10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to _________________

Commission file number: 001-35902

AMERICANN, INC

(Exact name of registrant as specified in its charter)

Delaware	27-4336843
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
3200 Brighton Blvd. Unit 114, Denver, CO	80216
(Address of principal executive offices)	(Zip Code)
(303) 862-9000
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑No ☐

Indicate by a checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☑
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐No ☑

As of July 30, 2016, the registrant had 16,631,000shares of common stock outstanding.

AMERICANN, INC.

FORM 10-Q

TABLE OF CONTENTS

			PAGE NO.
PART I	FINANCIAL INFORMATION
	Item 1.	Unaudited Financial Statements:
		Condensed Balance Sheets as of June 30, 2016 and September 30, 2015	1
		Condensed Statements of Operations for the Three and Nine Months Ended June 30, 2016 and 2015	2
		Condensed Statements of Cash Flows for the Nine Months Ended June 30, 2016 and 2015	3
		Notes to Unaudited Condensed Financial Statements	4
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 4.	Controls and Procedures	15
PART II	OTHER INFORMATION
	Item 6.	Exhibits	16
	SIGNATURES		17

PART I:  FINANCIAL INFORMATION

ITEM 1.      UNAUDITED FINANCIAL STATEMENTS

AMERICANN, INC.

CONDENSED BALANCE SHEETS

	June 30, 2016 (unaudited)			September 30, 2015
Assets
Current Assets:
Cash and cash equivalents	$	6,922		$	201,353
Interest receivable		3,423			5,975
Prepaid expenses		11,728			35,758
Land held for resale		-			2,250,809
Note receivable		335,904			-
Total current assets		357,977			2,493,895
Land held for resale		2,250,809			-
Furniture and equipment (net of depreciation of $2,300 and $1,458)		9,885			6,399
Notes and other receivables (net of allowance of $466,374 and $456,470)		751,279			1,251,105
Note receivable - related party		55,630			-
Website development costs (net of amortization of $11,528 and $1,153)		29,972			40,347
Deposits on land		725,000			200,000
Security deposit		3,110			3,110
Total assets	$	4,183,662		$	3,994,856
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	281,165		$	85,298
Interest payable (including $69,266 and $0 to related parties)		76,232			-
Other payables		9,937			11,716
Notes payable		1,511,297			900,000
Note payable - related party		1,910,349			-
Total current liabilities		3,788,980			997,014
Note payable - related party		-			1,682,849
Total liabilities		3,788,980			2,679,863
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 16,631,000 and 16,631,000 shares issued and outstanding as of June 30, 2016 and September 30, 2015, respectively		1,663			1,663
Additional paid in capital		5,129,021			5,007,497
Accumulated deficit		(4,736,002	)		(3,694,167	)
Total stockholders' equity		394,682			1,314,993
Total liabilities and stockholders' equity	$	4,183,662		$	3,994,856

See accompanying notes to unaudited condensed financial statements.

1

AMERICANN, INC.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2016			2015			2016			2015
Revenues:
Consulting fees	$	45,000		$	45,000		$	75,000		$	125,000
Total revenues		45,000			45,000			75,000			125,000
Operating expenses:
Advertising and marketing		14,990			4,954			17,338			11,029
Professional fees		140,369			191,002			493,449			464,469
General and administrative expenses		124,571			163,674			462,116			659,352
Provision for doubtful accounts		3,290			-			9,904			-
Total operating expenses		283,220			359,630			982,807			1,134,850
Loss from operations		(238,220	)		(314,630	)		(907,807	)		(1,009,850	)
Other income (expense):
Interest income		44,482			61,629			138,269			161,430
Interest expense		(48,826	)		(38,574	)		(113,031	)		(41,607	)
Loss on extinguishment of debt		(90,000	)		-			(90,000	)		-
Interest expense - related party		(23,814	)		(21,656	)		(69,266	)		(42,717	)
Total other income (expense)		(118,158	)		1,399			(134,028	)		77,106
Net loss	$	(356,378	)	$	(313,231	)	$	(1,041,835	)	$	(932,744	)
Basic and diluted loss per common share	$	(0.02	)	$	(0.02	)	$	(0.06	)	$	(0.06	)
Weighted average common shares outstanding		16,631,000			16,631,000			16,631,000			16,619,645

See accompanying notes to unaudited condensed financial statements.

2

AMERICANN, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(1,041,835	)	$	(932,744	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		11,217			45,196
Provision for doubtful accounts		9,904			-
Stock based compensation and option expense		121,524			301,223
Loss on extinguishment of debt		90,000			-
Expenses paid on behalf of the company		-			37,720
Changes in operating assets and liabilties:
Interest receivable		(93,831	)		(6,559	)
Prepaid expenses		24,030			(5,000	)
Accounts payable and accrued expenses		195,867			16,629
Related party payables		-			(54,077	)
Interest payable		30,780			7,689
Interest payable - related party		45,452			25,033
Other payables		(1,779	)		4,112
Deferred revenue		-			(11,740	)
Net cash flows used in operations		(608,671	)		(572,518	)
Cash flows from investing activities:
Purchase of fixed assets		(4,328	)		-
Capitalization of website development costs		-			(41,500	)
Deposit on land		(525,000	)		(100,000	)
Payments received on notes receivable		250,401			335,000
Advances made on notes receivable - related party		(55,630	)		(987,556	)
Net cash flows used in investing activities		(334,557	)		(794,056	)
Cash flows from financing activities:
Proceeds from note payable		521,297			611,006
Proceeds from note payable - related party		227,500			890,000
Payments on note payable - related party		-			(207,000	)
Net cash flows provided by financing activities		748,797			1,294,006
Net decrease in cash and cash equivalents		(194,431	)		(72,568	)
Cash and cash equivalents at beginning of period		201,353			173,956
Cash and cash equivalents at end of period	$	6,922		$	101,388
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$	57,431		$	36,357
Cash paid for income taxes	$	-		$	-

See accompanying notes to unaudited condensed financial statements.

3

AMERICANN, INC.

Notes To Unaudited CONDENSED Financial Statements

NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

AmeriCann, Inc. ("the Company", “we”, “our” or "the Issuer") was organized under the laws of the State of Delaware on June 25, 2010.

On January 17, 2014, a privately held limited liability company acquired approximately 93% of the Company's outstanding shares of common stock from several of the Company's shareholders, which resulted in a change in control of the Company.

The Company's business plan is to offer a comprehensive, turnkey package of services that includes consulting, design, construction and financing to approved and licensed marijuana operators throughout the United States. The Company's business plan is based on the anticipated growth of the regulated marijuana market in the United States.

The Company's activities are subject to significant risks and uncertainties including failure to secure funding to properly expand its operations.

Basis of Presentation

The (a) condensed balance sheet as of September 30, 2015, which has been derived from audited financial statements, and (b) the unaudited condensed financial statements as of and for the three and nine months ended June 30, 2016 and 2015, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on January 13, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the condensed financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2015 as reported in the Form 10-K have been omitted.

Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net loss.

Recent Accounting Pronouncements

In May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to clarify certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, to clarify the following two aspects of Topic 606: 1) identifying performance obligations, and 2) the licensing implementation guidance. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to reduce complexity in accounting standards involving several aspects of the accounting for employee share-based payment transactions, including (1) the income tax consequences, (2) classification of awards as either equity or liabilities, and (3) classification on the statement of cash flows. The amendments will be effective for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and early adoption is permitted. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method, amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively, amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively, and amendments related to the presentation of excess tax benefits on the statement of cash flows can be applied using either a prospective transition method or a retrospective transition method. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating the impact of these amendments on its financial statements.

4

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases: (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company is currently evaluating the impact of these amendments on its financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. As amended by the FASB in July 2015, the standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in 2018.

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $4,376,002 and $3,694,167 at June 30, 2016 and September 30, 2015, respectively, and had a net loss of $1,041,835 for the nine months ended June 30, 2016. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. Further, the amount due from WGP of $1,217,653 (before an allowance of $466,374) may not be collectible and the agreement for the sale of land for $2,500,000 has been terminated.

5

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3. NOTES AND OTHER RECEIVABLES

Notes and Other Receivables as of June 30, 2016 and September 30, 2015, consisted of the following: 

	June 30, 2016		September 30, 2015
Note receivable from 4900 Jackson, LLC, a licensed dispensary, interest rate of 12.0%; monthly principal and interest payments of $50,000, with a balloon payment of $182,531 due on May 1, 2017; collateralized by the borrower's assets.	$	335,904	$	586,305
Notes and other receivables from WGP, a licensed medical marijuana cultivator; $673,294 note secured by real and personal property of the borrower, interest rate of 18.0%; accrued consulting fees of $40,000, construction advances of $332,357 and accrued interest of $172,002. Net of reserves of $466,374 and $456,470. All amounts are due and payable immediately.		751,279		664,800
Related party note receivable from CCI, a non-profit corporation, financing of up to $2.5 million through April 2021, interest rate of 18.0%; monthly principal and interest payments commencing the sixth month after the borrower begins to generate sales; unsecured.		55,630		-
		1,142,813		1,251,105
Less: Current portion		335,904		-
	$	806,909	$	1,251,105

The notes and other receivables from WGP are classified as long term due to ongoing disputes between the Company and WGP.

