we develop analytics and optimization technologies to align advertisements with consumers . we generate revenue when an end user clicks on the advertisements we delivered . we manage our business as two segments , the partner network ( advertising technology ) and the owned and operated network ( digital publishing ) . within the partner network , we recruit online publishers and provide them an advertising delivery service , the primary brand for which is searchlinks © . this service allows publishers the ability to place inuvo ad-technology in various locations and configurations within their website or app for either a desktop or mobile implementation . we generate revenue in this segment when an advertisement that is delivered is subsequently clicked on by a consumer . advertisements can be served by either inuvo or a third party depending on the needs of the publisher . typically , we collect revenue from advertisers when an advertisement is clicked and then share a portion of the revenue with the publisher . we deliver well in excess of a billion such advertisements annually . the owned and operated network designs , builds and markets consumer websites and applications . this segment consists of our main online property marketed under the alot brand and a number of other websites targeted at specific demographics like earnspendlive and sites designed specifically for generating leads in a specific market vertical like askthis for automotive . the majority of revenue generated by this segment is derived from advertisements that have been delivered on web pages that include both inuvo content and advertisements . our alot branded websites and applications have a broad appeal focusing on popular topics such as health , finance , careers , local search , travel , living , education and auto . we have a number of highly differentiated and proprietary strengths that include ; long standing advertising relationships with yahoo and google from whom we source advertising inventory which we distribute through our own online properties or through those of third party publishers ; the ability to serve hundreds of millions of advertisements to any device or browser in milliseconds ; the ability to both self-market and self-monetize our own publishing business ; the ability to test advertising technology within our own publishing business ; the ability to target advertisements based on website content , past behavior or to redirect users back to inuvo content when the economics and alignment are optimized ; the ability to expand to other geographies where appropriate ; the ability to develop and publish content just-in-time to meet demand from advertisers ; a low cost operation in central arkansas with access to numerous universities , and a proprietary technology infrastructure developed by , and in some cases patented by inuvo . we plan to continue growing our website and mobile application business by expanding the alot brand and acquiring new websites where appropriate . we will continue to distribute searchlinks broadly throughout the internet by growing our network of publishers . financially , we are focused on growth while maintaining a positive cash flow . we expect to continue to make strategic investments principally in these areas ; marketing technology associated with direct to consumer acquisition ; the searchlinks platform , and advertising targeting analytics . 2016 overview after a year of very significant growth in 2015 , 42 % over the prior year , we experienced a soft second quarter in 2016. changes in advertiser demand increased in the third quarter and we reported a 12 % sequential growth rate in both our third and fourth quarters . during 2016 , we : 13 expanded the technology in our native advertising solution , searchlinks , by including a behavioral target decision matrix ; launched the performance marketing management platform for merchants , myap10 ; expanded the alot.com brand introducing an auto site ; and renewed our yahoo agreement . critical accounting policies and estimates the preparation of financial statements in conformity with u.s. gaap requires management to make estimates and assumptions that affect the reported amount of assets and liabilities , the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods . the more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances . we also have other key accounting policies , which involve the use of estimates , judgments and assumptions that are significant to understanding our results , which are described in note 2 to our audited financial statements for 2016 and 2015 appearing elsewhere in this report . results of operations net revenue replace_table_token_3_th net revenue for the year ended december 31 , 2016 was $ 71.5 million compared to $ 70.4 million for the year ended december 31 , 2015 . partner network decreased 14 % to $ 26.0 million and the owned and operated network increased 13.4 % to $ 45.5 million . the partner network , which represents 36 % of our total net revenue , delivers advertisements to our partners ' websites and applications . revenue in this segment is both a function of the total number of transactions processed through the validclick platform and the revenue we receive per transaction . at the end of the first quarter , we experienced fluctuations in demand from advertisers , which translated into a reduction in revenue received for ads we delivered . the result was both a lower number of transactions and a lower average rpc ( `` revenue per click `` ) . story_separator_special_tag this fluctuation persisted into the third quarter 2016 and by the middle of the third quarter , both volume of transactions and rpcs improved . despite this fluctuation , the partner network grew 58 % in the fourth quarter over the same quarter last year ; and grew sequentially 59 % in the fourth quarter over the third quarter of the same year . the owned and operated network generates revenue through our consumer-facing alot branded websites and applications and through acquired websites . our alot web properties include alot health , alot finance , alot careers , alot local , alot travel , alot living , alot education , and alot auto . these websites are content-rich and optimized for mobile and desktop devices , and are designed to capitalize on a growing consumer demand for content , delivered both on the desktop and on mobile devices . the increased revenue in this segment is from additional advertisements served to a growing user base of our owned and operated web properties . the revenue in this segment increased 13 % in 2016 over 2015. the increased revenue is due to additional advertisements served to a growing user base of our owned and operated web properties . the increase in advertisements served and users engaged was due in part to