10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2023

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 April 28, 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 March 31, 2023 and September 30, 2022	3
	Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2023 and 2022	4
	Consolidated Statements of Changes in Stockholders' Equity for the Six Months Ended March 31, 2023 and 2022	5
	Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2023 and 2022	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	17
PART II OTHER INFORMATION
Item 6.	Exhibits	18
SIGNATURES		19

2

PART I:  FINANCIAL INFORMATION

ITEM 1.      UNAUDITED FINANCIAL STATEMENTS

AMERICANN, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	March 31, 2023			September 30, 2022
Assets
Current Assets:
Cash and cash equivalents	$	1,252,871		$	1,341,127
Restricted cash		9,967			9,967
Tenant receivable		267,655			251,462
Prepaid expenses and other current assets		33,333			62,766
Note receivable		21,468			43,185
Total current assets		1,585,294			1,708,507
Construction in progress		371,682			338,977
Property and Equipment, net		6,586,167			6,611,961
Operating lease - right-of-use asset		6,743,575			6,778,085
Total assets	$	15,286,718		$	15,437,530
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	85,188		$	193,170
Accounts payable - related party		-			82,500
Interest payable (including $0 and $4,303 to related parties)		42,042			53,964
Other payables		8,957			8,612
Operating lease liability, short term		11,735			11,283
Notes payable (net of unamortized discounts of $69,491 and $162,353)		4,435,059			4,337,647
Notes payable		-			150,000
Total current liabilities		4,582,981			4,837,176
Note payable - related party		581,646			581,646
Operating lease liability, long term		4,210,612			4,216,596
Total liabilities		9,375,239			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 March 31, 2023 and September 30, 2022		2,439			2,439
Additional paid in capital		25,558,362			25,558,362
Accumulated deficit		(19,649,322	)		(19,758,689	)
Total stockholders' equity		5,911,479			5,802,112
Total liabilities and stockholders' equity	$	15,286,718		$	15,437,530

See accompanying notes to unaudited consolidated financial statements.

3

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Six months Ended March 31,						Three months Ended March 31,
	2023			2022			2023			2022
Rental income	$	1,483,172			911,047		$	748,406			667,366
Rental income - related party		-			407,264			-			-
Cost of revenues		13,615			21,950			-			10,500
Gross profit		1,469,557			1,296,361			748,406			656,866
Operating expenses:
Advertising and marketing		5,371			23,138			3,953			10,171
Professional fees		203,852			211,236			83,339			86,177
General and administrative expenses		783,263			1,245,489			391,957			375,401
Total operating expenses		992,486			1,479,863			479,249			471,749
Income (loss) from operations		477,071			(183,502	)		269,157			185,117
Other income (expense):
Interest income		2,796			6,680			1,133			3,119
Interest expense		(370,500	)		(305,864	)		(183,668	)		(151,089	)
Interest expense - related party		-			(26,102	)		-			(12,907	)
Total other income (expense)		(367,704	)		(325,286	)		(182,535	)	$	(160,877	)
Net income (loss)	$	109,367		$	(508,788	)	$	86,622		$	24,240
Basic and diluted income (loss) per common share	$	0.00		$	(0.02	)	$	0.00		$	0.00
Weighted average common shares outstanding		24,391,961			24,304,886			24,391,961			24,391,961

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		-	$	-		24,196,310	$	2,420	$	25,093,435	$	(19,585,445	)	$	5,510,410
Net loss		-		-		-		-		-		(533,028	)		(533,028	)
Stock issued for services		-		-		195,651		19		89,981		-			90,000
Extension of warrants		-		-		-		-		374,946		-			374,946
Balances, December 31, 2021		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(20,118,473	)	$	5,442,328
Net loss											$	24,240			24,240
Balances, March 31, 2022		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(20,094,233	)	$	5,466,568
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
Net income		-		-		-		-		-		86,622			86,622
Balances, March 31, 2023		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(19,649,322	)	$	5,911,479

See accompanying notes to unaudited consolidated financial statements. 

