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, 2019

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.)
1550 Wewatta St, Denver, CO	80202
(Address of principal executive offices)	(Zip Code)
(303) 862-9000
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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 every Interactive Date File required to be submitted 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 such files). Yes ☑ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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 August 9, 2019, the registrant had 23,410,086 outstanding shares of common stock.

AmeriCann, Inc.

FORM 10-Q

TABLE OF CONTENTS

			PAGE NO.
PART I	FINANCIAL INFORMATION
	Item 1.	Unaudited Financial Statements:
		Consolidated Balance Sheets as of June 30, 2019 and September 30, 2018	3
		Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2019 and 2018	4
		Consolidated Statement of Changes in Stockholders' Equity for the nine months ended June 30, 2019 and 2018	5
		Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2019 and 2018	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 4.	Controls and Procedures	19
PART II	OTHER INFORMATION
	Item 6.	Exhibits	20
	SIGNATURES		21

2

Part I:  FINANCIAL INFORMATION

Item 1.      UNAUDITED Financial Statements

AMERICANN, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

	June 30, 2019			September 30, 2018
Assets
Current Assets:
Cash and cash equivalents	$	3,437		$	198,144
Restricted cash		3,052			3,818,805
Current portion of prepaid land lease		57,959			57,959
Prepaid expenses and other current assets		2,500			7,470
Current portion of note receivable - related party		26,990			-
Total current assets		93,938			4,082,378
Construction in progress		6,387,566			1,681,382
Furniture and equipment (net of depreciation of $921 and $4,827)		1,842			5,794
Notes and other receivables (net of allowance of $977,770)		783,905			783,905
Note receivable - related party		127,789			176,764
Prepaid land lease and related deposits, net of current portion		2,680,618			2,724,088
Security deposit and other assets		3,110			3,110
Total assets	$	10,078,768		$	9,457,421
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	552,328		$	268,065
Related party payables		26,783			-
Interest payable (including $25,993 and $12,742 to related parties)		55,500			46,605
Other payables		17,754			8,906
Notes payable (net of discount of $0 and $138,750)		615,490			521,250
Notes payable - related party (inclusive of premium of $9,650 and $0)		1,766,296			-
Total current liabilities		3,034,151			844,826
Notes payable - related party (inclusive of premium of $0 and $25,673)		-			1,782,319
Total liabilities		3,034,151			2,627,145
Commitments and contingencies - see Note 7
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; 23,264,356 and 22,106,763 shares issued and outstanding as of June 30, 2019 and September 30, 2018, respectively		2,327			2,211
Additional paid in capital		21,803,504			19,937,606
Accumulated deficit		(14,761,214	)		(13,109,541	)
Total stockholders' equity		7,044,617			6,830,276
Total liabilities and stockholders' equity	$	10,078,768		$	9,457,421

See accompanying notes to unaudited consolidated financial statements.

3

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended June 30,						Nine Months Ended June 30,
	2019			2018			2019			2018
Revenues:
Consulting fees	$	-		$	-		$	-		$	-
Total revenues		-			-			-			-
Operating expenses:
Advertising and marketing		37,832			9,300			98,878			13,049
Professional fees		273,621			67,819			572,864			337,934
General and administrative expenses		199,058			357,224			716,261			1,149,678
Total operating expenses		510,511			434,343			1,388,003			1,500,661
Loss from operations		(510,511	)		(434,343	)		(1,388,003	)		(1,500,661	)
Other income (expense):
Interest income		7,150			15,453			22,239			40,839
Interest expense		(19,449	)		(830,204	)		(182,573	)		(2,009,192	)
Other income (expense)		-			-			(3,030	)		(2,861	)
Interest expense - related party		(33,435	)		(36,926	)		(100,306	)		(110,777	)
Total other income (expense)		(45,734	)		(851,677	)		(263,670	)		(2,081,991	)
Net loss	$	(556,245	)	$	(1,286,020	)	$	(1,651,673	)	$	(3,582,652	)
Basic and diluted loss per common share	$	(0.02	)	$	(0.07	)	$	(0.07	)	$	(0.18	)
Weighted average common shares outstanding		23,005,753			19,447,377			22,858,359			19,396,514

See accompanying notes to unaudited consolidated financial statements.

4

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

									Additional
	Preferred Stock				Common Stock				Paid In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balances, September 30, 2017		-	$	-		19,366,000	$	1,937	$	10,959,188	$	(8,676,825	)	$	2,284,300
Stock-based compensation		-				-		-		171,307		-			171,307
Benefical conversion feature and warrants		-				-		-		1,487,438		-			1,487,438
Net loss		-				-		-		-		(1,374,364	)		(1,374,364	)
Balances, December 31, 2017		-	$	-		19,366,000	$	1,937	$	12,617,933	$	(10,051,189	)	$	2,568,681
Stock issued for options exercised		-		-		25,000		3		18,747		-			18,750
Stock-based compensation		-		-		-		-		135,354		-			135,354
Benefical conversion feature and warrants		-		-		-		-		810,000		-			810,000
Net loss		-		-		-		-		-		(922,268	)		(922,268	)
Balances, March 31, 2018		-	$	-		19,391,000	$	1,940	$	13,582,034	$	(10,973,457	)	$	2,610,517
Stock-based compensation		-								126,126		-			126,126
Stock issued for cash						304,054		30		922,382					922,412
Conversion of debt						535,161		54		802,687					802,741
Stock issued for warrants exercised		-		-		200,000		20		224,980		-			225,000
Net loss		-		-		-		-		-		(1,286,020	)		(1,286,020	)
Balances, June 30, 2018		-	$	-		20,430,215	$	2,044	$	15,658,209	$	(12,259,477	)	$	3,400,776

									Additional
	Preferred Stock				Common Stock				Paid In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balances, September 30, 2018		-	$	-		22,106,763	$	2,211	$	19,937,606	$	(13,109,541	)	$	6,830,276
Stock issued for cash, net		-		-		311,816		31		649,969		-			650,000
Conversion of debt		-		-		31,328		3		46,989		-			46,992
Stock issued for warrants exercised, net		-		-		308,000		31		395,469		-			395,500
Stock issued for services		-		-		25,000		3		64,997		-			65,000
Net loss		-		-		-		-		-		(538,508	)		(538,508	)
Balances, December 31, 2018		-	$	-		22,782,907	$	2,279	$	21,095,030	$	(13,648,049	)	$	7,449,260
Stock issued for cash, net		-		-		176,609		17		303,984		-			304,001
Conversion of debt		-		-		20,000		2		29,998		-			30,000
Stock issued for warrants exercised, net		-		-		25,000		3		24,997		-			25,000
Net loss		-		-		-		-		-		(556,920	)		(556,920	)
Balances, March 31, 2019		-	$	-		23,004,516	$	2,301	$	21,454,009	$	(14,204,969	)	$	7,251,341
Stock issued for cash, net		-		-		81,826		8		109,992		-			110,000
Conversion of debt		-		-		123,014		12		184,509		-			184,521
Stock issued for warrants exercised, net		-		-		55,000		6		54,994		-			55,000
Net loss		-		-		-		-		-		(556,245	)		(556,245	)
Balances, June 30, 2019		-	$	-		23,264,356	$	2,327	$	21,803,504	$	(14,761,214	)	$	7,044,617

See accompanying notes to unaudited consolidated financial statements. 

5

AMERICANN, INC.

consolidated STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(1,651,673	)	$	(3,582,652	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		922			11,218
Stock based compensation and option expense		65,000			432,787
Loss on disposal of land		-			2,861
Loss on disposal of fixed assets		3,030			-
Amortization of equity instruments issued to lessor		29,595			28,979
Amortization of debt discount/(premium)		123,217			1,840,745
Changes in operating assets and liabilities:
Interest receivable		-			(40,838	)
Prepaid expenses		4,970			11,990
Accounts payable and accrued expenses		298,138			(536,217	)
Related party payables		26,783			(10,000	)
Interest payable		4,415			27,849
Interest payable - related party		25,993			(71,064	)
Other payables		8,848			(8,997	)
Net cash flows used in operations		(1,060,762	)		(1,893,339	)
Cash flows from investing activities:
Additions to construction in progress		(4,706,184	)		(214,951	)
Payments received on notes receivable		21,985			-
Net cash flows used in investing activities		(4,684,199	)		(214,951	)
Cash flows from financing activities:
Common stock issued for cash, net		1,064,001			922,412
Proceeds from note payable, net of financing costs		230,000			2,536,000
Proceeds from the exercise of warrants		475,500			225,000
Proceeds from the exercise of stock options		-			18,750
Principal payments on notes payable		(35,000	)		(285,677	)
Net cash flows provided by financing activities		1,734,501			3,416,485
Net increase (decrease) in cash, cash equivalents, and restricted cash		(4,010,460	)		1,308,195
Cash, cash equivalents, and restricted cash at beginning of period		4,016,949			1,627
Cash, cash equivalents, and restricted cash at end of period	$	6,489		$	1,309,822
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$	129,254		$	322,438
Cash paid for income taxes	$	-		$	-
Non-Cash Investing and Financing Activities:
Proceeds from sale of land used to satisfy debt obligations		-			1,608,451
Debt discount related to warrants issued with debt and Beneficial Conversion Feature		-			2,297,438
Notes payable and interest converted into shares of stock		261,513			802,741

See accompanying notes to unaudited consolidated financial statements. 

6

AMERICANN, INC.

Notes To Unaudited consolidated 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 design, develop, lease and operate state-of-the-art cultivation, processing and manufacturing facilities for licensed cannabis businesses throughout 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) consolidated balance sheet as of September 30, 2018, which has been derived from audited financial statements, and (b) the unaudited consolidated financial statements as of and for the nine months ended June 30, 2019 and 2018, 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 consolidated financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on January 15, 2019. 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 financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2018 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.

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts in the consolidated statements of cash flows:

	June 30, 2019		September 30, 2018
Cash and cash equivalents	$	3,437	$	198,144
Restricted cash		3,052		3,818,805
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	6,489	$	4,016,949

Amounts included in restricted cash represent amounts required to be set aside by a contractual agreement with a lender for the payment of specific construction related expenditures as part of the Company’s property development in Massachusetts.

Recent Accounting Pronouncements

In January 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-01, LEASES (TOPIC 842): LAND EASEMENT PRACTICAL EXPEDIENT FOR TRANSITION TO TOPIC 842; On February 25, 2016, the FASB issued Accounting Standards Update No. 2016- 02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. The FASB has been assisting stakeholders with implementation questions and issues as organizations prepare to adopt Topic 842. In connection with the FASB’s transition support efforts, a number of stakeholders inquired about the application of the new lease requirements in Topic 842 to land easements. Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity’s land for a specified purpose. The amendments in this Update affect the amendments in Update 2016-02, which are not yet effective but may be early adopted, and Example 10 of Subtopic 350- 30. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Update 2016-02. An entity that early adopted Topic 842 should apply the amendments in this Update upon issuance. The Company does not expect this amendment to have a material impact on its financial statements.

7

In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The amendments are effective for fiscal years beginning after December 15, 2018, and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company adopted the changes effective October 1, 2018 and the changes did not have a material impact on its financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC 718. The amendments are effective for fiscal years beginning after December 15, 2017, and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company adopted the changes effective October 1, 2018 and the changes did not have a material impact on its financial statements.

In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, which is the same time as the amendments in ASU No. 2014-09, and early adoption is permitted. The Company adopted the changes effective October 1, 2018 and the changes did not have a material impact on its financial statements.

In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014- 09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  The Company adopted ASU No. 2014-09 effective October 1, 2018 and the adoption did not have a material impact on its revenue recognition as it pertains to current revenue streams.

Between May 2014 and December 2016, the FASB issued several ASU’s on Revenue from Contracts with Customers (Topic 606). These updates will supersede nearly all existing revenue recognition guidance under current U.S. generally accepted accounting principles (GAAP). The core principle 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. A five-step process has been defined 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. The standards are 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 standards 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 the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company adopted Topic 606, effective October 1, 2018 and the adoption did not have a material impact on its revenue recognition as it pertains to current revenue streams.

NOTE 2. GOING CONCERN 

The accompanying consolidated 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 $14,761,214 and $13,109,541 at June 30, 2019 and September 30, 2018, respectively, and had a net loss of $556,245 and $1,651,673, for the three and nine months ended June 30, 2019, respectively. Further, the amount due from Wellness Group Pharms (“WGP”) of $1,761,675 (before an allowance of $977,770) may not be collectible. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to generate revenue, 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. On January 18, 2018, an arbitration panel awarded the Company $1,045,000 plus interest of $550,000 from WGP. In addition to the principal and interest awarded of $1,595,000, the Company was also awarded its attorneys’ fees and arbitration fees. Although there are no indicators to suggest that the amounts due from WGP will not be collectible, the Company has not collected on the award as of the filing date of this report.

8

Management believes that the actions presently being taken to further implement its business plan and generate revenue provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenue 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 revenue. 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, 2019 and September 30, 2018, consisted of the following: 

	June 30, 2019			September 30, 2018
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 and legal fees of $206,675, construction advances of $332,357 and accrued interest of $549,349. Net of reserves of $977,770. All amounts are due and payable immediately.		783,905			783,905
Related party note receivable from BASK, a non-profit corporation, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		154,779			176,764
Less: Current portion		(26,990	)		-
	$	911,694		$	960,669

The notes and other receivables from WGP are classified as long term due to ongoing disputes between the Company and WGP. The Company recently won an arbitration hearing against WGP, but will not reclassify the amounts from long-term until such time that actual payment is made or becomes known.

