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 December 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)

Colorado	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 January 26, 2023, 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 December 31, 2022 and September 30, 2022	3
		Consolidated Statements of Operations for the Three Months Ended December 31, 2022 and 2021	4
		Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended December 31, 2022 and 2021	5
		Consolidated Statements of Cash Flows for the Three Months Ended December 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	14
	Item 4.	Controls and Procedures	18
PART II  OTHER INFORMATION
	Item 6.	Exhibits	19
	SIGNATURES		20

2

PART I:  FINANCIAL INFORMATION

ITEM 1.      UNAUDITED FINANCIAL STATEMENTS

AMERICANN, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	December 31, 2022			September 30, 2022
Assets
Current Assets:
Cash and cash equivalents	$	1,273,317		$	1,341,127
Restricted cash		9,967			9,967
Tenant receivable		242,550			251,462
Prepaid expenses and other current assets		3,333			62,766
Note receivable		31,581			43,185
Total current assets		1,560,748			1,708,507
Construction in progress		379,661			338,977
Property and Equipment, net		6,499,480			6,611,961
Operating lease - right-of-use asset		6,760,857			6,778,085
Total assets	$	15,200,746		$	15,437,530
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	129,842		$	193,170
Accounts payable - related party		-			82,500
Interest payable (including $4,446 and $4,303 to related parties)		46,488			53,964
Other payables		6,420			8,612
Operating lease liability, short term		11,507			11,283
Notes payable (net of unamortized discounts of $113,647 and $162,353)		4,386,353			4,337,647
Notes payable		-			150,000
Total current liabilities		4,580,610			4,837,176
Notes payable - related party		581,646			581,646
Operating lease liability, long term		4,213,633			4,216,596
Total liabilities		9,375,889			9,635,418
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 shares issued and outstanding as of December 31, 2022 and September 30, 2022		2,439			2,439
Additional paid in capital		25,558,362			25,558,362
Accumulated deficit		(19,735,944	)		(19,758,689	)
Total stockholders' equity		5,824,857			5,802,112
Total liabilities and stockholders' equity	$	15,200,746		$	15,437,530

See accompanying notes to unaudited consolidated financial statements.

3

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months Ended December 31,
	2022			2021
Rental income	$	734,766		$	243,681
Rental income - related party		-			407,264
Cost of revenues		13,615			11,450
Gross profit		721,151			639,495
Operating expenses:
Advertising and marketing		1,418			12,967
Professional fees		120,513			125,059
General and administrative expenses		391,306			870,088
Total operating expenses		513,237			1,008,114
Income (loss) from operations		207,914			(368,619	)
Other income (expense):
Interest income		1,663			3,561
Interest expense		(186,832	)		(154,775	)
Interest expense - related party		-			(13,195	)
Total other income (expense)		(185,169	)	$	(164,409	)
Net income (loss)	$	22,745		$	(533,028	)
Basic and diluted income (loss) per common share	$	0.00		$	(0.02	)
Weighted average common shares outstanding		24,391,961			24,219,703

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, 2021		-	$	-		23,696,310	$	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		-	$	-		23,891,961	$	2,439	$	25,558,362	$	(20,118,473	)	$	5,442,328
Balances, September 30, 2022		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(19,758,689	)	$	5,802,112
Net income		-		-		-		-		-		22,745			22,745
Balances, December 31, 2022		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(19,735,944	)	$	5,824,857

See accompanying notes to unaudited consolidated financial statements. 

5

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended December
	2022			2021
Cash flows from operating activities:
Net income (loss)	$	22,745		$	(533,028	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		112,481			112,481
Amortization of right of use assets		17,228			17,021
Stock based compensation and warrants revaluation expense		-			374,946
Stock issued for services		-			90,000
Amortization of debt discount		48,706			25,976
Changes in operating assets and liabilities:
Tenant receivable		8,912			-
Tenant receivable - related party		-			22,985
Prepaid expenses		59,433			12,735
Accounts payable and accrued expenses		(63,328	)		25,433
Operating lease liability		(2,739	)		(2,531	)
Accounts payable - related party		(82,500	)		(30,000	)
Interest payable		(7,476	)		4,414
Interest payable - related party		-			13,194
Other payables		(2,192	)		(8,297	)
Net cash flows provided by operations		111,270			125,329
Cash flows from investing activities:
Additions to construction in progress		(40,684	)		(90,492	)
Payments received on notes receivable		11,604			9,706
Net cash flows (used in) investing activities		(29,080	)		(80,786	)
Cash flows from financing activities:
Principal payments on notes payable		(150,000	)		-
Net cash flows (used in) financing activities		(150,000	)		-
Net change in cash, cash equivalents, and restricted cash		(67,810	)		44,543
Cash, cash equivalents, and restricted cash at beginning of period		1,351,094			706,369
Cash, cash equivalents, and restricted cash at end of period	$	1,283,284		$	750,912
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$	145,602		$	124,386

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 changed its corporate domicile to Colorado in 2022.

