10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

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: 000-54231

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.)
1555 Blake Street, Unit 502 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 May 9, 2022, the registrant had 24,391,961 shares of common stock outstanding.

AMERICANN, INC.

FORM 10-Q

TABLE OF CONTENTS

			PAGE NO.
PART I   FINANCIAL INFORMATION
	Item 1.	Unaudited Financial Statements:
		Consolidated Balance Sheets as of March 31, 2022 and September 30, 2021	3
		Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2022 and 2021	4
		Consolidated Statements of Changes in Stockholders' Equity for the Six Months Ended March 31, 2022 and 2021	5
		Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2022 and 2021	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	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)

	March 31, 2022			September 30, 2021
Assets
Current Assets:
Cash and cash equivalents	$	814,872		$	696,380
Restricted cash		9,967			9,989
Tenant receivable - related party		240,165			258,854
Prepaid expenses and other current assets		33,333			12,970
Current portion of note receivable - related party		45,448			41,564
Total current assets		1,143,785			1,019,757
Construction in progress		249,883			93,400
Property and Equipment, net		6,836,923			7,061,884
Operating lease - right-of-use asset		6,812,383			6,846,476
Note receivable - related party		19,447			43,185
Total assets	$	15,062,421		$	15,064,702
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	210,399		$	190,020
Accounts payable - related party		82,500			97,500
Interest payable (including $4,446 and $4,303 to related parties)		49,578			54,194
Other payables		6,086			12,128
Operating lease liability, short term		10,849			10,432
Notes payable		150,000			150,000
Total current liabilities		509,412			514,274
Notes payable (net of unamortized discounts of $217,553 and $269,506)		4,282,447			4,230,494
Notes payable - related party		581,646			581,646
Operating lease liability, long term		4,222,348			4,227,878
Total liabilities		9,595,853			9,554,292
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; 24,391,961 and $24,196,310 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively		2,439			2,420
Additional paid in capital		25,558,362			25,093,435
Accumulated deficit		(20,094,233	)		(19,585,445	)
Total stockholders' equity		5,466,568			5,510,410
Total liabilities and stockholders' equity	$	15,062,421		$	15,064,702

See accompanying notes to unaudited consolidated financial statements.

3

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended March 31,						Six months Ended March 31,
	2022			2021			2022			2021
Revenues:
Rental income - related party	$	667,366		$	437,344		$	1,318,311		$	708,929
Cost of revenues		10,500			10,850			21,950			18,351
Gross profit		656,866			426,494			1,296,361			690,578
Operating expenses:
Advertising and marketing		10,171			7,203			23,138			8,629
Professional fees		86,177			85,416			211,236			182,272
General and administrative expenses		375,401			370,170			1,245,489			838,550
Total operating expenses		471,749			462,789			1,479,863			1,029,451
Income (loss) from operations		185,117			(36,295	)		(183,502	)		(338,873	)
Other income (expense):
Interest income		3,119			4,780			6,680			9,928
Interest expense		(151,089	)		(259,669	)		(305,864	)		(451,328	)
Interest expense - related party		(12,907	)		(12,908	)		(26,102	)		(26,103	)
Total other income (expense)		(160,877	)		(267,797	)		(325,286	)		(467,503	)
Net income (loss)	$	24,240		$	(304,092	)	$	(508,788	)	$	(806,376	)
Basic and diluted (loss) income per common share	$	-		$	(0.01	)		(0.02	)	$	(0.03	)
Weighted average common shares outstanding		24,391,961			23,696,310			24,304,886			23,696,310

See accompanying notes to unaudited consolidated financial statements.

4

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

	Preferred Stock				Common Stock				Paid In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balances, September 30, 2020		-	$	-		23,696,310	$	2,370	$	24,593,485	$	(18,722,552	)	$	5,873,303
Net loss		-		-		-		-		-		(502,284	)		(502,284	)
Balances, December 31, 2020		-	$	-		23,696,310	$	2,370	$	24,593,485	$	(19,224,836	)	$	5,371,019
Net loss												(304,092	)		(304,092	)
Balances, March 31, 2021		-	$	-		23,696,310	$	2,370	$	24,593,485	$	(19,528,928	)	$	5,066,927
Balances, September 30, 2021		-	$	-		24,196,310	$	2,420	$	25,093,435	$	(19,585,445	)	$	5,510,410
Net loss		-		-		-		-		-		(533,028	)		(533,028	)
Stock issued for services		-		-		195,651		19		89,981		-			90,000
Extension of warrants		-		-		-		-		374,946		-			374,946
Balances, December 31, 2021		-		-		24,391,961	$	2,439	$	25,558,362	$	(20,118,473	)	$	5,442,328
Net income		-		-		-		-		-		24,240			24,240
Balances, March 31, 2022		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(20,094,233	)	$	5,466,568

See accompanying notes to unaudited consolidated financial statements. 

5

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended March 31,
	2022			2021
Cash flows from operating activities:
Net (loss) income	$	(508,788	)	$	(806,376	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		224,961			225,345
Amortization of right of use assets		34,093			33,707
Stock based compensation and warrants revaluation expense		374,946			-
Stock issued for services		90,000			-
Amortization of debt discount		51,953			148,868
Changes in operating assets and liabilities:
Tenant receivable - related party		18,689			(51,620	)
Prepaid expenses		(20,363	)		-
Accounts payable and accrued expenses		20,379			(72,105	)
Operating lease liability		(5,113	)		(4,726	)
Accounts payable - related party		(15,000	)		65,000
Interest payable		(4,759	)		1,557
Interest payable - related party		143			(22,231	)
Other payables		(6,042	)		(512	)
Net cash flows provided by (used in) operations		255,099			(483,093	)
Cash flows from investing activities:
Additions to construction in progress		(156,483	)		(6,500	)
Payments received on notes receivable - related party		19,854			16,606
Net cash flows (used in) provided by investing activities		(136,629	)		10,106
Cash flows from financing activities:
Proceeds from note payable, net of financing costs		-			800,000
Principal payments on notes payable		-			(153,000	)
Net cash flows provided by financing activities		-			647,000
Net increase in cash, cash equivalents, and restricted cash		118,470			174,013
Cash, cash equivalents, and restricted cash at beginning of period		706,369			193,159
Cash, cash equivalents, and restricted cash at end of period	$	824,839		$	367,172
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$	284,628		$	121,964
Cash paid for income taxes	$	-		$	-

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.

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 the potential failure to secure funding to continue its operations.

Basis of Presentation

The (a) consolidated balance sheet as of September 30, 2021, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the six months ended March 31, 2022 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on December 6, 2021. 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 2021 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.

Significant Accounting Policies

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:

	March 31, 2022		September 30, 2021
Cash and cash equivalents	$	814,872	$	696,380
Restricted cash		9,967		9,989
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	824,839	$	706,369

Amounts included in restricted cash represent those required to be set aside by the Cannabis Control Commission in Massachusetts.

7

 

Property and Equipment, net

Property and equipment are stated at cost. Depreciation of property and equipment begins in the month following the month when the asset is placed into service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to twenty years. Property and equipment consist of:

	March 31, 2022			September 30, 2021
Buildings and improvements	$	7,608,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,960,427
Accumulated depreciation		(1,123,504	)		(898,543	)
Propertyand equipment, net	$	6,836,923		$	7,061,884

Depreciation expenses for the six months ended March 31, 2022 and March 31, 2021 amounted to $224,961 and $225,345, respectively.

Leases

Effective October 1, 2019, we adopted Topic 842, Lease Accounting using the effective date method. Under this method, periods prior to adoption remain unchanged. We determine if an arrangement is a lease at inception.

Right-of-Use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

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 $20,094,233 and $19,585,445 at March 31, 2022 and September 30, 2021, respectively, and had a net loss of $508,788 for the six months ended March 31, 2022. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management may raise additional funds through the sale of its securities or borrowings from third parties.