NOTE 4.  NOTES PAYABLE

On May 2, 2019, the Company borrowed $153,000 from an unrelated party. The loan bears interest at a rate of 12% and is due and payable on May 2, 2020. At any time on or before October 29, 2019 the Company may prepay the loan by paying the Lender the outstanding loan principal and accrued interest plus premiums ranging from 15% to 35%. After October 29, 2019, the Company may not repay the loan without the consent of the Lender. At any time after October 29, 2019, the full value of any unpaid principal is convertible into the Company’s common stock at a variable conversion price. The conversion price is equal to: (a) if the market price is greater than or equal to $1.50, the greater of (1) the variable conversion price (defined as market price multiplied by 65 percent) and (2) $1.00, and (b) if the market price is less than $1.50, the lesser of (1) the variable conversion price and (2) $1.00.

On May 21, 2019, the Company borrowed $83,000 from an unrelated party. The loan bears interest at a rate of 12% and is due and payable on May 21, 2020. Any amount not paid when due will bear interest at 22%. At any time after November 17, 2019, any unpaid principal is convertible into the Company’s common stock at a conversion price equal to: (a) if the market price is greater than or equal to $1.50, the greater of (1) the variable conversion price (defined as market price multiplied by 65 percent) and (2) $1.00, and (b) if the market price is less than $1.50, the lesser of (1) the variable conversion price and (2) $1.00.

The Company recorded debt discounts of $6,000 on the above notes of which $490 was amortized during the nine months ended June 30, 2019.

December 2017 Convertible Note Offering 

On December 29, 2017 the Company sold convertible notes in the principal amount of $800,000 to a group of accredited investors. The notes bear interest at 8% per year, are unsecured, and were due and payable on December 31, 2018. On December 31, 2018, the notes were extended to mature on December 31, 2019. At the option of the note holders, the notes may be converted at any time into shares of the Company's common stock at an initial conversion price of $1.50 per share.

9

The note holders also received warrants which entitle the note holders to purchase up to 533,333 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on October 17, 2022.

The placement agent for the offering received a cash commission of $64,000, plus warrants to purchase 106,667 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on December 29, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the 640,000 warrants was $607,024 which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the note is convertible, giving rise to a beneficial conversion feature of $128,976 which is recognized as additional paid in capital and a corresponding debt discount.

The $64,000 paid to the placement agent was allocated on a pro-rata basis to the warrants and the debt which was recorded as an offset to additional paid in capital and an increase in debt discount of $48,562 and $15,438, respectively.

During February 2019, a loan in the principal amount of $30,000 was converted into 20,000 shares of common stock.

During May 2018, a loan in the principal amount of $575,000 was converted into 383,333 shares of common stock. In addition, interest payable in the amount of $15,233 was converted into 10,155 shares.

All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were $51,749 and $645,768 for the nine months ended June 30, 2019 and 2018, respectively.

February 2018 Convertible Note Offering

On February 12, 2018 the Company sold convertible notes in the principal amount of $810,000 to a group of accredited investors. The notes bear interest at 8% per year, are unsecured, and are due and payable on December 31, 2018. On December 31, 2018, the notes were extended to mature on December 31,2019. At the option of the note holders, the notes may be converted at any time into shares of the Company's common stock at an initial conversion price of $1.50 per share.

The note holders also received warrants which entitle the note holders to purchase up to 540,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on October 17, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the 540,000 warrants was $523,013 which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the note is convertible, giving rise to a beneficial conversion feature of $286,987 which is recognized as additional paid in capital and a corresponding debt discount.

During January 2019, a loan in the amount of $35,000 was repaid in cash.

In October 2018, a loan in the principal amount of $45,000 was converted into 30,000 shares of common stock. In addition, interest payable in the amount of $1,992 was converted into 1,328 shares.

During July 2018, loans in the principal amount of $375,000 were converted into 250,000 shares of common stock. In addition, interest payable in the amount of $14,704 was converted into 9,802 shares.

In May 2019, loans in the principal amount of $150,000 were converted into 100,000 shares of common stock. In addition, interest payable in the amount of $19,521 was converted into 13,014 shares.

In April 2019, loans in the amount of $15,000 were converted to 10,000 shares of common stock.

All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were $87,001 and $405,000 for the nine months ended June 30, 2019 and 2018, respectively.

Related Party

On February 1, 2016, we entered into an agreement with an unrelated party which provided us with borrowing capacity of $200,000. On May 1, 2016, the agreement was amended to increase the borrowing capacity to $1,000,000. On July 14, 2016, Strategic Capital Partners (“SCP”) assumed the $521,297 loan borrowed against this credit line, increasing the total balance owed to SCP 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, we entered into a debt modification agreement whereby a portion of the debt was converted into common stock and the remaining debt was renegotiated into two promissory notes.

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Of the amounts owed to SCP, $500,000 was converted into 400,000 shares of our common stock ($1.25 conversion rate).

The remaining $1,756,646 owed to SCP was divided 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. The note can be converted at any time, at the option of the lender, 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 $756,646, bears interest at 8% per year and matures on December 31, 2019. Interest is payable quarterly. The note is not convertible into shares of our common stock but is secured by a first lien on all amounts due to us by WGP. Any payments received from the sale, lease or commercialization of the property in Denver, and any amounts received from WGP, will be applied to the principal amount of the note. Otherwise, all unpaid principal and interest will be due on December 31, 2019.

Accrued interest on these notes payable was $0 and $12,742 at June 30, 2019 and September 30, 2018, respectively. 

In connection with the debt modification agreement, 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. We allocated the relative fair values to the warrants, stock options, and convertible debt, as determined by the Black Scholes option pricing model. Based on the Black Scholes option pricing model, a net debt premium of $72,651 was allocated to the warrants which are reflected in additional paid-in-capital. The debt premium is being amortized on a straight-line basis over the term of the notes. At June 30, 2019, the outstanding principal on these notes was $1,756,646, and the unamortized debt premium was $9,650. Amortization of debt premium was $16,023 for the nine months ended June 30, 2019 and 2018.

NOTE 5. RELATED PARTY TRANSACTIONS

Strategic Capital Partners. At June 30, 2019 and September 30, 2018, we had outstanding notes payable to SCP of $1,766,296 and $1,782,319, respectively.

Interest expense was $33,435 and $36,926 for the three months ended June 30, 2019 and 2018, respectively; and $100,306 and $110,777 for the nine months ended June 30, 2019 and 2018, respectively. Interest payable – related party of $25,993 and $12,742 was included in the accompanying consolidated balance sheets at June 30, 2019 and September 30, 2018, respectively. We made interest payments of $12,783 during the quarter ended June 30, 2019, and $103,078 during the nine months ended June 30, 2019.

During the nine months ended June 30, 2019, the Company incurred $90,000 of consulting expenses with SCP of which approximately $26,800 remains outstanding as of June 30, 2019.

In October 2018, the Company paid SCP $30,000 to reimburse SCP for travel expenses incurred on the Company’s behalf.

In October 2018, the Company issued 65,000 shares of stock in exchange for consulting services.

Bask, Inc. On April 7, 2016, we signed agreements with Bask Inc. (formerly Coastal Compassion Inc.) (“BASK”). BASK is one of a limited number of non-profit organizations that has received a Final Certificate of Registration to cultivate, process and sell medical cannabis by the Massachusetts Cannabis Control Commission (formerly Massachusetts Department of Public Health). BASK has agreed to become the initial tenant in our planned MMCC.

Tim Keogh, our Chief Executive Officer, has been a Board Member of BASK since August of 2013. On November 7, 2012, Massachusetts voters approved a measure to legalize medical marijuana. At that time, Massachusetts law required Registered Marijuana Dispensaries (RMDs) to form and operate as nonprofit corporations pursuant to Massachusetts General Law (M.G.L.) .c.180.

Pursuant to the agreements, we agreed to provide BASK with financing for construction and working capital required for BASK’s approved dispensary and cultivation center in Fairhaven, MA. The financing accrued interest of 18% until 6-months after BASK opened its dispensary at which point the financing would be repaid over a five-year term at 18%.

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On August 15, 2018, which was 6-months after the first sales by BASK, the Company combined the construction and working capital advances of $129,634 and accrued interest of $44,517 with a payment schedule created for the 5 years with 18% interest as stipulated in the original agreement. The outstanding balance was $154,779 and $176,764 as of June 30, 2019 and September 30^, 2018, respectively. As of June 30, 2019, there is additional interest income of $22,239.

For a three- year period beginning April 1, 2016, we agreed to consult with BASK in the design, construction and operation of the Fairhaven facility. BASK will owe us $10,000 each month for these consulting services, but is not required to pay until nine months after generating certain revenues. Although the DPH has approved our agreement with BASK relating to the development and lease terms of the MCCC, the actual lease agreement with BASK has not been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to BASK. 

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,
	2019			2018			2019			2018
Net loss attributable to common stockholders	$	(556,245	)	$	(1,286,020	)	$	(1,651,673	)	$	(3,582,652	)
Basic weighted average outstanding shares of common stock		23,005,753			19,447,377			22,858,359			19,396,514
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		23,005,753			19,447,377			22,858,359			19,396,514
Basic and diluted net loss per share of common stock	$	(0.02	)	$	(0.07	)	$	(0.07	)	$	(0.18	)

As of June 30, 2019, we have excluded 150,000 of stock options and 9,090,650 of warrants from the computation of diluted net loss per share since the effects are anti-dilutive. As of June 30, 2018, we have excluded 180,000 of stock options and 9,415,000 of warrants from the computation of diluted net loss per share since the effects are anti-dilutive.

NOTE 7.  COMMITMENTS AND CONTINGENCIES

Officer Employment Agreement. On March 25, 2014, the Company entered into an employment agreement with Mr. Keogh. The agreement: (i) had an initial term of three years; (ii) required Mr. Keogh to devote at least 50% of his time to the Company and; (iii) provided that the Company would pay Mr. Keogh $12,000 per month during the term of the agreement. In connection with this employment agreement the Company granted Mr. Keogh shares of common stock and options.  This agreement has expired but the terms are continuing on a month to month basis.

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 MMCC. Plans for the MMCC 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. We paid the seller $100,000 upon the signing of the agreement which amount was applied toward the purchase price at the closing of the sale of the land.

Between August 2015 and September 2016, there were several amendments to the Agreement to extend the closing date to October 14, 2016. As consideration for the extensions, the Company, agreed to increase the purchase price to $4,325,000 and paid the seller $725,000, which was applied to the purchase price of the land when the property was purchased. As of September 30, 2016, the Company had paid $925,000 that was to be applied to the purchase price of the land at closing. On October 17, 2016, the Company closed on the land purchase via a sales-leaseback transaction. See ‘Operating Leases’ below for additional information.

Operating Leases

Land

On October 17, 2016, the Company closed the previously announced acquisition of a 52.6-acre parcel of undeveloped land in Freetown, Massachusetts. The deposits of $925,000 previously paid by the Company to the seller, Boston Beer Company (“BBC”), were credited against the total purchase price of $4,475,000. The remaining balance of $3,550,000 was paid to BBC by Massachusetts Medical Properties, LLC (“MMP”). The property is located approximately 47 miles southeast of Boston. The Company plans to develop the property as the Massachusetts Medical Cannabis Center (the “MMCC”). Plans for the MMCC include the construction of sustainable greenhouse cultivation, processing, and infused product facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program.

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As part of a simultaneous transaction, the Company assigned the property rights to MMP for a nominal fee and entered a lease agreement pursuant to which MMP agreed to lease the property to the Company for an initial term of fifty (50) years. The Company has the option to extend the term of the lease for four (4) additional ten (10) year periods. The lease is a triple net lease, with the Company paying all real estate taxes, repairs, maintenance and insurance.

The lease payments are greater of (a) $30,000 per month; (b) $0.38 per square foot per month of any structure built on the property; or (c) 1.5% of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but not down) every five (5) years by any increase in the Consumer Price Index.

Between October 17, 2016 and April 17, 2017, the monthly lease payments accrued, with all accrued lease payments paid to MMP on April 17, 2017. On April 17, 2017, the Company reimbursed MMP’s costs and expenses associated with the acquisition of the property, the lease, and the acquisition of the shares and the warrant from the Company (as further described below).

Under the terms of the lease, the Company had nine (6) months to obtain $2.6 million in capital funding for the construction of the first phase building. In the event that the Company was unable to raise these funds within the nine (6) month period, the Company had an additional nine (6) month period to do so; provided, that the Company has paid accrued lease payments and closing costs. If the Company was then unable to raise these funds on or before twelve (12) months from October 17, 2016, the lease would terminate. On October 17, 2017, the lease agreement was amended to provide that the Company will have until 16 months from October 17, 2016 to raise $2.6 million in capital funding. In addition to extending the funding deadline, this amendment granted MMP warrants to purchase up to 100,000 shares of Common Stock at an exercise price of $1.50 per share. The warrant can be exercised at any time on or after October 17, 2017 and on or before October 17, 2022. In February and April, 2018, the lease agreement was amended to provide that the Company will have until 20 months from October 17, 2016 to raise $2.6 million in capital funding. In addition to extending the funding deadline, this amendment granted MMP a warrant to purchase up to 100,000 shares of the Company’s common stock at an exercise price of $1.50 per share. The warrant can be exercised at any time on or before October 17, 2022. The Company recognized an expense of $0 and $0 during the three and nine months ended June 30, 2019, respectively, related to those warrants. The Company recognized an expense an expense of $0 and $171,307 during the three and nine months ended June 30, 2018, respectively. In July 2018, the Company fulfilled the $2.6 million capital funding commitment.