NOTE 4.  NOTES PAYABLE

On March 21, 2015, the Company closed on a $650,000 loan from a third party. The loan was due September 21, 2015 and was secured by the land held for sale the Company owns at 4200 Monaco Street, Denver, Colorado. The annual interest rate for the loan was 14%. The loan was due on September 21, 2015. Interest expense was $80,623 and $0 for the years ended September 30, 2015 and 2014, respectively. As part of the financing the Company incurred $27,772 of deferred financing costs that were recognized as interest expense in 2015. This note was repaid as described below.

On September 15, 2015, an unrelated third party loaned the Company $900,000. The loan bears interest at 12% per year and was due and payable on March 16, 2016. The Company used $650,000 of the proceeds to repay the existing loan that was secured by the property. On April 6, 2016, the loan was modified as follows: 

● The principal balance of the loan was increased to $990,000;

● The interest rate was increased to 18% per year; and

● The maturity date of the loan was extended to March 15, 2017.

The Company considered ASC Subtopic 470-50, Debt Modifications and Extinguishments, and determined that the modification was an extinguishment and therefore, recognized a loss on the extinguishment of the original debt of $90,000 in the three and nine months ended June 30, 2016. The Company may repay the loan at any time without penalty. The loan is secured by a first lien on the five-acre parcel of land in Denver. At June 30, 2016, accrued interest on this note payable was $0.

6

On February 1, 2016, the Company entered into an agreement with an unrelated party which provided the Company with borrowing capacity of $200,000. On May 1, 2016, the agreement was amended to increase the borrowing capacity to $1,000,000. As of June 30, 2016, the Company had borrowed $521,297 against this credit line. The loan bears interest at 8% per year, and all unpaid principal and interest is due on December 31, 2016. The Company may repay the loan at any time without penalty. As of June 30, 2016, accrued interest on this loan was $6,965. This loan was assumed by Strategic Capital Partners (“SCP”) in July 2016. See Notes 5 and 10 for additional details.

NOTE 5. RELATED PARTY TRANSACTIONS

Strategic Capital Partners. At June 30, 2016, we had an outstanding note payable of $1,910,349 to SCP, an entity controlled by our Chief Financial Officer. Under the note payable, as amended, outstanding amounts accrue interest at 5% per year payable on March 31^st and September 30^th, with all outstanding principal and interest due on December 31, 2016, and can be repaid at any time prior to maturity. Interest expense was $23,814 and $21,656 for the three months ended June 30, 2016 and 2015, respectively; and $69,266 and $42,717 for the nine months ended June 30, 2016 and 2015, respectively. Interest payable – related party of $69,266 and $0 was included in the accompanying balance sheets at June 30, 2016 and September 30, 2015, respectively. In September 2015, the Company agreed to include $49,849 of accrued and unpaid interest in the principal balance of the loan. During the nine months ended June 30, 2016, the Company received advances of $227,500 and no payments were made.

In July 2016, SCP assumed, and then restructured, the $521,297 loan referred to in Note 4. See Note 10 for more information.

Coastal Compassion. On April 7, 2016, we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is one of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned MMCC. Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to $2.5 million for a five-year term at 18% interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a three- year period beginning April 1, 2016, we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will pay us $10,000 each month for these consulting services. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of June 30, 2016, we have provided financing to CCI of $55,630, which includes construction and working capital advances of $54,191, and accrued interest of $1,439.

NOTE 6. LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Net loss attributable to common stockholders	$	(356,378	)	$	(313,231	)	$	(1,041,835	)	$	(932,744	)
Basic weighted average outstanding shares of common stock		16,631,000			16,631,000			16,631,000			16,619,645
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		16,631,000			16,631,000			16,631,000			16,619,645
Basic and diluted net loss per share of common stock	$	(0.02	)	$	(0.02	)	$	(0.06	)	$	(0.06	)

The Company has excluded 1,205,000 of stock options from the computation of diluted net loss per share since the effects are anti-dilutive.

7

NOTE 7. INCOME TAXES

The Company did not record any income tax expense or benefit for the three or nine months ended June 30, 2016. The Company increased its valuation allowance and reduced its net deferred tax assets to zero. The Company's assessment of the realization of its deferred tax assets has not changed, and as a result the Company continues to maintain a full valuation allowance for its net deferred assets as of June 30, 2016.

As of June 30, 2016, the Company did not have any unrecognized tax benefits. There were no significant changes to the calculation since September 30, 2015.

NOTE 8. STOCK BASED COMPENSATION

Restricted Stock Awards. The Company uses restricted stock awards to compensate certain key executives and other individuals. At June 30, 2016, the Company had 300,000 of outstanding unvested restricted stock awards which vest on March 20, 2017. Stock-based compensation expense associated with restricted stock awards was $18,725 and $46,813 for the three months ended June 30, 2016 and 2015, respectively, and $112,351 and $252,789 for the nine months ended June 30, 2016 and 2015, respectively. As of June 30, 2016, unrecognized stock-based compensation associated with restricted stock awards totaled $56,175, which is to be recognized over a weighted average period of 0.4 years.

Stock Options. Stock option activity as of and for the nine months ended June 30, 2016 is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2015		1,205,000	$	8.70
Granted		-	$	-
Cancelled		-	$	-
Exercised		-	$	-
Outstanding as of June 30, 2016		1,205,000	$	8.70		1.7	$	-
Vested and expected to vest at June 30, 2016		1,205,000	$	8.70		1.7	$	-
Exercisable at June 30, 2016		1,205,000	$	8.70		1.7	$	-

Stock-based compensation expense (benefit) associated with stock options totaled $0 and $(1,229) for the three months ended June 30, 2016 and 2015, respectively, and $9,173 and $48,434 for the nine months ended June 30, 2016 and 2015, respectively. At June 30, 2016, there is no remaining unrecognized stock-based compensation associated with stock options.

NOTE 9.  COMMITMENTS AND CONTIGENCIES

Massachusetts Land Purchase.  On January 14, 2015, the Company entered into an agreement to purchase a 52.6 acre parcel of undeveloped land in Freetown, Massachusetts. The property is located approximately 47 miles southeast of Boston. The Company plans to develop the property as the Massachusetts Medical Cannabis Center ("MMCC"). Plans for the MMCC may include the construction of sustainable greenhouse cultivation and processing facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program. Additional plans for the MMCC may include a testing laboratory, a research facility, a training center, an infused product production facility and corporate offices. The Company paid the seller a $100,000 deposit upon the signing of the agreement which will be applied toward the purchase price at the closing.

8

On December 8, 2015, The Town of Freetown Planning Board unanimously approved the Company’s site plan application for the MMCC.  The site plan application requested 977,000 square feet of infrastructure for medical marijuana cultivation, processing, testing and associated administration in Freetown's Industrial Park.  On March 24, 2016, the Department of Public Health (the “DPH”) for the Commonwealth of Massachusetts approved the Company’s consulting and development agreements relating to the MMCC. Although the DPH has approved these agreements, the actual lease agreement with the first tenant for the MMCC has not been finalized or approved by the DPH. 

Between August 2015 and June 2016, there were several amendments to the land purchase agreement to extend the closing date. As consideration for the extensions, the Company agreed to increase the purchase price and paid the seller $625,000, which will be applied to the purchase price of the land if and when the Company closes on this transaction. On July 14, 2016, the Company, at its election, extended the closing date to August 14, 2016. As consideration for the extension of the closing date, the Company agreed to increase the purchase price for the property to $4,325,000 and the Company paid an additional $50,000 to the seller, which payment will be applied to the purchase price if the closing occurs.

To date, the Company has paid $775,000 that will be applied to the purchase price of the land if, and when, the Company closes on the transaction. If the closing does not occur, for any reason, the full deposit of $775,000 is nonrefundable.

Coastal Compassion. On April 7, 2016, we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is one of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned MMCC. Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to $2.5 million for a five-year term at 18% interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a three- year period beginning April 1, 2016, we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will pay us $10,000 each month for these consulting services. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of June 30, 2016, we have provided financing to CCI of $55,630, which includes construction and working capital advances of $54,191, and accrued interest of $1,439.

AQUSCAN Delaware. On April 12, 2016, we signed agreements with AQUSCAN Delaware Corp. (“AQUSCAN”). AQUSCAN is one of eleven applicants for a vertically-integrated license to cultivate, process and sell medical cannabis in Delaware. The Delaware Division of Public Health is scheduled announce the application results in August of 2016 and award licenses for up to two new Registered Compassion Centers (“RCC”). AQUSCAN has agreed to become the sole tenant in our planned Delaware Medical Cannabis Center (“DMCC”) if a RCC license is awarded. We will build and own the facility.

The DMCC project is designed on 10 acres of unimproved land located in Garrison Oak Technology Park in Dover, DE. We have signed a Purchase and Sale Agreement for the property with the City of Dover that is contingent upon the award of a license.

In addition to building a state-of-the-art cultivation facility at the DMCC, we plan to purchase and renovate an existing 3,200 square foot building located in Dover as a secure, medical cannabis dispensary.

Additionally, we may provide AQUSCAN with financing of up to $750,000 for a five-year term at 18% interest per year for working capital associated with establishing and maintaining the RCC.

As of June 30, 2016, we have provided no financing to AQUSCAN.

Operating Leases. The Company leases its office space located at 3200 Brighton Boulevard, Denver, Colorado for $2,870 per month under a month-to-month lease.

The Company leases an automobile under an operating lease commencing October 4, 2014 for 39 months at $611 per month. At June 30, 2016, the future rental payments required under this lease are $1,833 for the remainder of fiscal 2016, $7,332 for fiscal 2017 and $1,834 for fiscal 2018.