The Company designs, develops, leases and plans to operate state-of-the-art cannabis cultivation, processing and manufacturing facilities.

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, 2022, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the three months ended December 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 29, 2022. 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 2022 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 income or 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:

	December 31, 2022		September 30, 2022
Cash and cash equivalents	$	1,273,317	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,283,284	$	1,351,094

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:

	December 31, 2022			September 30, 2022
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		(1,460,947	)		(1,348,466	)
Property and equipment, net	$	6,499,480		$	6,611,961

Depreciation expense for the three months ended December 31, 2022 and December 31, 2021 amounted to $112,481.

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 unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $19,735,944 and $19,758,689 at December 31, 2022 and September 30, 2022, respectively. 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. NOTE RECEIVABLE

Notes and other receivables as of December 31, 2022 and September 30, 2022, consisted of the following: 

	December 31, 2022		September 30, 2022
Note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		31,581		43,185
Total		31,581		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 three months ended December 31, 2022 and December 31, 2021.

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 bore interest at the rate of 11% per year, was due and payable on August 2, 2022 and was 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 December 31, 2022, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $113,647. 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 $48,706 and $25,976 for the three months ended December 31, 2022 and 2021, respectively.

The modified 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 were unsecured and bore interest at 8% per year.  On October 12, 2020, this remaining note was extended to mature on December 31, 2021. On December 15, 2021, the remaining note of $150,000 was extended to mature on December 31, 2022. On October 5, 2022, the Company paid $159,140 to fully repay the $150,000 note including $9,140 of interest. At December 31, 2022 and September 30, 2022, the outstanding principal on this note was $0 and $150,000, respectively. 

Related Party

SCP. On September 30, 2019, we entered into an amended note with Strategic Capital Partners, LLC (“SCP”), in the principal amount of $1,756,646, bearing interest of 9% per year and maturing on December 31, 2022. During the year ended September 30, 2022, the maturity of the note was extended to December 31, 2023.

Accrued interest on the note was $4,446 and $4,303 at December 31, 2022 and September 31, 2022, respectively.

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

During the year ended September 30, 2022, the Company also incurred $180,000 of consulting expenses with SCP and paid $195,000. As of September 30, 2022, $82,500 remained unpaid. During the three months ended December 31, 2022, the Company incurred $45,000 of consulting expenses with SCP and paid $127,500. As of December 31, 2022, $0 remains outstanding.   

NOTE 5. TENANT RECEIVABLE

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 December 31, 2022 and September 30, 2022, the outstanding balance on the note receivable was $31,581 and $43,185, 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. The BASK tenant receivable balance was $242,550 and $251,462 as of December 31, 2022 and September 30, 2022, respectively.

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

10

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
	December 31,
	2022		2021
Net income (loss) attributable to common stockholders	$	22,745	$	(533,028	)
Basic weighted average outstanding shares of common stock		24,391,961		24,219,703
Dilutive effects of common share equivalents		-		-
Dilutive weighted average outstanding shares of common stock		24,391,961		24,219,703
Basic and diluted net income (loss) per share of common stock	$	0.00	$	(0.02	)

As of December 31, 2022 we excluded 1,700,000 of stock options, 2,211,650 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 December 31, 2021 we excluded 1,700,000 of stock options, 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.  

NOTE 7.  COMMITMENTS AND CONTINGENCIES

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 property is located approximately 47 miles southeast of Boston. The Company is developing the property as the Massachusetts Medical Center (“MCC”). Plans for the property may include the construction of sustainable greenhouse cultivation and processing facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program.

As part of a simultaneous transaction, the Company assigned the property rights to Massachusetts Medical Properties (“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.

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 completed the construction of Building I on the leased land and on September 1, 2019, BASK, commenced its 15-year sublease of Building I which includes an annual base rent of $138,762 plus 15% of BASK’s gross revenues from products produced at the MCC. This sublease income is recorded as Rental income on the Company’s consolidated statements of operations.

As of December 31, 2022, the Company’s right-of-use assets were $6,760,857, the Company’s current maturities of operating lease liabilities were $11,507 and the Company’s noncurrent lease liabilities were $4,213,633. During the three months ended December 31, 2022, the Company had operating cash flows from operating leases of $98,354.

11

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

	As of December 31, 2022
Weighted average remaining lease term
Operating leases		43.75
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 December 31, 2022 are as follows:

2023		256,123
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		13,318,505
Total lease payments		14,940,628
Less: Interest		(10,715,488	)
	$	4,225,140
Less: operating lease liability, current portion		(11,507	)
Operating lease liability, long term	$	4,213,633

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 $7,500 for the three months ended December 31, 2022 and 2021.

Aggregate rental expense under all leases totaled $120,344 and $114,218 for the three months ended December 31, 2022 and 2021, respectively.