5

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net income (loss)	$	109,367		$	(508,788	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		225,794			224,961
Amortization of right of use assets		34,510			34,093
Stock based compensation and warrants revaluation expense		-			374,946
Stock issued for services		-			90,000
Amortization of debt discount		97,412			51,953
Changes in operating assets and liabilities:
Tenant receivable		(16,193	)		-
Tenant receivable - related party		-			18,689
Prepaid expenses		29,433			(20,363	)
Accounts payable and accrued expenses		(107,982	)		20,379
Operating lease liability		(5,532	)		(5,113	)
Accounts payable - related party		(82,500	)		(15,000	)
Interest payable		(11,922	)		(4,759	)
Interest payable - related party		-			143
Other payables		345			(6,042	)
Net cash flows provided byoperations		272,732			255,099
Cash flows from investing activities:
Additions to construction in progress		(32,705	)		(156,483	)
Additions to property and equipment		(200,000	)		-
Payments received on notes receivable		21,717			19,854
Net cash flows (used in) investing activities		(210,988	)		(136,629	)
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		(88,256	)		118,470
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	$	1,262,838		$	824,839
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$	285,010		$	284,628
Cash paid for income taxes	$	-		$	-

See accompanying notes to unaudited consolidated financial statements.   

6

AMERICANN, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

AmeriCann, Inc. ("the Company", “we”, “our” or "the Issuer") was organized under the laws of the State of Delaware on June 25, 2010. The Company 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 six months ended March 31, 2023 and 2022, 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:

	March 31, 2023		September 30, 2022
Cash and cash equivalents	$	1,252,871	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,262,838	$	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:

	March 31, 2023			September 30, 2022
Buildings and improvements	$	7,808,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,160,427			7,960,427
Accumulated depreciation		(1,574,260	)		(1,348,466	)
Property and equipment, net	$	6,586,167		$	6,611,961

Depreciation expense for the six months ended March 31, 2023 and March 31, 2022 amounted to $225,794 and $224,961.

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 $19,649,322 and $19,758,689 at March 31, 2023 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 March 31, 2023 and September 30, 2022, consisted of the following:

	March 31, 2023		September 30, 2022
Note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.	$	21,468	$	43,185
Total	$	21,468	$	43,185

NOTE 4.  NOTES PAYABLE

Unrelated

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

On August 25, 2020, the Company borrowed $153,000 from an unrelated party. The loan was unsecured, had an interest rate of 10% per year and was due and payable on August 25, 2021. In February 2021, the Company paid off the loan principal balance of $153,000 and paid a prepayment fee of $47,941. The Company incurred debt issuance costs of $3,000 which was recorded as a debt discount. Amortization expense related to the debt discount was $0 during the six months ended March 31, 2023, and March 31, 2022.

On August 2, 2019 the Company secured a $4,000,000 investment from an unrelated third party in the form of a loan. The loan was evidenced by a note which 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 March 31, 2023, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $64,941. 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 $97,412 and $51,953 for the six months ended March 31, 2023 and 2022, 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 March 31, 2023 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 $0 and $4,303 at March 31, 2023 and September 30, 2022, respectively.

At March 31, 2023 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 six months ended March 31, 2023, the Company incurred $90,000 of consulting expenses with SCP and paid $172,500. As of March 31, 2023, $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 March 31, 2023 and September 30, 2022, the outstanding balance on the note receivable was $21,468 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 from products produced at the MCC. The BASK tenant receivable balance was $267,655 and $251,462 as of March 31, 2023 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				Six months ended
	March 31,				March 31,
	2023		2022		2023		2022
Net income (loss) attributable to common stockholders	$	86,622	$	24,240	$	109,367	$	(508,788	)
Basic weighted average outstanding shares of common stock		24,391,961		24,391,961		24,391,961		24,304,886
Dilutive effects of common share equivalents		-		-		-		-
Dilutive weighted average outstanding shares of common stock		24,391,961		24,391,961		24,391,961		24,304,886
Basic and diluted net income (loss) per share of common stock	$	0.00	$	0.00	$	0.00	$	(0.02	)

As of March 31, 2023 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 March 31, 2022 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 Center (“MCC”). Plans for the property 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 March 31, 2023, the Company’s right-of-use assets were $6,743,575, the Company’s current maturities of operating lease liabilities were $11,735 and the Company’s noncurrent lease liabilities were $4,210,612. During the six months ended March 31, 2023, the Company had operating cash flows from operating leases of $196,708.