The Company received a credit for the $925,000 paid towards the purchase price of the land in the form of discounted lease payments. For the initial fifty (50) year term of the lease, the lease payments will be reduced by $1,542 each month

In connection with the sale of the property to MMP and the lease, the Company and MMP entered into a Share Purchase Agreement pursuant to which the Company issued to MMP 100,000 shares of its common stock at par value of $0.0001 (“Common Stock”), and a warrant to purchase up to 3,640,000 shares of Common Stock at an exercise price of $1.00 per share. The warrant can be exercised at any time on or before October 17, 2020. The warrant does not contain a cashless exercise provision. The fair value of the warrant was established using the Black Scholes option pricing model using the following assumptions:

● Risk-free interest rate – 1.12 percent

● Expected term – 4.0 years

● Volatility – 115 percent

The Company allocated $1,899,966 to the warrant which is reflected in additional paid-in-capital and was allocated to prepaid land lease. The fair value of the common stock on the date of the agreement was $73,000, which is also reflected in additional paid-in-capital and was allocated to prepaid land lease. The prepaid land lease is being amortized on a straight-line basis over the term of the lease.

The lease expense, which includes the amortization related to the prepaid land lease and office space, was $99,865 for each of the three months ended June 30, 2019 and 2018 and $199,730 for each of the nine months ended June 30, 2019 and 2018. At June 30, 2019, the future rental payments required under this lease are $85,374 for the remainder of fiscal 2019, $341,496 for fiscal years 2020 through 2023, and $14,684,528 thereafter.

On June 26, 2019 the expiration date of warrants to purchase 3,640,000 shares of common stock was extended to October 17, 2021.

Office space

In January 2018 the Company's offices moved to 1550 Wewatta St, Denver, CO 80202. The Company leases this new space on a month-to-month basis at a rate of $1,230 per month. Lease expense for office space was $3,801 and $3,690 for the three months ended June 30, 2019 and 2018, respectively and $11,544 and $20,590 for the nine months ended June 30, 2019 and 2018, respectively.

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NOTE 8.  SHAREHOLDERS’ EQUITY

Equity Line Agreement. On December 12, 2017, the Company entered into an amended and restated Equity Line agreement with Mountain States Capital, LLC (MSC). Under the equity line agreement, MSC agreed to provide the Company with up to $10,000,000 of funding through the purchase of shares of the Company's common stock.

During the term of the Agreement, the Company, at its sole discretion, may deliver a Put Notice to MSC, which will specify the dollar amount which the Company wants to draw down under the Equity Line. The amount the Company can draw down at any one time is the lesser of twice the average of the 10-day average daily trading volume (computed by multiplying the volume weighted average price for each day by the number of shares traded for that day), or $500,000.

A closing will occur on the date which is no earlier than five trading days following and no later than seven trading days following the applicable Put Notice. On each Closing Date, the Company will sell, and MSC will purchase, the shares of the Company's common stock specified in the Put Notice.

The amount to be paid by MSC on a particular Closing Date will be determined by dividing the dollar amount specified in the Put Notice by the Purchase Price. The Purchase Price is 90% of the lowest daily volume weighted average price of the Company's common stock during the Pricing Period. The Pricing Period, with respect to a particular Put Notice is the five consecutive trading days including, and immediately following, the delivery of a Put Notice. However, no Put Notice may be delivered on a day that is not a Trading Day.

The Company may specify a Minimum Price when submitting a Put Notice, provided however that the Minimum Price must be more than 75% of the Closing Price of the Company's Common Stock on the date immediately preceding the date of the delivery of the Put Notice. If the Purchase Price is less than the Minimum Price, the Company may, at its option, sell shares to MSC on the Closing Date using the Purchase Price. Notwithstanding the above, the Company will not sell any shares at a price below $1.00 per share.

The Company is under no obligation to submit any Put Notices.

The equity line agreement has a term of 18 months, which began on February 14, 2018.

During the year ended September 30, 2018, the Company submitted Put Notices for a total of 447,801 shares and received $1,222,412 from the sale of the shares to Mountain States.

During the nine months ended June 30, 2019, the Company submitted Put Notices for the total of 570,251 shares and received $1,064,001 from the sale of these shares to Mountain States.

In October 2018, the Company issued 65,000 shares for stock in exchange for consulting services.

Stock Options. There was no stock option activity for the nine months ended June 30, 2019. Stock option details are as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding as of September 30, 2018		150,000	$	2.21		2.9	$	-
Outstanding as of June 30, 2019		150,000	$	2.50		2.1	$	-
Vested and expected to vest at June 30, 2019		150,000	$	2.50		2.1	$	-
Exercisable at June 30, 2019		150,000	$	2.50		2.1	$	-

There was no stock-based compensation expense associated with stock options for the three and nine months ended June 30, 2019 and 2018. At June 30, 2019, there is no remaining unrecognized stock-based compensation associated with stock options.

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Warrants. Warrant activity as of and for the nine months ended June 30, 2019 is as follows:

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		9,478,650		$	1.55		2.6
Exercised		(388,000	)		1.23
Outstanding as of June 30, 2019		9,090,650		$	1.56		2.2	$	1,048,003
Exercisable at June 30, 2019		5,450,650		$	1.94		2.1	$	247,203

During the nine months ended June 30, 2019, the Company issued 388,000 shares upon the exercise of warrants for total proceeds of $475,500.

NOTE 9. INCOME TAXES

We did not record any income tax expense or benefit for the three or nine months ended June 30, 2019 or 2018. We increased our valuation allowance and reduced our net deferred tax assets to zero. Our assessment of the realization of our deferred tax assets has not changed, and as a result we continue to maintain a full valuation allowance for our net deferred assets as of June 30, 2019 and 2018.

As of June 30, 2019, we did not have any unrecognized tax benefits. There were no significant changes to the calculation since September 30, 2018.

NOTE 10. SUBSEQUENT EVENTS

As part of the existing agreement with MSC, on July 15, 2019, the Company submitted Put Notices on the Equity Line for a total of 65,000 shares for $65,000 in cash. 

On August 2, 2019 the Company borrowed $4,000,000 from an unrelated third party. The loan was evidenced by a note which bears interest at the rate of 11% per year, is due and payable on August 1, 2022 and is secured by a first lien on Building 1 at the Company’s Massachusetts Cannabis Center.

The note holder also received a warrant which allows the holder to purchase 600,000 shares of the Company’s common stock at a price of $1.50 per share. The warrant will expire on the earlier of (i) August2, 2024 or (ii) twenty days after written notice of the holder that the daily Volume Weighted Average Price of the Company’s common stock was at least $4.00 for twenty consecutive trading days and the average daily volume of trades of the Company’s common stock during the twenty trading days was at least 150,000 shares.

As part of the existing agreement with MSC, on August 7, the Company submitted Put Notices on the Equity Line for a total of 80,430 shares for $82,000 in cash.

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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 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, 2018 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's business plan is to design, develop, operate and/or lease state-of-the-art cannabis cultivation, processing and manufacturing facilities throughout the United States. 

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

AmeriCann’s flagship project is the Massachusetts Medical Cannabis Center. The Massachusetts Cannabis Center (“MMCC”) is being developed on a 52-acre parcel located in Southeastern Massachusetts. AmeriCann’s MMCC project is permitted for 987,000 sq. ft. of cannabis cultivation and processing infrastructure, which is being developed in phases to support both the existing medical cannabis and the newly emerging adult-use cannabis marketplace.

The first phase of the million square foot project is under-construction. Building 1 at MMCC is a 30,000 square foot cultivation and processing facility. Construction of the project is moving forward rapidly, with millions of dollars already invested in site preparation, concrete, and buildings. More than a dozen companies have been retained for construction of the facility which is being overseen by CBRE on behalf of AmeriCann. The building is expected to be complete by the summer of 2019.

AmeriCann, Inc. plans to apply for Marijuana Product Manufacturing and cultivation licenses to operate at MMCC but also enter into agreements with other licensed cannabis businesses in Massachusetts to occupy space in the million square foot project. AmeriCann will generate revenue through lease arrangements with the operators that include base rents and royalty payments up to 15% of gross revenue generated from products produced at MMCC.

AmeriCann, through a 100% owned subsidiary AmeriCann Brands, Inc., plans to secure licenses from the Massachusetts Cannabis Control Commission to provide extraction and product manufacturing support to the entire MMCC project, as well as to other licensed cannabis farmers throughout regulated markets. AmeriCann Brands plans to occupy space in Building 2 at MMCC which is in the final design process. In addition to large-scale extraction of cannabis plant material, AmeriCann Brands plans to produce branded consumer packaged goods including cannabis beverages, vaporizer products, edible products, non-edible products and concentrates at the state-of-the-art facility.

AmeriCann plans to replicate the brands, technology and innovations developed at its MMCC project to new markets as a multi-state operator.

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SIGNIFICANT ACCOUNTING POLICIES

There were no changes in our significant accounting policies and estimates during the three and nine months ended June 30, 2019 from those set forth in our Annual Report on Form 10-K for the year ended September 30, 2018 filed on January 15, 2019.

RESULTS OF OPERATIONS

Advertising and Marketing Expenses

Advertising and marketing expenses were approximately $38,000 and $9,300 for the three months ended June 30, 2019 and 2018, respectively. During the nine months ended June 30, 2019 and 2018, the advertising and marketing expenses were approximately $99,000 and $13,000, respectively. The increase is due to more advertising and marketing activities, as the Company is shifting its focus to the planning and development of the first phase building of the Massachusetts Medical Cannabis Center.

Professional Fees  

Professional fees were approximately $274,000 and $68,000 for the three months ended June 30, 2019 and 2018, respectively. During the nine months ended June 30, 2019 and 2018, the professional fees were approximately $573,000 and $338,000, respectively. The increase is due to an increase in consulting fees of approximately $286,000 offset with a decrease in legal fees of approximately $22,000.

General and Administrative Expenses

General and administrative expenses were approximately $199,000 and $357,000 for the three months ended June 30, 2019 and 2018, respectively. General and administrative expenses were approximately $716,000 and $1,150,000 for the nine months ended June 30, 2019 and 2018, respectively. The increase is primarily due to the compensation expense associated with the modification of warrants.

Interest Income

Interest income was approximately $7,000 and $15,000 for the three months ended June 30, 2019 and 2018, respectively. Interest income was approximately $22,000 and $41,000 for the nine months ended June 30, 2019 and 2018, respectively. The decrease is a result of the amended BASK note receivable.

Interest Expense

Interest expense was approximately $53,000 and $867,000 for the three months ended June 30, 2019 and 2018, respectively. Interest expense was approximately $283,000 and $2,120,000 for the nine months ended June 30, 2019 and 2018, respectively. The decrease is primarily attributable to amortization of debt discounts during the three and nine months ended June 30, 2018.

Net Operating Loss 

We had a net loss of $(556,245) and $(1,286,020) for the three months ended June 30, 2019 and 2018, respectively. We had a net loss of $(1,651,673) and $(3,582,652) for the nine months ended June 30, 2019 and 2018, respectively. The decrease in net loss is attributable to changes in operating expenses and interest income and expense, each of which is described above.

LIQUIDITY AND CAPITAL RESOURCES 

The accompanying unaudited consolidated 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 $14,761,214 and $13,109,541 at June 30, 2019, and September 30, 2018, respectively, and had a net loss of $1,651,673 for the nine months ended June 30, 2019. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to generate revenue, 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 $1,761,675 (before an allowance of $977,770) may not be collectible. On January 18, 2018, an arbitration panel awarded the Company $1,045,000 plus interest of $550,000 from WGP. In addition to the principal and interest awarded of $1,595,000, the Company was also awarded its attorneys’ fees and arbitration fees. The Company has not collected on the award as of the filing date.

17

Management believes that the actions presently being taken to further implement its business plan and generate revenue provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of the Company’s strategy to generate revenue 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 revenue. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Notes Payable

See Notes 4 the unaudited consolidated financial statements filed with this report for information concerning our notes payable

Analysis of Cash Flows 

During the nine months ended June 30, 2019, our net cash flows used in operations were $ 1,060,762 as compared to net cash flows used in operations of $1,893,339 for the nine months ended June 30, 2018. The decrease is primarily due to the timing of working capital payments, amortization of debt discounts and stock-based compensation expense in the nine months ended June 30, 2018.

Cash flows used in investing activities were $4,684,199 for the nine months ended June 30, 2019, consisting primarily of additions to construction in progress and payments received on notes receivables. Cash flows used in investing activities were $214,951 for the nine months ended June 30, 2018, consisting of additions to construction in progress.

Cash flows provided by financing activities were $1,734,501 for the nine months ended June 30, 2019, consisting of common stock issued for cash, proceeds from the exercise of warrants and proceeds from a note payable. Cash flows provided by financing activities were $3,416,485 for the nine months ended June 30, 2018, consisting of proceeds from notes payable, proceeds for exercises of warrants and stock options and payments on note payable.

On August 2, 2019 the Company borrowed $4,000,000 from an unrelated third party. The loan was evidenced by a note which bears interest at the rate of 11% per year, is due and payable on August 1, 2022 and is secured by a first lien on Building 1 at the Company’s Massachusetts Cannabis Center.

The note holder also received a warrant which allows the holder to purchase 600,000 shares of the Company’s common stock at a price of $1.50 per share. The warrant will expire on the earlier of (i) August2, 2024 or (ii) twenty days after written notice of the holder that the daily Volume Weighted Average Price of the Company’s common stock was at least $4.00 for twenty consecutive trading days and the average daily volume of trades of the Company’s common stock during the twenty trading days was at least 150,000 shares.