8

 

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The consolidated 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 March 31, 2022 and September 30, 2021, consisted of the following: 

	March 31, 2022			September 30, 2021
Related party note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.
		64,895			84,749
		64,895			84,749
Less: Current portion		(45,448	)		(41,564	)
	$	19,447		$	43,185

NOTE 4.  NOTES PAYABLE

Unrelated

On February 25, 2021, the Company borrowed $300,000 from an unrelated party. The loan was unsecured, had an interest at a rate of 11% and was due and payable on August 2, 2021. This loan was fully paid in July 2021.

On August 25, 2020, the Company borrowed $153,000 from an unrelated party. The loan was unsecured, had an interest rate of 10% per year and was due and payable on August 25, 2021.  In February 2021, the Company paid off the loan principal balance of $153,000 and paid a prepayment fee of $47,941. The Company incurred debt issuance costs of $3,000 which was recorded as a debt discount. Amortization expense related to the debt discount was $0 during the six months ended March 31, 2022.

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

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) August 2, 2024 or (ii) twenty days after written notice to 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 trading volume of the Company’s common stock during the twenty trading days was at least 150,000 shares.

The broker for the loan received a cash commission of $320,000 plus warrants to purchase 48,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on August 2, 2024. The cash commission and the fair value of the warrants amounting to $52,392 were recognized as a discount to the note.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the 600,000 warrants was $562,762 which was recognized as additional paid in capital and a corresponding debt discount. 

9

 

On December 4, 2020, the loan was modified and increased by $500,000. The maturity date of the loan was extended to August 1, 2023. All other provisions of the original loan remain the same. The debt modification was deemed not substantial and was accounted for as a debt modification. The broker for the loan received a cash commission of $40,000 which was expensed when incurred.

At March 31, 2022, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $217,553. All debt discounts are being amortized on a straight-line basis over the term of the modified note. Amortization expense related to the debt discounts was $51,953 and $148,868 for the six months ended March 31, 2022 and 2021, respectively.

The note is secured by a first lien on Building 1 at the Company’s Massachusetts Cannabis Center (“MCC”).

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 are unsecured and bear interest at 8% per year.  At March 31, 2022 and September 30, 2021, the outstanding principal on these notes was $150,000.  On October 12, 2020, this remaining note was extended to mature on March 31, 2022. On December 15, 2021, the remaining note was extended to mature on December 31, 2022.

Related Party

SCP. 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”) was assigned 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 was due and payable on December 31, 2019. Interest is payable quarterly. The note can be converted at any time, at the option of SCP, into shares of our common stock, initially at a conversion price of $1.25 per share.

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 was not convertible into shares of our common stock. All unpaid principal and interest was due on December 31, 2019.

On September 30, 2019, both notes were amended and combined into one note, in the principal amount of $1,756,646, bearing interest of 9% per year and maturing on December 31, 2022. Additionally, the conversion option in the first note was eliminated. The new note is unsecured. SCP also received warrants to purchase 1,500,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.25 per share and expire on December 31, 2022. The debt modification was deemed substantial and was accounted for as a debt extinguishment. The fair value of the 1,500,000 warrants was $977,110 and was recognized as loss on extinguishment of debt during the year ended September 30, 2019. On December 20, 2021, the Company extended the expiration date of those warrants to December 31, 2024 and recorded a warrants revaluation expense based on a Black Scholes model calculation of $255,600.

The Company made principal payments on the note of $1,175,000 during the year ended September 30, 2021. Accrued interest on the note payable was $17,497 and $4,303 at March 31, 2022 and September 30, 2021, respectively. 

At March 31, 2022 and September 30, 2021, the outstanding principal on this note was $581,646.

10

 

During the year ended September 30, 2021, the Company also incurred $180,000 of consulting expenses with SCP of which $97,500 remained outstanding at September 30, 2021. During the six months ended March 31, 2022, the Company incurred $90,000 of consulting expenses with SCP and paid $105,000. As of March 31, 2022, $82,500 remains outstanding.  

NOTE 5. RELATED PARTY TRANSACTIONS

BASK (formerly Coastal Compassion, Inc). On April 7, 2016, we signed agreements with BASK. BASK is one of a limited number of organizations that has received a provisional or final registration to cultivate, process and sell medical and adult use cannabis by the Massachusetts Cannabis Control Commission.

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.

On August 15, 2018, the Company combined the construction and working capital advances of $129,634 and accrued interest of $44,517 into a new loan with payments over 5 years with 18% interest. At March 31, 2022 and September 30, 2021, the outstanding balance on the note receivable was $64,895 and $84,749, respectively.

On July 26, 2019, the Company entered into a 15-Year Triple Net lease of Building 1 of the MCC with BASK. The lease commenced on September 1, 2019 and includes an annual base rent of $135,000 and a revenue participation fee equivalent to 15% of BASK's gross revenues. As of March 31, 2022, the BASK tenant receivable balance was $240,165.

Tim Keogh, our Chief Executive Officer, was a Board Member of BASK between August 2013 and November 2021.

NOTE 6. INCOME/LOSS PER SHARE

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

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2022		2021			2022			2021
Net income (loss) attributable to common stockholders	$	24,240	$	(304,092	)	$	(508,788	)	$	(806,376	)
Basic weighted average outstanding shares of common stock		24,391,961		23,696,310			24,304,886			23,696,310
Dilutive effects of common share equivalents		-		-			-			-
Dilutive weighted average outstanding shares of common stock		24,391,961		23,696,310			24,304,886			23,696,310
Basic and diluted net income (loss) per share of common stock	$	-	$	(0.01	)	$	(0.02	)	$	(0.03	)

As of March 31, 2022 we excluded 1,700,000 of stock options and 7,666,650 of warrants and 100,000 shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive.  

As of March 31, 2021 we excluded 1,850,000 of stock options and 8,911,650 of warrants and 100,000 shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive. 

NOTE 7.  COMMITMENTS AND CONTINGENCIES

Massachusetts Cannabis Center. 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 are developing the property as the Massachusetts Cannabis Center. Plans for the MCC 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. 

11

 

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. As of September 30, 2016, the Company had paid $925,000 that was 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’ section below for additional information.

Operating Leases

Land

On October 17, 2016, the Company closed the acquisition of the 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. In August 2019, the Company completed construction of Building 1 at MCC.

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 will be the 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.

In connection with the sale of the property to MMP and the lease, we entered into a Share Purchase Agreement pursuant to which we issued to MMP 100,000 shares of our 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, 2021. On October 12, 2021, the warrant’s expiration date was extended to April 17, 2022.

Effective October 1, 2019, the Company adopted Topic 842 and recorded ROU assets and lease liabilities of $6,980,957 and $4,256,869, respectively. As part of the adoption, the prepaid land lease balance of $2,724,088 was classified as a component of the Company’s ROU assets.

The Company constructed Building 1 on the leased land and on September 1, 2019, BASK commenced its 15-year sublease of Building 1 which includes a base rent plus 15% of BASK’s gross revenues. This sublease income is recorded as Rental income - related party on the Company’s consolidated statements of operations.

As of March 31, 2022, the Company’s right-of-use assets were $6,812,383, the Company’s current maturities of operating lease liabilities were $10,849, and the Company’s noncurrent lease liabilities were $4,222,348. During the three months ended March 31, 2022, the Company had operating cash flows from operating leases of $190,582.

12

 

The table below presents lease related terms and discount rates as of March 31, 2022.

	As of March 31, 2022
Weighted average remaining lease term
Operating leases		44.50
Weighted average discount rate
Operating leases		7.9	%

The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of March 31, 2022 are as follows:

2022		170,751
2023		341,500
2024		341,500
2025		341,500
2026		341,500
Thereafter		13,660,001
Total lease payments		15,196,752
Less: Interest		(10,963,555	)
	$	4,233,197
Less: operating lease liability, current portion		(10,849	)
Operating lease liability, long term	$	4,222,348

Office space

The Company leases its office space located at 1555 Blake St., Unit 502, Denver, CO 80202 for $2,500 per month with a lease term of less than 12 months.

Lease expense for office space was $15,000 for the six months ended March 31, 2022 and 2021.

Aggregate rental expense under all leases totaled $234,561 and $214,730 for the six months ended March 31, 2022 and 2021, respectively.

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NOTE 8.  STOCKHOLDERS’ EQUITY

Common Stock. During the six months ended March 31, 2022, the Company issued 195,651 shares of stock for services valued $90,000.