Except as described above, the Company has no other non-cancelable lease commitments.

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NOTE 10.  SUBSEQUENT EVENTS

MMCC. Previously the Company entered into an agreement to purchase a 52.6-acre parcel of undeveloped land in Freetown, Massachusetts. The Company paid the seller $100,000 upon the signing of the agreement which will be applied toward the purchase price at the closing.

Between August 2015 and June 2016, there were several amendments to the Agreement to extend the closing date to August 14, 2016.

On July 14, 2016, the Company, at its election, extended the closing date to August 14, 2016. As consideration for the extension of the closing date, the Company agreed to increase the purchase price for the property to $4,325,000 and the Company paid an additional $50,000 to the seller, which payment will be applied to the purchase price if the closing occurs.

To date, the Company has paid $775,000 that will be applied to the purchase price of the property if and when the Company closes on the transaction. If the closing does not occur, for any reason, the full deposit of $775,000 is nonrefundable.

Strategic Capital Partners. On July 14, 2016, Strategic Capital Partners (“SCP”) assumed the $521,297 loan referred to in Note 4, increasing the total balance owed to SCP by the Company to $2,431,646. SCP is controlled by Benjamin J. Barton, one of our officers and directors and a principal shareholder. The amounts borrowed from SCP were used to fund our operations. On July 14, 2016, $500,000 of the amount owed to SCP was converted into 400,000 shares of our common stock ($1.25 conversion rate). In connection with the conversion, we issued SCP warrants to purchase 800,000 shares of our common stock, exercisable at a price of $1.50 per share, and warrants to purchase an additional 800,000 shares of common stock, exercisable at a price of $3.00 per share. Both sets of warrants expire on June 30, 2020

The warrants to purchase the first 800,000 shares of our common stock will expire 45 days after written notice to SCP that the average closing price of our common stock was at least $3.00 for twenty consecutive trading days, and the average daily volume of trades of our common stock during the twenty trading days was at least 100,000 shares, provided a registration statement is in effect with respect to the shares issuable upon the exercise of the Warrants.

The warrants to purchase the additional 800,000 shares of our common stock will expire 45 days after written notice to SCP that the average closing price of our common stock was at least $4.80 for twenty consecutive trading days, and the average daily volume of trades of our common stock during the twenty trading days was at least 100,000 shares, provided a registration statement is in effect with respect to the shares issuable upon the exercise of the Warrants.

The remaining $1,931,646 owed to SCP was converted into two promissory notes.

The first Note, in the principal amount of $1,000,000, bears interest at 9.5% per year and matures on December 31, 2019. Interest is payable quarterly with the first interest payment due on September 30, 2016. The Note can be converted at any time into shares of our common stock, initially at a conversion price of $1.25 per share. The conversion price will be proportionately adjusted in the event of any stock split or capital reorganization. The Note is not secured.

If the average closing price of our common stock is at least $2.50 for twenty consecutive trading days, and the average daily volume of trades of our common stock during the twenty trading days is at least 100,000 shares, we may, within 10 days of the end of such twenty day period, notify SCP that its right to convert the Note into shares of our common stock will end 45 days after the date of the notice to SCP.

The second Note, in the principal amount of $931,640, bears interest at 8% per year and matures on December 31, 2019. Interest is payable quarterly, with the first interest payment due on September 30, 2016. The Note is not convertible into shares of our common stock. The Note will be secured by a second lien on our property in Denver, Colorado and a first lien on all amounts due to us by Wellness Group Pharms. Any payments received from the sale, lease or commercialization of the property in Denver, and any amounts received from Wellness Group Pharms, will be applied to the principal amount of the Note. Otherwise, all unpaid principal and interest will be due on December 31, 2019.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended September 30, 2015 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K

Forward-Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (“the Exchange Act”), which are subject to the “safe harbor” created by those sections. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “should,” “could,” “predicts,” “potential,” “continue,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. All forward-looking statements in this Form 10-Q are made based on our current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. In evaluating these statements, you should specifically consider various factors, uncertainties and risks that could affect our future results or operations. These factors, uncertainties and risks may cause our actual results to differ materially from any forward-looking statement set forth in this Form 10-Q. You should carefully consider these risk and uncertainties described and other information contained in the reports we file with or furnish to the SEC before making any investment decision with respect to our securities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

OVERVIEW

AmeriCann, Inc. develops, owns and supports advanced medical cannabis cultivation and processing facilities nationwide. Currently, we have 125,000 square feet of approved cultivation and processing infrastructure on the 5 acres located at 5280 Monaco St. in Denver, and site approval for 977,000 square feet of cultivation, processing and administration infrastructure at the Massachusetts Medical Cannabis Center (“MMCC”).

AmeriCann’s team includes board members, consultants, engineers and architects who specialize in traditional horticulture, lean manufacturing, medical research, facility construction, regulatory compliance, security, marijuana cultivation and genetics, extraction processes, and infused product development.

To support local businesses that seek to serve cannabis patients in their communities we initiated the AmeriCann Preferred Partner Program. The initial step in becoming a Preferred Partner involves an application on our website. Based on the initial inquiry, we determine if the location, market, type of project and economics support additional due diligence. Currently, we have one Preferred Partner in Colorado, which is 4900 Jackson, LLC, and one Preferred Partner in Delaware, which is AQUSCAN. Through this program we provide an essential set of resources including advance cultivation facilities, access to a team of experts and in certain cases, capital for our partner’s businesses. This support is designed to assist our Preferred Partners in newly regulated markets. In addition, AmeriCann’s team actively participated in winning cannabis licenses in competitive application processes throughout the country including Massachusetts and Illinois.

AmeriCann plans to lease facilities to its Preferred Partners that will be designed with AmeriCann’s propriety cultivation and processing system called “Cannopy.” Cannopy uniquely combines experience from traditional horticulture, lean manufacturing, regulatory compliance and cannabis cultivation to create facilities and procedures. Cannopy includes automation throughout the production life-cycle, customized workflow processes, monitoring and controls, and top-line security systems. Cannopy empowers Preferred Partners to consistently produce medical marijuana for patients at a lower cost in an efficient, compliant manner. AmeriCann provides initial and on-going training, policies, practices and procedures to operate the state-of-the-art facilities.

The expanding cannabis industry requires extensive real estate to meet the growing needs of medical marijuana patients. AmeriCann utilizes a proven strategy for identifying, acquiring and developing real estate specifically suited for cannabis operations. AmeriCann assists its Preferred Partners with the identification, design, permitting, acquisition, development and operation of scalable infrastructure to cultivate and to dispense medical marijuana in regulated markets.

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As an early market participant, we leverage our leadership and competitive strengths in a formative industry to increase market share as the cannabis industry expands.

We currently have two financing and consulting agreements, one with a licensed Colorado cannabis dispensary owner and grower (“4900 Jackson, LLC”), and the other with Coastal Compassion Inc. (“CCI”). Under these agreements, we are earning consulting fees and interest income on notes receivable. We are also the owner of a five-acre parcel of land located in north central Denver, Colorado, which is currently zoned for cannabis cultivation and processing by the City and County of Denver.

RECENT DEVELOPMENTS

Monaco Street Property. See Note 4 to the financial statements included as part of this report for information concerning the modification of the loan secured by our property in Denver, Colorado.

MMCC. On January 14, 2015, we entered into an agreement to purchase a 52.6 acre parcel of undeveloped land in Freetown, Massachusetts. The property is located approximately 47 miles southeast of Boston. We plan to develop the property as the Massachusetts Medical Cannabis Center "MMCC". Plans for the MMCC may include the construction of sustainable greenhouse cultivation and processing facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program. Additional plans for the MMCC may include a testing laboratory, a research facility, a training center, an infused product production facility and corporate offices.  We paid the seller $100,000 upon the signing of the agreement which amount will be applied toward the purchase price at the closing.

On December 8, 2015, The Town of Freetown Planning Board unanimously approved our site plan application for the MMCC.  The site plan application requested 977,000 square feet of infrastructure for medical marijuana cultivation, processing, testing and associated administration in Freetown's Industrial Park.  On March 24, 2016, the Department of Public Health (the “DPH”) for the Commonwealth of Massachusetts approved our consulting and development agreements relating to the MMCC. Although the DPH has approved these agreements, the actual lease agreement with Coastal Compassion, Inc., the first tenant for the MMCC, has not been finalized or approved by the DPH. We will need to secure significant capital to acquire the property and to develop the first phase of the MMCC.

Between August 2015 and June 2016, there were several amendments to the Agreement to extend the closing date to August 14, 2016. As consideration for the extensions, the Company agreed to increase the purchase price to $4,325,000 and paid the seller $625,000, which will be applied to the purchase price of the land if and when the Company closes on this transaction.

On July 14, 2016, the Company, at its election, extended the closing date to August 14, 2016. As consideration for the extension of the closing date, the Company agreed to increase the purchase price for the property to $4,325,000 and the Company paid an additional $50,000 to the seller, which payment will be applied to the purchase price if the closing occurs.

To date, the Company has paid $775,000 that will be applied to the purchase price of the land if, and when, the Company closes on the transaction.    If the closing does not occur, for any reason, the full deposit of $775,000 is nonrefundable.

Coastal Compassion. On April 7, 2016, we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is one of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned MMCC. Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to $2.5 million for a five-year term at 18% interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a three- year period beginning April 1, 2016, we have agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will pay us $10,000 each month for these consulting services. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of June 30, 2016, we have provided financing to CCI of $55,630, which includes construction and working capital advances of $54,191, and accrued interest of $1,439.