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

18

OFF-BALANCE SHEET ARRANGEMENTS

As of June 30, 2019, 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 following reasons:

● 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,

● limited or no segregation of duties, and

● lack of independent directors.

We are currently in the process of evaluating the steps necessary to remediate these material weaknesses.

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, 2019 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.

19

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.

20

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 19, 2019	By:	/s/ Timothy Keogh
		Timothy Keogh
		Principal Executive Officer
	By:	/s/ Benjamin Barton
		Benjamin Barton
		Principal Financial and Accounting Officer

21

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 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 19, 2019

/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 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 19, 2019

/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 period ended June 30, 2019, 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 19, 2019
By:	/s/ Benjamin Barton
	Benjamin Barton
	Principal Financial Officer

Dated August 19, 2019

XML

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2019	Aug. 09, 2019
Document Information [Line Items]
Entity Registrant Name	Americann, Inc.
Entity Central Index Key	0001508348
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		23,410,086
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2019	Sep. 30, 2018
Current Assets:
Cash and cash equivalents	$ 3,437	$ 198,144
Restricted cash	3,052	3,818,805
Current portion of prepaid land lease	57,959	57,959
Prepaid expenses and other current assets	2,500	7,470
Current portion of note receivable - related party	26,990
Total current assets	93,938	4,082,378
Notes and other receivables (net of allowance of $977,770)	783,905	783,905
Note receivable - related party	127,789	176,764
Prepaid land lease and related deposits, net of current portion	2,680,618	2,724,088
Security deposit and other assets	3,110	3,110
Total assets	10,078,768	9,457,421
Current Liabilities:
Accounts payable and accrued expenses	552,328	268,065
Related party payables	26,783
Interest payable (including $25,993 and $12,742 to related parties)	55,500	46,605
Other payables	17,754	8,906
Notes payable (net of discount of $0 and $138,750)	615,490	521,250
Notes payable - related party (inclusive of premium of $9,650 and $0)	1,766,296
Total current liabilities	3,034,151	844,826
Notes payable - related party (inclusive of premium of $0 and $25,673)		1,782,319
Total liabilities	3,034,151	2,627,145
Commitments and contingencies - see Note 7
Stockholders' Equity:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.0001 par value; 100,000,000 shares authorized; 23,264,356 and 22,106,763 shares issued and outstanding as of June 30, 2019 and September 30, 2018, respectively	2,327	2,211
Additional paid in capital	21,803,504	19,937,606
Accumulated deficit	(14,761,214)	(13,109,541)
Total stockholders' equity	7,044,617	6,830,276
Total liabilities and stockholders' equity	10,078,768	9,457,421
Construction in Progress [Member]
Current Assets:
Construction in progress	6,387,566	1,681,382
Furniture and Equipment [Member]
Current Assets:
Construction in progress	$ 1,842	$ 5,794

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2019	Sep. 30, 2018
Notes and other receivables, allowance	$ 977,770	$ 977,770
Interest payable, related parties	25,993	12,742
Note payable, discount	0	138,750
Note payable, related party, premium, current	9,650	0
Notes payable, related party, premium, noncurrent	$ 0	$ 25,673
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)	23,264,356	22,106,763
Common stock, shares outstanding (in shares)	23,264,356	22,106,763
Furniture and Equipment [Member]
Furniture and equipment, accmulated depreciation	$ 921	$ 4,827

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues:
Revenues
Operating expenses:
Advertising and marketing	37,832	9,300	98,878	13,049
Professional fees	273,621	67,819	572,864	337,934
General and administrative expenses	199,058	357,224	716,261	1,149,678
Total operating expenses	510,511	434,343	1,388,003	1,500,661
Loss from operations	(510,511)	(434,343)	(1,388,003)	(1,500,661)
Other income (expense):
Interest income	7,150	15,453	22,239	40,839
Interest expense	(19,449)	(830,204)	(182,573)	(2,009,192)
Other income (expense)			(3,030)	(2,861)
Interest expense - related party	(33,435)	(36,926)	(100,306)	(110,777)
Total other income (expense)	(45,734)	(851,677)	(263,670)	(2,081,991)
Net loss	$ (556,245)	$ (1,286,020)	$ (1,651,673)	$ (3,582,652)
Basic and diluted loss per common share (in dollars per share)	$ (0.02)	$ (0.07)	$ (0.07)	$ (0.18)
Weighted average common shares outstanding (in shares)	23,005,753	19,447,377	22,858,359	19,396,514
Service [Member]
Revenues:
Revenues

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Sep. 30, 2017		19,366,000
Balances at Sep. 30, 2017		$ 1,937	$ 10,959,188	$ (8,676,825)	$ 2,284,300
Stock-based compensation			171,307		171,307
Benefical conversion feature and warrants			1,487,438		1,487,438
Net loss				(1,374,364)	(1,374,364)
Balances (in shares) at Dec. 31, 2017		19,366,000
Balances at Dec. 31, 2017		$ 1,937	12,617,933	(10,051,189)	2,568,681
Balances (in shares) at Sep. 30, 2017		19,366,000
Balances at Sep. 30, 2017		$ 1,937	10,959,188	(8,676,825)	2,284,300
Net loss					(3,582,652)
Balances (in shares) at Jun. 30, 2018		20,430,215
Balances at Jun. 30, 2018		$ 2,044	15,658,209	(12,259,477)	3,400,776
Balances (in shares) at Dec. 31, 2017		19,366,000
Balances at Dec. 31, 2017		$ 1,937	12,617,933	(10,051,189)	2,568,681
Stock-based compensation			135,354		135,354
Benefical conversion feature and warrants			810,000		810,000
Net loss				(922,268)	(922,268)
Stock issued for options exercised (in shares)		25,000
Stock issued for options exercised		$ 3	18,747		18,750
Balances (in shares) at Mar. 31, 2018		19,391,000
Balances at Mar. 31, 2018		$ 1,940	13,582,034	(10,973,457)	2,610,517
Stock-based compensation			126,126		126,126
Net loss				(1,286,020)	(1,286,020)
Stock issued for cash (in shares)		304,054
Stock issued for cash		$ 30	922,382		922,412
Conversion of debt (in shares)		535,161
Conversion of debt		$ 54	802,687		802,741
Stock issued for warrants exercised (in shares)		200,000
Stock issued for warrants exercised		$ 20	224,980		225,000
Balances (in shares) at Jun. 30, 2018		20,430,215
Balances at Jun. 30, 2018		$ 2,044	15,658,209	(12,259,477)	3,400,776
Balances (in shares) at Sep. 30, 2018		22,106,763
Balances at Sep. 30, 2018		$ 2,211	19,937,606	(13,109,541)	6,830,276
Net loss				(538,508)	(538,508)
Stock issued for cash (in shares)		311,816
Stock issued for cash		$ 31	649,969		650,000
Conversion of debt (in shares)		31,328
Conversion of debt		$ 3	46,989		46,992
Stock issued for warrants exercised (in shares)		308,000
Stock issued for warrants exercised		$ 31	395,469		395,500
Stock Issued During Period, Shares, Issued for Services		25,000
Stock issued for services		$ 3	64,997		65,000
Balances (in shares) at Dec. 31, 2018		22,782,907
Balances at Dec. 31, 2018		$ 2,279	21,095,030	(13,648,049)	7,449,260
Balances (in shares) at Sep. 30, 2018		22,106,763
Balances at Sep. 30, 2018		$ 2,211	19,937,606	(13,109,541)	6,830,276
Net loss					$ (1,651,673)
Stock issued for warrants exercised (in shares)					388,000
Balances (in shares) at Jun. 30, 2019		23,264,356
Balances at Jun. 30, 2019		$ 2,327	21,803,504	(14,761,214)	$ 7,044,617
Balances (in shares) at Dec. 31, 2018		22,782,907
Balances at Dec. 31, 2018		$ 2,279	21,095,030	(13,648,049)	7,449,260
Net loss				(556,920)	(556,920)
Stock issued for cash (in shares)		176,609
Stock issued for cash		$ 17	303,984		304,001
Conversion of debt (in shares)		20,000
Conversion of debt		$ 2	29,998		30,000
Stock issued for warrants exercised (in shares)		25,000
Stock issued for warrants exercised		$ 3	24,997		25,000
Balances (in shares) at Mar. 31, 2019		23,004,516
Balances at Mar. 31, 2019		$ 2,301	21,454,009	(14,204,969)	7,251,341
Net loss				(556,245)	(556,245)
Stock issued for cash (in shares)		81,826
Stock issued for cash		$ 8	109,992		110,000
Conversion of debt (in shares)		123,014
Conversion of debt		$ 12	184,509		184,521
Stock issued for warrants exercised (in shares)		55,000
Stock issued for warrants exercised		$ 6	54,994		55,000
Balances (in shares) at Jun. 30, 2019		23,264,356
Balances at Jun. 30, 2019		$ 2,327	$ 21,803,504	$ (14,761,214)	$ 7,044,617

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net loss	$ 1,651,673	$ 3,582,652
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	922	11,218
Stock based compensation and option expense	65,000	432,787
Amortization of equity instruments issued to lessor	29,595	28,979
Amortization of debt discount/(premium)	123,217	1,840,745
Changes in operating assets and liabilities:
Interest receivable	0	(40,838)
Prepaid expenses	4,970	11,990
Accounts payable and accrued expenses	298,138	(536,217)
Related party payables	26,783	(10,000)
Interest payable	4,415	27,849
Interest payable - related party	25,993	(71,064)
Other payables	8,848	(8,997)
Net cash flows used in operations	(1,060,762)	(1,893,339)
Cash flows from investing activities:
Additions to construction in progress	(4,706,184)	(214,951)
Payments received on notes receivable	21,985	0
Net cash flows used in investing activities	(4,684,199)	(214,951)
Cash flows from financing activities:
Common stock issued for cash, net	1,064,001	922,412
Proceeds from note payable, net of financing costs	230,000	2,536,000
Proceeds from the exercise of warrants	475,500	225,000
Proceeds from the exercise of stock options	0	18,750
Principal payments on notes payable	(35,000)	(285,677)
Net cash flows provided by financing activities	1,734,501	3,416,485
Net increase (decrease) in cash, cash equivalents, and restricted cash	(4,010,460)	1,308,195
Cash, cash equivalents, and restricted cash at beginning of period	4,016,949	1,627
Cash, cash equivalents, and restricted cash at end of period	6,489	1,309,822
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	129,254	322,438
Cash paid for income taxes	0	0
Non-Cash Investing and Financing Activities:
Proceeds from sale of land used to satisfy debt obligations	0	1,608,451
Debt discount related to warrants issued with debt and Beneficial Conversion Feature	0	2,297,438
Notes payable and interest converted into shares of stock	261,513	802,741
Land [Member]
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of assets	0	2,861
Fixed Asset [Member]
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of assets	$ 3,030	$ 0

XML

Note 1 - Nature of Business and Basis of Presentation

9 Months Ended

Jun. 30, 2019

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 design, develop, lease and operate state-of-the-art cultivation, processing and manufacturing facilities for licensed cannabis businesses throughout 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) consolidated balance sheet as of

September 30, 2018,

which has been derived from audited financial statements, and (b) the unaudited consolidated financial statements as of and for the

nine

months ended

June 30, 2019

and

2018,

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 consolidated financial statements and notes thereto contained in the Company's Form

10

-K filed with the SEC on

January 15, 2019.

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 financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal

2018

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.

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts in the consolidated statements of cash flows:

	June 30, 2019		September 30, 2018
Cash and cash equivalents	$	3,437	$	198,144
Restricted cash		3,052		3,818,805
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	6,489	$	4,016,949

Amounts included in restricted cash represent amounts required to be set aside by a contractual agreement with a lender for the payment of specific construction related expenditures as part of the Company’s property development in Massachusetts.

Recent Accounting Pronouncements

In

January 2018,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2018

-

01,

LEASES (TOPIC

842

): LAND EASEMENT PRACTICAL EXPEDIENT FOR TRANSITION TO TOPIC

842;

On

February 25, 2016,

the FASB issued Accounting Standards Update

No.

2016

-

02,

Leases (Topic

842

), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. The FASB has been assisting stakeholders with implementation questions and issues as organizations prepare to adopt Topic

842.

In connection with the FASB’s transition support efforts, a number of stakeholders inquired about the application of the new lease requirements in Topic

842

to land easements. Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity’s land for a specified purpose. The amendments in this Update affect the amendments in Update

2016

-

02,

which are

not

yet effective but

may

be early adopted, and Example

10

of Subtopic

350

-

30.

The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Update

2016

-

02.

An entity that early adopted Topic

842

should apply the amendments in this Update upon issuance. The Company does

not

expect this amendment to have a material impact on its financial statements.

In

July 2017,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2017

-

11,

Earnings Per Share (Topic

260

); Distinguishing Liabilities from Equity (Topic

480

); Derivatives and Hedging (Topic

815

): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option)

no

longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The amendments are effective for fiscal years beginning after

December 15, 2018,

and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company adopted the changes effective

October 1, 2018

and the changes did

not

have a material impact on its financial statements.

In

May 2017,

the FASB issued ASU

No.

2017

-

09,

Compensation—Stock Compensation (Topic

718

): Scope of Modification Accounting, to provide clarity and reduce both (

1

) diversity in practice and (

2

) cost and complexity when applying the guidance in Topic

718,

Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC

718.