Stock Options. In December 2021, the Company extended the expiration date of some stock options and recorded an additional stock option-based compensation expense of $119,346 based on the fair value established using the Black Scholes option pricing model.

Stock option details are as follows: 

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Exercisable at September 30, 2021		1,700,000	$	1.94		3.5	$	-
Outstanding as of March 31, 2022		1,700,000	$	1.94		4.9	$	-
Vested and expected to vest at March 31, 2022		1,700,000	$	1.94		4.9	$	-
Exercisable at March 31, 2022		1,700,000	$	1.94		4.9	$	-

Stock option-based compensation expense associated with stock options was $119,346 and $0 for the six months ended March 31, 2022 and 2021, respectively.

Warrants. Warrant activity as of and for the six months ended March 31, 2022 is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding as of September 30, 2021		7,666,650		1.21		0.80	$	-
Outstanding as of March 31, 2022		7,666,650		1.21		0.90	$	-
Exercisable at March 31, 2022		7,666,650		1.21		0.90	$	-

NOTE 9. INCOME TAXES

We did not record any income tax expense or benefit for the six months ended March 31, 2022 or 2020. 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 March 31, 2022 and September 30, 2021.

As of March 31, 2022, we did not have any unrecognized tax benefits. There were no significant changes to the calculation since September 30, 2021.

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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, 2021 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 designs, develops, leases and plans to operate state-of-the-art cannabis cultivation, processing and manufacturing facilities. 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 Cannabis Center. The Massachusetts Cannabis Center (“MCC”) is being developed on a 52-acre parcel located in Southeastern Massachusetts. AmeriCann’s MCC 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, Building 1, a 30,000 square foot cultivation and processing facility, is fully-operational and is currently 100% leased by a vertically-integrated Massachusetts cannabis company. AmeriCann generates revenue through lease arrangements with the operators that includes base rent and royalty payments of 15% of gross revenue generated from products produced at the MCC.

The increase in Operating Revenue for the quarter ending March 31, 2022 is result of increased cultivation yields and increases in the production and sale of manufactured goods from the Massachusetts Cannabis Center.

A summary of operational highlights included the following:

● AmeriCann’s Operating Revenue from Building 1 increased over 52% from the quarter ended March 31, 2021 to the quarter ending March 31, 2022.

● The manufacturing of cannabis infused products, including the recently launched 1906 branded “Drops”, Howl’s Tincture, and Harpoon Extracts, has increased dramatically at the Massachusetts Cannabis Center. Sales of manufactured infused products are expected to be even stronger once the anticipated increase of production and sales for 1906 “Drops” are realized.

● For the months of December, January and February 1906 “Drops” was the top selling edible product in the Massachusetts market. Howl’s Tincture was the top selling brand in the Tincture Category.

● AmeriCann’s tenant, Bask, Inc. added adult-use retail sales in February of 2021.

15

● In February 2022, revenue from the Massachusetts cannabis market was $139.6 million which was 40% greater than February 2021.

● For the 2021 calendar year, revenue for the Massachusetts cannabis market was $1.62 billion, 75% more than 2020 revenue. Experts believe the market will exceed $1.8 billion annually.

● Total Massachusetts cannabis sales have exceeded $2.8 billion since the inception of the Commonwealth’s regulated cannabis program.

● Cannabis sales nationally have been excellent as the industry has produced strong sales growth in markets across the country.

AmeriCann, through a 100% owned subsidiary, AmeriCann Brands, Inc., has received two licenses from the Massachusetts Cannabis Control Commission to cultivate cannabis and provide extraction and product manufacturing support to the entire MCC project, as well as to other licensed cannabis farmers throughout regulated markets. AmeriCann Brands plans to operate in Building 2 at the MCC 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 MCC project to new markets throughout the country as a multi-state operator. The outlook for new states continues to improve with legislation recently passing in New York, New Jersey, Connecticut, Virginia and New Mexico. Several additional states are expected to pass adult use regulations including Pennsylvania and Rhode Island in the near term which will create additional opportunities for AmeriCann’s business model.

COVID-19 Pandemic

The Company believes that the COVID- 19 pandemic has had certain impacts on its business, but management does not believe there has been a material long-term impact from the effects of the pandemic on the Company’s business and operations, results of operations, financial condition, cash flows, liquidity or capital and financial resources.

The Company has established policies to monitor the pandemic and has taken a number of actions to protect its employees, including restricting travel, encouraging quarantine and isolation when warranted, and directing most of its employees to work from home.

SIGNIFICANT ACCOUNTING POLICIES

Leases

Effective October 1, 2019, we adopted ASC 842, Lease Accounting using the effective date method. We determine if an arrangement is a lease at inception. 

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Right-of-Use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

RESULTS OF OPERATIONS 

Total Revenues

During the three months ended March 31, 2022 and 2021, we generated $667,366 and $437,344 in revenue, respectively. During the six months ended March 31, 2022 and 2021, we generated $1,318,311 and $708,929 in revenue, respectively. The increase in revenues is due to higher rental revenue and participation fee revenues as a result of increased cultivation yields and increases in the production and sale of manufactured goods from the Massachusetts Cannabis Center.

Advertising and Marketing Expenses

Advertising and marketing expenses were $10,171 and $7,203 for the three months ended March 31, 2022 and 2021, respectively. During the six months ended March 31, 2022 and 2021, the advertising and marketing expenses were $23,138 and $8,629, respectively. The increase is due to additional social media and marketing expenses in 2022.

Professional Fees  

Professional fees were $86,177 and $85,416 for the three months ended March 31, 2022 and 2021, respectively. During the six months ended March 31, 2022 and 2021, the professional fees were $211,236 and $182,272, respectively. The increase is due to an increase in accounting, consulting and legal fees.

General and Administrative Expenses

General and administrative expenses were $375,401 and $370,170 for the three months ended March 31, 2022 and 2021, respectively. During the six months ended March 31, 2022 and 2021, the general and administrative expenses were $1,245,489 and $838,550, respectively. The increase is primarily a result of an increase in stock option compensation.

Interest Income

Interest income was $3,119 and $4,780 for the three months ended March 31, 2022 and 2021, respectively.  The decrease is a result of a decline in the principal balance of the BASK note receivable. During the six months ended March 31, 2022 and 2021, the interest income was $6,680 and $9,928, respectively.

Interest Expense

Interest expense was $163,996 and $272,577 for the three months ended March 31, 2022 and 2021, respectively. The decrease is primarily attributable to amortization of debt discounts. During the six months ended March 31, 2022 and 2021, the interest expense was $331,966 and $477,431, respectively.

Net Operating Income/Loss 

We had a net income of $24,240 and a net loss of $(304,092) for the three months ended March 31, 2022 and 2021, respectively. We had a net loss of $(508,788) and $(806,376) for the six months ended March 31, 2022 and 2021, respectively. The increase in net income is attributed primarily to higher revenues.

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LIQUIDITY AND CAPITAL RESOURCES 

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 $20,094,233 and $19,585,445 at March 31, 2022 and September 30, 2021, respectively, and had a net income (loss) of $24,240 and $(304,092) for the three months ended March 31, 2022 and March 31, 2021, respectively. The Company had a net loss of $(508,788) and $(806,376) for the six months ended March 31, 2022 and 2021, respectively. ]While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. 

Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate additional revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate additional revenues. The consolidated 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 of the unaudited consolidated financial statements filed with this report for information concerning our notes payable.

Analysis of Cash Flows 

During the six months ended March 31, 2022, our net cash flows provided by operations were $255,099 as compared to net cash flows used in operations of $483,093 for the six months ended March 31, 2022. The increase is primarily due to timing of working capital payments, and stock-based compensation expense during the six months ended March 31, 2022.

Cash flows (used) provided by investing activities were $(136,629) and $10,106 for the six months ended March 31, 2022 and 2021, respectively, consisting of payments received on notes receivable offset by additions to construction in progress.

Cash flows provided by financing activities were $0 for the six months ended March 31, 2022. Cash flows provided by financing activities were $647,000 for the six months ended March 31, 2021, consisting of proceeds from note payable offset by principal payments on notes payable.