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AQUSCAN. On April 12, 2016, we signed agreements with AQUSCAN Delaware Corp. (“AQUSCAN”). AQUSCAN is one of eleven applicants for a vertically-integrated license to cultivate, process and sell medical cannabis in Delaware. The Delaware Division of Public Health is scheduled announce the application results in August of 2016 and award licenses for up to two new Registered Compassion Centers (“RCC”). AQUSCAN has agreed to become the sole tenant in our planned Delaware Medical Cannabis Center (“DMCC”) if a RCC license is awarded. We will build and own the facility.

The DMCC project is designed on 10 acres of unimproved land located in Garrison Oak Technology Park in Dover, DE. We have signed a Purchase and Sale Agreement for the property with the City of Dover that is contingent upon the award of a license.

In addition to building a state-of-the-art cultivation facility at the DMCC, we plan to purchase and renovate an existing 3,200 square foot building located in Dover as a secure, medical cannabis dispensary.

Additionally, we may provide AQUSCAN with financing of up to $750,000 for a five-year term at 18% interest per year for working capital associated with establishing and maintaining the RCC.

As of June 30, 2016, we have provided no financing to AQUSCAN.

Private Offering. By means of a Private Offering Memorandum dated July 19, 2016, we are offering to a limited number of accredited investors up to 200 Units at a price of $25,000 per Unit for a total of $5,000,000. Each Unit consists of one $25,000 Secured Convertible Promissory Note and Series I and Series II Warrants. The Notes will bear interest at 9.5% per year, mature on June 30, 2019, and can be converted at any time into shares of our common stock, initially at a conversion price of $1.25 per share. The Notes will be secured by a first lien on a 52.6-acre parcel of land, located in Freetown, Massachusetts, which we will purchase with a portion of the proceeds from the Offering. Each Series I Warrant allows the holder to purchase 20,000 shares of our common stock at a price of $1.50 per share. Each Series II Warrant allows the Holder to purchase 20,000 shares of our common stock at a price of $3.00 per share. The Series I and Series II Warrants expire on June 30, 2020.

The Offering is for a minimum of 160 Units ($4,000,000) (the “Minimum Offering”) and a maximum of 200 Units ($5,000,000) (the “Maximum Offering”). If the Minimum Offering is not sold by the later of August 14, 2016, or the date of the closing of our contemplated purchase of land in Massachusetts (the “Escrow Date”), unless extended, all funds received from prospective investors will be promptly refunded to them, without interest and without deduction for commissions or expenses. The Escrow Date may be extended if the agreement relating to the purchase of the land in Massachusetts is extended. However, in no case may the Escrow Date be later than October 15, 2016. If we raise the minimum required $4,000,000, the Offering will continue on a best-efforts basis until all Units offered are sold or we elect to terminate the Offering.

SIGNIFICANT ACCOUNTING POLICIES

There were no changes in our significant accounting policies and estimates during the nine months ended June 30, 2016 from those set forth in our Annual Report on Form 10-K for the year ended September 30, 2015 filed on January 13, 2016. 

RESULTS OF OPERATIONS

Total Revenues

During the three and nine months ended June 30, 2016 we generated $45,000 and $75,000 in revenue, respectively. For the three and nine months ended June 30, 2015, we generated $45,000 and $125,000 in revenue, respectively. The reduction in revenues reflects our amendment to reduce our consulting fees for 4900 Jackson, LLC (and its predecessor) from $10,000 per month to $5,000 per month, offset by a new consulting agreement entered into in April 2016 with CCI in which we earn $10,000 per month.

Advertising and Marketing Expenses

Advertising and marketing expenses were approximately $15,000 and $17,000 for the three and nine months ended June 30, 2016, respectively, as compared to approximately $5,000 and 11,000 for the three and nine months ended June 30, 2015, respectively. The increase is due to increased print marketing and advertising efforts to raise the profile and awareness of the company and pursue new opportunities in our national expansion program.

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Professional Fees

Professional fees were approximately $140,000 and $493,000 for the three and nine months ended June 30, 2016, respectively, as compared to approximately $191,000 and $464,000 for the three and nine months ended June 30, 2015, respectively. The decrease in professional fees for the three months ended June 30, 2016, is attributable primarily to the decrease in legal expenses associated with our operations. The increase in professional fees for the nine months ended June 30, 2016, is primarily due to the planning, design, and permitting costs associated with the Massachusetts Medical Cannabis Center.

General and Administrative Expenses

General and administrative expenses were approximately $125,000 and $462,000 for the three and nine months ended June 30, 2016, respectively, as compared to approximately $164,000 and $659,000 for the three and nine months ended June 30, 2015, respectively. The decrease is attributable primarily to a decrease in stock based compensation and option expense as many of our stock-based awards were granted in 2014 and were subject to short vesting periods. This decrease is partially offset by and other general and administrative expenses as we continue to develop our business and expand our operations.

Interest Income

Interest income was approximately $44,000 and $138,000 for the three and nine months ended June 30, 2016, respectively, as compared to approximately $62,000 and $161,000 for the three and nine months ended June 30, 2015, respectively. The decrease is attributable to decreases in amounts owed from our clients.

Interest Expense

Interest expense was approximately $73,000 and $182,000 for the three and nine months ended June 30, 2016, respectively, as compared to approximately $60,000 and $84,000 for the three and nine months ended June 30, 2015, respectively. The increase is attributable to the financing of our recent investing and operating activities primarily with debt.

Loss on Extinguishment of Debt

As discussed in Note 4, we obtained a loan modification in April 2016. As a result of the modification, we recognized a loss on the extinguishment of the original debt of $90,000 in the three and nine months ended June 30, 2016, respectively. There was no similar charge in the three and nine months ended June 30, 2015.

Net Operating Loss

We had a net loss of approximately $(356,000) and $(1,042,000) for the three and nine months ended June 30, 2016, respectively, as compared to a net loss of approximately $(313,000) and $(933,000) for the three and nine months ended June 30, 2015, respectively. The increase in net loss is attributable to changes in revenues, operating expenses and interest income and expense, each of which is described above.

 LIQUIDITY AND CAPITAL RESOURCES

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $4,376,002 and $3,694,167 at June 30, 2016 and September 30, 2015, respectively, and had a net loss of $1,041,835 for the nine months ended June 30, 2016. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. Further, the amount due from WGP of $1,217,653 (before an allowance of $466,374) may not be collectible and the agreement for the sale of land for $2,500,000 has been terminated.

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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Notes Payable

See Notes 4, 5 and 10 to the financial statements filed with this report for information concerning our notes payable.

Analysis of Cash Flows

During the nine months ended June 30, 2016, our net cash flows used in operations were approximately $609,000 as compared to net cash flows used in operations of approximately $573,000 for the nine months ended June 30, 2015. This was primarily due to an increase in our net loss, a reduction in stock based compensation, and changes in working capital during the nine months ended June 30, 2016.

Cash flows used in investing activities were approximately $335,000 for the nine months ended June 30, 2016, consisting of a $525,000 deposit on land, advances made on notes receivable – related party of approximately $56,000 and minor purchases of fixed assets, offset by approximately $250,000 of payments received from notes receivable. Cash flows used in investing activities were approximately $794,000 for the nine months ended June 30, 2015, consisting of advances made on notes receivables, deposits on land and website development expenditures, partially offset by payments received from notes receivable.

Cash flows provided by financing activities were $749,000 for the nine months ended June 30, 2016, consisting of proceeds from notes payable and notes payable - related parties. Cash flows provided by financing activities were approximately $1,294,000 for the nine months ended June 30, 2015, consisting of proceeds from notes payable, partially offset by payments on notes payable.

We do not have any firm commitments from any person to provide us with any capital.

OFF-BALANCE SHEET ARRANGEMENTS

As of June 30, 2016, we did not have any off balance sheet arrangements.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were not effective for the same reasons that our internal control over financial reporting was not adequate.

Internal Control over Financial Reporting

As indicated in our Form 10-K filed on January 13, 2016, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective during the 2015 fiscal year at the reasonable assurance level, as a result of a material weakness primarily related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP.

We are currently in the process of evaluating the steps necessary to remediate this material weakness.