increased marketing activity associated with our web properties where we are continuously expanding content . the lower revenue in the fourth quarter 2016 compared to the same quarter in the prior year was due in part to a reduction in advertiser demand we experienced in the alot sites . we intend to continue to expand our owned and operated network by enhancing our current websites and mobile applications , launching additional mobile applications under the alot brand , expanding the content of the alot sites and acquiring additional web properties . during the first quarter of 2016 , the accrued sales allowance was adjusted as a result of not having an advertiser chargeback over the course of the previous year . the adjustment increased net revenue in the first quarter of 2016 by $ 250,000. cost of revenue 14 replace_table_token_4_th cost of revenue in the partner network is generated by payments to website and application publishers who host our advertisements . the decrease in cost of revenue in 2016 compared to 2015 is directly associated with the lower revenue reported in the partner network . owned and operated network cost of revenue consists of charges for web searches and content acquisition . operating expenses replace_table_token_5_th operating expenses increased in the twelve months ended december 31 , 2016 as compared to the same period of the prior year . all operating expense categories reported higher expense . marketing costs include those expenses required to attract traffic to our owned and operated websites . marketing costs increased in the twelve months ended december 31 , 2016 as a result of the growth within the owned and operated website and application business . we expect marketing costs to continue to increase proportionally as we expand the alot branded websites and mobile applications and acquired sites . compensation expense increased 22.0 % in the twelve months ended december 31 , 2016 to $ 6.8 million as compared to the same period of 2015 due primarily to an increase in the number of employees . our total employment , both full-time and part-time was 72 at december 31 , 2016 compared to 63 at december 31 , 2015. we expect compensation expense to increase in 2017 as we hire additional developers and sales personnel to support the searchlinks product . selling , general and administrative costs were $ 5.0 million , an increase of 7.6 % over 2015. the primary reasons for the higher cost in the twelve months ended december 31 , 2016 compared to the same period last year are approximately $ 402,000 higher amortization and depreciation expense ; $ 70,000 higher facilities cost ; $ 53,000 higher travel and entertainment costs ; partially offset by $ 172,000 lower professional fees . we expect selling , general and administrative costs to remain relatively flat in 2017. interest expense , net interest expense , net was $ 99,965 and $ 141,311 for the years ended december 31 , 2016 and 2015 , respectively . this is interest expense on the bank credit facility where average outstanding loan balances were significantly lower in 2016 compared to 2015. income tax benefit in 2016 , we recognized an income tax benefit of $ 29,260 . in 2015 , we recognized a tax benefit of approximately $ 300,000 due to settling a disputed income tax claim with the state of new jersey . the claim related to the 2007-2009 tax years and was settled for $ 100,000. as a result , the remaining long-term taxes payable liability was adjusted and resulted in a one-time $ 406,000 income tax benefit . the tax benefit in 2015 is partially offset by expense of approximately $ 106,000 for state income tax . 15 income ( loss ) from discontinued operations certain of our subsidiaries previously operated in the european union ( `` eu `` ) . though operations ceased in 2009 , statutory requirements required a continued presence in the eu for varying terms until november 2015. profits and losses generated from the remaining assets and liabilities are accounted for as discontinued operations . in the third quarter of 2016 , our petition with the uk ( united kingdom ) companies house to strike off and dissolve the remaining subsidiary in the eu was approved . as a result , for the twelve months ended december 31 , 2016 and december 31 , 2015 , we recognized income from discontinued operations of $ 155,287 and $ 33,969 , respectively , due primarily to the adjustment of certain accrued liabilities originating in 2009 and earlier . story_separator_special_tag style= `` line-height:120 % ; text-align : left ; font-size:10pt ; `` > net cash

liquidity and capital resources on september 27 , 2016 , we renewed our business financing agreement with western alliance bank , the parent company of bridge bank , our original lender ( see note 6 , `` notes payable '' ) . the renewal provided continued access to the revolving line of credit up to $ 10 million through september 2018. as of december 31 , 2016 , the balance of the revolving line of credit was zero and had approximately $ 6.0 million in availability . in may 2015 , we acquired websites from a publisher that had previously been a client on our validclick network . the purchase was structured as an earn-out payable in up to 500,000 shares of our common stock over a three-year period dependent upon achieving certain minimum levels of volume . the fair value of the transaction was determined to be $ 715,874. the transaction was recorded as an intangible asset on our balance sheet offset by a contingent liability of the same amount . on may 8 , 2016 , the seller achieved the specific performance target for the first year and as a result , we distributed 166,667 shares of our common stock .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources on september 27 , 2016 , we renewed our business financing agreement with western alliance bank , the parent company of bridge bank , our original lender ( see note 6 , `` notes payable '' ) . the renewal provided continued access to the revolving line of credit up to $ 10 million through september 2018. as of december 31 , 2016 , the balance of the revolving line of credit was zero and had approximately $ 6.0 million in availability . in may 2015 , we acquired websites from a publisher that had previously been a client on our validclick network . the purchase was structured as an earn-out payable in up to 500,000 shares of our common stock over a three-year period dependent upon achieving certain minimum levels of volume . the fair value of the transaction was determined to be $ 715,874. the transaction was recorded as an intangible asset on our balance sheet offset by a contingent liability of the same amount . on may 8 , 2016 , the seller achieved the specific performance target for the first year and as a result , we distributed 166,667 shares of our common stock .
