 2020. the 2020 notes , including original principal and accrued interest , are convertible at any time into the company 's common stock at a price of $ 6.75 per share , pursuant to the terms of the indenture dated as of december 10 , 2015 , by and between the company and us bank national association ( the `` indenture '' ) , under which the new notes were issued . as a result of this transaction , we recorded a debt discount in the amount of $ 2.0 million which is the difference between the proceeds from this transaction and the principal and accrued interest of new notes on the day of the issuance . in addition , based on the conversion rate of $ 6.75 per share , the fair value of the shares receivable on conversion exceed the $ 8.0 million in net proceeds ; therefore , a beneficial conversion feature was recorded in the amount of $ 1.48 million . this amount was recorded as additional debt discount with a corresponding amount recorded as additional paid-in capital .
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 Suspicious Activity Report : the project has received permits in accordance with the california environmental quality act ( `` ceqa `` ) which allow the capture and conservation of 2.5 million acre-feet of groundwater over 50 years under the terms of a groundwater management plan approved by san bernardino county , which is responsible for groundwater use at the project area . our 2017 working capital requirements relate largely to the final development activities associated with the water project and those activities consistent with the water project related to further development of our land and agricultural assets . while we continue to believe that the ultimate implementation of the water project will provide the primary source of our future cash flow , we also believe there is significant additional value in our underlying agricultural assets . demand for agricultural land with water rights is at an all-time high ; therefore , in addition to our water project proposal , we are engaged in agricultural joint ventures at the cadiz/fenner property that put some of the groundwater currently being lost to evaporation from the underlying aquifer system to immediate beneficial use . we have farmed portions of the cadiz/fenner property since the late 1980s relying on groundwater from the aquifer system for irrigation and have found the site is well suited for various permanent and seasonal crops . presently , the property has 2,100 acres leased to third parties for a variety of crops , including citrus , dried-on-the-vine raisins and seasonal vegetables . we also continue to explore additional uses of our land and water resource assets , including renewable energy development , the marketing of our approved desert tortoise land conservation bank , which is located on our properties outside the water project area , and other long-term legacy uses of our properties , such as habitat conservation and cultural development . w ater resource development the water project is designed to supply , capture and conserve billions of gallons of renewable native groundwater currently being lost annually to evaporation from the aquifer system underlying our cadiz/fenner property , and provide a new reliable water supply for approximately 400,000 people in southern california . the total quantity of groundwater to be recovered and conveyed to water project participants will not exceed a long-term annual average of 50,000 acre-feet per year for 50 years . the water project also offers participants the ability to carry-over their annual supply and store it in the groundwater basin from year to year . a second phase of the water project , phase ii , will offer up to one million acre-feet of storage capacity that can be used to hold imported water supplies at the water project area . 25 water project facilities required for phase i primarily include , among other things : · high-yield wells designed to efficiently recover available native groundwater from beneath the water project area ; · a water conveyance pipeline to deliver water from the well-field to the cra for further delivery to project participants ; and · an energy source to provide power to the well-field , pipeline and pumping facilities . if an imported water storage component of the project is ultimately implemented in phase ii , the following additional facilities would be required , among other things : · facilities to pump water through the conveyance pipeline from the cra to the water project well-field and or through the company 's pipeline from cadiz to barstow , ca ; and · spreading basins , which are shallow settling ponds that will be configured to efficiently percolate water from the ground surface down to the water table using subsurface storage capacity for the storage of water . in 2016 , the company focused on completing the remaining steps to implement the project , including clearance to use an existing railroad right-of-way for its conveyance pipeline and defending the water project 's ceqa permits in the california court of appeal . prior to construction , the water project must ( 1 ) complete efforts to secure its pipeline right-of-way , ( 2 ) finalize contracts with project participating agencies and secure transportation arrangements to deliver water into each participant 's service area , and ( 3 ) secure private construction financing . below is a discussion of present activities to advance these objectives . ( 1 ) water conveyance pipeline right-of-way pipeline from cadiz to cra in september 2008 , we secured a right-of-way for the water project 's water conveyance pipeline by entering into a lease agreement with the arizona & california railroad company ( `` arzc `` ) , which operated an active shortline railroad extending from cadiz to matthie , arizona . the agreement allows for the use of a portion of the railroad 's right-of-way to construct and operate a water conveyance pipeline for a period up to 99 years . the buried pipeline would be constructed parallel to the railroad tracks and be used to convey water between our cadiz valley property and the cra in freda , california . our lease agreement with the arzc also expressly requires that the project further several railroad purposes and , under the terms of the lease agreement , the arzc reserved water supplies from the project for its operational needs as well as access to project facilities , such as roads and power appurtenances , for the benefit of its railroad operation . in september 2013 , we also entered into a trackage rights agreement with the arzc that would enable the operation of steam-powered , passenger excursion trains on the line powered by water made available from the pipeline . story_separator_special_tag credits sold by the fenner bank will fund our permanent preservation of the land as well as research by outside entities , including san diego zoo global , into desert tortoise health and species protection . 