18

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

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2022, 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 concluded that, as of such date, our disclosure controls and procedures were not effective for the same reasons that our internal control over financial reporting were not effective.

Internal Control over Financial Reporting

As indicated in our Form 10-K filed on December 6, 2021, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective as of September 30, 2021 at the reasonable assurance level, as a result of a material weaknesses primarily related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP, 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 March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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

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PART II OTHER INFORMATION

ITEM 1.         LEGAL PROCEEDINGS

On August 9, 2019, Bask, Inc. filed a complaint against two former employees for Tortious Interference, Conversion, Civil Conspiracy, Unjust Enrichment, Trade Secret Violations and violations of G.L. C. 93A 11. In response to Bask, Inc.’s complaint, the two former Bask, Inc. employees filed a Counterclaim naming 17 Counterclaim Defendants.

AmeriCann, Inc., AmeriCann Massachusetts, Inc. and Timothy Keogh, the Company’s Chief Executive Officer and a director (collectively, the “AmeriCann Entities”), are Counterclaim Defendants in the Action, having been impleaded into the case by the former employees of Bask, Inc.

The litigation, styled Bask, Inc. et al. v. Adam DiOrio et al., is pending in the Commonwealth of Massachusetts Superior Court in and for Bristol County as Docket No. 1973-CV-00742 (the “Action”).

In their Counterclaim in the Action, the two former Bask, Inc. employees claim that they somehow were also employees of one or both of AmeriCann, Inc. or AmeriCann Massachusetts, Inc. and that the AmeriCann Entities allegedly had some managerial responsibility for Bask.

The two former Bask, Inc. employees have alleged causes of action against the AmeriCann Entities (and others) for: purported violations of the Fair Labor Standards Act (29 U.S.C. § 215(a)(3)); purported violations of M.G.L. c. 149, §§ 148 & 148A and M.G.L. c. 151, § 19; retaliatory termination; unjust enrichment; and misrepresentation.

The AmeriCann Entities contest the Counterclaim and have asserted defenses, inter alia, based on the lack of any employer-employee relationship with the two former Bask, Inc. employees, the fact that the two former Bask, Inc. employees never provided anything of value to the Americann Entities – thereby precluding any unjust enrichment claim – and AmeriCann Entities never having made any representations of any kind to the two former Bask, Inc. employees at any time. The case is presently in the discovery process.

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	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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: May 16, 2022	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 for the quarterly period ended March 31, 2022 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: May 16, 2022

By:	/s/ Timothy Keogh
	Timothy Keogh
	Principal Executive Officer

EX-31.2

Exhibit 31.2

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

I, Benjamin Barton, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 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: May 16, 2022

By:	/s/ Benjamin Barton
	Benjamin Barton
	Principal Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of AmeriCann, Inc. (the “Company”), for the quarter ended March 31, 2022, 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.

Dated May 16, 2022

By:	/s/ Timothy Keogh
	Timothy Keogh
	Principal Executive Officer
By:	/s/ Benjamin Barton
	Benjamin Barton
	Principal Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Mar. 31, 2022	May 09, 2022
Document Information [Line Items]
Entity Central Index Key	0001508348
Entity Registrant Name	Americann, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	000-54231
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-4336843
Entity Address, Address Line One	1555 Blake Street, Unit 502
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80202
City Area Code	303
Local Phone Number	862-9000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		24,391,961

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2022	Sep. 30, 2021
Assets
Cash and cash equivalents	$ 814,872	$ 696,380
Restricted cash	9,967	9,989
Tenant receivable - related party	240,165	258,854
Prepaid expenses and other current assets	33,333	12,970
Current portion of note receivable - related party	45,448	41,564
Total current assets	1,143,785	1,019,757
Operating lease - right-of-use asset	6,812,383	6,846,476
Note receivable - related party	19,447	43,185
Total assets	15,062,421	15,064,702
Current Liabilities:
Accounts payable and accrued expenses	210,399	190,020
Accounts payable - related party	82,500	97,500
Interest payable (including $4,446 and $4,303 to related parties)	49,578	54,194
Other payables	6,086	12,128
Operating lease liability, short term	10,849	10,432
Notes payable	150,000	150,000
Total current liabilities	509,412	514,274
Notes payable (net of unamortized discounts of $217,553 and $269,506)	4,282,447	4,230,494
Notes payable - related party	581,646	581,646
Operating lease liability, long term	4,222,348	4,227,878
Total liabilities	9,595,853	9,554,292
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; 24,391,961 and $24,196,310 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively	2,439	2,420
Additional paid in capital	25,558,362	25,093,435
Accumulated deficit	(20,094,233)	(19,585,445)
Total stockholders' equity	5,466,568	5,510,410
Total liabilities and stockholders' equity	15,062,421	15,064,702
Construction in Progress [Member]
Assets
Property and Equipment, net	249,883	93,400
Property Plant and Equipment Excluding Construction in Progress [Member]
Assets
Property and Equipment, net	$ 6,836,923	$ 7,061,884

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Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Mar. 31, 2022	Sep. 30, 2021
Interest payable, related parties	$ 4,446	$ 4,303
Note payable, discount, noncurrent	$ 217,553	$ 269,506
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)	24,391,961	24,196,310
Common stock, shares outstanding (in shares)	24,391,961	24,196,310

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Rental income - related party	$ 667,366	$ 437,344	$ 1,318,311	$ 708,929
Cost of revenues	10,500	10,850	21,950	18,351
Gross profit	656,866	426,494	1,296,361	690,578
Operating expenses:
Advertising and marketing	10,171	7,203	23,138	8,629
Professional fees	86,177	85,416	211,236	182,272
General and administrative expenses	375,401	370,170	1,245,489	838,550
Total operating expenses	471,749	462,789	1,479,863	1,029,451
Income (loss) from operations	185,117	(36,295)	(183,502)	(338,873)
Other income (expense):
Interest income	3,119	4,780	6,680	9,928
Interest expense	(151,089)	(259,669)	(305,864)	(451,328)
Interest expense - related party	(12,907)	(12,908)	(26,102)	(26,103)
Total other income (expense)	(160,877)	(267,797)	(325,286)	(467,503)
Net income (loss)	$ 24,240	$ (304,092)	$ (508,788)	$ (806,376)
Basic and diluted (loss) income per common share (in dollars per share)	$ 0	$ (0.01)	$ (0.02)	$ (0.03)
Weighted average common shares outstanding (in shares)	24,391,961	23,696,310	24,304,886	23,696,310

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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, 2020		23,696,310
Balances at Sep. 30, 2020		$ 2,370	$ 24,593,485	$ (18,722,552)	$ 5,873,303
Net (loss) income	$ 0	$ 0	0	(502,284)	(502,284)
Balances (in shares) at Dec. 31, 2020		23,696,310
Balances at Dec. 31, 2020		$ 2,370	24,593,485	(19,224,836)	5,371,019
Balances (in shares) at Sep. 30, 2020		23,696,310
Balances at Sep. 30, 2020		$ 2,370	24,593,485	(18,722,552)	5,873,303
Net (loss) income					(806,376)
Balances (in shares) at Mar. 31, 2021	0	23,696,310
Balances at Mar. 31, 2021	$ 0	$ 2,370	24,593,485	(19,528,928)	5,066,927
Balances (in shares) at Dec. 31, 2020		23,696,310
Balances at Dec. 31, 2020		$ 2,370	24,593,485	(19,224,836)	5,371,019
Net (loss) income				(304,092)	(304,092)
Balances (in shares) at Mar. 31, 2021	0	23,696,310
Balances at Mar. 31, 2021	$ 0	$ 2,370	24,593,485	(19,528,928)	5,066,927
Balances (in shares) at Sep. 30, 2021	0	24,196,310
Balances at Sep. 30, 2021	$ 0	$ 2,420	25,093,435	(19,585,445)	5,510,410
Net (loss) income	$ 0	$ 0	0	(533,028)	(533,028)
Stock issued for services (in shares)	0	195,651
Stock issued, for services	$ 0	$ 19	89,981	0	90,000
Extension of warrants	$ 0	$ 0	374,946	0	374,946
Balances (in shares) at Dec. 31, 2021	0	24,391,961
Balances at Dec. 31, 2021	$ 0	$ 2,439	25,558,362	(20,118,473)	5,442,328
Balances (in shares) at Sep. 30, 2021	0	24,196,310
Balances at Sep. 30, 2021	$ 0	$ 2,420	25,093,435	(19,585,445)	5,510,410
Net (loss) income					$ (508,788)
Stock issued for services (in shares)					195,651
Stock issued, for services					$ 90,000
Balances (in shares) at Mar. 31, 2022	0	24,391,961
Balances at Mar. 31, 2022	$ 0	$ 2,439	25,558,362	(20,094,233)	5,466,568
Balances (in shares) at Dec. 31, 2021	0	24,391,961
Balances at Dec. 31, 2021	$ 0	$ 2,439	25,558,362	(20,118,473)	5,442,328
Net (loss) income	$ 0	$ 0	0	24,240	24,240
Balances (in shares) at Mar. 31, 2022	0	24,391,961
Balances at Mar. 31, 2022	$ 0	$ 2,439	$ 25,558,362	$ (20,094,233)	$ 5,466,568