The amendments are effective for fiscal years beginning after

December 15, 2017,

and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company adopted the changes effective

October 1, 2018

and the changes did

not

have a material impact on its financial statements.

In

February 2017,

the FASB issued ASU

No.

2017

-

05,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic

610

-

20

): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic

610

-

20,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic

610

-

20,

which was issued in

May 2014

as a part of ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years, which is the same time as the amendments in ASU

No.

2014

-

09,

and early adoption is permitted. The Company adopted the changes effective

October 1, 2018

and the changes did

not

have a material impact on its financial statements.

In

January 2017,

the FASB issued ASU

No.

2017

-

03,

Accounting Changes and Error Corrections (Topic

250

). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

); ASU

No.

2016

-

02,

Leases (Topic

842

); and ASU

No.

2016

-

13,

Financial Instruments—Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments.  The Company adopted ASU

No.

2014

-

09

effective

October 1, 2018

and the adoption did

not

have a material impact on its revenue recognition as it pertains to current revenue streams.

Between

May 2014

and

December 2016,

the FASB issued several ASU’s on Revenue from Contracts with Customers (Topic

606

). These updates will supersede nearly all existing revenue recognition guidance under current U.S. generally accepted accounting principles (GAAP). The core principle 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. A

five

-step process has been defined 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. The standards are 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 standards 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 the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company adopted Topic

606,

effective

October 1, 2018

and the adoption did

not

have a material impact on its revenue recognition as it pertains to current revenue streams.

XML

Note 2 - Going Concern

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE

2.

GOING CONCERN

 

The accompanying consolidated 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

$14,761,214

and

$13,109,541

at

June 30, 2019

and

September 30, 2018,

respectively, and had a net loss of

$556,245

and

$1,651,673,

for the

three

and

nine

months ended

June 30, 2019,

respectively. Further, the amount due from Wellness Group Pharms (“WGP”) of

$1,761,675

(before an allowance of

$977,770

)

may

not

be collectible. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. While the Company is attempting to generate revenue, 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. On

January 18, 2018,

an arbitration panel awarded the Company

$1,045,000

plus interest of

$550,000

from WGP. In addition to the principal and interest awarded of

$1,595,000,

the Company was also awarded its attorneys’ fees and arbitration fees. Although there are

no

indicators to suggest that the amounts due from WGP will

not

be collectible, the Company has

not

collected on the award as of the filing date of this report.

Management believes that the actions presently being taken to further implement its business plan and generate revenue provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenue 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 revenue. The financial statements do

not

include any adjustments that might be necessary if the Company is unable to continue as a going concern.

XML

Note 3 - Notes and Other Receivables

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

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

NOTE

3.

NOTES AND OTHER RECEIVABLES

Notes and other receivables as of

June 30, 2019

and

September 30, 2018,

consisted of the following: 

	June 30, 2019			September 30, 2018
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 and legal fees of $206,675, construction advances of $332,357 and accrued interest of $549,349. Net of reserves of $977,770. All amounts are due and payable immediately.		783,905			783,905
Related party note receivable from BASK, a non-profit corporation, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		154,779			176,764
Less: Current portion		(26,990	)		-
	$	911,694		$	960,669

The notes and other receivables from WGP are classified as long term due to ongoing disputes between the Company and WGP. The Company recently won an arbitration hearing against WGP, but will

not

reclassify the amounts from long-term until such time that actual payment is made or becomes known.

XML

Note 4 - Notes Payable

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

4

.  NOTES PAYABLE

On

May 2, 2019,

the Company borrowed

$153,000

from an unrelated party. The loan bears interest at a rate of

12%

and is due and payable on

May 2, 2020. 

At any time on or before

October 29, 2019

the Company

may

prepay the loan by paying the Lender the outstanding loan principal and accrued interest plus premiums ranging from

15%

to

35%.

After

October 29, 2019,

the Company

may

not

repay the loan without the consent of the Lender. At any time after 

October 29, 2019,

the full value of any unpaid principal is convertible into the Company’s common stock at a variable conversion price. The conversion price is equal to: (a) if the market price is greater than or equal to

$1.50,

the greater of (

1

) the variable conversion price (defined as market price multiplied by

65

percent) and (

2

)

$1.00,

and (b) if the market price is less than

$1.50,

the lesser of (

1

) the variable conversion price and (

2

)

$1.00.

On

May 21, 2019,

the Company borrowed

$83,000

from an unrelated party. The loan bears interest at a rate of

12%

and is due and payable on

May 21, 2020.

Any amount

not

paid when due will bear interest at

22%.

At any time after 

November 17, 2019,

any unpaid principal is convertible into the Company’s common stock at a conversion price equal to: (a) if the market price is greater than or equal to

$1.50,

the greater of (

1

) the variable conversion price (defined as market price multiplied by

65

percent) and (

2

)

$1.00,

and (b) if the market price is less than

$1.50,

the lesser of (

1

) the variable conversion price and (

2

)

$1.00.

The Company recorded debt discounts of

$6,000

on the above notes of which

$490

was amortized during the

nine

months ended

June 30, 2019.

December 2017

Convertible Note Offering

On

December 29, 2017

the Company sold convertible notes in the principal amount of

$800,000

to a group of accredited investors. The notes bear interest at

8%

per year, are unsecured, and were due and payable on

December 31, 2018.

On

December 31, 2018,

the notes were extended to mature on

December 31, 2019.

At the option of the note holders, the notes

may

be converted at any time into shares of the Company's common stock at an initial conversion price of

$1.50

per share.

The note holders also received warrants which entitle the note holders to purchase up to

533,333

shares of the Company's common stock. The warrants are exercisable at a price of

$1.50

per share and expire on

October 17, 2022.

The placement agent for the offering received a cash commission of

$64,000,

plus warrants to purchase

106,667

shares of the Company's common stock. The warrants are exercisable at a price of

$1.50

per share and expire on

December 29, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the

640,000

warrants was

$607,024

which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the note is convertible, giving rise to a beneficial conversion feature of

$128,976

which is recognized as additional paid in capital and a corresponding debt discount.

The

$64,000

paid to the placement agent was allocated on a pro-rata basis to the warrants and the debt which was recorded as an offset to additional paid in capital and an increase in debt discount of

$48,562

and

$15,438,

respectively.

During

February 2019,

a loan in the principal amount of

$30,000

was converted into

20,000

shares of common stock.

During

May 2018,

a loan in the principal amount of

$575,000

was converted into

383,333

shares of common stock. In addition, interest payable in the amount of

$15,233

was converted into

10,155

shares.

All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were

$51,749

and

$645,768

for the

nine

months ended

June 30, 2019

and

2018,

respectively.

February 2018

Convertible Note Offering

On

February 12, 2018

the Company sold convertible notes in the principal amount of

$810,000

to a group of accredited investors. The notes bear interest at

8%

per year, are unsecured, and are due and payable on

December 31, 2018.

On

December 31, 2018,

the notes were extended to mature on

December

31,2019.

At the option of the note holders, the notes

may

be converted at any time into shares of the Company's common stock at an initial conversion price of

$1.50

per share.

The note holders also received warrants which entitle the note holders to purchase up to

540,000

shares of the Company's common stock. The warrants are exercisable at a price of

$1.50

per share and expire on

October 17, 2022.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the

540,000

warrants was

$523,013

which was recognized as additional paid in capital and a corresponding debt discount. After such allocation, the effective conversion price on the issuance date was less than the fair value of the stock into which the note is convertible, giving rise to a beneficial conversion feature of

$286,987

which is recognized as additional paid in capital and a corresponding debt discount.

During

January 2019,

a loan in the amount of

$35,000

was repaid in cash.

In

October 2018,

a loan in the principal amount of

$45,000

was converted into

30,000

shares of common stock. In addition, interest payable in the amount of

$1,992

was converted into

1,328

shares.

During

July 2018,

loans in the principal amount of

$375,000

were converted into

250,000

shares of common stock. In addition, interest payable in the amount of

$14,704

was converted into

9,802

shares.

In

May 2019,

loans in the principal amount of

$150,000

were converted into

100,000

shares of common stock. In addition, interest payable in the amount of

$19,521

was converted into

13,014

shares.

In

April 2019,

loans in the amount of

$15,000

were converted to

10,000

shares of common stock.

All debt discounts are being recognized on a straight-line basis over the terms of the notes. Amortization expense related to the debt discounts were

$87,001

and

$405,000

for the

nine

months ended

June 30, 2019

and

2018,

respectively.

Related Party

On

February 1, 2016,

we entered into an agreement with an unrelated party which provided us with borrowing capacity of

$200,000.

 On

May 1, 2016,

the agreement was amended to increase the borrowing capacity to

$1,000,000.

On

July 14, 2016,

Strategic Capital Partners (“SCP”) assumed the

$521,297

loan borrowed against this credit line, increasing the total balance owed to SCP 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,

we entered into a debt modification agreement whereby a portion of the debt was converted into common stock and the remaining debt was renegotiated into

two

promissory notes.

Of the amounts owed to SCP,

$500,000

was converted into

400,000

shares of our common stock (

$1.25

conversion rate).

The remaining

$1,756,646

owed to SCP was divided 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. The note can be converted at any time, at the option of the lender, 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

$756,646,

bears interest at

8%

per year and matures on

December 31, 2019.

Interest is payable quarterly. The note is

not

convertible into shares of our common stock but is secured by a

first

lien on all amounts due to us by WGP. Any payments received from the sale, lease or commercialization of the property in Denver, and any amounts received from WGP, will be applied to the principal amount of the note. Otherwise, all unpaid principal and interest will be due on

December 31, 2019.

Accrued interest on these notes payable was

$0

and

$12,742

at

June 30, 2019

and

September 30, 2018,

respectively. 

In connection with the debt modification agreement, 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.

We allocated the relative fair values to the warrants, stock options, and convertible debt, as determined by the Black Scholes option pricing model. Based on the Black Scholes option pricing model, a net debt premium of

$72,651

was allocated to the warrants which are reflected in additional paid-in-capital. The debt premium is being amortized on a straight-line basis over the term of the notes. At

June 30, 2019,

the outstanding principal on these notes was

$1,756,646,

and the unamortized debt premium was

$9,650.

Amortization of debt premium was

$16,023

 for the

nine

months ended

June 30, 2019

and

2018.

XML

Note 5 - Related Party Transactions

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE

5

. RELATED PARTY TRANSACTIONS

Strategic Capital Partners.

 At

June 30, 2019

and

September 30, 2018,

we had outstanding notes payable to SCP of

$1,766,296

and

$1,782,319,

respectively.

Interest expense was

$33,435

and

$36,926

for the

three

months ended

June 30, 2019

and

2018,

respectively; and

$100,306

and

$110,777

for the

nine

months ended

June 30, 2019

and

2018,

respectively. Interest payable – related party of

$25,993

and

$12,742

was included in the accompanying consolidated balance sheets at

June 30, 2019

and

September 30, 2018,

respectively. We made interest payments of

$12,783

during the quarter ended

June 30, 2019,

and

$103,078

during the

nine

months ended

June 30, 2019.

During the

nine

months ended

June 30, 2019,

the Company incurred

$90,000

of consulting expenses with SCP of which approximately

$26,800

remains outstanding as of

June 30, 2019.

In

October 2018,

the Company paid SCP

$30,000

to reimburse SCP for travel expenses incurred on the Company’s behalf.

In

October 2018,

the Company issued

65,000

shares of stock in exchange for consulting services.

Bask, Inc

.

 On

April 7, 2016,

we signed agreements with Bask Inc. (formerly Coastal Compassion Inc.) (“BASK”). BASK is

one

of a limited number of non-profit organizations that has received a Final Certificate of Registration to cultivate, process and sell medical cannabis by the Massachusetts Cannabis Control Commission (formerly Massachusetts Department of Public Health). BASK has agreed to become the initial tenant in our planned MMCC.

Tim Keogh, our Chief Executive Officer, has been a Board Member of BASK since

August

of

2013.

On

November 7, 2012,

Massachusetts voters approved a measure to legalize medical marijuana. At that time, Massachusetts law required Registered Marijuana Dispensaries (RMDs) to form and operate as nonprofit corporations pursuant to Massachusetts General Law (M.G.L.)

.c.180.

Pursuant to the agreements, we agreed to provide BASK with financing for construction and working capital required for BASK’s approved dispensary and cultivation center in Fairhaven, MA. The financing accrued interest of

18%

until

6

-months after BASK opened its dispensary at which point the financing would be repaid over a

five

-year term at

18%.

On

August 15, 2018,

which was

6

-months after the

first

sales by BASK, the Company combined the construction and working capital advances of

$129,634

and accrued interest of

$44,517

with a payment schedule created for the

5

years with

18%

interest as stipulated in the original agreement. The outstanding balance was

$154,779

and

$176,764

as of

June 30, 2019

and

September 30

,

2018,

respectively. As of

June 30, 2019,

there is additional interest income of

$22,239.

For a

three

- year period beginning

April 1, 2016,

we agreed to consult with BASK in the design, construction and operation of the Fairhaven facility. BASK will owe us

$10,000

each month for these consulting services, but is

not

required to pay until

nine

months after generating certain revenues. Although the DPH has approved our agreement with BASK relating to the development and lease terms of the MCCC, the actual lease agreement with BASK has

not

been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to BASK. 