11

The table below presents lease related terms and discount rates as of March 31, 2023.

	As of March 31, 2023
Weighted average remaining lease term
Operating leases		43.50
Weighted average discount rate
Operating leases		7.9	%

The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of March 31, 2023 are as follows:

2023		170,747
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		13,318,505
Total lease payments		14,855,252
Less: Interest		(10,632,905	)
	$	4,222,347
Less: operating lease liability, current portion		(11,735	)
Operating lease liability, long term	$	4,210,612

Office space

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

Lease expense for office space was $15,000 for the six months ended March 31, 2023 and 2022.

Aggregate rental expense under all leases totaled $240,688 and $234,561 for the six months ended March 31, 2023 and 2022, respectively.

12

NOTE 8.  STOCKHOLDERS’ EQUITY

Common Stock. There was no common stock activity during the six months ended March 31, 2023.

Stock Options. There was no stock option activity during the six months ended March 31, 2023.

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 March 31, 2023		1,700,000	$	1.94		3.9	$	-
Vested and expected to vest at March 31, 2023		1,700,000	$	1.94		3.9	$	-
Exercisable at March 31, 2023		1,700,000	$	1.94		3.9	$	-

Stock option-based compensation expense associated with stock options was $0 and $119,346 for the six months ended March 31, 2023 and 2022, respectively.

Warrants. Warrant activity as of and for the three months ended March 31, 2023 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 March 31, 2023		2,211,650			1.32		1.60	$	-
Exercisable at March 31, 2023		2,211,650			1.32		1.60	$	-

NOTE 9. INCOME TAXES

We did not record any income tax expense or benefit for the six months ended March 31, 2023 or 2022. We increased our valuation allowance and reduced our net deferred tax assets to zero. Our assessment of the realization of our deferred tax assets has not changed, and as a result we continue to maintain a full valuation allowance for our net deferred assets as of March 31, 2023 and September 30, 2022.

As of March 31, 2023, 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 operates 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 over 800,000 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 project, Building 1, a 30,000 square foot cultivation and processing facility, is fully-operational and is currently 100% leased by a vertically-integrated Massachusetts cannabis company. AmeriCann generates revenue through lease arrangements with the operators that includes base rent and royalty payments of 15% of gross revenue generated from products produced at the MCC.

The increase in Operating Revenue for the quarter ending March 31, 2023 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 March 31, 2023, increased approximately 12% from the quarter ended March 31, 2022.

● 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.

● The cannabis market in Massachusetts generated $1.76 billion in total sales during 2022 which was an increase of over 8.5% from the prior year.

● 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 March 31, 2023 and 2022, we generated $748,406 and $667,366 in revenue, respectively. During the six months ended March 31, 2023 and 2022, we generated $1,483,172 and $1,318,311 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.

Cost of Revenues

During the three months ended March 31, 2023 and 2022, we incurred $0 and $10,500 of costs of revenue, respectively. During the six months ended March 31, 2023 and 2022, we incurred $13,615 and $21,950 of cost of revenue, respectively. The decrease in cost is due to conclusion of a facilities maintenance agreement.

Advertising and Marketing Expenses

Advertising and marketing expenses were $3,953 and $10,171 for the three months ended March 31, 2023 and 2022, respectively. During the six months ended March 31, 2023 and 2022, the advertising and marketing expenses were $5,371 and $23,138, respectively. The decrease is due to lower social media and marketing expenses in 2023.

Professional Fees  

Professional fees were $83,339 and $86,177 for the three months ended March 31, 2023 and 2022, respectively. During the six months ended March 31, 2023 and 2022, the professional fees were $203,852 and $211,236, respectively. The decrease is primarily due to aa decrease in legal fees.

General and Administrative Expenses

General and administrative expenses were $391,957 and $375,401 for the three months ended March 31, 2023 and 2022, respectively. The increase is primarily due to increased property taxes. During the six months ended March 31, 2023 and 2022, the general and administrative expenses were $783,263 and $1,245,489, respectively. The decrease is primarily due to stock option compensation expense in 2022.

Interest Income

Interest income was $1,133 and $3,119 for the three months ended March 31, 2023 and 2022, respectively.  During the six months ended March 31, 2023 and 2022, the interest income was $2,796 and $6,680, respectively. The decrease is a result of a decline in the principal balance of the BASK note receivable.