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NOTE 8.  STOCKHOLDERS’ EQUITY

Common Stock. There was no common stock activity during the three months ended December 31, 2022. During the three months ended December 31, 2021, the Company issued 195,651 shares of stock for services valued $90,000.

Stock Options. There was no stock option activity during the three months ended December 31, 2022. 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, 2022		1,700,000	$	1.94		3.5	$	-
Outstanding as of December 31, 2022		1,700,000	$	1.94		4.2	$	-
Vested and expected to vest at December 31, 2022		1,700,000	$	1.94		4.2	$	-
Exercisable at December 31, 2022		1,700,000	$	1.94		4.2	$	-

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

Warrants. Warrant activity as of and for the three months ended December 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, 2022		4,026,650			1.21		0.80	$	-
Expired		(1,815,000	)		1.50
Outstanding as of December 31, 2022		2,211,650			1.32		2.10	$	-
Exercisable at December 31, 2022		2,211,650			1.32		2.10	$	-

NOTE 9. INCOME TAXES

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

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

13

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, 2022 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 December 31, 2022 is the 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 for the quarter ended December 31, 2022, increased approximately 13% from the quarter ended December 31, 2021.

● In addition to increased cultivation productivity in the state-of-the-art greenhouse, the manufacturing of cannabis-infused products has increased dramatically in Building 1.

● Manufactured infused products produced at Building 1 have achieved success as some of the bestselling cannabis brands in Massachusetts in their respective categories.

● For the first 10 months of 2022, the revenue from the Massachusetts cannabis market was $1.46 billion, which was 9.7% greater than the first 10 months of 2021. The annualized revenue estimate based on the first 10 months of 2022 is approximately $1.75 billion. Experts believe the market will exceed $1.8 billion annually.

● The Massachusetts cannabis market has exceeded $4 billion in sales since the inception of the Commonwealth’s regulated cannabis program. 

14

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 additional markets.

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. 

15

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 December 31, 2022 and 2021, we generated $734,766 and $650,945 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 $1,418 and $12,967 for the three months ended December 31, 2022 and 2021, respectively. The decrease is due to lower social media and marketing expenses in 2022.

Professional Fees  

Professional fees were $120,513 and $125,059 for the three months ended December 31, 2022 and 2021, respectively. The decrease is primarily due to a decrease in legal fees.

General and Administrative Expenses

General and administrative expenses were $391,306 and $870,088 for the three months ended December 31, 2022 and 2021, respectively. The decrease is primarily due to stock option compensation expense in 2021 resulting from an extension of stock options and a warrants revaluation expense.

Interest Income

Interest income was $1,663 and $3,561 for the three months ended December 31, 2022 and 2021, respectively.  The decrease is a result of a decline in the principal balance of the BASK note receivable.

Interest Expense

Interest expense was $186,832 and $167,970 for the three months ended December 31, 2022 and 2021, respectively. The increase is primarily attributable to amortization of debt discounts.

Net Operating Income/Loss 

We had a net income of $22,745 and a net loss of $(533,028) for the three months ended December 31, 2022 and 2021, respectively. The increase in net income is primarily due to higher revenues and lower general and administrative expense.

16

LIQUIDITY AND CAPITAL RESOURCES 

The accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $19,735,944 and $19,758,689 at December 31, 2022 and September 30, 2022, respectively.

The Company is continuing to support the optimization of operations and generate additional revenues from its Massachusetts Cannabis Center (MCC).  The Company's cash position and quarterly revenue is currently significant enough to support the Company's daily operations. The Company is not obligated to raise additional funds for the expansion of the MCC.  When Management determines expansion opportunities exist the Company may finance construction with cash from operations, a sale-lease-back, refinancing and expand existing debt, issuance of new debt, or sales of equity. 

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 three months ended December 31, 2022, our net cash flows provided by operations were $111,270 as compared to net cash flows used in operations of $125,329 for the three months ended December 31, 2021. The decrease is primarily due to an increase in our net income during the three months ended December 31, 2022 offset by timing of working capital payments, and stock -based compensation expense during the three months ended December 31, 2021.

Cash flows (used by) investing activities were $(29,080) and $(80,786) for the three months ended December 31, 2022 and 2021, respectively, consisting of payments received on notes receivable offset by additions to construction in progress.

Cash flows (used by) financing activities were $(150,000) and $0 for the three months ended December 31, 2022 and 2021, respectively, consisting of payments on a note payable in 2022.

17

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

OFF-BALANCE SHEET ARRANGEMENTS

As of December 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 was not effective.

Internal Control over Financial Reporting

As indicated in our Form 10-K filed on December 29, 2022, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective as of September 30, 2022 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 December 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.

18

PART II OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit Number	Description of Document
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, (filed herewith)
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, (filed herewith)
32	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS	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).