31 other opportunities other opportunities in the water and agricultural or related infrastructure business complementary to our current objectives could provide new opportunities for our company . over the longer-term , we believe the population of southern california , nevada and arizona will continue to grow , and that , in time , the economics of commercial and residential development at our properties may become attractive . we remain committed to the sustainable use of our land and water assets , and will continue to explore all opportunities for environmentally responsible development of these assets . we can not predict with certainty which of these various opportunities will ultimately be utilized . results of operations ( a ) year ended december 31 , 2016 compared to year ended december 31 , 2015 we have not received significant revenues from our water resource and real estate development activity to date . our revenues have been limited to our agricultural operations . as a result , we have historically incurred a net loss from operations . we had revenues of $ 412 thousand for the year ended december 31 , 2016 , and $ 304 thousand for the year ended december 31 , 2015. the net loss totaled $ 26.3 million for the year ended december 31 , 2016 , compared with a net loss of $ 24.0 million for the year ended december 31 , 2015. the higher loss in 2016 was primarily related to a $ 2.25 million loss on extinguishment of debt . the higher 2016 loss was also related to higher interest expense on additional convertible debt issued and higher amortization expense , offset by a decrease in litigation costs related to the water project due to the timing of the appellate litigation . our primary expenses are our ongoing overhead costs associated with the development of the water project ( i.e . , general and administrative expense ) and our interest expense . we will continue to incur non-cash expense in connection with our management and director equity incentive compensation plans . revenues . revenue totaled $ 412 thousand during the year ended december 31 , 2016 , compared to $ 304 thousand during the year ended december 31 , 2015. the 2016 revenue is primarily related to rental income from the fvf lease ( see `` agricultural development `` , above ) . cost of sales . cost of sales were zero for the year ended december 31 , 2016 , compared with $ 334 thousand during the year ended december 31 , 2015 . 32 general and administrative expenses . general and administrative expenses during the year ended december 31 , 2016 , totaled $ 9.3 million compared with $ 13.7 million for the year ended december 31 , 2015. non-cash compensation costs related to stock and option awards are included in general and administrative expenses . general and administrative expenses , exclusive of stock-based compensation costs , totaled $ 8.0 million in the year ended december 31 , 2016 , compared with $ 12.6 million for the year ended december 31 , 2015. the decrease in general and administrative expense in 2016 was primarily due to lower litigation costs related to the water project due to the timing of the appellate litigation ( see item 1 . – `` business , ( a ) general development of business `` , above . ) compensation costs from stock and option awards for the year ended december 31 , 2016 , totaled $ 1.3 million compared with $ 1.1 million for the year ended december 31 , 2015. the higher 2016 expense was primarily due to higher stock-based non-cash compensation costs related to shares awarded to the brownstein law firm for certain legal and advisory services to the company . depreciation . depreciation expense totaled $ 292 thousand for the year ended december 31 , 2016 , and $ 270 thousand for the year ended december 31 , 2015. interest expense , net . net interest expense totaled $ 14.9 million during the year ended december 31 , 2016 , compared to $ 10.1 million during 2015. the following table summarizes the components of net interest expense for the two periods ( in thousands ) : replace_table_token_3_th the interest on outstanding debt increased from $ 8.2 million to $ 9.7 million due to the compounded interest on the debt facilities resulting in a higher principal balance . amortization of debt discount increased from $ 1.6 million to $ 5.0 million primarily due to the acceleration of unamortized debt discount related to the conversion of approximately $ 2.8 million in original principal amount of the 2020 notes that were issued in april 2016. see note 6 to the consolidated financial statements , `` long-term debt `` . story_separator_special_tag roman ' , times , serif ; font-variant : normal ; width : 9pt ; font-weight : bold ; font-style : italic ; display : inline-block `` > interest expense , net . net interest expense totaled $ 10.1 million during the year ended december 31 , 2015 , compared to $ 8.5 million during 2014. the following table summarizes the components of net interest expense for the two periods ( in thousands ) : replace_table_token_4_th the interest on outstanding debt increased from $ 7.7 million to $ 8.2 million due to the compounded interest on the debt facilities resulting in a higher principal balance . see note 6 to the consolidated financial statements , `` long-term debt `` . prior debt refinancings . in november 2015 , we entered into an agreement with our senior lenders which granted us the right to extend the maturity date of an original $ 30 million first tranche of our secured senior debt from march 2016

