further , we can not assess the impact of each such factor on our results of operations or the extent to which any factor , or combination of factors , may cause actual results to differ materially from those contained in any forward-looking statements . the following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report on form 10-k. 12 results of operations the following comparative analysis on results of operations was based primarily on the comparative consolidated financial statements , footnotes and related information for the periods identified below and should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the years ended september 30 , 2019 and 2018 , which are included elsewhere in this annual report on form 10-k. the results discussed below are for the years ended september 30 , 2019 and 2018 ( in thousands ) . replace_table_token_1_th revenues in 2019 , the company now engages directly in the cultivation , production and sale of cannabis and related products . prior to 2019 , the company was engaged in renting properties used in the cultivation , production and sale of cannabis . therefore , comparison of revenue between the two periods is comparing disparate business models . 100 % of the revenue in 2019 is from the cultivation , production and sale of cannabis , and related . 100 % of the revenue from 2018 is from rental of real estate . going forward , the cultivation , production and sale of cannabis related products will constitute most of the company 's revenues . in 2019 , all of the company 's revenue originates in the state of oregon . going forward the company expects to begin realizing revenue from the states of nevada and california in the near future . the company has also targeted florida , maryland , massachusetts and it has also begun working towards its investments obtaining licenses in eswatini . cost of revenues cost of revenues for the year ended september 30 , 2019 totaled approximately $ 1.9 million and consisted of contracted labor , growing and trimming expenses , and product testing . no cost of revenues was recognized during the year ended september 30 , 2018. the company expects its cost of revenues to grow in line with its future revenue growth . operating expenses consulting fees consulting fees for the years ended september 30 , 2019 and 2018 totaled approximately $ 2.9 million and $ 1.1 million , respectively . the increase of $ 1.9 million is primarily related to stock-based compensation expenses recognized during the year ended september 30 , 2019 for restricted stock awards and warrants to acquire the company 's common stock issued to consultants . professional fees professional fees for the years ended september 30 , 2019 and 2018 totaled approximately $ 1.5 million and $ 0.8 million , respectively . the increase of $ 0.7 million is primarily related to legal , accounting and other professional fees incurred during the year ended september 30 , 2019. we expect our professional fees to increase as we continue to grow our business . general and administrative general and administrative expenses for the years ended september 30 , 2019 and 2018 totaled approximately $ 14.9 million and $ 7.9 million , respectively . the increase of $ 7.0 million is primarily related to increases in salaries and wages and stock-based compensation expense for restricted stock awards and options and an increase of general and administrative costs of $ 1.0 million ( insurance , rent , etc . ) . 13 impairment of property and equipment and intangibles impairment expenses related to property and equipment totaled approximately $ 1.7 million for the year ended september 30 , 2019. we recorded an expense of $ 1.0 million related to our property and equipment acquired with our acquisition of never again real estate and never again 2 real estate and $ 0.7 million in other related properties . impairment expenses related to intangible assets totaled approximately $ 0.5 million for the year ended september 30 , 2019 and were incurred in connection with our investment in ymy . this impairment is with respect to the granting of an option to effectuate the balance of one hundred percent of an acquisition that never took place . loss on extinguishment of rent loss on extinguishment of rent expense for the year ended september 30 , 2019 , was approximately $ 1.1 million and was related to deferred rent . other income ( expense ) other expenses for the years ended september 30 , 2019 and 2018 , totaled approximately $ 0.4 million and $ 0.3 million , respectively . interest expense increased by $ 2.2 million in fiscal 2019 compared to fiscal 2018. that increase was primarily the result of our new borrowings from canaccord convertible notes and the discounts associated with the notes . this increase in interest expense was offset by $ 2.2 million in gains from the reduction of liabilities that resulted from the bifurcation of certain embedded features in the canaccord convertible notes and warrants that the company treated as liabilities . loss from equity method investees in 2019 , we incurred losses from equity method investees of approx . $ 6.5 million . this loss was primarily the result of fully impairing the investment of $ 5.7 million in stempro international acquired from our acquisition of south african ventures and fully impairing the investment of $ 0.5 million in sok management and related investees . story_separator_special_tag and their effects can not be determined with absolute certainty . therefore , the determination of estimates requires the exercise of judgment . story_separator_special_tag the company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events . the company does not test for impairment in the year of acquisition of properties so long as those properties are acquired from unrelated third parties . the company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts . in cases where estimated future net undiscounted cash flows are less than the carrying value , an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the asset or asset group . fair value is generally determined using the assets expected future discounted cash flows or market value , if readily determinable . if long- lived assets are determined to be recoverable , but the newly determined remaining estimated useful lives are shorter than originally estimated , the net book values of the long-lived assets are depreciated and amortized prospectively over the newly determined remaining estimated useful lives . 