Change in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarterly period ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

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PART II OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit Number	Description of Document
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, (filed herewith)
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, (filed herewith)
32	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AMERICANN, INC.
Dated: August 11, 2016	By:	/s/ Timothy Keogh
		Timothy Keogh
		Principal Executive Officer
	By:	/s/ Benjamin Barton
		Benjamin Barton
		Principal Financial and Accounting Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14(a)AND 15a-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

I, Timothy Keogh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 of AmeriCann, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

          (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

          (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2016

/s/ Timothy Keogh

Timothy Keogh

Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULES 13a-14(a) AND 15a-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

I, Benjamin Barton, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 of AmeriCann, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

          (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

          (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2016

/s/ Benjamin Barton

Benjamin Barton

Principal Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of AmeriCann, Inc. (the “Company”), for the quarter ended June 30, 2016, as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, Timothy Keogh, principal executive officer of the Company, and Benjamin Barton, principal financial officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Timothy Keogh
	Timothy Keogh
	Principal Executive Officer
Dated August 11, 2016
By:	/s/ Benjamin Barton
	Benjamin Barton
	Principal Financial Officer

Dated August 11, 2016

XML

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2016	Jul. 30, 2016
Document Information [Line Items]
Entity Registrant Name	Americann, Inc.
Entity Central Index Key	0001508348
Trading Symbol	amci
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		16,631,000
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2016	Sep. 30, 2015
Current Assets:
Cash and cash equivalents	$ 6,922	$ 201,353
Interest receivable	3,423	5,975
Prepaid expenses	11,728	35,758
Land held for resale		2,250,809
Note receivable	335,904
Total current assets	357,977	2,493,895
Land held for resale	2,250,809
Furniture and equipment (net of depreciation of $2,300 and $1,458)	9,885	6,399
Notes and other receivables (net of allowance of $466,374 and $456,470)	1,142,813	1,251,105
Note receivable - related party	55,630
Website development costs (net of amortization of $11,528 and $1,153)	29,972	40,347
Deposits on land	725,000	200,000
Security deposit	3,110	3,110
Total assets	4,183,662	3,994,856
Current Liabilities:
Accounts payable and accrued expenses	281,165	85,298
Interest payable (including $69,266 and $0 to related parties)	76,232
Other payables	9,937	11,716
Notes payable	1,511,297	900,000
Notes Payable, Related Parties, Current	1,910,349
Total current liabilities	3,788,980	997,014
Note payable - related party		1,682,849
Total liabilities	3,788,980	2,679,863
Stockholders' Equity:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.0001 par value; 100,000,000 shares authorized; 16,631,000 and 16,631,000 shares issued and outstanding as of June 30, 2016 and September 30, 2015, respectively	1,663	1,663
Additional paid in capital	5,129,021	5,007,497
Accumulated deficit	(4,376,002)	(3,694,167)
Total stockholders' equity	394,682	1,314,993
Total liabilities and stockholders' equity	$ 4,183,662	$ 3,994,856

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Condensed Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2016	Sep. 30, 2015
Furniture and equipment, accmulated depreciation	$ 2,300	$ 1,458
Notes and other receivables, allowance	466,374	456,470
Website development costs, accumulation amortization	11,528	1,153
Interest payable, related parties	$ 69,266	$ 0
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	16,631,000	16,631,000
Common stock, shares outstanding (in shares)	16,631,000	16,631,000

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Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Consulting fees	$ 45,000	$ 45,000	$ 75,000	$ 125,000
Total revenues	45,000	45,000	75,000	125,000
Operating expenses:
Advertising and marketing	14,990	4,954	17,338	11,029
Professional fees	140,369	191,002	493,449	464,469
General and administrative expenses	124,571	163,674	462,116	659,352
Provision for doubtful accounts	3,290		9,904
Total operating expenses	283,220	359,630	982,807	1,134,850
Loss from operations	(238,220)	(314,630)	(907,807)	(1,009,850)
Other income (expense):
Interest income	44,482	61,629	138,269	161,430
Interest expense	(48,826)	(38,574)	(113,031)	(41,607)
Loss on extinguishment of debt	(90,000)		(90,000)
Interest expense - related party	(23,814)	(21,656)	(69,266)	(42,717)
Total other income (expense)	(118,158)	1,399	(134,028)	77,106
Net loss	$ (356,378)	$ (313,231)	$ (1,041,835)	$ (932,744)
Basic and diluted loss per common share (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.06)	$ (0.06)
Weighted average common shares outstanding (in shares)	16,631,000	16,631,000	16,631,000	16,619,645

XML

Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net loss	$ (1,041,835)	$ (932,744)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	11,217	45,196
Provision for doubtful accounts	9,904
Stock based compensation and option expense	121,524	301,223
Loss on extinguishment of debt	90,000
Expenses paid on behalf of the company	0	37,720
Changes in operating assets and liabilties:
Interest receivable	(93,831)	(6,559)
Prepaid expenses	24,030	(5,000)
Accounts payable and accrued expenses	195,867	16,629
Related party payables	0	(54,077)
Interest payable	30,780	7,689
Interest payable - related party	45,452	25,033
Other payables	(1,779)	4,112
Deferred revenue		(11,740)
Net cash flows used in operations	(608,671)	(572,518)
Cash flows from investing activities:
Purchase of fixed assets	(4,328)
Capitalization of website development costs		(41,500)
Deposit on land	(525,000)	(100,000)
Payments received on notes receivable	250,401	335,000
Advances made on notes receivable - related party	(55,630)	(987,556)
Net cash flows used in investing activities	(334,557)	(794,056)
Cash flows from financing activities:
Proceeds from note payable	521,297	611,006
Proceeds from note payable - related party	227,500	890,000
Payments on note payable - related party	0	(207,000)
Net cash flows provided by financing activities	748,797	1,294,006
Net decrease in cash and cash equivalents	(194,431)	(72,568)
Cash and cash equivalents at beginning of period	201,353	173,956
Cash and cash equivalents at end of period	6,922	101,388
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	57,431	36,357
Cash paid for income taxes	$ 0	$ 0

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Note 1 - Nature of Business and Basis of Presentation

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

NOTE 1.

NATURE

OF BUSINESS AND

BASIS OF PRESENTATION

AmeriCann, Inc. ("the Company", “we”, “our” or "the Issuer") was organized under the laws of the State of Delaware on June 25, 2010.

On January 17, 2014, a privately held limited liability company acquired approximately 93% of the Company's outstanding shares of common stock from several of the Company's shareholders, which resulted in a change in control of the Company.

The Company's business plan is to offer a comprehensive, turnkey package of services that includes consulting, design, construction and financing to approved and licensed marijuana operators throughout the United States. The Company's business plan is based on the anticipated growth of the regulated marijuana market in the United States.

The Company's activities are subject to significant risks and uncertainties including failure to secure funding to properly expand its operations.

Basis of Presentation

The (a) condensed balance sheet as of September 30, 2015, which has been derived from audited financial statements, and (b) the unaudited condensed financial statements as of and for the three and nine months ended June 30, 2016 and 2015, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on January 13, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the condensed financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2015 as reported in the Form 10-K have been omitted.

Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net loss.

Recent Accounting Pronouncements

In May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to clarify certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, to clarify the following two aspects of Topic 606: 1) identifying performance obligations, and 2) the licensing implementation guidance. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to reduce complexity in accounting standards involving several aspects of the accounting for employee share-based payment transactions, including (1) the income tax consequences, (2) classification of awards as either equity or liabilities, and (3) classification on the statement of cash flows. The amendments will be effective for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and early adoption is permitted. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method, amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively, amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively, and amendments related to the presentation of excess tax benefits on the statement of cash flows can be applied using either a prospective transition method or a retrospective transition method. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating the impact of these amendments on its financial statements.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases: (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company is currently evaluating the impact of these amendments on its financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. As amended by the FASB in July 2015, the standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in 2018.

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Note 2 - Going Concern

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $4,376,002 and $3,694,167 at June 30, 2016 and September 30, 2015, respectively, and had a net loss of $1,041,835 for the nine months ended June 30, 2016. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. Further, the amount due from WGP of $1,217,653 (before an allowance of $466,374) may not be collectible and the agreement for the sale of land for $2,500,000 has been terminated.

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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Note 3 - Notes and Other Receivables

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 3.

NOTES

AND OTHER

RECEIVABLE

S

Notes and Other Receivables as of June 30, 2016 and September 30, 2015, consisted of the following: 

	June 30, 2016		September 30, 2015
Note receivable from 4900 Jackson, LLC, a licensed dispensary, interest rate of 12.0%; monthly principal and interest payments of $50,000, with a balloon payment of $182,531 due on May 1, 2017; collateralized by the borrower's assets.	$	335,904	$	586,305
Notes and other receivables from WGP, a licensed medical marijuana cultivator; $673,294 note secured by real and personal property of the borrower, interest rate of 18.0%; accrued consulting fees of $40,000, construction advances of $332,357 and accrued interest of $172,002. Net of reserves of $466,374 and $456,470. All amounts are due and payable immediately.		751,279		664,800
Related party note receivable from CCI, a non-profit corporation, financing of up to $2.5 million through April 2021, interest rate of 18.0%; monthly principal and interest payments commencing the sixth month after the borrower begins to generate sales; unsecured.		55,630		-
		1,142,813		1,251,105
Less: Current portion		335,904		-
	$	806,909	$	1,251,105

The notes and other receivables from WGP are classified as long term due to ongoing disputes between the Company and WGP.

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Note 4 - Note Payable

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

4

.

 NOTE

S

PAYABLE

On March 21, 2015, the Company closed on a $650,000 loan from a third party. The loan was due September 21, 2015 and was secured by the land held for sale the Company owns at 4200 Monaco Street, Denver, Colorado. The annual interest rate for the loan was 14%. The loan was due on September 21, 2015. Interest expense was $80,623 and $0 for the years ended September 30, 2015 and 2014, respectively. As part of the financing the Company incurred $27,772 of deferred financing costs that were recognized as interest expense in 2015. This note was repaid as described below.

On September 15, 2015, an unrelated third party loaned the Company $900,000. The loan bears interest at 12% per year and was due and payable on March 16, 2016. The Company used $650,000 of the proceeds to repay the existing loan that was secured by the property. On April 6, 2016, the loan was modified as follows: 

● The principal balance of the loan was increased to $990,000;

● The interest rate was increased to 18% per year; and

● The maturity date of the loan was extended to March 15, 2017.