19

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: February 14, 2023	By:	/s/ Timothy Keogh
		Timothy Keogh
		Principal Executive Officer
	By:	/s/ Benjamin Barton
		Benjamin Barton
		Principal Financial and Accounting Officer

20

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 December 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: February 14, 2023

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 December 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: February 14, 2023

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 December 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 February 14, 2023

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

XML

Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2022	Jan. 26, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Entity File Number	000-54231
Entity Registrant Name	AMERICANN, INC
Entity Incorporation, State or Country Code	CO
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 (in shares)		24,391,961
Entity Central Index Key	0001508348
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Assets
Cash and cash equivalents	$ 1,273,317	$ 1,341,127
Restricted cash	9,967	9,967
Tenant receivable	242,550	251,462
Prepaid expenses and other current assets	3,333	62,766
Note receivable	31,581	43,185
Total current assets	1,560,748	1,708,507
Operating lease - right-of-use asset	6,760,857	6,778,085
Total assets	15,200,746	15,437,530
Current Liabilities:
Accounts payable and accrued expenses	129,842	193,170
Accounts payable - related party	0	82,500
Interest payable (including $4,446 and $4,303 to related parties)	46,488	53,964
Other payables	6,420	8,612
Operating lease liability, short term	11,507	11,283
Notes payable (net of unamortized discounts of $113,647 and $162,353)	4,386,353	4,337,647
Total current liabilities	4,580,610	4,837,176
Notes payable - related party	581,646	581,646
Operating lease liability, long term	4,213,633	4,216,596
Total liabilities	9,375,889	9,635,418
Commitments and Contingencies
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 shares issued and outstanding as of December 31, 2022 and September 30, 2022	2,439	2,439
Additional paid in capital	25,558,362	25,558,362
Accumulated deficit	(19,735,944)	(19,758,689)
Total stockholders' equity	5,824,857	5,802,112
Total liabilities and stockholders' equity	15,200,746	15,437,530
February 2018 Convertible Notes [Member]
Current Liabilities:
Notes payable (net of unamortized discounts of $113,647 and $162,353)	0	150,000
Construction in Progress [Member]
Assets
Construction in progress	379,661	338,977
Property Plant and Equipment Excluding Construction in Progress [Member]
Assets
Construction in progress	$ 6,499,480	$ 6,611,961

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Interest Payable, Related Party, Current	$ 4,446	$ 4,303
Note payable, discount, noncurrent	$ 113,647	$ 162,353
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, Ending Balance (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	24,391,961
Common Stock, Shares, Outstanding, Ending Balance (in shares)	24,391,961	24,391,961

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Rental income	$ 734,766	$ 243,681
Rental income - related party	0	407,264
Cost of revenues	13,615	11,450
Gross profit	721,151	639,495
Operating expenses:
Advertising and marketing	1,418	12,967
Professional fees	120,513	125,059
General and administrative expenses	391,306	870,088
Total operating expenses	513,237	1,008,114
Income (loss) from operations	207,914	(368,619)
Other income (expense):
Interest income	1,663	3,561
Interest expense	(186,832)	(154,775)
Interest expense - related party	0	(13,195)
Total other income (expense)	(185,169)	(164,409)
Net income (loss)	$ 22,745	$ (533,028)
Basic and diluted income (loss) per common share (in dollars per share)	$ 0.00	$ (0.02)
Weighted average common shares outstanding (in shares)	24,391,961	24,219,703

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Preferred Stock [Member]	Total
Balances (in shares) at Sep. 30, 2021	23,696,310
Balances at Sep. 30, 2021	$ 2,420	$ 25,093,435	$ (19,585,445)		$ 5,510,410
Net income (loss)	$ 0	0	(533,028)	$ 0	$ (533,028)
Stock issued for services (in shares)	195,651			0	195,651
Stock issued for services	$ 19	89,981	0	$ 0	$ 90,000
Extension of warrants	$ 0	374,946	0	$ 0	374,946
Balances (in shares) at Dec. 31, 2021	23,891,961			0
Balances at Dec. 31, 2021	$ 2,439	25,558,362	(20,118,473)	$ 0	5,442,328
Balances (in shares) at Sep. 30, 2022	24,391,961			0
Balances at Sep. 30, 2022	$ 2,439	25,558,362	(19,758,689)	$ 0	5,802,112
Net income (loss)	$ 0	0	22,745	$ 0	22,745
Balances (in shares) at Dec. 31, 2022	24,391,961			0
Balances at Dec. 31, 2022	$ 2,439	$ 25,558,362	$ (19,735,944)	$ 0	$ 5,824,857