Interest Expense

Interest expense was $183,668 and $163,996 for the three months ended March 31, 2023 and 2022, respectively. The increase is primarily attributable to amortization of debt discounts. During the six months ended March 31, 2023 and 2022, the interest expense was $370,500 and $331,966, respectively.

Net Operating Income/Loss 

We had a net income of $86,622 and $24,240 for the three months ended March 31, 2023 and 2022, respectively. We had a net income of $109,367 and a net loss of $ (508,788) for the six months ended March 31, 2023 and 2022, respectively. The increase in net income is attributed primarily 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 $19,649,322 and $19,758,689 at March 31, 2023 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 six months ended March 31, 2023, our net cash flows provided by operations were $272,732 as compared to net cash flows provided by operations of $255,099 for the six months ended March 31, 2022. The increase is primarily due to timing of working capital payments, and stock-based compensation expense during the six months ended March 31, 2022.

Cash flows used by investing activities were $(210,988) and $(136,629) for the six months ended March 31, 2023 and 2022, respectively, consisting of payments received on notes receivable offset by additions to property and equipment and construction in progress.

Cash flows used by financing activities were $150,000 and $0 for the six months ended March 31, 2023 and 2022, respectively, consisting of principal payments on notes payable.

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

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2023, 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 March 31, 2023 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.

17

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).

18

SIGNATURES

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

	AMERICANN, INC.
Dated: May 11, 2023	By:	/s/ Timothy Keogh
		Timothy Keogh
		Principal Executive Officer
	By:	/s/ Benjamin Barton
		Benjamin Barton
		Principal Financial and Accounting Officer

19

EX-31.1

Exhibit 31.1

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

I, Timothy Keogh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 of AmeriCann, Inc.;

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

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

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

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

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

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

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

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

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

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

Date: May 11, 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 March 31, 2023 of AmeriCann, Inc.;

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

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

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

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

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

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

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

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

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

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

Date: May 11, 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 March 31, 2023 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, Timothy Keogh, principal executive officer of the Company, and Benjamin Barton, principal financial officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

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

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

Dated May 11, 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
	Mar. 31, 2023	Apr. 28, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
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	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Assets
Cash and cash equivalents	$ 1,252,871	$ 1,341,127
Restricted cash	9,967	9,967
Tenant receivable	267,655	251,462
Prepaid expenses and other current assets	33,333	62,766
Note receivable	21,468	43,185
Total current assets	1,585,294	1,708,507
Operating lease - right-of-use asset	6,743,575	6,778,085
Total assets	15,286,718	15,437,530
Current Liabilities:
Accounts payable and accrued expenses	85,188	193,170
Interest payable (including $0 and $4,303 to related parties)	42,042	53,964
Other payables	8,957	8,612
Operating lease liability, short term	11,735	11,283
Notes payable (net of unamortized discounts of $69,491 and $162,353)	4,435,059	4,337,647
Total current liabilities	4,582,981	4,837,176
Operating lease liability, long term	4,210,612	4,216,596
Total liabilities	9,375,239	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 March 31, 2023 and September 30, 2022	2,439	2,439
Additional paid in capital	25,558,362	25,558,362
Accumulated deficit	(19,649,322)	(19,758,689)
Total stockholders' equity	5,911,479	5,802,112
Total liabilities and stockholders' equity	15,286,718	15,437,530
February 2018 Convertible Notes [Member]
Current Liabilities:
Notes payable (net of unamortized discounts of $69,491 and $162,353)	0	150,000
Related Party [Member]
Current Liabilities:
Accounts payable - related party	0	82,500
Note payable - related party	581,646	581,646
Construction in Progress [Member]
Assets
Construction in progress	371,682	338,977
Property Plant and Equipment Excluding Construction in Progress [Member]
Assets
Construction in progress	$ 6,586,167	$ 6,611,961

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Interest Payable, Related Party, Current	$ 0	$ 4,303
Note payable, discount, noncurrent	$ 69,491	$ 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 (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, Outstanding, Ending Balance (in shares)	24,391,961	24,391,961
Common Stock, Shares, Issued (in shares)	24,391,961	24,391,961