The Company considered ASC Subtopic 470-50, Debt Modifications and Extinguishments, and determined that the modification was an extinguishment and therefore, recognized a loss on the extinguishment of the original debt of $90,000 in the three and nine months ended June 30, 2016. The Company may repay the loan at any time without penalty. The loan is secured by a first lien on the five-acre parcel of land in Denver. At June 30, 2016, accrued interest on this note payable was $0.

On February 1, 2016, the Company entered into an agreement with an unrelated party which provided the Company with borrowing capacity of $200,000. On May 1, 2016, the agreement was amended to increase the borrowing capacity to $1,000,000. As of June 30, 2016, the Company had borrowed $521,297 against this credit line. The loan bears interest at 8% per year, and all unpaid principal and interest is due on December 31, 2016. The Company may repay the loan at any time without penalty.

As of June 30, 2016, accrued interest on this loan was $6,965. This loan was assumed by Strategic Capital Partners (“SCP”) in July 2016. See Notes 5 and 10 for additional details.

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Note 5 - Related Party Transactions and Related Party Notes Payable

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE

5

. RELATED PARTY TRANSACTIONS

Strategic Capital Partners

.

At June 30, 2016, we had an outstanding note payable of $1,910,349 to SCP, an entity controlled by our Chief Financial Officer. Under the note payable, as amended, outstanding amounts accrue interest at 5% per year payable on March 31

st

and September 30

th

, with all outstanding principal and interest due on December 31, 2016, and can be repaid at any time prior to maturity. Interest expense was $23,814 and $21,656 for the three months ended June 30, 2016 and 2015, respectively; and $69,266 and $42,717 for the nine months ended June 30, 2016 and 2015, respectively. Interest payable – related party of $69,266 and $0 was included in the accompanying balance sheets at June 30, 2016 and September 30, 2015, respectively.

In September 2015, the Company agreed to include $49,849 of accrued and unpaid interest in the principal balance of the loan. During the nine months ended June 30, 2016, the Company received advances of $227,500 and no payments were made.

In July 2016, SCP assumed, and then restructured, the $521,297 loan referred to in Note 4. See Note 10 for more information.

Coastal Compassion.

On April 7, 2016, we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is one of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned MMCC. Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to $2.5 million for a five-year term at 18% interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a three- year period beginning April 1, 2016, we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will pay us $10,000 each month for these consulting services. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of June 30, 2016, we have provided financing to CCI of $55,630, which includes construction and working capital advances of $54,191, and accrued interest of $1,439.

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Note 6 - Loss Per Share

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 6

.

LOSS

PER SHARE

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Net loss attributable to common stockholders	$	(356,378	)	$	(313,231	)	$	(1,041,835	)	$	(932,744	)
Basic weighted average outstanding shares of common stock		16,631,000			16,631,000			16,631,000			16,619,645
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		16,631,000			16,631,000			16,631,000			16,619,645
Basic and diluted net loss per share of common stock	$	(0.02	)	$	(0.02	)	$	(0.06	)	$	(0.06	)

The Company has excluded 1,205,000 of stock options from the computation of diluted net loss per share since the effects are anti-dilutive.

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Note 7 - Income Taxes

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

7

. INCOME TAXES

The Company did not record any income tax expense or benefit for the three or nine months ended June 30, 2016. The Company increased its valuation allowance and reduced its net deferred tax assets to zero. The Company's assessment of the realization of its deferred tax assets has not changed, and as a result the Company continues to maintain a full valuation allowance for its net deferred assets as of June 30, 2016.

As of June 30, 2016, the Company did not have any unrecognized tax benefits. There were no significant changes to the calculation since September 30, 2015.

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Note 8 - Stock Based Compensation

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 8

.

STOCK BASED COMPENSATION

Restricted Stock Awards

.

The Company uses restricted stock awards to compensate certain key executives and other individuals. At June 30, 2016, the Company had 300,000 of outstanding unvested restricted stock awards which vest on March 20, 2017. Stock-based compensation expense associated with restricted stock awards was $18,725 and $46,813 for the three months ended June 30, 2016 and 2015, respectively, and $112,351 and $252,789 for the nine months ended June 30, 2016 and 2015, respectively. As of June 30, 2016, unrecognized stock-based compensation associated with restricted stock awards totaled $56,175, which is to be recognized over a weighted average period of 0.4 years.

Stock Options.

Stock option activity as of and for the nine months ended June 30, 2016 is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2015		1,205,000	$	8.70
Granted		-	$	-
Cancelled		-	$	-
Exercised		-	$	-
Outstanding as of June 30, 2016		1,205,000	$	8.70		1.7	$	-
Vested and expected to vest at June 30, 2016		1,205,000	$	8.70		1.7	$	-
Exercisable at June 30, 2016		1,205,000	$	8.70		1.7	$	-

Stock-based compensation expense (benefit) associated with stock options totaled $0 and $(1,229)

for the three months ended June 30, 2016 and 2015, respectively, and $9,173 and $48,434

for the nine months ended June 30, 2016 and 2015, respectively. At June 30, 2016, there is no remaining unrecognized stock-based compensation associated with stock options.

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Note 9 - Commitments and Contigencies

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

9

.

 COMMITMENTS AND CONTIGENC

IES

Massachusetts Land Purchase

.  On January 14, 2015, the Company entered into an agreement to purchase a 52.6 acre parcel of undeveloped land in Freetown, Massachusetts. The property is located approximately 47 miles southeast of Boston. The Company plans to develop the property as the Massachusetts Medical Cannabis Center ("MMCC"). Plans for the MMCC may include the construction of sustainable greenhouse cultivation and processing facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program. Additional plans for the MMCC may include a testing laboratory, a research facility, a training center, an infused product production facility and corporate offices. The Company paid the seller a $100,000 deposit upon the signing of the agreement which will be applied toward the purchase price at the closing.

On December 8, 2015, The Town of Freetown Planning Board unanimously approved the Company’s site plan application for the MMCC.  The site plan application requested 977,000 square feet of infrastructure for medical marijuana cultivation, processing, testing and associated administration in Freetown's Industrial Park.  On March 24, 2016, the Department of Public Health (the “DPH”) for the Commonwealth of Massachusetts approved the Company’s consulting and development agreements relating to the MMCC. Although the DPH has approved these agreements, the actual lease agreement with the first tenant for the MMCC has not been finalized or approved by the DPH. 

Between August 2015 and June 2016, there were several amendments to the land purchase agreement to extend the closing date. As consideration for the extensions, the Company agreed to increase the purchase price and paid the seller $625,000, which will be applied to the purchase price of the land if and when the Company closes on this transaction. On July 14, 2016, the Company, at its election, extended the closing date to August 14, 2016. As consideration for the extension of the closing date, the Company agreed to increase the purchase price for the property to $4,325,000 and the Company paid an additional $50,000 to the seller, which payment will be applied to the purchase price if the closing occurs.

To date, the Company has paid $775,000 that will be applied to the purchase price of the land if, and when, the Company closes on the transaction. If the closing does not occur, for any reason, the full deposit of $775,000 is nonrefundable.

Coastal Compassion.

On April 7, 2016, we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is one of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned MMCC. Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to $2.5 million for a five-year term at 18% interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a three- year period beginning April 1, 2016, we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will pay us $10,000 each month for these consulting services. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of June 30, 2016, we have provided financing to CCI of $55,630, which includes construction and working capital advances of $54,191, and accrued interest of $1,439.

AQUSCAN Delaware

.

On April 12, 2016, we signed agreements with AQUSCAN Delaware Corp. (“AQUSCAN”). AQUSCAN is one of eleven applicants for a vertically-integrated license to cultivate, process and sell medical cannabis in Delaware. The Delaware Division of Public Health is scheduled announce the application results in August of 2016 and award licenses for up to two new Registered Compassion Centers (“RCC”). AQUSCAN has agreed to become the sole tenant in our planned Delaware Medical Cannabis Center (“DMCC”) if a RCC license is awarded. We will build and own the facility.

The DMCC project is designed on 10 acres of unimproved land located in Garrison Oak Technology Park in Dover, DE. We have signed a Purchase and Sale Agreement for the property with the City of Dover that is contingent upon the award of a license.

In addition to building a state-of-the-art cultivation facility at the DMCC, we plan to purchase and renovate an existing 3,200 square foot building located in Dover as a secure, medical cannabis dispensary.

Additionally, we may provide AQUSCAN with financing of up to $750,000 for a five-year term at 18% interest per year for working capital associated with establishing and maintaining the RCC.

As of June 30, 2016, we have provided no financing to AQUSCAN.

Operating Leases.

The Company leases its office space located at 3200 Brighton Boulevard, Denver, Colorado for $2,870 per month under a month-to-month lease.

The Company leases an automobile under an operating lease commencing October 4, 2014 for 39 months at $611 per month. At June 30, 2016, the future rental payments required under this lease are $1,833 for the remainder of fiscal 2016, $7,332 for fiscal 2017 and $1,834 for fiscal 2018.

Except as described above, the Company has no other non-cancelable lease commitments.

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Note 10 - Subsequent Events

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 1

0

.

SUBSEQUENT EVENTS

MMC

C.

Previously the Company entered into an agreement to purchase a 52.6-acre parcel of undeveloped land in Freetown, Massachusetts. The Company paid the seller $100,000 upon the signing of the agreement which will be applied toward the purchase price at the closing.

Between August 2015 and June 2016, there were several amendments to the Agreement to extend the closing date to August 14, 2016.