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net income (loss)	$ 22,745	$ (533,028)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	112,481	112,481
Amortization of right of use assets	17,228	17,021
Stock based compensation and warrants revaluation expense	0	374,946
Stock issued for services	0	90,000
Amortization of debt discount	48,706	25,976
Changes in operating assets and liabilities:
Tenant receivable	8,912	0
Tenant receivable - related party	0	22,985
Prepaid expenses	59,433	12,735
Accounts payable and accrued expenses	(63,328)	25,433
Operating lease liability	(2,739)	(2,531)
Accounts payable - related party	(82,500)	(30,000)
Interest payable	(7,476)	4,414
Interest payable - related party	0	13,194
Other payables	(2,192)	(8,297)
Net cash flows provided by operations	111,270	125,329
Cash flows from investing activities:
Additions to construction in progress	(40,684)	(90,492)
Payments received on notes receivable	11,604	9,706
Net cash flows (used in) investing activities	(29,080)	(80,786)
Cash flows from financing activities:
Principal payments on notes payable	(150,000)	0
Net cash flows (used in) financing activities	(150,000)	0
Net change in cash, cash equivalents, and restricted cash	(67,810)	44,543
Cash, cash equivalents, and restricted cash at beginning of period	1,351,094	706,369
Cash, cash equivalents, and restricted cash at end of period	1,283,284	750,912
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$ 145,602	$ 124,386

XML

Note 1 - Nature of Business and Basis of Presentation

3 Months Ended

Dec. 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 changed its corporate domicile to Colorado in 2022.

The Company designs, develops, leases and plans to operate state-of-the-art cannabis cultivation, processing and manufacturing facilities.

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, 2022, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the three months ended December 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 29, 2022. 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 2022 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 income or 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:

	December 31, 2022		September 30, 2022
Cash and cash equivalents	$	1,273,317	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,283,284	$	1,351,094

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:

	December 31, 2022			September 30, 2022
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		(1,460,947	)		(1,348,466	)
Property and equipment, net	$	6,499,480		$	6,611,961

Depreciation expense for the three months ended December 31, 2022 and December 31, 2021 amounted to $112,481.

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

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE 2. GOING CONCERN 

The accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $19,735,944 and $19,758,689 at December 31, 2022 and September 30, 2022, respectively. 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 Receivable

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

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

NOTE 3. NOTE RECEIVABLE

Notes and other receivables as of December 31, 2022 and September 30, 2022, consisted of the following: 

	December 31, 2022		September 30, 2022
Note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		31,581		43,185
Total		31,581		43,185

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Note 4 - Notes Payable

3 Months Ended

Dec. 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 three months ended December 31, 2022 and December 31, 2021.

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 bore interest at the rate of 11% per year, was due and payable on August 2, 2022 and was 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 December 31, 2022, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $113,647. 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 $48,706 and $25,976 for the three months ended December 31, 2022 and 2021, respectively.

The modified 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 were unsecured and bore interest at 8% per year.  On October 12, 2020, this remaining note was extended to mature on December 31, 2021. On December 15, 2021, the remaining note of $150,000 was extended to mature on December 31, 2022. On October 5, 2022, the Company paid $159,140 to fully repay the $150,000 note including $9,140 of interest. At December 31, 2022 and September 30, 2022, the outstanding principal on this note was $0 and $150,000, respectively. 

Related Party

SCP. On September 30, 2019, we entered into an amended note with Strategic Capital Partners, LLC (“SCP”), in the principal amount of $1,756,646, bearing interest of 9% per year and maturing on December 31, 2022. During the year ended September 30, 2022, the maturity of the note was extended to December 31, 2023.

Accrued interest on the note was $4,446 and $4,303 at December 31, 2022 and September 31, 2022, respectively.

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

During the year ended September 30, 2022, the Company also incurred $180,000 of consulting expenses with SCP and paid $195,000. As of September 30, 2022, $82,500 remained unpaid. During the three months ended December 31, 2022, the Company incurred $45,000 of consulting expenses with SCP and paid $127,500. As of December 31, 2022, $0 remains outstanding.   

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Note 5 - Tenant Receivable

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 5. TENANT RECEIVABLE

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 December 31, 2022 and September 30, 2022, the outstanding balance on the note receivable was $31,581 and $43,185, 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. The BASK tenant receivable balance was $242,550 and $251,462 as of December 31, 2022 and September 30, 2022, respectively.

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

3 Months Ended

Dec. 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
	December 31,
	2022		2021
Net income (loss) attributable to common stockholders	$	22,745	$	(533,028	)
Basic weighted average outstanding shares of common stock		24,391,961		24,219,703
Dilutive effects of common share equivalents		-		-
Dilutive weighted average outstanding shares of common stock		24,391,961		24,219,703
Basic and diluted net income (loss) per share of common stock	$	0.00	$	(0.02	)

As of December 31, 2022 we excluded 1,700,000 of stock options, 2,211,650 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 December 31, 2021 we excluded 1,700,000 of stock options, 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.  