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022
Rental income	$ 748,406	$ 667,366	$ 1,483,172	$ 911,047
Rental income - related party	0	0	0	407,264
Cost of revenues	0	10,500	13,615	21,950
Gross profit	748,406	656,866	1,469,557	1,296,361
Operating expenses:
Advertising and marketing	3,953	10,171	5,371	23,138
Professional fees	83,339	86,177	203,852	211,236
General and administrative expenses	391,957	375,401	783,263	1,245,489
Total operating expenses	479,249	471,749	992,486	1,479,863
Income (loss) from operations	269,157	185,117	477,071	(183,502)
Other income (expense):
Interest income	1,133	3,119	2,796	6,680
Total other income (expense)	(182,535)	(160,877)	(367,704)	(325,286)
Net income (loss)	$ 86,622	$ 24,240	$ 109,367	$ (508,788)
Basic and diluted income (loss) per common share (in dollars per share)	$ 0.00	$ 0.00	$ 0.00	$ (0.02)
Weighted average common shares outstanding (in shares)	24,391,961	24,391,961	24,391,961	24,304,886
Nonrelated Party [Member]
Other income (expense):
Interest expense	$ (183,668)	$ (151,089)	$ (370,500)	$ (305,864)
Related Party [Member]
Other income (expense):
Interest expense	$ 0	$ (12,907)	$ 0	$ (26,102)

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Sep. 30, 2021	0	24,196,310
Balances, September 30, 2021 at Sep. 30, 2021		$ 2,420	$ 25,093,435	$ (19,585,445)	$ 5,510,410
Net income (loss)	$ 0	$ 0	0	(533,028)	(533,028)
Stock issued for services (in shares)	0	195,651
Stock issued for services	$ 0	$ 19	89,981	0	90,000
Extension of warrants	$ 0	$ 0	374,946	0	374,946
Balances (in shares) at Dec. 31, 2021	0	24,391,961
Balances, December 31, 2021 at Dec. 31, 2021	$ 0	$ 2,439	25,558,362	(20,118,473)	5,442,328
Balances (in shares) at Sep. 30, 2021	0	24,196,310
Balances, September 30, 2021 at Sep. 30, 2021		$ 2,420	25,093,435	(19,585,445)	5,510,410
Net income (loss)					(508,788)
Balances (in shares) at Mar. 31, 2022	0	24,391,961
Balances, December 31, 2021 at Mar. 31, 2022	$ 0	$ 2,439	25,558,362	(20,094,233)	5,466,568
Balances (in shares) at Dec. 31, 2021	0	24,391,961
Balances, September 30, 2021 at Dec. 31, 2021	$ 0	$ 2,439	25,558,362	(20,118,473)	5,442,328
Net income (loss)				24,240	24,240
Balances (in shares) at Mar. 31, 2022	0	24,391,961
Balances, December 31, 2021 at Mar. 31, 2022	$ 0	$ 2,439	25,558,362	(20,094,233)	5,466,568
Balances (in shares) at Sep. 30, 2022	0	24,391,961
Balances, September 30, 2021 at Sep. 30, 2022	$ 0	$ 2,439	25,558,362	(19,758,689)	5,802,112
Net income (loss)	$ 0	$ 0	0	22,745	22,745
Balances (in shares) at Dec. 31, 2022	0	24,391,961
Balances, December 31, 2021 at Dec. 31, 2022	$ 0	$ 2,439	25,558,362	(19,735,944)	5,824,857
Balances (in shares) at Sep. 30, 2022	0	24,391,961
Balances, September 30, 2021 at Sep. 30, 2022	$ 0	$ 2,439	25,558,362	(19,758,689)	5,802,112
Net income (loss)					109,367
Balances (in shares) at Mar. 31, 2023	0	24,391,961
Balances, December 31, 2021 at Mar. 31, 2023	$ 0	$ 2,439	25,558,362	(19,649,322)	5,911,479
Balances (in shares) at Dec. 31, 2022	0	24,391,961
Balances, September 30, 2021 at Dec. 31, 2022	$ 0	$ 2,439	25,558,362	(19,735,944)	5,824,857
Net income (loss)	$ 0	$ 0	0	86,622	86,622
Balances (in shares) at Mar. 31, 2023	0	24,391,961
Balances, December 31, 2021 at Mar. 31, 2023	$ 0	$ 2,439	$ 25,558,362	$ (19,649,322)	$ 5,911,479