16 goodwill and intangible assets goodwill . goodwill represents the excess acquisition cost over the fair value of net tangible and intangible assets acquired . goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value . in testing for goodwill impairment , the company has the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount . if , after assessing the totality of events and circumstances , the company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount , then performing the two-step impairment test is not required . if the company concludes otherwise , the company is required to perform the two-step impairment test . the goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value . if the estimated fair value exceeds the carrying value , goodwill at the reporting unit level is not impaired . if the estimated fair value is less than the carrying value , further analysis is necessary to determine the amount of impairment , if any , by comparing the implied fair value of the reporting unit 's goodwill to the carrying value of the reporting unit 's goodwill . intangible assets . intangible assets deemed to have finite lives are amortized on a straight-line basis over their estimated useful lives , where the useful life is the period over which the asset is expected to contribute directly , or indirectly , to our future cash flows . intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist . for amortizable intangible assets , impairment exists when the carrying amount of the intangible asset exceeds its fair value . at least annually , the remaining useful life is evaluated . an intangible asset with an indefinite useful life is not amortized but assessed for impairment annually , or more frequently , when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired . impairment exists when the carrying amount exceeds its fair value . in testing for impairment , the company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists . if it is determined that it is not more likely than not that an impairment exists , a quantitative impairment test is not necessary . if the company concludes otherwise , it is required to perform a quantitative impairment test . to the extent an impairment loss is recognized , the loss establishes the new cost basis of the asset that is amortized over the remaining useful life of that asset , if any . subsequent reversal of impairment losses is not permitted . principals of consolidation the company 's policy is to consolidate all entities that it controls by ownership of a majority of the outstanding voting stock . in addition , the company consolidates entities that meet the definition of a variable interest entity ( “ vie ” ) for which it is the primary beneficiary . the primary beneficiary is the party who has the power to direct the activities of a vie that most significantly impact the entity 's economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity . for consolidated entities that are less than wholly owned , the third party 's holding of equity interest is presented as noncontrolling interests in the company 's consolidated balance sheets and consolidated statements of changes in stockholders ' equity . the portion of net loss attributable to the noncontrolling interests is presented as net loss attributable to noncontrolling interests in the company 's consolidated statements of operations . the accompanying consolidated financial statements include the accounts of stem holdings , inc. and its wholly-owned subsidiaries , stem holdings oregon , inc. , stem holdings ip , inc. , opco , llc , stem agri , llc . , stem group oklahoma , inc. and stem holdings florida , inc. all material intercompany accounts , transactions , and profits have been eliminated in consolidation . our wholly owned subsidiaries had no operations , assets or liabilities as of september 30 , 2019. equity

liquidity and capital resources at september 30 , 2019 , we had negative working capital of approximately $ 2.6 million , which included cash and cash equivalents of $ 3.3 million . we reported a net loss of approximately $ 29 million and our net cash used in operating expenses totaled $ 6.5 million , our cash provided by investing activities was $ 6.3 million and cash flows from financing activities totaled $ 2.8 million . we are currently negotiating with certain mortgage lenders to extend the maturity of their notes . subsequent to september 30 , 2019 , we received gross proceeds from the sale of promissory notes of $ 1.0 million . in addition , we believe we will closing in the near future on a $ 10 million investment for the issuance of a new class of preferred shares by the company . going concern at september 30 , 2019 , the company had approximate balances of cash and cash equivalents of $ 3.3 million , negative working capital of $ 2.6 million , total stockholders ' equity of $ 23.6 million and an accumulated deficit of $ 37.1 million . these audited consolidated financial statements have been prepared on a going concern basis , which assumes that the company will be able to realize its assets and discharge its liabilities in the normal course of business .