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Note 7 - Commitments and Contingencies

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 7.  COMMITMENTS AND CONTINGENCIES

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 property is located approximately 47 miles southeast of Boston. The Company is developing the property as the Massachusetts Medical Center (“MCC”). Plans for the property may include the construction of sustainable greenhouse cultivation and processing facilities that will be leased or sold to Registered Marijuana Dispensaries under the Massachusetts Medical Marijuana Program.

As part of a simultaneous transaction, the Company assigned the property rights to Massachusetts Medical Properties (“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.

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 completed the construction of Building I on the leased land and on September 1, 2019, BASK, commenced its 15-year sublease of Building I which includes an annual base rent of $138,762 plus 15% of BASK’s gross revenues from products produced at the MCC. This sublease income is recorded as Rental income on the Company’s consolidated statements of operations.

As of December 31, 2022, the Company’s right-of-use assets were $6,760,857, the Company’s current maturities of operating lease liabilities were $11,507 and the Company’s noncurrent lease liabilities were $4,213,633. During the three months ended December 31, 2022, the Company had operating cash flows from operating leases of $98,354.

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

	As of December 31, 2022
Weighted average remaining lease term
Operating leases		43.75
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 December 31, 2022 are as follows:

2023		256,123
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		13,318,505
Total lease payments		14,940,628
Less: Interest		(10,715,488	)
	$	4,225,140
Less: operating lease liability, current portion		(11,507	)
Operating lease liability, long term	$	4,213,633

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 $7,500 for the three months ended December 31, 2022 and 2021.

Aggregate rental expense under all leases totaled $120,344 and $114,218 for the three months ended December 31, 2022 and 2021, respectively.

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Note 8 - Stockholders' Equity

3 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8.  STOCKHOLDERS’ EQUITY

Common Stock. There was no common stock activity during the three months ended December 31, 2022. During the three months ended December 31, 2021, the Company issued 195,651 shares of stock for services valued $90,000.

Stock Options. There was no stock option activity during the three months ended December 31, 2022. 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, 2022		1,700,000	$	1.94		3.5	$	-
Outstanding as of December 31, 2022		1,700,000	$	1.94		4.2	$	-
Vested and expected to vest at December 31, 2022		1,700,000	$	1.94		4.2	$	-
Exercisable at December 31, 2022		1,700,000	$	1.94		4.2	$	-

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

Warrants. Warrant activity as of and for the three months ended December 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, 2022		4,026,650			1.21		0.80	$	-
Expired		(1,815,000	)		1.50
Outstanding as of December 31, 2022		2,211,650			1.32		2.10	$	-
Exercisable at December 31, 2022		2,211,650			1.32		2.10	$	-

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Note 9 - Income Taxes

3 Months Ended

Dec. 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 three months ended December 31, 2022 or 2021. 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 December 31, 2022 and September 30, 2022.

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

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Significant Accounting Policies (Policies)

3 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of PresentationThe (a) consolidated balance sheet as of September 30, 2022, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the three months ended December 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 29, 2022. 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 2022 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 income or loss.

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

Restricted CashThe 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:

	December 31, 2022		September 30, 2022
Cash and cash equivalents	$	1,273,317	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,283,284	$	1,351,094

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, netProperty 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:

	December 31, 2022			September 30, 2022
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		(1,460,947	)		(1,348,466	)
Property and equipment, net	$	6,499,480		$	6,611,961

Depreciation expense for the three months ended December 31, 2022 and December 31, 2021 amounted to $112,481.

Lessee, Leases [Policy Text Block]

LeasesEffective 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)

3 Months Ended

Dec. 31, 2022

Notes Tables

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

	December 31, 2022		September 30, 2022
Cash and cash equivalents	$	1,273,317	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,283,284	$	1,351,094

Property, Plant and Equipment [Table Text Block]

	December 31, 2022			September 30, 2022
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		(1,460,947	)		(1,348,466	)
Property and equipment, net	$	6,499,480		$	6,611,961

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Note 3 - Notes Receivable (Tables)

3 Months Ended

Dec. 31, 2022

Notes Tables

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

	December 31, 2022		September 30, 2022
Note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.		31,581		43,185
Total		31,581		43,185

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

3 Months Ended

Dec. 31, 2022

Notes Tables

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

	Three months ended
	December 31,
	2022		2021
Net income (loss) attributable to common stockholders	$	22,745	$	(533,028	)
Basic weighted average outstanding shares of common stock		24,391,961		24,219,703
Dilutive effects of common share equivalents		-		-
Dilutive weighted average outstanding shares of common stock		24,391,961		24,219,703
Basic and diluted net income (loss) per share of common stock	$	0.00	$	(0.02	)

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Note 7 - Commitments and Contingencies (Tables)

3 Months Ended

Dec. 31, 2022

Notes Tables

Lease Related Terms and Discount Rates [Table Text Block]

	As of December 31, 2022
Weighted average remaining lease term
Operating leases		43.75
Weighted average discount rate
Operating leases		7.9	%