On July 14, 2016, the Company, at its election, extended the closing date to August 14, 2016. As consideration for the extension of the closing date, the Company agreed to increase the purchase price for the property to $4,325,000 and the Company paid an additional $50,000 to the seller, which payment will be applied to the purchase price if the closing occurs.

To date, the Company has paid $775,000 that will be applied to the purchase price of the property if and when the Company closes on the transaction. If the closing does not occur, for any reason, the full deposit of $775,000 is nonrefundable.

Strategic Capital Partners

.

On July 14, 2016, Strategic Capital Partners (“SCP”) assumed the $521,297 loan referred to in Note 4, increasing the total balance owed to SCP by the Company to $2,431,646. SCP is controlled by Benjamin J. Barton, one of our officers and directors and a principal shareholder. The amounts borrowed from SCP were used to fund our operations. On July 14, 2016, $500,000 of the amount owed to SCP was converted into 400,000 shares of our common stock ($1.25 conversion rate). In connection with the conversion, we issued SCP warrants to purchase 800,000 shares of our common stock, exercisable at a price of $1.50 per share, and warrants to purchase an additional 800,000 shares of common stock, exercisable at a price of $3.00 per share. Both sets of warrants expire on June 30, 2020

The warrants to purchase the first 800,000 shares of our common stock will expire 45 days after written notice to SCP that the average closing price of our common stock was at least $3.00 for twenty consecutive trading days, and the average daily volume of trades of our common stock during the twenty trading days was at least 100,000 shares, provided a registration statement is in effect with respect to the shares issuable upon the exercise of the Warrants.

The warrants to purchase the additional 800,000 shares of our common stock will expire 45 days after written notice to SCP that the average closing price of our common stock was at least $4.80 for twenty consecutive trading days, and the average daily volume of trades of our common stock during the twenty trading days was at least 100,000 shares, provided a registration statement is in effect with respect to the shares issuable upon the exercise of the Warrants.

The remaining $1,931,646 owed to SCP was converted into two promissory notes.

The first Note, in the principal amount of $1,000,000, bears interest at 9.5% per year and matures on December 31, 2019. Interest is payable quarterly with the first interest payment due on September 30, 2016. The Note can be converted at any time into shares of our common stock, initially at a conversion price of $1.25 per share. The conversion price will be proportionately adjusted in the event of any stock split or capital reorganization. The Note is not secured.

If the average closing price of our common stock is at least $2.50 for twenty consecutive trading days, and the average daily volume of trades of our common stock during the twenty trading days is at least 100,000 shares, we may, within 10 days of the end of such twenty day period, notify SCP that its right to convert the Note into shares of our common stock will end 45 days after the date of the notice to SCP.

The second Note, in the principal amount of $931,640, bears interest at 8% per year and matures on December 31, 2019. Interest is payable quarterly, with the first interest payment due on September 30, 2016. The Note is not convertible into shares of our common stock. The Note will be secured by a second lien on our property in Denver, Colorado and a first lien on all amounts due to us by Wellness Group Pharms. Any payments received from the sale, lease or commercialization of the property in Denver, and any amounts received from Wellness Group Pharms, will be applied to the principal amount of the Note. Otherwise, all unpaid principal and interest will be due on December 31, 2019.

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Significant Accounting Policies (Policies)

9 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The (a) condensed balance sheet as of September 30, 2015, which has been derived from audited financial statements, and (b) the unaudited condensed financial statements as of and for the three and nine months ended June 30, 2016 and 2015, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on January 13, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the condensed financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2015 as reported in the Form 10-K have been omitted.

Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on net loss.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In May 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to clarify certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition and disclosures no longer required if the full retrospective transition method is adopted. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, to clarify the following two aspects of Topic 606: 1) identifying performance obligations, and 2) the licensing implementation guidance. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, to reduce complexity in accounting standards involving several aspects of the accounting for employee share-based payment transactions, including (1) the income tax consequences, (2) classification of awards as either equity or liabilities, and (3) classification on the statement of cash flows. The amendments will be effective for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and early adoption is permitted. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method, amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively, amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively, and amendments related to the presentation of excess tax benefits on the statement of cash flows can be applied using either a prospective transition method or a retrospective transition method. An entity that elects early adoption must adopt all of the amendments in the same period. The Company is currently evaluating the impact of these amendments on its financial statements.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed below). The Company is currently evaluating the impact of these amendments on its financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases: (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company is currently evaluating the impact of these amendments on its financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. As amended by the FASB in July 2015, the standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in 2018.

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Note 3 - Notes and Other Receivables (Tables)

9 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	June 30, 2016		September 30, 2015
Note receivable from 4900 Jackson, LLC, a licensed dispensary, interest rate of 12.0%; monthly principal and interest payments of $50,000, with a balloon payment of $182,531 due on May 1, 2017; collateralized by the borrower's assets.	$	335,904	$	586,305
Notes and other receivables from WGP, a licensed medical marijuana cultivator; $673,294 note secured by real and personal property of the borrower, interest rate of 18.0%; accrued consulting fees of $40,000, construction advances of $332,357 and accrued interest of $172,002. Net of reserves of $466,374 and $456,470. All amounts are due and payable immediately.		751,279		664,800
Related party note receivable from CCI, a non-profit corporation, financing of up to $2.5 million through April 2021, interest rate of 18.0%; monthly principal and interest payments commencing the sixth month after the borrower begins to generate sales; unsecured.		55,630		-
		1,142,813		1,251,105
Less: Current portion		335,904		-
	$	806,909	$	1,251,105

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Note 6 - Loss Per Share (Tables)

9 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Net loss attributable to common stockholders	$	(356,378	)	$	(313,231	)	$	(1,041,835	)	$	(932,744	)
Basic weighted average outstanding shares of common stock		16,631,000			16,631,000			16,631,000			16,619,645
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		16,631,000			16,631,000			16,631,000			16,619,645
Basic and diluted net loss per share of common stock	$	(0.02	)	$	(0.02	)	$	(0.06	)	$	(0.06	)

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Note 8 - Stock Based Compensation (Tables)

9 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding at September 30, 2015		1,205,000	$	8.70
Granted		-	$	-
Cancelled		-	$	-
Exercised		-	$	-
Outstanding as of June 30, 2016		1,205,000	$	8.70		1.7	$	-
Vested and expected to vest at June 30, 2016		1,205,000	$	8.70		1.7	$	-
Exercisable at June 30, 2016		1,205,000	$	8.70		1.7	$	-

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Note 1 - Nature of Business and Basis of Presentation (Details Textual)	Jan. 17, 2014
Ownership Percentage, Transfered	93.00%

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Note 2 - Going Concern (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Sep. 30, 2015
Wellness Group Pharms LLC [Member]
Notes, Loans and Financing Receivable, Gross, Noncurrent	$ 1,217,653		$ 1,217,653
Allowance for Notes, Loans and Financing Receivable, Noncurrent	466,374		466,374		$ 456,470
Land, Held-for-sale [Member]
Assets, Held-for-sale, Not Part of Disposal Group, Sale Price	2,500,000		2,500,000
Retained Earnings (Accumulated Deficit)	(4,376,002)		(4,376,002)		(3,694,167)
Net Income (Loss) Attributable to Parent	(356,378)	$ (313,231)	(1,041,835)	$ (932,744)
Allowance for Notes, Loans and Financing Receivable, Noncurrent	$ 466,374		$ 466,374		$ 456,470

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Note 3 - Schedule of Notes and Other Receivables (Details) - USD ($)	Jun. 30, 2016	Sep. 30, 2015
4900 Jackson LLC [Member]
Note receivable	$ 335,904	$ 586,305
Wellness Group Pharms LLC [Member]
Note receivable	751,279	664,800
Coastal Compassion Inc. [Member]
Note receivable	55,630
Note receivable	1,142,813	1,251,105
Less: Current portion	335,904
	$ 806,909	$ 1,251,105

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Note 3 - Schedule of Notes and Other Receivables (Details) (Parentheticals) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2016	Sep. 30, 2015
4900 Jackson LLC [Member]
Interest rate	12.00%	12.00%
Monthly principal payments and interest payments	$ 50,000	$ 50,000
Balloon payment	$ 182,531	$ 182,531
Wellness Group Pharms LLC [Member]
Interest rate	18.00%	18.00%
Secured note	$ 673,294	$ 673,294
Accrued consulting fees	40,000	40,000
Construction advances	332,357	332,357
Accrued interest	172,002	172,002
Notes and other receivables, allowance	466,374	456,470
Coastal Compassion Inc. [Member] | Maximum [Member]
Maximum financing amount	$ 2,500,000
Coastal Compassion Inc. [Member]
Interest rate	18.00%
Notes and other receivables, allowance	$ 466,374	$ 456,470

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Note 4 - Note Payable (Details Textual) - USD ($)			3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 15, 2015	Mar. 21, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	May 01, 2016	Apr. 06, 2016	Feb. 01, 2016
Potential Buyer of Land, Held-for-sale [Member]
Gain (Loss) on Extinguishment of Debt			$ (90,000)		$ (90,000)
Proceeds from Short-term Debt	$ 900,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%									18.00%
Debt Instrument, Face Amount										$ 990,000
Debt Instrument, Increase, Accrued Interest					$ 0
Third Party [Member] | Loan Secured by Land [Member]
Proceeds from Short-term Debt		$ 650,000
Debt Instrument, Interest Rate, Stated Percentage		14.00%
Interest Expense							$ 80,623	$ 0
Repayments of Short-term Debt	$ 650,000
Third Party [Member] | Interest Expense [Member]
Amortization of Debt Issuance Costs							$ 27,772
Unrelated Party [Member]
Debt Instrument, Interest Rate, Stated Percentage			8.00%		8.00%
Line of Credit Facility, Current Borrowing Capacity									$ 1,000,000		$ 200,000
Long-term Line of Credit			$ 521,297		$ 521,297
Accrued Liabilities			6,965		6,965
Gain (Loss) on Extinguishment of Debt			(90,000)		(90,000)
Interest Expense			$ 48,826	$ 38,574	$ 113,031	$ 41,607