 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 at september 30 , 2019 , we had negative working capital of approximately $ 2.6 million , which included cash and cash equivalents of $ 3.3 million . we reported a net loss of approximately $ 29 million and our net cash used in operating expenses totaled $ 6.5 million , our cash provided by investing activities was $ 6.3 million and cash flows from financing activities totaled $ 2.8 million . we are currently negotiating with certain mortgage lenders to extend the maturity of their notes . subsequent to september 30 , 2019 , we received gross proceeds from the sale of promissory notes of $ 1.0 million . in addition , we believe we will closing in the near future on a $ 10 million investment for the issuance of a new class of preferred shares by the company . going concern at september 30 , 2019 , the company had approximate balances of cash and cash equivalents of $ 3.3 million , negative working capital of $ 2.6 million , total stockholders ' equity of $ 23.6 million and an accumulated deficit of $ 37.1 million . these audited consolidated financial statements have been prepared on a going concern basis , which assumes that the company will be able to realize its assets and discharge its liabilities in the normal course of business .
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 Suspicious Activity Report : further , we can not assess the impact of each such factor on our results of operations or the extent to which any factor , or combination of factors , may cause actual results to differ materially from those contained in any forward-looking statements . the following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report on form 10-k. 12 results of operations the following comparative analysis on results of operations was based primarily on the comparative consolidated financial statements , footnotes and related information for the periods identified below and should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the years ended september 30 , 2019 and 2018 , which are included elsewhere in this annual report on form 10-k. the results discussed below are for the years ended september 30 , 2019 and 2018 ( in thousands ) . replace_table_token_1_th revenues in 2019 , the company now engages directly in the cultivation , production and sale of cannabis and related products . prior to 2019 , the company was engaged in renting properties used in the cultivation , production and sale of cannabis . therefore , comparison of revenue between the two periods is comparing disparate business models . 100 % of the revenue in 2019 is from the cultivation , production and sale of cannabis , and related . 100 % of the revenue from 2018 is from rental of real estate . going forward , the cultivation , production and sale of cannabis related products will constitute most of the company 's revenues . in 2019 , all of the company 's revenue originates in the state of oregon . going forward the company expects to begin realizing revenue from the states of nevada and california in the near future . the company has also targeted florida , maryland , massachusetts and it has also begun working towards its investments obtaining licenses in eswatini . cost of revenues cost of revenues for the year ended september 30 , 2019 totaled approximately $ 1.9 million and consisted of contracted labor , growing and trimming expenses , and product testing . no cost of revenues was recognized during the year ended september 30 , 2018. the company expects its cost of revenues to grow in line with its future revenue growth . operating expenses consulting fees consulting fees for the years ended september 30 , 2019 and 2018 totaled approximately $ 2.9 million and $ 1.1 million , respectively . the increase of $ 1.9 million is primarily related to stock-based compensation expenses recognized during the year ended september 30 , 2019 for restricted stock awards and warrants to acquire the company 's common stock issued to consultants . professional fees professional fees for the years ended september 30 , 2019 and 2018 totaled approximately $ 1.5 million and $ 0.8 million , respectively . the increase of $ 0.7 million is primarily related to legal , accounting and other professional fees incurred during the year ended september 30 , 2019. we expect our professional fees to increase as we continue to grow our business . general and administrative general and administrative expenses for the years ended september 30 , 2019 and 2018 totaled approximately $ 14.9 million and $ 7.9 million , respectively . the increase of $ 7.0 million is primarily related to increases in salaries and wages and stock-based compensation expense for restricted stock awards and options and an increase of general and administrative costs of $ 1.0 million ( insurance , rent , etc . ) . 13 impairment of property and equipment and intangibles impairment expenses related to property and equipment totaled approximately $ 1.7 million for the year ended september 30 , 2019. we recorded an expense of $ 1.0 million related to our property and equipment acquired with our acquisition of never again real estate and never again 2 real estate and $ 0.7 million in other related properties . impairment expenses related to intangible assets totaled approximately $ 0.5 million for the year ended september 30 , 2019 and were incurred in connection with our investment in ymy . this impairment is with respect to the granting of an option to effectuate the balance of one hundred percent of an acquisition that never took place . loss on extinguishment of rent loss on extinguishment of rent expense for the year ended september 30 , 2019 , was approximately $ 1.1 million and was related to deferred rent . other income ( expense ) other expenses for the years ended september 30 , 2019 and 2018 , totaled approximately $ 0.4 million and $ 0.3 million , respectively . interest expense increased by $ 2.2 million in fiscal 2019 compared to fiscal 2018. that increase was primarily the result of our new borrowings from canaccord convertible notes and the discounts associated with the notes . this increase in interest expense was offset by $ 2.2 million in gains from the reduction of liabilities that resulted from the bifurcation of certain embedded features in the canaccord convertible notes and warrants that the company treated as liabilities . loss from equity method investees in 2019 , we incurred losses from equity method investees of approx . $ 6.5 million . this loss was primarily the result of fully impairing the investment of $ 5.7 million in stempro international acquired from our acquisition of south african ventures and fully impairing the investment of $ 0.5 million in sok management and related investees . story_separator_special_tag and their effects can not be determined with absolute certainty . therefore , the determination of estimates requires the exercise of judgment . story_separator_special_tag the company evaluates assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events . the company does not test for impairment in the year of acquisition of properties so long as those properties are acquired from unrelated third parties . the company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts . in cases where estimated future net undiscounted cash flows are less than the carrying value , an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the asset or asset group . fair value is generally determined using the assets expected future discounted cash flows or market value , if readily determinable . if long- lived assets are determined to be recoverable , but the newly determined remaining estimated useful lives are shorter than originally estimated , the net book values of the long-lived assets are depreciated and amortized prospectively over the newly determined remaining estimated useful lives . 16 goodwill and intangible assets goodwill . goodwill represents the excess acquisition cost over the fair value of net tangible and intangible assets acquired . goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value . in testing for goodwill impairment , the company has the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount . if , after assessing the totality of events and circumstances , the company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount , then performing the two-step impairment test is not required . if the company concludes otherwise , the company is required to perform the two-step impairment test . the goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value . if the estimated fair value exceeds the carrying value , goodwill at the reporting unit level is not impaired . if the estimated fair value is less than the carrying value , further analysis is necessary to determine the amount of impairment , if any , by comparing the implied fair value of the reporting unit 's goodwill to the carrying value of the reporting unit 's goodwill . intangible assets . intangible assets deemed to have finite lives are amortized on a straight-line basis over their estimated useful lives , where the useful life is the period over which the asset is expected to contribute directly , or indirectly , to our future cash flows . intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist . for amortizable intangible assets , impairment exists when the carrying amount of the intangible asset exceeds its fair value . at least annually , the remaining useful life is evaluated . an intangible asset with an indefinite useful life is not amortized but assessed for impairment annually , or more frequently , when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired . impairment exists when the carrying amount exceeds its fair value . in testing for impairment , the company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists . if it is determined that it is not more likely than not that an impairment exists , a quantitative impairment test is not necessary . if the company concludes otherwise , it is required to perform a quantitative impairment test . to the extent an impairment loss is recognized , the loss establishes the new cost basis of the asset that is amortized over the remaining useful life of that asset , if any . subsequent reversal of impairment losses is not permitted . principals of consolidation the company 's policy is to consolidate all entities that it controls by ownership of a majority of the outstanding voting stock . in addition , the company consolidates entities that meet the definition of a variable interest entity ( “ vie ” ) for which it is the primary beneficiary . the primary beneficiary is the party who has the power to direct the activities of a vie that most significantly impact the entity 's economic performance and who has an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity . for consolidated entities that are less than wholly owned , the third party 's holding of equity interest is presented as noncontrolling interests in the company 's consolidated balance sheets and consolidated statements of changes in stockholders ' equity . the portion of net loss attributable to the noncontrolling interests is presented as net loss attributable to noncontrolling interests in the company 's consolidated statements of operations . the accompanying consolidated financial statements include the accounts of stem holdings , inc. and its wholly-owned subsidiaries , stem holdings oregon , inc. , stem holdings ip , inc. , opco , llc , stem agri , llc . , stem group oklahoma , inc. and stem holdings florida , inc. all material intercompany accounts , transactions , and profits have been eliminated in consolidation . our wholly owned subsidiaries had no operations , assets or liabilities as of september 30 , 2019. equity