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

2023		256,123
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		13,318,505
Total lease payments		14,940,628
Less: Interest		(10,715,488	)
	$	4,225,140
Less: operating lease liability, current portion		(11,507	)
Operating lease liability, long term	$	4,213,633

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Note 8 - Stockholders' Equity (Tables)

3 Months Ended

Dec. 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, 2022		1,700,000	$	1.94		3.5	$	-
Outstanding as of December 31, 2022		1,700,000	$	1.94		4.2	$	-
Vested and expected to vest at December 31, 2022		1,700,000	$	1.94		4.2	$	-
Exercisable at December 31, 2022		1,700,000	$	1.94		4.2	$	-

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, 2022		4,026,650			1.21		0.80	$	-
Expired		(1,815,000	)		1.50
Outstanding as of December 31, 2022		2,211,650			1.32		2.10	$	-
Exercisable at December 31, 2022		2,211,650			1.32		2.10	$	-

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Note 1 - Nature of Business and Basis of Presentation (Details Textual) - USD ($)	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Depreciation, Total	$ 112,481	$ 112,481
Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life	20 years

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Note 1 - Nature of Business and Basis of Presentation - Restricted Cash (Details) - USD ($)	Dec. 31, 2022	Sep. 30, 2022
Cash and cash equivalents	$ 1,273,317	$ 1,341,127
Restricted cash	9,967	9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$ 1,283,284	$ 1,351,094

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Note 1 - Description of Business and Significant Accounting Policies - Property, Plant and Equipment, Net (Details) - USD ($)	Dec. 31, 2022	Sep. 30, 2022
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	(1,460,947)	(1,348,466)
Property and equipment, net	$ 6,499,480	$ 6,611,961

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Note 2 - Going Concern (Details Textual) - USD ($)	Dec. 31, 2022	Sep. 30, 2022	Sep. 30, 2021
Retained Earnings (Accumulated Deficit), Total	$ 19,735,944	$ 19,758,689	$ 19,758,689

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Note 3 - Notes Receivable - Schedule of Notes Receivable (Details) - USD ($)	Dec. 31, 2022	Sep. 30, 2022	Aug. 15, 2018
Note receivable	$ 31,581	$ 43,185
BASK [Member]
Note receivable	$ 31,581	$ 43,185	$ 129,634

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Note 3 - Notes Receivable - Schedule of Notes Receivable (Details) (Parentheticals) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022
Note Receivable, Interest Rate	18.00%	18.00%
Note Receivable, 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	Feb. 28, 2021	Dec. 31, 2022	Dec. 31, 2021	Mar. 31, 2022	Sep. 30, 2022	Sep. 30, 2019	Feb. 12, 2018
Amortization of Debt Discount (Premium)						$ 48,706	$ 25,976
Class of Warrant or Right, Exercise Price of Warrants or Rights						$ 1.32			$ 1.21
Class of Warrant or Right, Outstanding						2,211,650			4,026,650
Notes Payable, Current, Total						$ 4,386,353			$ 4,337,647
Interest Payable, Related Party, Current						4,446			4,303
February 2018 Convertible Notes [Member]
Notes Payable, Current, Total						0			150,000
Unrelated Party [Member] | Promissory Notes [Member]
Average Closing Price per Share				$ 4.00
Average Daily Volume Of Shares Trades				150,000
Payments of Debt Issuance Costs				$ 320,000
Strategic Capital Partners [Member]
Notes Payable, Related Parties										$ 1,756,646
Strategic Capital Partners [Member] | Consulting Services [Member]
Related Party Transaction, Expenses from Transactions with Related Party						45,000			180,000
Related Party Transaction, Amounts of Transaction						127,500			195,000
Due to Related Parties, Total						0			82,500
Strategic Capital Partners [Member] | Promissory Notes [Member]
Notes Payable, Related Parties						581,646			581,646
Interest Payable, Related Party, Current						4,446			$ 4,303
Strategic Capital Partners [Member] | Promissory Note Two [Member]
Debt Instrument, Interest Rate, Stated Percentage										9.00%
Warrants Issued to Unrelated Parties Lenders [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				600,000
Warrants Issued to Unrelated Parties Lenders [Member] | Promissory Notes [Member]
Class of Warrant or Right, Outstanding				600,000
Warrants and Rights Outstanding				$ 562,762
Warrants to Purchase Additional Shares [Member]
Debt Instrument, Convertible, Conversion Price				$ 1.50
Warrants Issued to Placement Agent [Member] | Promissory Notes [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				48,000
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 1.50
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
Unrelated Party [Member] | Promissory Notes [Member]
Proceeds from Issuance of Long-Term Debt, Total		$ 500,000
Amortization of Debt Discount (Premium)						48,706	$ 25,976
Debt Instrument, Unamortized Discount, Total				$ 52,392		113,647
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