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 Suspicious Activity Report : we develop analytics and optimization technologies to align advertisements with consumers . we generate revenue when an end user clicks on the advertisements we delivered . we manage our business as two segments , the partner network ( advertising technology ) and the owned and operated network ( digital publishing ) . within the partner network , we recruit online publishers and provide them an advertising delivery service , the primary brand for which is searchlinks © . this service allows publishers the ability to place inuvo ad-technology in various locations and configurations within their website or app for either a desktop or mobile implementation . we generate revenue in this segment when an advertisement that is delivered is subsequently clicked on by a consumer . advertisements can be served by either inuvo or a third party depending on the needs of the publisher . typically , we collect revenue from advertisers when an advertisement is clicked and then share a portion of the revenue with the publisher . we deliver well in excess of a billion such advertisements annually . the owned and operated network designs , builds and markets consumer websites and applications . this segment consists of our main online property marketed under the alot brand and a number of other websites targeted at specific demographics like earnspendlive and sites designed specifically for generating leads in a specific market vertical like askthis for automotive . the majority of revenue generated by this segment is derived from advertisements that have been delivered on web pages that include both inuvo content and advertisements . our alot branded websites and applications have a broad appeal focusing on popular topics such as health , finance , careers , local search , travel , living , education and auto . we have a number of highly differentiated and proprietary strengths that include ; long standing advertising relationships with yahoo and google from whom we source advertising inventory which we distribute through our own online properties or through those of third party publishers ; the ability to serve hundreds of millions of advertisements to any device or browser in milliseconds ; the ability to both self-market and self-monetize our own publishing business ; the ability to test advertising technology within our own publishing business ; the ability to target advertisements based on website content , past behavior or to redirect users back to inuvo content when the economics and alignment are optimized ; the ability to expand to other geographies where appropriate ; the ability to develop and publish content just-in-time to meet demand from advertisers ; a low cost operation in central arkansas with access to numerous universities , and a proprietary technology infrastructure developed by , and in some cases patented by inuvo . we plan to continue growing our website and mobile application business by expanding the alot brand and acquiring new websites where appropriate . we will continue to distribute searchlinks broadly throughout the internet by growing our network of publishers . financially , we are focused on growth while maintaining a positive cash flow . we expect to continue to make strategic investments principally in these areas ; marketing technology associated with direct to consumer acquisition ; the searchlinks platform , and advertising targeting analytics . 2016 overview after a year of very significant growth in 2015 , 42 % over the prior year , we experienced a soft second quarter in 2016. changes in advertiser demand increased in the third quarter and we reported a 12 % sequential growth rate in both our third and fourth quarters . during 2016 , we : 13 expanded the technology in our native advertising solution , searchlinks , by including a behavioral target decision matrix ; launched the performance marketing management platform for merchants , myap10 ; expanded the alot.com brand introducing an auto site ; and renewed our yahoo agreement . critical accounting policies and estimates the preparation of financial statements in conformity with u.s. gaap requires management to make estimates and assumptions that affect the reported amount of assets and liabilities , the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods . the more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances . we also have other key accounting policies , which involve the use of estimates , judgments and assumptions that are significant to understanding our results , which are described in note 2 to our audited financial statements for 2016 and 2015 appearing elsewhere in this report . results of operations net revenue replace_table_token_3_th net revenue for the year ended december 31 , 2016 was $ 71.5 million compared to $ 70.4 million for the year ended december 31 , 2015 . partner network decreased 14 % to $ 26.0 million and the owned and operated network increased 13.4 % to $ 45.5 million . the partner network , which represents 36 % of our total net revenue , delivers advertisements to our partners ' websites and applications . revenue in this segment is both a function of the total number of transactions processed through the validclick platform and the revenue we receive per transaction . at the end of the first quarter , we experienced fluctuations in demand from advertisers , which translated into a reduction in revenue received for ads we delivered . the result was both a lower number of transactions and a lower average rpc ( `` revenue per click `` ) . story_separator_special_tag this fluctuation persisted into the third quarter 2016 and by the middle of the third quarter , both volume of transactions and rpcs improved . despite this fluctuation , the partner network grew 58 % in the fourth quarter over the same quarter last year ; and grew sequentially 59 % in the fourth quarter over the third quarter of the same year . the owned and operated network generates revenue through our consumer-facing alot branded websites and applications and through acquired websites . our alot web properties include alot health , alot finance , alot careers , alot local , alot travel , alot living , alot education , and alot auto . these websites are content-rich and optimized for mobile and desktop devices , and are designed to capitalize on a growing consumer demand for content , delivered both on the desktop and on mobile devices . the increased revenue in this segment is from additional advertisements served to a growing user base of our owned and operated web properties . the revenue in this segment increased 13 % in 2016 over 2015. the increased revenue is due to additional advertisements served to a growing user base of our owned and operated web properties . the increase in advertisements served and users engaged was due in part to increased marketing activity associated with our web properties where we are continuously expanding content . the lower revenue in the fourth quarter 2016 compared to the same quarter in the prior year was due in part to a reduction in advertiser demand we experienced in the alot sites . we intend to continue to expand our owned and operated network by enhancing our current websites and mobile applications , launching additional mobile applications under the alot brand , expanding the content of the alot sites and acquiring additional web properties . during the first quarter of 2016 , the accrued sales allowance was adjusted as a result of not having an advertiser chargeback over the course of the previous year . the adjustment increased net revenue in the first quarter of 2016 by $ 250,000. cost of revenue 14 replace_table_token_4_th cost of revenue in the partner network is generated by payments to website and application publishers who host our advertisements . the decrease in cost of revenue in 2016 compared to 2015 is directly associated with the lower revenue reported in the partner network . owned and operated network cost of revenue consists of charges for web searches and content acquisition . operating expenses replace_table_token_5_th operating expenses increased in the twelve months ended december 31 , 2016 as compared to the same period of the prior year . all operating expense categories reported higher expense . marketing costs include those expenses required to attract traffic to our owned and operated websites . marketing costs increased in the twelve months ended december 31 , 2016 as a result of the growth within the owned and operated website and application business . we expect marketing costs to continue to increase proportionally as we expand the alot branded websites and mobile applications and acquired sites . compensation expense increased 22.0 % in the twelve months ended december 31 , 2016 to $ 6.8 million as compared to the same period of 2015 due primarily to an increase in the number of employees . our total employment , both full-time and part-time was 72 at december 31 , 2016 compared to 63 at december 31 , 2015. we expect compensation expense to increase in 2017 as we hire additional developers and sales personnel to support the searchlinks product . selling , general and administrative costs were $ 5.0 million , an increase of 7.6 % over 2015. the primary reasons for the higher cost in the twelve months ended december 31 , 2016 compared to the same period last year are approximately $ 402,000 higher amortization and depreciation expense ; $ 70,000 higher facilities cost ; $ 53,000 higher travel and entertainment costs ; partially offset by $ 172,000 lower professional fees . we expect selling , general and administrative costs to remain relatively flat in 2017. interest expense , net interest expense , net was $ 99,965 and $ 141,311 for the years ended december 31 , 2016 and 2015 , respectively . this is interest expense on the bank credit facility where average outstanding loan balances were significantly lower in 2016 compared to 2015. income tax benefit in 2016 , we recognized an income tax benefit of $ 29,260 . in 2015 , we recognized a tax benefit of approximately $ 300,000 due to settling a disputed income tax claim with the state of new jersey . the claim related to the 2007-2009 tax years and was settled for $ 100,000. as a result , the remaining long-term taxes payable liability was adjusted and resulted in a one-time $ 406,000 income tax benefit . the tax benefit in 2015 is partially offset by expense of approximately $ 106,000 for state income tax . 15 income ( loss ) from discontinued operations certain of our subsidiaries previously operated in the european union ( `` eu `` ) . though operations ceased in 2009 , statutory requirements required a continued presence in the eu for varying terms until november 2015. profits and losses generated from the remaining assets and liabilities are accounted for as discontinued operations . in the third quarter of 2016 , our petition with the uk ( united kingdom ) companies house to strike off and dissolve the remaining subsidiary in the eu was approved . as a result , for the twelve months ended december 31 , 2016 and december 31 , 2015 , we recognized income from discontinued operations of $ 155,287 and $ 33,969 , respectively , due primarily to the adjustment of certain accrued liabilities originating in 2009 and earlier . story_separator_special_tag style= `` line-height:120 % ; text-align : left ; font-size:10pt ; `` > net cash