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net (loss) income	$ (508,788)	$ (806,376)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	224,961	225,345
Amortization of right of use assets	34,093	33,707
Stock based compensation and warrants revaluation expense	374,946	0
Stock issued for services	90,000	0
Amortization of debt discount	51,953	148,868
Changes in operating assets and liabilities:
Tenant receivable - related party	18,689	(51,620)
Prepaid expenses	(20,363)	0
Accounts payable and accrued expenses	20,379	(72,105)
Operating lease liability	(5,113)	(4,726)
Accounts payable - related party	(15,000)	65,000
Interest payable	(4,759)	1,557
Interest payable - related party	143	(22,231)
Other payables	(6,042)	(512)
Net cash flows provided by (used in) operations	255,099	(483,093)
Cash flows from investing activities:
Additions to construction in progress	(156,483)	(6,500)
Payments received on notes receivable - related party	19,854	16,606
Net cash flows (used in) provided by investing activities	(136,629)	10,106
Cash flows from financing activities:
Proceeds from note payable, net of financing costs	0	800,000
Principal payments on notes payable	0	(153,000)
Net cash flows provided by financing activities	0	647,000
Net increase in cash, cash equivalents, and restricted cash	118,470	174,013
Cash, cash equivalents, and restricted cash at beginning of period	706,369	193,159
Cash, cash equivalents, and restricted cash at end of period	824,839	367,172
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	284,628	121,964
Cash paid for income taxes	$ 0	$ 0

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Note 1 - Nature of Business and Basis of Presentation

6 Months Ended

Mar. 31, 2022

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.

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 the potential failure to secure funding to continue its operations.

Basis of Presentation

The (a) consolidated balance sheet as of September 30, 2021, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the six months ended March 31, 2022 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on December 6, 2021. 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 2021 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.

Significant Accounting Policies

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:

	March 31, 2022		September 30, 2021
Cash and cash equivalents	$	814,872	$	696,380
Restricted cash		9,967		9,989
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	824,839	$	706,369

Amounts included in restricted cash represent those required to be set aside by the Cannabis Control Commission in Massachusetts.

Property and Equipment, net

Property and equipment are stated at cost. Depreciation of property and equipment begins in the month following the month when the asset is placed into service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to twenty years. Property and equipment consist of:

	March 31, 2022			September 30, 2021
Buildings and improvements	$	7,608,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,960,427
Accumulated depreciation		(1,123,504	)		(898,543	)
Propertyand equipment, net	$	6,836,923		$	7,061,884

Depreciation expenses for the six months ended March 31, 2022 and March 31, 2021 amounted to $224,961 and $225,345, respectively.

Leases

Effective October 1, 2019, we adopted Topic 842, Lease Accounting using the effective date method. Under this method, periods prior to adoption remain unchanged. We determine if an arrangement is a lease at inception.

Right-of-Use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

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Note 2 - Going Concern

6 Months Ended

Mar. 31, 2022

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 $20,094,233 and $19,585,445 at March 31, 2022 and September 30, 2021, respectively, and had a net loss of $508,788 for the six months ended March 31, 2022. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management may raise additional funds through the sale of its securities or borrowings from third parties.

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

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Note 3 - Notes and Other Receivables

6 Months Ended

Mar. 31, 2022

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 March 31, 2022 and September 30, 2021, consisted of the following: 

	March 31, 2022			September 30, 2021
Related party note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.
		64,895			84,749
		64,895			84,749
Less: Current portion		(45,448	)		(41,564	)
	$	19,447		$	43,185

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Note 4 - Notes Payable

6 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 4.  NOTES PAYABLE

Unrelated

On February 25, 2021, the Company borrowed $300,000 from an unrelated party. The loan was unsecured, had an interest at a rate of 11% and was due and payable on August 2, 2021. This loan was fully paid in July 2021.

On August 25, 2020, the Company borrowed $153,000 from an unrelated party. The loan was unsecured, had an interest rate of 10% per year and was due and payable on August 25, 2021.  In February 2021, the Company paid off the loan principal balance of $153,000 and paid a prepayment fee of $47,941. The Company incurred debt issuance costs of $3,000 which was recorded as a debt discount. Amortization expense related to the debt discount was $0 during the six months ended March 31, 2022.

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

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) August 2, 2024 or (ii) twenty days after written notice to 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 trading volume of the Company’s common stock during the twenty trading days was at least 150,000 shares.

The broker for the loan received a cash commission of $320,000 plus warrants to purchase 48,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.50 per share and expire on August 2, 2024. The cash commission and the fair value of the warrants amounting to $52,392 were recognized as a discount to the note.

The Company allocated the proceeds between the note and the warrants based on their relative fair values. The relative fair value of the 600,000 warrants was $562,762 which was recognized as additional paid in capital and a corresponding debt discount. 

On December 4, 2020, the loan was modified and increased by $500,000. The maturity date of the loan was extended to August 1, 2023. All other provisions of the original loan remain the same. The debt modification was deemed not substantial and was accounted for as a debt modification. The broker for the loan received a cash commission of $40,000 which was expensed when incurred.

At March 31, 2022, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $217,553. All debt discounts are being amortized on a straight-line basis over the term of the modified note. Amortization expense related to the debt discounts was $51,953 and $148,868 for the six months ended March 31, 2022 and 2021, respectively.

The note is secured by a first lien on Building 1 at the Company’s Massachusetts Cannabis Center (“MCC”).

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 are unsecured and bear interest at 8% per year.  At March 31, 2022 and September 30, 2021, the outstanding principal on these notes was $150,000.  On October 12, 2020, this remaining note was extended to mature on March 31, 2022. On December 15, 2021, the remaining note was extended to mature on December 31, 2022.

Related Party

SCP. 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”) was assigned 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 was due and payable on December 31, 2019. Interest is payable quarterly. The note can be converted at any time, at the option of SCP, into shares of our common stock, initially at a conversion price of $1.25 per share.

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 was not convertible into shares of our common stock. All unpaid principal and interest was due on December 31, 2019.

On September 30, 2019, both notes were amended and combined into one note, in the principal amount of $1,756,646, bearing interest of 9% per year and maturing on December 31, 2022. Additionally, the conversion option in the first note was eliminated. The new note is unsecured. SCP also received warrants to purchase 1,500,000 shares of the Company's common stock. The warrants are exercisable at a price of $1.25 per share and expire on December 31, 2022. The debt modification was deemed substantial and was accounted for as a debt extinguishment. The fair value of the 1,500,000 warrants was $977,110 and was recognized as loss on extinguishment of debt during the year ended September 30, 2019. On December 20, 2021, the Company extended the expiration date of those warrants to December 31, 2024 and recorded a warrants revaluation expense based on a Black Scholes model calculation of $255,600.

The Company made principal payments on the note of $1,175,000 during the year ended September 30, 2021. Accrued interest on the note payable was $17,497 and $4,303 at March 31, 2022 and September 30, 2021, respectively. 

At March 31, 2022 and September 30, 2021, the outstanding principal on this note was $581,646.