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Note 5 - Tenant Receivable (Details Textual) - USD ($)	Jul. 26, 2019	Aug. 15, 2018	Dec. 31, 2022	Sep. 30, 2022
Note receivable			$ 31,581	$ 43,185
Note Receivable, Interest Rate			18.00%	18.00%
Tenant Receivable, Current			$ 242,550	$ 251,462
BASK [Member]
Note receivable		$ 129,634	31,581	43,185
Interest Receivable		$ 44,517
Note Receivable, Term		5 years
Note Receivable, Interest Rate		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			$ 242,550	$ 251,462

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Note 6 - Income (Loss) Per Share (Details Textual) - shares	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,700,000	1,700,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,211,650	7,666,650
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	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
	Dec. 31, 2022	Dec. 31, 2021
Net income (loss)	$ 22,745	$ (533,028)
Weighted average common shares outstanding (in shares)	24,391,961	24,219,703
Dilutive effects of common share equivalents (in shares)	0	0
Dilutive weighted average outstanding shares of common stock (in shares)	24,391,961	24,219,703
Basic and diluted income (loss) per common share (in dollars per share)	$ 0.00	$ (0.02)

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Note 7 - Commitments and Contingencies (Details Textual)				3 Months Ended
	Sep. 01, 2021 USD ($)	Sep. 01, 2019	Oct. 17, 2016 USD ($) a	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2022 USD ($)	Oct. 01, 2019 USD ($)
Operating Lease, Right-of-Use Asset				$ 6,760,857		$ 6,778,085	$ 6,980,957
Operating Lease, Liability, Total				4,225,140			4,256,869
Operating Lease, Liability, Current				11,507		11,283
Operating Lease, Liability, Noncurrent				4,213,633		$ 4,216,596
Operating Cash Flows from Operating Leases				98,354
Operating Lease, Expense				120,344	$ 114,218
Office Space in Denver, CO [Member]
Operating Leases, Monthly Payment				2,500
Operating Lease, Expense				$ 7,500	$ 7,500
BASK [Member]
Lessee, Operating Sublease, Term (Year)		15 years
Sublease Income	$ 138,762
Lessee, Operating Sublease, Percentage of Gross Revenues		15.00%
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			10 years
Sale Leaseback Transaction, Monthly Rental Payments			$ 30,000
Sale Leaseback Transaction, Monthly Rental Payments, Per Square Foot			0.38
Sale Leaseback Transaction, Monthly Rental Payments, Percentage of Gross Monthly Sales			1.50%
Sale Leaseback Transaction, Monthly Rental Payments, Adjustment Period			5 years
Sale Leaseback to MMP [Member] | Accounting Standards Update 2016-02 [Member]
Prepaid Rent							$ 2,724,088
Massachusetts Land Purchase [Member]
Area of Land (Acre) | a			52.6

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Note 7 - Commitments and Contingencies - Lease Related Terms and Discount Rates (Details)	Mar. 31, 2022
Operating leases (Year)	43 years 9 months
Operating leases	7.90%

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Note 7 - Commitments and Contingencies - Future Rental Payments Under Operating Leases (Details) - USD ($)	Dec. 31, 2022	Sep. 30, 2022	Oct. 01, 2019
2023	$ 256,123
2024	341,500
2025	341,500
2026	341,500
2027	341,500
Thereafter	13,318,505
Total lease payments	14,940,628
Less: Interest	(10,715,488)
Operating Lease, Liability, Total	4,225,140		$ 4,256,869
Less: operating lease liability, current portion	(11,507)	$ (11,283)
Operating lease liability, long term	$ 4,213,633	$ 4,216,596

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Note 8 - Stockholders' Equity (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Stock Issued During Period, Shares, Issued for Services			195,651
Stock Issued During Period, Value, Issued for Services			$ 90,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Expense	$ 119,346	$ 0	$ 119,346

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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 2 months 12 days	3 years 6 months
Outstanding, weighted average exercise price (in dollars per share)	$ 1.94
Outstanding, weighted average contractual term (Year)	4 years 2 months 12 days
Vested and expected to vest, weighted average contractual term (Year)	4 years 2 months 12 days

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Note 8 - Stockholders' Equity - Warrant Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022
Outstanding, warrants (in shares)	4,026,650
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 1.21
Outstanding, warrants, weighted average remaining contract term (Year)	2 years 1 month 6 days	9 months 18 days
Expired, warrants (in shares)	(1,815,000)
Expired, warrants, weighted average exercise price (in dollars per share)	$ 1.50
Outstanding, warrants (in shares)	2,211,650	4,026,650
Outstanding, warrants, weighted average exercise price (in dollars per share)	$ 1.32	$ 1.21
Exercisable, warrants (in shares)	2,211,650
Exercisable, warrants, weighted average exercise price (in dollars per share)	$ 1.32
Exercisable, warrants, weighted average remaining contract term (Year)	2 years 1 month 6 days

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Note 9 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Expense (Benefit), Total	$ 0	$ 0