XML

Note 6 - Loss Per Share

9 Months Ended

Jun. 30, 2019

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,
	2019			2018			2019			2018
Net loss attributable to common stockholders	$	(556,245	)	$	(1,286,020	)	$	(1,651,673	)	$	(3,582,652	)
Basic weighted average outstanding shares of common stock		23,005,753			19,447,377			22,858,359			19,396,514
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		23,005,753			19,447,377			22,858,359			19,396,514
Basic and diluted net loss per share of common stock	$	(0.02	)	$	(0.07	)	$	(0.07	)	$	(0.18	)

As of

June 30, 2019,

we have excluded

150,000

of stock options and

9,090,650

of warrants from the computation of diluted net loss per share since the effects are anti-dilutive. As of

June 30, 2018,

we have excluded

180,000

of stock options and

9,415,000

of warrants from the computation of diluted net loss per share since the effects are anti-dilutive.

XML

Note 7 - Commitments and Contingencies

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

7

.  COMMITMENTS AND CONTINGENCIES

Officer Employment Agreement. 

On

March 25, 2014,

the Company entered into an employment agreement with Mr. Keogh. The agreement: (i) had an initial term of

three

years; (ii) required Mr. Keogh to devote at least

50%

of his time to the Company and; (iii) provided that the Company would pay Mr. Keogh

$12,000

per month during the term of the agreement. In connection with this employment agreement the Company granted Mr. Keogh shares of common stock and options.  This agreement has expired but the terms are continuing on a month to month basis.

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 MMCC. Plans for the MMCC 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. We paid the seller

$100,000

upon the signing of the agreement which amount was applied toward the purchase price at the closing of the sale of the land.

Between

August 2015

and

September 2016,

there were several amendments to the Agreement to extend the closing date to

October 14, 2016.

As consideration for the extensions, the Company, agreed to increase the purchase price to

$4,325,000

and paid the seller

$725,000,

which was applied to the purchase price of the land when the property was purchased. As of

September 30, 2016,

the Company had paid

$925,000

that was to be applied to the purchase price of the land at closing. On

October 17, 2016,

the Company closed on the land purchase via a sales-leaseback transaction. See ‘Operating Leases’ below for additional information.

Operating Leases

Land

On

October 17, 2016,

the Company closed the previously announced acquisition of a

52.6

-acre parcel of undeveloped land in Freetown, Massachusetts. The deposits of

$925,000

previously paid by the Company to the seller, Boston Beer Company (“BBC”), were credited against the total purchase price of

$4,475,000.

The remaining balance of

$3,550,000

was paid to BBC by Massachusetts Medical Properties, LLC (“MMP”). The property is located approximately

47

miles southeast of Boston. The Company plans to develop the property as the Massachusetts Medical Cannabis Center (the “MMCC”). Plans for the MMCC include the construction of sustainable greenhouse cultivation, processing, and infused product facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program.

As part of a simultaneous transaction, the Company assigned the property rights to MMP for a nominal fee and entered a lease agreement pursuant to which MMP agreed to lease the property to the Company for an initial term of

fifty

(

50

) years. The Company has the option to extend the term of the lease for

four

(

4

) additional

ten

(

10

) year periods. The lease is a triple net lease, with the Company paying all real estate taxes, repairs, maintenance and insurance.

The lease payments are greater of (a)

$30,000

per month; (b)

$0.38

per square foot per month of any structure built on the property; or (c)

1.5%

of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but

not

down) every

five

(

5

) years by any increase in the Consumer Price Index.

Between

October 17, 2016

and

April 17, 2017,

the monthly lease payments accrued, with all accrued lease payments paid to MMP on

April 17, 2017.

On

April 17, 2017,

the Company reimbursed MMP’s costs and expenses associated with the acquisition of the property, the lease, and the acquisition of the shares and the warrant from the Company (as further described below).

Under the terms of the lease, the Company had

nine

(

6

) months to obtain

$2.6

million in capital funding for the construction of the

first

phase building. In the event that the Company was unable to raise these funds within the

nine

(

6

) month period, the Company had an additional

nine

(

6

) month period to do so; provided, that the Company has paid accrued lease payments and closing costs. If the Company was then unable to raise these funds on or before

twelve

(

12

) months from

October 17, 2016,

the lease would terminate. On

October 17, 2017,

the lease agreement was amended to provide that the Company will have until

16

months from

October 17, 2016

to raise

$2.6

million in capital funding. In addition to extending the funding deadline, this amendment granted MMP warrants to purchase up to

100,000

shares of Common Stock at an exercise price of

$1.50

per share. The warrant can be exercised at any time on or after

October 17, 2017

and on or before

October 17, 2022.

In

February

and

April, 2018,

the lease agreement was amended to provide that the Company will have until

20

months from

October 17, 2016

to raise

$2.6

million in capital funding. In addition to extending the funding deadline, this amendment granted MMP a warrant to purchase up to

100,000

shares of the Company’s common stock at an exercise price of

$1.50

per share. The warrant can be exercised at any time on or before 

October 17, 2022.

The Company recognized an expense of

$0

and

$0

during the

three

and

nine

months ended

June 30, 2019,

respectively, related to those warrants. The Company recognized an expense an expense of

$0

and

$171,307

during the

three

and

nine

months ended

June 30, 2018,

respectively. In

July 2018,

the Company fulfilled the

$2.6

million capital funding commitment.

The Company received a credit for the

$925,000

paid towards the purchase price of the land in the form of discounted lease payments. For the initial

fifty

(

50

) year term of the lease, the lease payments will be reduced by

$1,542

each month

In connection with the sale of the property to MMP and the lease, the Company and MMP entered into a Share Purchase Agreement pursuant to which the Company issued to MMP

100,000

shares of its common stock at par value of

$0.0001

(“Common Stock”), and a warrant to purchase up to

3,640,000

shares of Common Stock at an exercise price of

$1.00

per share. The warrant can be exercised at any time on or before

October 17, 2020.

The warrant does

not

contain a cashless exercise provision. The fair value of the warrant was established using the Black Scholes option pricing model using the following assumptions:

● Risk-free interest rate – 1.12 percent

● Expected term – 4.0 years

● Volatility – 115 percent

The Company allocated

$1,899,966

to the warrant which is reflected in additional paid-in-capital and was allocated to prepaid land lease. The fair value of the common stock on the date of the agreement was

$73,000,

which is also reflected in additional paid-in-capital and was allocated to prepaid land lease. The prepaid land lease is being amortized on a straight-line basis over the term of the lease.

The lease expense, which includes the amortization related to the prepaid land lease and office space, was

$99,865

for each of the

three

months ended

June 30, 2019

and

2018

and

$199,730

for each of the

nine

months ended

June 30, 2019

and

2018.

At

June 30, 2019,

the future rental payments required under this lease are 

$85,374

for the remainder of fiscal

2019,

$341,496

for fiscal years

2020

through

2023,

and

$14,684,528

thereafter.

On

June 26, 2019

the expiration date of warrants to purchase

3,640,000

shares of common stock was extended to

October 17, 2021.

Office space

In

January 2018

the Company's offices moved to

1550

Wewatta St, Denver, CO

80202.

The Company leases this new space on a month-to-month basis at a rate of

$1,230

per month. Lease expense for office space was

$3,801

and

$3,690

for the

three

months ended

June 30, 2019

and

2018,

respectively and

$11,544

and

$20,590

for the

nine

months ended

June 30, 2019

and

2018,

respectively.

XML

Note 8 - Shareholders' Equity

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

8

.  SHAREHOLDERS’ EQUITY

Equity Line Agreement.

On

December 12, 2017,

the Company entered into an amended and restated Equity Line agreement with Mountain States Capital, LLC (MSC). Under the equity line agreement, MSC agreed to provide the Company with up to

$10,000,000

of funding through the purchase of shares of the Company's common stock.

During the term of the Agreement, the Company, at its sole discretion,

may

deliver a Put Notice to MSC, which will specify the dollar amount which the Company wants to draw down under the Equity Line. The amount the Company can draw down at any

one

time is the lesser of twice the average of the

10

-day average daily trading volume (computed by multiplying the volume weighted average price for each day by the number of shares traded for that day), or

$500,000.

A closing will occur on the date which is

no

earlier than

five

trading days following and

no

later than

seven

trading days following the applicable Put Notice. On each Closing Date, the Company will sell, and MSC will purchase, the shares of the Company's common stock specified in the Put Notice.

The amount to be paid by MSC on a particular Closing Date will be determined by dividing the dollar amount specified in the Put Notice by the Purchase Price. The Purchase Price is

90%

of the lowest daily volume weighted average price of the Company's common stock during the Pricing Period. The Pricing Period, with respect to a particular Put Notice is the

five

consecutive trading days including, and immediately following, the delivery of a Put Notice. However,

no

Put Notice

may

be delivered on a day that is

not

a Trading Day.

The Company

may

specify a Minimum Price when submitting a Put Notice, provided however that the Minimum Price must be more than

75%

of the Closing Price of the Company's Common Stock on the date immediately preceding the date of the delivery of the Put Notice. If the Purchase Price is less than the Minimum Price, the Company

may,

at its option, sell shares to MSC on the Closing Date using the Purchase Price. Notwithstanding the above, the Company will

not

sell any shares at a price below

$1.00

per share.

The Company is under

no

obligation to submit any Put Notices.

The equity line agreement has a term of

18

months, which began on

February 14, 2018.

During the year ended

September 30, 2018,

the Company submitted Put Notices for a total of

447,801

shares and received

$1,222,412

from the sale of the shares to Mountain States.

During the

nine

months ended

June 30, 2019,

the Company submitted Put Notices for the total of

570,251

shares and received

$1,064,001

from the sale of these shares to Mountain States.

In

October 2018,

the Company issued

65,000

shares for stock in exchange for consulting services.

Stock Options

.

There was

no

stock option activity for the

nine

months ended

June 30, 2019.

Stock option details are as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding as of September 30, 2018		150,000	$	2.21		2.9	$	-
Outstanding as of June 30, 2019		150,000	$	2.50		2.1	$	-
Vested and expected to vest at June 30, 2019		150,000	$	2.50		2.1	$	-
Exercisable at June 30, 2019		150,000	$	2.50		2.1	$	-

There was

no

stock-based compensation expense associated with stock options for the

three

and

nine

months ended

June 30, 2019

and

2018.

At

June 30, 2019,

there is

no

remaining unrecognized stock-based compensation associated with stock options.

Warrants.

 Warrant activity as of and for the

nine

months ended

June 30, 2019

is as follows:

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		9,478,650		$	1.55		2.6
Exercised		(388,000	)		1.23
Outstanding as of June 30, 2019		9,090,650		$	1.56		2.2	$	1,048,003
Exercisable at June 30, 2019		5,450,650		$	1.94		2.1	$	247,203

During the

nine

months ended

June 30, 2019,

the Company issued

388,000

shares upon the exercise of warrants for total proceeds of

$475,500.

XML

Note 9 - Income Taxes

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

9

. INCOME TAXES

We did

not

record any income tax expense or benefit for the

three

or

nine

months ended

June 30, 2019

or

2018.

We increased our valuation allowance and reduced our net deferred tax assets to zero. Our assessment of the realization of our deferred tax assets has

not

changed, and as a result we continue to maintain a full valuation allowance for our net deferred assets as of

June 30, 2019

and

2018.

As of

June 30, 2019,

we did

not

have any unrecognized tax benefits. There were

no

significant changes to the calculation since

September 30, 2018.

XML

Note 10 - Subsequent Events

9 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

1

0

. SUBSEQUENT EVENTS

As part of the existing agreement with MSC, on 

July 15, 2019, 

the Company submitted Put Notices on the Equity Line for a total of 

65,000

 shares for 

$65,000

 in cash.

On

August 2, 2019

the Company borrowed

$4,000,000

from an unrelated

third

party. The loan was evidenced by a note which bears interest at the rate of

11%

per year, is due and payable on

August 1, 2022

and is secured by a

first

lien on Building

1

at the Company’s Massachusetts Cannabis Center.

The note holder also received a warrant which allows the holder to purchase

600,000

shares of the Company’s common stock at a price of

$1.50

per share. The warrant will expire on the earlier of (i)

August2,

2024

or (ii)

twenty

days after written notice of the holder that the daily Volume Weighted Average Price of the Company’s common stock was at least

$4.00

for

twenty

consecutive trading days and the average daily volume of trades of the Company’s common stock during the

twenty

trading days was at least

150,000

shares.

As part of the existing agreement with MSC, on

August 7,

the Company submitted Put Notices on the Equity Line for a total of

80,430

shares for

$82,000

in cash.

XML

Significant Accounting Policies (Policies)

9 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The (a) consolidated balance sheet as of

September 30, 2018,

which has been derived from audited financial statements, and (b) the unaudited consolidated financial statements as of and for the

nine

months ended

June 30, 2019

and

2018,

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 consolidated financial statements and notes thereto contained in the Company's Form

10

-K filed with the SEC on

January 15, 2019.

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 financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal

2018

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.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts in the consolidated statements of cash flows:

	June 30, 2019		September 30, 2018
Cash and cash equivalents	$	3,437	$	198,144
Restricted cash		3,052		3,818,805
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	6,489	$	4,016,949

Amounts included in restricted cash represent amounts required to be set aside by a contractual agreement with a lender for the payment of specific construction related expenditures as part of the Company’s property development in Massachusetts.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In

January 2018,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2018

-

01,

LEASES (TOPIC

842

): LAND EASEMENT PRACTICAL EXPEDIENT FOR TRANSITION TO TOPIC

842;

On

February 25, 2016,

the FASB issued Accounting Standards Update

No.