During the year ended September 30, 2021, the Company also incurred $180,000 of consulting expenses with SCP of which $97,500 remained outstanding at September 30, 2021. During the six months ended March 31, 2022, the Company incurred $90,000 of consulting expenses with SCP and paid $105,000. As of March 31, 2022, $82,500 remains outstanding.  

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Note 5 - Related Party Transactions

6 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 5. RELATED PARTY TRANSACTIONS

BASK (formerly Coastal Compassion, Inc). On April 7, 2016, we signed agreements with BASK. BASK is one of a limited number of organizations that has received a provisional or final registration to cultivate, process and sell medical and adult use cannabis by the Massachusetts Cannabis Control Commission.

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.

On August 15, 2018, the Company combined the construction and working capital advances of $129,634 and accrued interest of $44,517 into a new loan with payments over 5 years with 18% interest. At March 31, 2022 and September 30, 2021, the outstanding balance on the note receivable was $64,895 and $84,749, respectively.

On July 26, 2019, the Company entered into a 15-Year Triple Net lease of Building 1 of the MCC with BASK. The lease commenced on September 1, 2019 and includes an annual base rent of $135,000 and a revenue participation fee equivalent to 15% of BASK's gross revenues. As of March 31, 2022, the BASK tenant receivable balance was $240,165.

Tim Keogh, our Chief Executive Officer, was a Board Member of BASK between August 2013 and November 2021.

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Note 6 - Income (Loss) Per Share

6 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 6. INCOME/LOSS PER SHARE

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

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2022		2021			2022			2021
Net income (loss) attributable to common stockholders	$	24,240	$	(304,092	)	$	(508,788	)	$	(806,376	)
Basic weighted average outstanding shares of common stock		24,391,961		23,696,310			24,304,886			23,696,310
Dilutive effects of common share equivalents		-		-			-			-
Dilutive weighted average outstanding shares of common stock		24,391,961		23,696,310			24,304,886			23,696,310
Basic and diluted net income (loss) per share of common stock	$	-	$	(0.01	)	$	(0.02	)	$	(0.03	)

As of March 31, 2022 we excluded 1,700,000 of stock options and 7,666,650 of warrants and 100,000 shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive.  

As of March 31, 2021 we excluded 1,850,000 of stock options and 8,911,650 of warrants and 100,000 shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive. 

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Note 7 - Commitments and Contingencies

6 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 7.  COMMITMENTS AND CONTINGENCIES

Massachusetts Cannabis Center. 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 are developing the property as the Massachusetts Cannabis Center. Plans for the MCC 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. 

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. As of September 30, 2016, the Company had paid $925,000 that was 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’ section below for additional information.

Operating Leases

Land

On October 17, 2016, the Company closed the acquisition of the 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. In August 2019, the Company completed construction of Building 1 at MCC.

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 will be the 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.

In connection with the sale of the property to MMP and the lease, we entered into a Share Purchase Agreement pursuant to which we issued to MMP 100,000 shares of our 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, 2021. On October 12, 2021, the warrant’s expiration date was extended to April 17, 2022.

Effective October 1, 2019, the Company adopted Topic 842 and recorded ROU assets and lease liabilities of $6,980,957 and $4,256,869, respectively. As part of the adoption, the prepaid land lease balance of $2,724,088 was classified as a component of the Company’s ROU assets.

The Company constructed Building 1 on the leased land and on September 1, 2019, BASK commenced its 15-year sublease of Building 1 which includes a base rent plus 15% of BASK’s gross revenues. This sublease income is recorded as Rental income - related party on the Company’s consolidated statements of operations.

As of March 31, 2022, the Company’s right-of-use assets were $6,812,383, the Company’s current maturities of operating lease liabilities were $10,849, and the Company’s noncurrent lease liabilities were $4,222,348. During the three months ended March 31, 2022, the Company had operating cash flows from operating leases of $190,582.

The table below presents lease related terms and discount rates as of March 31, 2022.

	As of March 31, 2022
Weighted average remaining lease term
Operating leases		44.50
Weighted average discount rate
Operating leases		7.9	%

The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of March 31, 2022 are as follows:

2022		170,751
2023		341,500
2024		341,500
2025		341,500
2026		341,500
Thereafter		13,660,001
Total lease payments		15,196,752
Less: Interest		(10,963,555	)
	$	4,233,197
Less: operating lease liability, current portion		(10,849	)
Operating lease liability, long term	$	4,222,348

Office space

The Company leases its office space located at 1555 Blake St., Unit 502, Denver, CO 80202 for $2,500 per month with a lease term of less than 12 months.

Lease expense for office space was $15,000 for the six months ended March 31, 2022 and 2021.

Aggregate rental expense under all leases totaled $234,561 and $214,730 for the six months ended March 31, 2022 and 2021, respectively.

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Note 8 - Stockholders' Equity

6 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8.  STOCKHOLDERS’ EQUITY

Common Stock. During the six months ended March 31, 2022, the Company issued 195,651 shares of stock for services valued $90,000.

Stock Options. In December 2021, the Company extended the expiration date of some stock options and recorded an additional stock option-based compensation expense of $119,346 based on the fair value established using the Black Scholes option pricing model.

Stock option details are as follows: 

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Exercisable at September 30, 2021		1,700,000	$	1.94		3.5	$	-
Outstanding as of March 31, 2022		1,700,000	$	1.94		4.9	$	-
Vested and expected to vest at March 31, 2022		1,700,000	$	1.94		4.9	$	-
Exercisable at March 31, 2022		1,700,000	$	1.94		4.9	$	-

Stock option-based compensation expense associated with stock options was $119,346 and $0 for the six months ended March 31, 2022 and 2021, respectively.

Warrants. Warrant activity as of and for the six months ended March 31, 2022 is as follows:

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding as of September 30, 2021		7,666,650		1.21		0.80	$	-
Outstanding as of March 31, 2022		7,666,650		1.21		0.90	$	-
Exercisable at March 31, 2022		7,666,650		1.21		0.90	$	-

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Note 9 - Income Taxes

6 Months Ended

Mar. 31, 2022

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 six months ended March 31, 2022 or 2020. 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 March 31, 2022 and September 30, 2021.

As of March 31, 2022, we did not have any unrecognized tax benefits. There were no significant changes to the calculation since September 30, 2021.

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Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The (a) consolidated balance sheet as of September 30, 2021, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the six months ended March 31, 2022 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Form 10-K filed with the SEC on December 6, 2021. 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 2021 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:

	March 31, 2022		September 30, 2021
Cash and cash equivalents	$	814,872	$	696,380
Restricted cash		9,967		9,989
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	824,839	$	706,369

Amounts included in restricted cash represent those required to be set aside by the Cannabis Control Commission in Massachusetts.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment, net

Property and equipment are stated at cost. Depreciation of property and equipment begins in the month following the month when the asset is placed into service and is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to twenty years. Property and equipment consist of:

	March 31, 2022			September 30, 2021
Buildings and improvements	$	7,608,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,960,427
Accumulated depreciation		(1,123,504	)		(898,543	)
Propertyand equipment, net	$	6,836,923		$	7,061,884

Depreciation expenses for the six months ended March 31, 2022 and March 31, 2021 amounted to $224,961 and $225,345, respectively.

Lessee, Leases [Policy Text Block]

Leases

Effective October 1, 2019, we adopted Topic 842, Lease Accounting using the effective date method. Under this method, periods prior to adoption remain unchanged. We determine if an arrangement is a lease at inception.

Right-of-Use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Variable lease payments are not included in the calculation of the right-of-use asset and lease liability due to uncertainty of the payment amount and are recorded as lease expense in the period incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Under the available practical expedient, we account for the lease and non-lease components as a single lease component for all classes of underlying assets as both a lessee and lessor. Further, we elected a short-term lease exception policy on all classes of underlying assets, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less).