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Note 5 - Related Party Transactions and Related Party Notes Payable (Details Textual) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 07, 2016	Sep. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jul. 31, 2016
Strategic Capital Partners [Member] | Subsequent Event [Member] | Unrelated Party [Member]
Long-term Line of Credit							$ 521,297
Strategic Capital Partners [Member]
Repayments of Related Party Debt					$ 0
Notes Payable, Related Parties, Current			$ 1,910,349		$ 1,910,349
Debt Instrument, Interest Rate, Stated Percentage			5.00%		5.00%
Interest Expense, Related Party			$ 23,814	$ 21,656	$ 69,266	$ 42,717
Interest Payable, Current		$ 0		69,266		69,266
Accrued and Unpaid Interest, Included in Principal Balance of the Borrowing		49,849
Proceeds from Related Party Debt					227,500
Coastal Compassion Inc. [Member] | Maximum [Member]
Working Capital Advances	$ 2,500,000
Coastal Compassion Inc. [Member]
Working Capital Advances, Term	5 years
Note Receivable, Interest Rate	18.00%
Consulting Services Revenue Monthly	$ 10,000
Working Capital Advances Receivable			55,630		55,630
Construction Advances Receivable			54,191		54,191
Interest Receivable, Noncurrent			$ 1,439		$ 1,439
Unrelated Party [Member]
Debt Instrument, Interest Rate, Stated Percentage			8.00%		8.00%
Long-term Line of Credit			$ 521,297		$ 521,297
Repayments of Related Party Debt					0	207,000
Notes Payable, Related Parties, Current			1,910,349		1,910,349
Interest Expense, Related Party			23,814	$ 21,656	69,266	42,717
Interest Payable, Current			$ 76,232		76,232
Proceeds from Related Party Debt					$ 227,500	$ 890,000

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Note 6 - Loss Per Share (Details Textual)	9 Months Ended
	Jun. 30, 2016 shares
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,205,000

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Note 6 - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net Income (Loss) Attributable to Parent	$ (356,378)	$ (313,231)	$ (1,041,835)	$ (932,744)
Basic weighted average outstanding shares of common stock (in shares)	16,631,000	16,631,000	16,631,000	16,619,645
Dilutive effects of common share equivalents (in shares)
Dilutive weighted average outstanding shares of common stock (in shares)	16,631,000	16,631,000	16,631,000	16,619,645
Basic and diluted net loss per share of common stock (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.06)	$ (0.06)

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Note 7 - Income Taxes (Details Textual)	3 Months Ended	9 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)
Income Tax Expense (Benefit)	$ 0	$ 0
Deferred Income Tax Assets, Net	0	0
Unrecognized Tax Benefits	$ 0	$ 0

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Note 8 - Stock Based Compensation (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	300,000		300,000
Allocated Share-based Compensation Expense	$ 18,725	$ 46,813	$ 112,351	$ 252,789
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	56,175		$ 56,175
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			146 days
Employee Stock Option [Member]
Allocated Share-based Compensation Expense	0	$ 1,229	$ 9,173	$ 48,434
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 0		$ 0

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Note 8 - Stock Option Activity (Details)	9 Months Ended
	Jun. 30, 2016 $ / shares shares
Shares Outstanding (in shares) | shares	1,205,000
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 8.70
Shares Outstanding (in shares) | shares	1,205,000
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 8.70
Outstanding as of June 30, 2016, weighted average contractual term	1 year 255 days
Shares Vested and expected to vest at June 30, 2016 (in shares) | shares	1,205,000
Vested and expected to vest at June 30, 2016, weighted average exercise price (in dollars per share) | $ / shares	$ 8.70
Vested and expected to vest at June 30, 2016, weighted average contractual term	1 year 255 days
Shares Exercisable at June 30, 2016 (in shares) | shares	1,205,000
Exercisable at June 30, 2016, weighted average exercise price (in dollars per share) | $ / shares	$ 8.70
Exercisable at June 30, 2016, weighted average contractual term	1 year 255 days

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Note 9 - Commitments and Contigencies (Details Textual)						6 Months Ended	18 Months Ended
	Jul. 14, 2016 USD ($)	Apr. 12, 2016 USD ($) a ft²	Apr. 07, 2016 USD ($)	Dec. 08, 2015 USD ($) a	Oct. 04, 2014 USD ($)	Mar. 31, 2016 USD ($)	Jun. 30, 2016 USD ($)	Jul. 19, 2016 a	Sep. 30, 2015 USD ($)	Jan. 14, 2015 USD ($) a
AQUSCAN Delaware Corp. [Member] | Dover, DE [Member]
Area of Land | a		10
Area of Real Estate Property | ft²		3,200
AQUSCAN Delaware Corp. [Member]
Working Capital Advances Receivable							$ 0
Working Capital Advances		$ 750,000
Working Capital Advances, Term		5 years
Note Receivable, Interest Rate		18.00%
Massachusetts Land Purchase [Member] | Subsequent Event [Member]
Area of Land | a								52.6
Payments to Acquire Land	$ 50,000
Land, Purchase Price	$ 4,325,000
Massachusetts Land Purchase [Member]
Area of Land | a										52.6
Deposits on Land										$ 100,000
Area of Real Estate Property | a				977,000
Payments to Acquire Land				$ 625,000			775,000
Maximum [Member] | Coastal Compassion Inc. [Member]
Working Capital Advances			$ 2,500,000
Coastal Compassion Inc. [Member]
Working Capital Advances Receivable							55,630
Working Capital Advances, Term			5 years
Note Receivable, Interest Rate			18.00%
Consulting Services Revenue Monthly			$ 10,000
Construction Advances Receivable							54,191
Interest Receivable, Noncurrent							1,439
Operating Leases, Office Space [Member]
Operating Leases, Monthly Payment						$ 2,870
Operating Leases, Automobile [Member]
Operating Leases, Monthly Payment					$ 611
Lessee Leasing Arrangements, Operating Leases, Term of Contract					3 years 90 days
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year							1,833
Operating Leases, Future Minimum Payments, Due in Two Years							7,332
Operating Leases, Future Minimum Payments, Due in Three Years							1,834
Deposits on Land							$ 725,000		$ 200,000

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Note 10 - Subsequent Events (Details Textual)			18 Months Ended
	Jul. 14, 2016 USD ($) $ / shares shares	Dec. 08, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jul. 19, 2016 a	Jan. 14, 2015 a
Massachusetts Land Purchase [Member] | Subsequent Event [Member]
Area of Land | a				52.6
Land, Purchase Price	$ 4,325,000
Payments to Acquire Land	50,000
Massachusetts Land Purchase [Member]
Area of Land | a					52.6
Payments to Acquire Land		$ 625,000	$ 775,000
Subsequent Event [Member] | Strategic Capital Partners [Member] | Convertible Notes Payable [Member]
Notes Payable, Related Parties	$ 500,000
Subsequent Event [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member] | Minimum [Member]
Average Closing Price per Share | $ / shares	$ 4.80
Subsequent Event [Member] | Strategic Capital Partners [Member] | Warrants to Purchase Additional Shares [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 3
Class of Warrant or Right Expiration Term	45 days
Number of Consecutive Trading Days	20 days
Average Daily Volume Of Shares Trades | shares	100,000
Subsequent Event [Member] | Strategic Capital Partners [Member] | Minimum [Member]
Average Closing Price per Share | $ / shares	$ 3
Subsequent Event [Member] | Strategic Capital Partners [Member] | Notes Payable Converted to Promissory Notes [Member]
Notes Payable, Related Parties	$ 1,931,646
Subsequent Event [Member] | Strategic Capital Partners [Member] | Promissory Note One [Member]
Notes Payable, Related Parties	$ 1,000,000
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 1.25
Average Closing Price per Share | $ / shares	$ 2.50
Number of Consecutive Trading Days	20 days
Average Daily Volume Of Shares Trades | shares	100,000
Debt Instrument, Interest Rate, Stated Percentage	9.50%
Period to Notify End of Right to Convert Notes	10 years
Period before Right to Convert Notes Expires	45 days
Subsequent Event [Member] | Strategic Capital Partners [Member] | Promissory Note Two [Member]
Notes Payable, Related Parties	$ 931,640
Debt Instrument, Interest Rate, Stated Percentage	8.00%
Subsequent Event [Member] | Strategic Capital Partners [Member]
Line of Credit Outstanding Amount Assumed by Related Party	$ 521,297
Notes Payable, Related Parties	$ 2,431,646
Debt Conversion, Converted Instrument, Shares Issued | shares	400,000
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 1.25
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	800,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 1.50
Class of Warrant or Right Expiration Term	45 days
Number of Consecutive Trading Days	20 days
Average Daily Volume Of Shares Trades | shares	100,000
Strategic Capital Partners [Member]
Debt Instrument, Interest Rate, Stated Percentage			5.00%