2016

-

02,

Leases (Topic

842

), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. The FASB has been assisting stakeholders with implementation questions and issues as organizations prepare to adopt Topic

842.

In connection with the FASB’s transition support efforts, a number of stakeholders inquired about the application of the new lease requirements in Topic

842

to land easements. Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity’s land for a specified purpose. The amendments in this Update affect the amendments in Update

2016

-

02,

which are

not

yet effective but

may

be early adopted, and Example

10

of Subtopic

350

-

30.

The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Update

2016

-

02.

An entity that early adopted Topic

842

should apply the amendments in this Update upon issuance. The Company does

not

expect this amendment to have a material impact on its financial statements.

In

July 2017,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2017

-

11,

Earnings Per Share (Topic

260

); Distinguishing Liabilities from Equity (Topic

480

); Derivatives and Hedging (Topic

815

): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The ASU was issued to address the complexity associated with applying generally accepted accounting principles (GAAP) for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option)

no

longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The amendments are effective for fiscal years beginning after

December 15, 2018,

and should be applied retrospectively. Early adoption is permitted, including adoption in an interim period. The Company adopted the changes effective

October 1, 2018

and the changes did

not

have a material impact on its financial statements.

In

May 2017,

the FASB issued ASU

No.

2017

-

09,

Compensation—Stock Compensation (Topic

718

): Scope of Modification Accounting, to provide clarity and reduce both (

1

) diversity in practice and (

2

) cost and complexity when applying the guidance in Topic

718,

Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC

718.

The amendments are effective for fiscal years beginning after

December 15, 2017,

and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company adopted the changes effective

October 1, 2018

and the changes did

not

have a material impact on its financial statements.

In

February 2017,

the FASB issued ASU

No.

2017

-

05,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic

610

-

20

): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of Subtopic

610

-

20,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic

610

-

20,

which was issued in

May 2014

as a part of ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments are effective for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years, which is the same time as the amendments in ASU

No.

2014

-

09,

and early adoption is permitted. The Company adopted the changes effective

October 1, 2018

and the changes did

not

have a material impact on its financial statements.

In

January 2017,

the FASB issued ASU

No.

2017

-

03,

Accounting Changes and Error Corrections (Topic

250

). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

); ASU

No.

2016

-

02,

Leases (Topic

842

); and ASU

No.

2016

-

13,

Financial Instruments—Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments.  The Company adopted ASU

No.

2014

-

09

effective

October 1, 2018

and the adoption did

not

have a material impact on its revenue recognition as it pertains to current revenue streams.

Between

May 2014

and

December 2016,

the FASB issued several ASU’s on Revenue from Contracts with Customers (Topic

606

). These updates will supersede nearly all existing revenue recognition guidance under current U.S. generally accepted accounting principles (GAAP). The core principle 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. A

five

-step process has been defined 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. The standards are 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 standards 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 the standards recognized at the date of adoption (which includes additional footnote disclosures). The Company adopted Topic

606,

effective

October 1, 2018

and the adoption did

not

have a material impact on its revenue recognition as it pertains to current revenue streams.

XML

Note 1 - Nature of Business and Basis of Presentation (Tables)

9 Months Ended

Jun. 30, 2019

Notes Tables

Cash, Cash Equivalents, and Restricted Cash [Table Text Block]

	June 30, 2019		September 30, 2018
Cash and cash equivalents	$	3,437	$	198,144
Restricted cash		3,052		3,818,805
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	6,489	$	4,016,949

XML

Note 3 - Notes and Other Receivables (Tables)

9 Months Ended

Jun. 30, 2019

Notes Tables

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

	June 30, 2019			September 30, 2018
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 and legal fees of $206,675, construction advances of $332,357 and accrued interest of $549,349. Net of reserves of $977,770. All amounts are due and payable immediately.		783,905			783,905
Related party note receivable from BASK, a non-profit corporation, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		154,779			176,764
Less: Current portion		(26,990	)		-
	$	911,694		$	960,669

XML

Note 6 - Loss Per Share (Tables)

9 Months Ended

Jun. 30, 2019

Notes Tables

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

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Net loss attributable to common stockholders	$	(556,245	)	$	(1,286,020	)	$	(1,651,673	)	$	(3,582,652	)
Basic weighted average outstanding shares of common stock		23,005,753			19,447,377			22,858,359			19,396,514
Dilutive effects of common share equivalents		-			-			-			-
Dilutive weighted average outstanding shares of common stock		23,005,753			19,447,377			22,858,359			19,396,514
Basic and diluted net loss per share of common stock	$	(0.02	)	$	(0.07	)	$	(0.07	)	$	(0.18	)

XML

Note 8 - Shareholders' Equity (Tables)

9 Months Ended

Jun. 30, 2019

Notes Tables

Share-based Payment Arrangement, Option, Activity [Table Text Block]

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding as of September 30, 2018		150,000	$	2.21		2.9	$	-
Outstanding as of June 30, 2019		150,000	$	2.50		2.1	$	-
Vested and expected to vest at June 30, 2019		150,000	$	2.50		2.1	$	-
Exercisable at June 30, 2019		150,000	$	2.50		2.1	$	-

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2018		9,478,650		$	1.55		2.6
Exercised		(388,000	)		1.23
Outstanding as of June 30, 2019		9,090,650		$	1.56		2.2	$	1,048,003
Exercisable at June 30, 2019		5,450,650		$	1.94		2.1	$	247,203

XML

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

XML

Note 1 - Nature of Business and Basis of Presentation - Restricted Cash (Details) - USD ($)	Jun. 30, 2019	Sep. 30, 2018	Jun. 30, 2018	Sep. 30, 2017
Cash and cash equivalents	$ 3,437	$ 198,144
Restricted cash	3,052	3,818,805
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$ 6,489	$ 4,016,949	$ 1,309,822	$ 1,627

XML

Note 2 - Going Concern (Details Textual) - USD ($)		3 Months Ended						9 Months Ended
	Jan. 18, 2018	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018
Retained Earnings (Accumulated Deficit), Ending Balance		$ (14,761,214)						$ (14,761,214)		$ (13,109,541)
Net Income (Loss) Attributable to Parent, Total		(556,245)	$ (556,920)	$ (538,508)	$ (1,286,020)	$ (922,268)	$ (1,374,364)	(1,651,673)	$ (3,582,652)
Financing Receivable, Allowance for Credit Loss, Noncurrent		977,770						977,770		977,770
Demand for Arbitration against WGP [Member]
Litigation Settlement, Amount Awarded from Other Party	$ 1,045,000
Litigation Settlement Interest	(550,000)
Litigation Settlement, Amount Awarded from Other Party, Including Interest	$ 1,595,000
Wellness Group Pharms LLC [Member]
Financing Receivable, before Allowance for Credit Loss, Noncurrent		1,761,675						1,761,675
Financing Receivable, Allowance for Credit Loss, Noncurrent		$ 977,770						$ 977,770		$ 977,770

XML

Note 3 - Notes and Other Receivables - Schedule of Notes Receivable (Details) - USD ($)	Jun. 30, 2019	Sep. 30, 2018
Notes and other receivables	$ 911,694	$ 960,669
Less: Current portion	(26,990)
	911,694	960,669
Wellness Group Pharms LLC [Member]
Notes and other receivables	783,905	783,905
	783,905	783,905
BASK [Member] | Maturing in 2023 [Member]
Notes and other receivables	154,779	176,764
	$ 154,779	$ 176,764

XML

Note 3 - Notes and Other Receivables - Schedule of Notes Receivable (Details) (Parentheticals) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2019	Sep. 30, 2018
Notes and other receivables, allowance	$ 977,770	$ 977,770
Wellness Group Pharms LLC [Member]
Secured note	$ 673,294	$ 673,294
Interest rate	18.00%	18.00%
Accrued consulting fees	$ 206,675	$ 206,675
Construction advances	332,357	332,357
Accrued interest	549,349	549,349
Notes and other receivables, allowance	$ 977,770	$ 977,770
BASK [Member] | Maturing in 2023 [Member]
Interest rate	18.00%	18.00%
Periodic payment	$ 4,422	$ 4,422

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Note 4 - Notes Payable (Details Textual)						1 Months Ended							6 Months Ended	9 Months Ended
	May 21, 2019 USD ($) $ / shares	May 02, 2019 USD ($) $ / shares	Feb. 12, 2018 USD ($) $ / shares shares	Dec. 29, 2017 USD ($) $ / shares shares	Jul. 14, 2016 USD ($) $ / shares shares	May 31, 2019 USD ($) shares	Apr. 30, 2019 USD ($) shares	Feb. 28, 2019 USD ($) shares	Jan. 31, 2019 USD ($)	Oct. 31, 2018 USD ($) shares	Jul. 31, 2018 USD ($) shares	May 31, 2018 USD ($) shares	Jun. 30, 2019 USD ($) $ / shares	Jun. 30, 2019 USD ($) $ / shares	Jun. 30, 2018 USD ($)	Jun. 26, 2019 shares	Sep. 30, 2018 USD ($) $ / shares	May 01, 2016 USD ($)	Feb. 01, 2016 USD ($)
Amortization of Debt Discount (Premium)														$ 123,217	$ 1,840,745
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares																3,640,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares													$ 1.56	$ 1.56			$ 1.55
Debt Instrument, Unamortized Discount, Total													$ 0	$ 0			$ 138,750
Strategic Capital Partners [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares					$ 1.25
Amortization of Debt Discount (Premium)														16,023	16,024
Debt Conversion, Converted Instrument, Shares Issued | shares					400,000
Line of Credit Outstanding Amount Assumed by Related Party					$ 521,297
Notes Payable, Related Parties					2,431,646								1,756,646	1,756,646
Debt Instrument, Unamortized Premium, Total					72,651								9,650	9,650
Conversion from December 2017 Convertible Notes to Common Stock [Member]
Debt Conversion, Original Debt, Amount								$ 30,000				$ 575,000
Debt Conversion, Converted Instrument, Shares Issued | shares								20,000				383,333
Debt Conversion, Accrued Interest												$ 15,233
Debt Conversion, Converted Interest payable, Shares Issued | shares												10,155
February 2018 Convertible Notes, Loan Principal Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount						$ 150,000				$ 45,000
Debt Conversion, Converted Instrument, Shares Issued | shares						100,000				30,000	250,000
February 2018 Convertible Notes, Interest Payable Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount						$ 19,521				$ 1,992	$ 14,704
Debt Conversion, Converted Instrument, Shares Issued | shares						13,014				1,328	9,802
February 2018 Convertible Notes, Loan Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount							$ 15,000
Debt Conversion, Converted Instrument, Shares Issued | shares							10,000
Debt Converted into Common Stock [Member] | Strategic Capital Partners [Member]
Debt Conversion, Original Debt, Amount					500,000
Debt Converted into Promissory Notes [Member] | Strategic Capital Partners [Member]
Debt Conversion, Original Debt, Amount					$ 1,756,646
December 2017 Convertible Notes [Member] | GVC Capital LLC [Member]
Payments of Debt Issuance Costs				$ 64,000
Debt Instrument, Unamortized Discount, Total				15,438
Adjustments to Additional Paid in Capital, Warrant Issued				$ 48,562
Promissory Note One [Member] | Strategic Capital Partners [Member]
Debt Instrument, Interest Rate, Stated Percentage					9.50%
Debt Instrument, Convertible, Conversion Price | $ / shares					$ 1.25
Notes Payable, Related Parties					$ 1,000,000
Average Closing Price per Share | $ / shares					$ 2.50
Convertible Debt, Number of Trading Days					20
Average Daily Volume Of Shares Trades | shares					100,000
Period to Notify End of Right to Convert Notes					10 days
Period before Right to Convert Notes Expires					45 days
Promissory Note Two [Member] | Strategic Capital Partners [Member]
Debt Instrument, Interest Rate, Stated Percentage					8.00%
Notes Payable, Related Parties					$ 756,646
Interest Payable													0	0			$ 12,742
Warrants Issued to Accredited Investors [Member] | December 2017 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares				533,333
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares				$ 1.50
Warrants Issued to Accredited Investors [Member] | February 2018 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares			540,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares			$ 1.50
Warrants Issued to Placement Agent [Member] | December 2017 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares				106,667
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares				$ 1.50
Warrants Issued to Accredited Investors and Placement Agent [Member] | December 2017 Convertible Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares				640,000
February 2018 Convertible Notes, Loan Principal Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount											$ 375,000
Warrant to Related Party, Set 1 [Member] | Strategic Capital Partners [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					$ 1.50
Warrants to Purchase Additional Shares [Member] | Strategic Capital Partners [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
Unrelated Party [Member]
Proceeds from Short-term Debt, Total	$ 83,000	$ 153,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%	12.00%
Debt Instrument, Default Interest Rate	22.00%
Debt Discount (Premium)													6,000	6,000
Amortization of Debt Discount (Premium)													$ 490
Line of Credit Facility, Current Borrowing Capacity																		$ 1,000,000	$ 200,000
Unrelated Party [Member] | Construction Loans [Member]
Debt Instrument, Interest Rate, Stated Percentage				8.00%
Debt Instrument, Convertible, Conversion Price | $ / shares				$ 1.50
Proceeds from Issuance of Long-term Debt, Total				$ 800,000
Unrelated Party [Member] | Scenario 1 [Member]
Debt Instrument, Convertible, Variable Conversion Price, Percent By Market Price	65.00%	65.00%
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 1	$ 1
Unrelated Party [Member] | Scenario 2 [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares	1	$ 1
Unrelated Party [Member] | Minimum [Member]
Prepayment Premium Percent		15.00%
Unrelated Party [Member] | Maximum [Member]
Prepayment Premium Percent		35.00%
Unrelated Party [Member] | Maximum [Member] | Scenario 1 [Member]
Debt Instrument, Convertible, Necessary Market Price | $ / shares	1.50	$ 1.50
Unrelated Party [Member] | Maximum [Member] | Scenario 2 [Member]
Debt Instrument, Convertible, Necessary Market Price | $ / shares	$ 1.50	$ 1.50
Accredited Investors [Member] | Convertible Debt [Member] | December 2017 Convertible Notes [Member]
Amortization of Debt Discount (Premium)														51,749	645,768
Debt Instrument, Unamortized Discount, Total				607,024
Debt Instrument, Convertible, Beneficial Conversion Feature				$ 128,976
Accredited Investors [Member] | Convertible Debt [Member] | February 2018 Convertible Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			8.00%
Debt Instrument, Convertible, Conversion Price | $ / shares			$ 1.50
Amortization of Debt Discount (Premium)														$ 87,001	$ 405,000
Debt Instrument, Unamortized Discount, Total			$ 523,013
Debt Instrument, Convertible, Beneficial Conversion Feature			286,987
Debt Instrument, Face Amount			$ 810,000
Repayments of Convertible Debt									$ 35,000