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

6 Months Ended

Mar. 31, 2022

Notes Tables

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

	March 31, 2022		September 30, 2021
Cash and cash equivalents	$	814,872	$	696,380
Restricted cash		9,967		9,989
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	824,839	$	706,369

Property, Plant and Equipment [Table Text Block]

	March 31, 2022			September 30, 2021
Buildings and improvements	$	7,608,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		7,960,427			7,960,427
Accumulated depreciation		(1,123,504	)		(898,543	)
Propertyand equipment, net	$	6,836,923		$	7,061,884

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Note 3 - Notes and Other Receivables (Tables)

6 Months Ended

Mar. 31, 2022

Notes Tables

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

	March 31, 2022			September 30, 2021
Related party note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.
		64,895			84,749
		64,895			84,749
Less: Current portion		(45,448	)		(41,564	)
	$	19,447		$	43,185

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Note 6 - Income (Loss) Per Share (Tables)

6 Months Ended

Mar. 31, 2022

Notes Tables

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

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2022		2021			2022			2021
Net income (loss) attributable to common stockholders	$	24,240	$	(304,092	)	$	(508,788	)	$	(806,376	)
Basic weighted average outstanding shares of common stock		24,391,961		23,696,310			24,304,886			23,696,310
Dilutive effects of common share equivalents		-		-			-			-
Dilutive weighted average outstanding shares of common stock		24,391,961		23,696,310			24,304,886			23,696,310
Basic and diluted net income (loss) per share of common stock	$	-	$	(0.01	)	$	(0.02	)	$	(0.03	)

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Note 7 - Commitments and Contingencies (Tables)

6 Months Ended

Mar. 31, 2022

Notes Tables

Lease Related Terms and Discount Rates [Table Text Block]

	As of March 31, 2022
Weighted average remaining lease term
Operating leases		44.50
Weighted average discount rate
Operating leases		7.9	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

2022		170,751
2023		341,500
2024		341,500
2025		341,500
2026		341,500
Thereafter		13,660,001
Total lease payments		15,196,752
Less: Interest		(10,963,555	)
	$	4,233,197
Less: operating lease liability, current portion		(10,849	)
Operating lease liability, long term	$	4,222,348

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Note 8 - Stockholders' Equity (Tables)

6 Months Ended

Mar. 31, 2022

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
Exercisable at September 30, 2021		1,700,000	$	1.94		3.5	$	-
Outstanding as of March 31, 2022		1,700,000	$	1.94		4.9	$	-
Vested and expected to vest at March 31, 2022		1,700,000	$	1.94		4.9	$	-
Exercisable at March 31, 2022		1,700,000	$	1.94		4.9	$	-

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, 2021		7,666,650		1.21		0.80	$	-
Outstanding as of March 31, 2022		7,666,650		1.21		0.90	$	-
Exercisable at March 31, 2022		7,666,650		1.21		0.90	$	-

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Note 1 - Nature of Business and Basis of Presentation (Details Textual) - USD ($)	6 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Depreciation, Total	$ 224,961	$ 225,345
Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)	3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)	20 years

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Note 1 - Nature of Business and Basis of Presentation - Restricted Cash (Details) - USD ($)	Mar. 31, 2022	Sep. 30, 2021
Cash and cash equivalents	$ 814,872	$ 696,380
Restricted cash	9,967	9,989
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$ 824,839	$ 706,369

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Note 1 - Description of Business and Significant Accounting Policies - Property, Plant and Equipment, Net (Details) - USD ($)	Mar. 31, 2022	Sep. 30, 2021
Property, plant and equipment, gross	$ 7,960,427	$ 7,960,427
Building and Building Improvements [Member]
Property, plant and equipment, gross	7,608,087	7,608,087
Computer Equipment [Member]
Property, plant and equipment, gross	349,576	349,576
Furniture and Equipment 1[Member]
Property, plant and equipment, gross	2,764	2,764
Property Plant and Equipment Excluding Construction in Progress [Member]
Accumulated depreciation	(1,123,504)	(898,543)
Propertyand equipment, net	$ 6,836,923	$ 7,061,884

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Note 2 - Going Concern (Details Textual) - USD ($)	3 Months Ended				6 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2022	Mar. 31, 2021	Sep. 30, 2021
Retained Earnings (Accumulated Deficit), Total	$ (20,094,233)				$ (20,094,233)		$ (19,585,445)
Net Income (Loss) Attributable to Parent, Total	$ 24,240	$ (533,028)	$ (304,092)	$ (502,284)	$ (508,788)	$ (806,376)

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Note 3 - Notes and Other Receivables - Schedule of Notes Receivable (Details) - USD ($)	Mar. 31, 2022	Sep. 30, 2021	Aug. 15, 2018
Related party note receivable	$ 64,895	$ 84,749
Less: Current portion	(45,448)	(41,564)
Notes Receivable, Related Parties, Noncurrent	19,447	43,185
BASK [Member]
Related party note receivable	$ 64,895	$ 84,749	$ 129,634

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Note 3 - Notes and Other Receivables - Schedule of Notes Receivable (Details) (Parentheticals) - BASK [Member] - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2022	Sep. 30, 2021	Aug. 15, 2018
Interest rate	18.00%	18.00%	18.00%
Periodic payment	$ 4,422	$ 4,422

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Note 4 - Notes Payable (Details Textual) - USD ($)						1 Months Ended	3 Months Ended	6 Months Ended		12 Months Ended
	Feb. 25, 2021	Dec. 04, 2020	Aug. 25, 2020	Aug. 02, 2019	Jul. 14, 2016	Feb. 28, 2021	Dec. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Sep. 30, 2021	Sep. 30, 2019	Feb. 12, 2018	May 01, 2016	Feb. 01, 2016
Amortization of Debt Discount (Premium)								$ 51,953	$ 148,868
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)								$ 1.21		$ 1.21
Class of Warrant or Right, Outstanding (in shares)								7,666,650		7,666,650
Notes Payable, Noncurrent, Total								$ 4,282,447		$ 4,230,494
Notes Payable, Current, Total								150,000		150,000
Interest Payable, Related Party, Current								4,446		4,303
Notes Amendment [Member]
Gain (Loss) on Extinguishment of Debt, Total											$ 977,110
Unrelated Party [Member] | Promissory Notes [Member]
Average Closing Price per Share (in dollars per share)				$ 4.00
Average Daily Volume Of Shares Trades (in shares)				150,000
Payments of Debt Issuance Costs				$ 320,000
Strategic Capital Partners [Member]
Debt Instrument, Convertible, Conversion Price (in dollars per share)					$ 1.25
Line of Credit Outstanding Amount Assumed by Related Party					$ 521,297
Notes Payable, Related Parties					$ 2,431,646						$ 1,756,646
Debt Conversion, Converted Instrument, Shares Issued (in shares)					400,000
Strategic Capital Partners [Member] | Consulting Services [Member]
Related Party Transaction, Expenses from Transactions with Related Party								90,000		180,000
Due to Related Parties, Total								82,500		97,500
Related Party Transaction, Amounts of Transaction								105,000
Strategic Capital Partners [Member] | Debt Converted into Common Stock [Member]
Debt Conversion, Original Debt, Amount					$ 500,000
Strategic Capital Partners [Member] | Debt Converted into Promissory Notes [Member]
Debt Conversion, Original Debt, Amount					$ 1,756,646
Strategic Capital Partners [Member] | Promissory Notes [Member]
Repayments of Long-term Debt, Total										1,175,000
Notes Payable, Related Parties								581,646		581,646
Interest Payable, Related Party, Current								17,497		4,303
Strategic Capital Partners [Member] | Promissory Note One [Member]
Debt Instrument, Interest Rate, Stated Percentage					9.50%
Debt Instrument, Convertible, Conversion Price (in dollars per share)					$ 1.25
Notes Payable, Related Parties					$ 1,000,000
Strategic Capital Partners [Member] | Promissory Note Two [Member]
Debt Instrument, Interest Rate, Stated Percentage					8.00%						9.00%
Notes Payable, Related Parties					$ 756,646
Warrants Issued to Unrelated Parties Lenders [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				600,000
Warrants Issued to Unrelated Parties Lenders [Member] | Promissory Notes [Member]
Class of Warrant or Right, Outstanding (in shares)				600,000
Warrants and Rights Outstanding				$ 562,762
Warrants to Purchase Additional Shares [Member]
Debt Instrument, Convertible, Conversion Price (in dollars per share)				$ 1.50
Warrants Issued to Placement Agent [Member] | Promissory Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				48,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 1.50
Warrants Issued for Notes Amendment [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)											1,500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)											$ 1.25
Class of Warrant or Right, Outstanding (in shares)											1,500,000
Warrants Revaluation Expense							$ 255,600
Unrelated Party [Member]
Proceeds from Issuance of Long-term Debt, Total	$ 300,000		$ 153,000	$ 4,000,000
Debt Instrument, Interest Rate, Stated Percentage	11.00%		10.00%	11.00%
Repayments of Long-term Debt, Total						$ 153,000
Payment for Debt Extinguishment or Debt Prepayment Cost						$ 47,941
Debt Instrument, Convertible, Beneficial Conversion Feature			$ 3,000
Amortization of Debt Discount (Premium)								0
Line of Credit Facility, Current Borrowing Capacity													$ 1,000,000	$ 200,000
Unrelated Party [Member] | Promissory Notes [Member]
Proceeds from Issuance of Long-term Debt, Total		$ 500,000
Amortization of Debt Discount (Premium)								51,953	$ 148,868
Debt Instrument, Unamortized Discount, Total				$ 52,392				217,553
Notes Payable, Noncurrent, Total								4,500,000
Unrelated Party [Member] | Promissory Notes [Member] | Broker [Member]
Debt Instrument, Fee Amount		$ 40,000
Accredited Investors [Member] | February 2018 Convertible Notes [Member] | Convertible Debt [Member]
Debt Instrument, Interest Rate, Stated Percentage												8.00%
Debt Instrument, Face Amount												$ 810,000
Notes Payable, Current, Total								$ 150,000		$ 150,000

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Note 5 - Related Party Transactions (Details Textual) - USD ($)	Jul. 26, 2019	Aug. 15, 2018	Mar. 31, 2022	Sep. 30, 2021
Notes Receivable, Related Parties			$ 64,895	$ 84,749
Tenant Receivable, Current			240,165	258,854
BASK [Member]
Notes Receivable, Related Parties		$ 129,634	$ 64,895	$ 84,749
Interest Receivable		$ 44,517
Note Receivable, Term (Year)		5 years
Note Receivable, Interest Rate		18.00%	18.00%	18.00%
BASK [Member] | Lease Agreement [Member]
Lessee, Operating Lease, Term of Contract (Year)	15 years
Annual Base Rent	$ 135,000
Operating Lease, Percentage of Leassee's Gross Revenue	15.00%
Tenant Receivable, Current			$ 240,165

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Note 6 - Income (Loss) Per Share (Details Textual) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	1,700,000	1,850,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	7,666,650	8,911,650
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	100,000	100,000

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Note 6 - Income (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended				6 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2022	Mar. 31, 2021
Net income (loss) attributable to common stockholders	$ 24,240	$ (533,028)	$ (304,092)	$ (502,284)	$ (508,788)	$ (806,376)
Weighted average common shares outstanding (in shares)	24,391,961		23,696,310		24,304,886	23,696,310
Dilutive effects of common share equivalents (in shares)	0		0		0	0
Dilutive weighted average outstanding shares of common stock (in shares)	24,391,961		23,696,310		24,304,886	23,696,310
Basic and diluted (loss) income per common share (in dollars per share)	$ 0		$ (0.01)		$ (0.02)	$ (0.03)

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Note 7 - Commitments and Contingencies (Details Textual)			3 Months Ended	6 Months Ended		12 Months Ended	14 Months Ended	21 Months Ended
	Sep. 01, 2019	Oct. 17, 2016 USD ($) a $ / shares shares	Mar. 31, 2022 USD ($) $ / shares	Mar. 31, 2022 USD ($) $ / shares	Mar. 31, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2021 USD ($) $ / shares	Oct. 01, 2019 USD ($)	Jan. 14, 2015 USD ($) a
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares			$ 1.21	$ 1.21					$ 1.21
Operating Lease, Right-of-Use Asset			$ 6,812,383	$ 6,812,383					$ 6,846,476	$ 6,980,957
Operating Lease, Liability, Total			4,233,197	4,233,197						4,256,869
Operating Lease, Liability, Current			10,849	10,849					10,432
Operating Lease, Liability, Noncurrent			4,222,348	4,222,348					$ 4,227,878
Operating Cash Flows from Operating Leases			$ 190,582
Operating Lease, Expense				234,561	$ 214,730
Office Space in Denver, CO [Member]
Operating Leases, Monthly Payment						$ 2,500
Operating Lease, Expense				$ 15,000	$ 15,000
BASK [Member]
Lessee, Operating Sublease, Term (Year)	15 years
Lessee, Operating Sublease, Percentage of Gross Revenues	15.00%
Warrants Issued to Massachusetts Medical Properties [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares		3,640,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares		$ 1.00
Sale Leaseback to MMP [Member]
Lessee, Operating Lease, Term of Contract (Year)		50 years
Lessee Leasing Arrangements, Operating Leases, Number of Renewal Periods		4
Lessee, Operating Lease, Renewal Term (Year)		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 (Year)		5 years
Sale Leaseback to MMP [Member] | Accounting Standards Update 2016-02 [Member]
Prepaid Rent										$ (2,724,088)
Sale Leaseback to MMP [Member] | Massachusetts Medical Properties, LLC [Member]
Stock Issued During Period, Shares, New Issues (in shares) | shares		100,000
Massachusetts Land Purchase [Member]
Area of Land (Acre) | 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

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Note 7 - Commitments and Contingencies - Lease Related Terms and Discount Rates (Details)	Mar. 31, 2022
Operating leases (Year)	44 years 6 months
Operating leases	7.90%

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Note 7 - Commitments and Contingencies - Future Rental Payments Under Operating Leases (Details) - USD ($)	Mar. 31, 2022	Sep. 30, 2021	Oct. 01, 2019
2022	$ 170,751
2023	341,500
2024	341,500
2025	341,500
2026	341,500
Thereafter	13,660,001
Total lease payments	15,196,752
Less: Interest	(10,963,555)
Operating Lease, Liability, Total	4,233,197		$ 4,256,869
Less: operating lease liability, current portion	(10,849)	$ (10,432)
Operating Lease, Liability, Noncurrent	$ 4,222,348	$ 4,227,878

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Note 8 - Stockholders' Equity (Details Textual) - USD ($)	3 Months Ended	6 Months Ended
	Dec. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Stock Issued During Period, Shares, Issued for Services (in shares)		195,651
Stock Issued During Period, Value, Issued for Services	$ 90,000	$ 90,000
Share-Based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Expense		$ 119,346	$ 0

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Note 8 - Stockholders' Equity - Stock Option Activity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2022	Sep. 30, 2021
Shares Exercisable (in shares)	1,700,000	1,700,000
Exercisable, weighted average exercise price (in dollars per share)	$ 1.94	$ 1.94
Exercisable, weighted average contractual term (Year)	4 years 10 months 24 days	3 years 6 months
Shares Outstanding (in shares)	1,700,000
Outstanding, weighted average exercise price (in dollars per share)	$ 1.94
Outstanding, weighted average contractual term (Year)	4 years 10 months 24 days
Shares Vested and expected to vest (in shares)	1,700,000
Vested and expected to vest, weighted average exercise price (in dollars per share)	$ 1.94
Vested and expected to vest, weighted average contractual term (Year)	4 years 10 months 24 days

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Note 8 - Stockholders' Equity - Warrant Activity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2022	Sep. 30, 2021
Outstanding, warrants (in shares)	7,666,650	7,666,650
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 1.21	$ 1.21
Outstanding, warrants, weighted average remaining contract term (Year)	10 months 24 days	9 months 18 days
Exercisable, warrants (in shares)	7,666,650
Exercisable, warrants, weighted average exercise price (in dollars per share)	$ 1.21
Exercisable, warrants, weighted average remaining contract term (Year)	10 months 24 days

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Note 9 - Income Taxes (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Tax Expense (Benefit), Total	$ 0	$ 0
Unrecognized Tax Benefits, Ending Balance	$ 0