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Note 5 - Related Party Transactions (Details Textual) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended
	Aug. 15, 2018	Oct. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2019	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Jul. 14, 2016
Interest Expense, Related Party			$ 33,435	$ 36,926		$ 100,306	$ 110,777
Interest Payable, Current			55,500			55,500		$ 46,605
Interest Paid, Excluding Capitalized Interest, Operating Activities						129,254	322,438
Stock Issued During Period, Shares, Issued for Services		65,000
Increase (Decrease) in Accrued Interest Receivable, Net						0	40,838
Consulting Services [Member]
Stock Issued During Period, Shares, Issued for Services		65,000
Strategic Capital Partners [Member]
Notes Payable, Related Parties			1,756,646			1,756,646			$ 2,431,646
Interest Expense, Related Party			33,435	$ 36,926		100,306	$ 110,777
Interest Payable, Current			25,993			25,993		12,742
Interest Paid, Excluding Capitalized Interest, Operating Activities			12,783			103,078
Strategic Capital Partners [Member] | Consulting Services [Member]
Related Party Transaction, Amounts of Transaction						90,000
Due to Related Parties, Total			26,800			26,800
Strategic Capital Partners [Member] | Reimbursements for Travel Expenses [Member]
Related Party Transaction, Amounts of Transaction		$ 30,000
Strategic Capital Partners [Member] | Notes Payable Converted to Promissory Notes [Member]
Notes Payable, Related Parties			$ 1,766,296			$ 1,766,296		1,782,319
BASK [Member]
Note Receivable, Interest Rate	18.00%		18.00%			18.00%
Note Receivable, Term	5 years
Notes Receivable, Related Parties	$ 129,634		$ 154,779			$ 154,779		$ 176,764
Interest Receivable	$ 44,517
Increase (Decrease) in Accrued Interest Receivable, Net						$ 22,239
BASK [Member] | Consulting Services [Member]
Consulting Services Term					3 years
Revenue from Contract with Customer, Monthly					$ 10,000
BASK [Member] | Construction Loans [Member]
Note Receivable, Interest Rate			18.00%			18.00%
Note Receivable, Term						5 years

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Note 6 - Loss Per Share (Details Textual) - shares	9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	150,000	180,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	9,090,650	9,415,000

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Note 6 - Loss Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended						9 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2019	Jun. 30, 2018
Net Income (Loss) Attributable to Parent, Total	$ (556,245)	$ (556,920)	$ (538,508)	$ (1,286,020)	$ (922,268)	$ (1,374,364)	$ (1,651,673)	$ (3,582,652)
Basic weighted average outstanding shares of common stock (in shares)	23,005,753			19,447,377			22,858,359	19,396,514
Dilutive effects of common share equivalents (in shares)	0			0
Dilutive weighted average outstanding shares of common stock (in shares)	23,005,753			19,447,377			22,858,359	19,396,514
Basic and diluted loss per common share (in dollars per share)	$ (0.02)			$ (0.07)			$ (0.07)	$ (0.18)

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Note 7 - Commitments and Contingencies (Details Textual)					1 Months Ended	3 Months Ended		9 Months Ended		14 Months Ended	21 Months Ended
	Apr. 17, 2018 USD ($) $ / shares shares	Oct. 17, 2017 USD ($) $ / shares shares	Oct. 17, 2016 USD ($) a yr $ / shares shares	Mar. 25, 2014 USD ($)	Jan. 31, 2018 USD ($)	Jun. 30, 2019 USD ($) $ / shares	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) $ / shares	Jun. 30, 2018 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 26, 2019 shares	Sep. 30, 2018 $ / shares	Dec. 12, 2017 $ / shares	Jan. 14, 2015 USD ($) a
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares												3,640,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares						$ 1.56		$ 1.56					$ 1.55
Common Stock, Par or Stated Value Per Share | $ / shares						$ 0.0001		$ 0.0001					$ 0.0001
Operating Leases, Office Space [Member]
Operating Leases, Rent Expense, Net, Total						$ 3,801	$ 3,690	$ 11,544	$ 20,590
Operating Leases, Monthly Payment					$ 1,230
Additional Paid-in Capital [Member]
Warrants Issued During Period, Value, Sale Leaseback Transaction			$ 1,899,966
Stock Issued During Period, Value, Sale Leaseback Transaction			73,000
Warrants Issued for Lease Amendment #1 [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares		100,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares		$ 1.50
Warrants Issued for Lease Amendment #3 [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares	100,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 1.50
Allocated Warrants or Rights Expense						0	0	0	171,307
Sale Leaseback to MMP [Member]
Payments to Acquire Land			$ 925,000
Lessee, Operating Lease, Term of Contract			50 years
Lessee Leasing Arrangements, Operating Leases, Number of Renewal Periods			4
Lessee, Operating Lease, Renewal Term			10 years
Sale Leaseback Transaction, Monthly Rental Payments			$ 30,000
Sale Leaseback Transaction, Monthly Rental Payments, Per Square Foot			0.38
Sale Leaseback Transaction, Monthly Rental Payments, Percentage of Gross Monthly Sales			1.50%
Sale Leaseback Transaction, Monthly Rental Payments, Adjustment Period			5 years
Sale Leaseback Transaction, Period Available to Obtain Capital Funding for Construction of the First Phase Building	1 year 240 days	1 year 120 days	180 days
Sales Leaseback Transaction, Amount of Capital Funding to Obtain For Construction of the First Phase Building	$ 2,600,000	$ 2,600,000	$ 2,600,000
Sale Leaseback Transaction, Additional Period Available to Obtain Capital Funding for Construction of the First Phase Building			180 days
Sale Leaseback Transaction, Period Unable to Obtain Capital Funding for Construction of the First Phase Building, After Which the Arrangement Will Terminate			1 year
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares			3,640,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares			$ 1											$ 1
Sale Leaseback Transaction, Discount to the Purchase Price, Monthly Reduction in Payments			$ 1,542
Stock Issued During Period, Shares, Sale Leaseback Transaction | shares			100,000
Common Stock, Par or Stated Value Per Share | $ / shares			$ 0.0001
Sale Leaseback to MMP [Member] | Measurement Input, Risk Free Interest Rate [Member]
Warrants and Rights Outstanding, Measurement Input			0.0112
Sale Leaseback to MMP [Member] | Measurement Input, Expected Term [Member]
Warrants and Rights Outstanding, Measurement Input | yr			4
Sale Leaseback to MMP [Member] | Measurement Input, Price Volatility [Member]
Warrants and Rights Outstanding, Measurement Input			1.15
Massachusetts Land Purchase [Member]
Area of Land | a			52.6												52.6
Deposits on Land															$ 100,000
Land, Selling Price			$ 4,475,000							$ 4,325,000
Payments to Acquire Land										$ 725,000	$ 925,000
Payments to Acquire Land Held-for-use			$ 3,550,000
Operating Leases, Rent Expense, Net, Total						99,865	$ 99,865	199,730	$ 199,730
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year						85,374		85,374
Operating Leases, Future Minimum Payments, Due in Two Years						341,496		341,496
Operating Leases, Future Minimum Payments, Due in Three Years						341,496		341,496
Operating Leases, Future Minimum Payments, Due in Four Years						341,496		341,496
Operating Leases, Future Minimum Payments, Due in Five Years						341,496		341,496
Operating Leases, Future Minimum Payments, Due Thereafter						$ 14,684,528		$ 14,684,528
Chief Executive Officer [Member]
Officer Employment Agreement, Initial Term				3 years
Chief Executive Officer [Member] | Officer Employment Agreement [Member]
Officer Employment Agreement, Time Devoted, Percentage				50.00%
Officer Employment Agreement, Monthly Payment				$ 12,000

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Note 8 - Shareholders' Equity (Details Textual) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 14, 2018	Oct. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Dec. 12, 2017	Oct. 17, 2016
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 1.56		$ 1.56		$ 1.55
Proceeds from Issuance of Common Stock					$ 1,064,001	$ 922,412
Stock Issued During Period, Shares, Issued for Services		65,000
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount			$ 0		$ 0
Stock Issued During Period, Shares, Warrants Exercised					388,000
Proceeds from Warrant Exercises					$ 475,500
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Expense			$ 0	$ 0	0	$ 0
Sale Leaseback to MMP [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights								$ 1	$ 1
Equity Line Agreement [Member]
Purchase Price of Weighted Average Price of Common Stock								90.00%
Percentage of Closing Price of Common Stock								75.00%
Stock Issued During Period, Value, New Issues					570,251		$ 447,801
Proceeds from Issuance of Common Stock					$ 1,064,001		$ 1,222,412
Mountain States Capital, LLC [Member]
Line of Credit Facility, Maximum Borrowing Capacity								$ 10,000,000
Line of Credit Facility, Current Borrowing Capacity								$ 500,000
Debt Instrument, Term	1 year 180 days

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Note 8 - Shareholders' Equity - Stock Option Activity (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2019	Sep. 30, 2018
Shares Outstanding (in shares)	150,000
Outstanding, weighted average exercise price (in dollars per share)	$ 2.21
Outstanding, weighted average contractual term (Year)	2 years 36 days	2 years 328 days
Outstanding, aggregate intrinsic value
Shares Outstanding (in shares)	150,000	150,000
Outstanding, weighted average exercise price (in dollars per share)	$ 2.50	$ 2.21
Shares Vested and expected to vest (in shares)	150,000
Vested and expected to vest, weighted average exercise price (in dollars per share)	$ 2.50
Vested and expected to vest, weighted average contractual term (Year)	2 years 36 days
Shares Exercisable (in shares)	150,000
Exercisable, weighted average exercise price (in dollars per share)	$ 2.50
Exercisable, weighted average contractual term (Year)	2 years 36 days
Exercisable, aggregate intrinsic value

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Note 8 - Shareholders' Equity - Warrant Activity (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2019	Sep. 30, 2018
Outstanding, warrants (in shares)	9,478,650
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 1.55
Outstanding, warrants, weighted average remaining contract term (Year)	2 years 73 days	2 years 219 days
Class of warrant or right, outstanding, aggregate intrinsic value	$ 1,048,003
Exercised, warrants (in shares)	(388,000)
Exercised, warrants, weighted average exercise price (in dollars per share)	$ 1.23
Outstanding, warrants (in shares)	9,090,650	9,478,650
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 1.56	$ 1.55
Exercisable, warrants (in shares)	5,450,650
Exercisable, warrants, weighted average exercise price (in dollars per share)	$ 1.94
Exercisable, warrants, weighted average remaining contract term (Year)	2 years 36 days
Class of warrant or right, exercisable, aggregate intrinsic value	$ 247,203

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Note 9 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Expense (Benefit), Total	$ 0	$ 0	$ 0	$ 0
Unrecognized Tax Benefits, Ending Balance	$ 0		$ 0

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Note 10 - Subsequent Events (Details Textual) - USD ($)						9 Months Ended	12 Months Ended
	Aug. 07, 2019	Aug. 02, 2019	Jul. 15, 2019	May 21, 2019	May 02, 2019	Jun. 30, 2019	Sep. 30, 2018
Class of Warrant or Right, Exercise Price of Warrants or Rights						$ 1.56	$ 1.55
Unrelated Party [Member]
Proceeds from Short-term Debt, Total				$ 83,000	$ 153,000
Debt Instrument, Interest Rate, Stated Percentage				12.00%	12.00%
Subsequent Event [Member] | Unrelated Party [Member]
Proceeds from Short-term Debt, Total		$ 4,000,000
Debt Instrument, Interest Rate, Stated Percentage		11.00%
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right		600,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1.50
Warrants and Rights Outstanding, Term, Number of Days After Written Notice		20 days
Warrants and Rights Outstanding, Term, Minimum Volume Weighted Average Share Price of Common Stock for Twenty Consecutive Days		$ 4
Warrants and Rights Outstanding, Term, Minimum Average Daily Volume Trades of Common Stock for Twenty Consecutive Days		150,000
Equity Line Agreement [Member]
Stock Issued During Period, Value, New Issues						$ 570,251	$ 447,801
Equity Line Agreement [Member] | Subsequent Event [Member]
Stock Issued During Period, Shares, New Issues	80,430		65,000
Stock Issued During Period, Value, New Issues	$ 82,000		$ 65,000