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income (loss)	$ 109,367	$ (508,788)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	225,794	224,961
Amortization of right of use assets	34,510	34,093
Stock based compensation and warrants revaluation expense	0	374,946
Stock issued for services	0	90,000
Amortization of debt discount	97,412	51,953
Changes in operating assets and liabilities:
Prepaid expenses	29,433	(20,363)
Accounts payable and accrued expenses	(107,982)	20,379
Operating lease liability	(5,532)	(5,113)
Other payables	345	(6,042)
Net cash flows provided byoperations	272,732	255,099
Cash flows from investing activities:
Additions to construction in progress	(32,705)	(156,483)
Additions to property and equipment	(200,000)	0
Payments received on notes receivable	21,717	19,854
Net cash flows (used in) investing activities	(210,988)	(136,629)
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	(88,256)	118,470
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	1,262,838	824,839
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	285,010	284,628
Cash paid for income taxes	0	0
Nonrelated Party [Member]
Changes in operating assets and liabilities:
Tenant receivable	(16,193)	0
Interest payable	(11,922)	(4,759)
Related Party [Member]
Changes in operating assets and liabilities:
Tenant receivable	0	18,689
Accounts payable	(82,500)	(15,000)
Interest payable	$ 0	$ 143

XML

Note 1 - Nature of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2023

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 six months ended March 31, 2023 and 2022, 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:

	March 31, 2023		September 30, 2022
Cash and cash equivalents	$	1,252,871	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,262,838	$	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:

	March 31, 2023			September 30, 2022
Buildings and improvements	$	7,808,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,160,427			7,960,427
Accumulated depreciation		(1,574,260	)		(1,348,466	)
Property and equipment, net	$	6,586,167		$	6,611,961

Depreciation expense for the six months ended March 31, 2023 and March 31, 2022 amounted to $225,794 and $224,961.

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).

XML

Note 2 - Going Concern

3 Months Ended

Mar. 31, 2023

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 $19,649,322 and $19,758,689 at March 31, 2023 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.

XML

Note 3 - Notes Receivable

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

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

NOTE 3. NOTE RECEIVABLE

Notes and other receivables as of March 31, 2023 and September 30, 2022, consisted of the following:

	March 31, 2023		September 30, 2022
Note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.	$	21,468	$	43,185
Total	$	21,468	$	43,185

XML

Note 4 - Notes Payable

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 4.  NOTES PAYABLE

Unrelated

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

On August 25, 2020, the Company borrowed $153,000 from an unrelated party. The loan was unsecured, had an interest rate of 10% per year and was due and payable on August 25, 2021. In February 2021, the Company paid off the loan principal balance of $153,000 and paid a prepayment fee of $47,941. The Company incurred debt issuance costs of $3,000 which was recorded as a debt discount. Amortization expense related to the debt discount was $0 during the six months ended March 31, 2023, and March 31, 2022.

On August 2, 2019 the Company secured a $4,000,000 investment from an unrelated third party in the form of a loan. The loan was evidenced by a note which 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 March 31, 2023, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $64,941. 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 $97,412 and $51,953 for the six months ended March 31, 2023 and 2022, 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 March 31, 2023 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 $0 and $4,303 at March 31, 2023 and September 30, 2022, respectively.

At March 31, 2023 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 six months ended March 31, 2023, the Company incurred $90,000 of consulting expenses with SCP and paid $172,500. As of March 31, 2023, $0 remains outstanding.

XML

Note 5 - Tenant Receivable

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 and September 30, 2022, the outstanding balance on the note receivable was $21,468 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 from products produced at the MCC. The BASK tenant receivable balance was $267,655 and $251,462 as of March 31, 2023 and September 30, 2022, respectively.

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

XML

Note 6 - Income (Loss) Per Share

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 6. INCOME/LOSS PER SHARE

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

	Three months ended				Six months ended
	March 31,				March 31,
	2023		2022		2023		2022
Net income (loss) attributable to common stockholders	$	86,622	$	24,240	$	109,367	$	(508,788	)
Basic weighted average outstanding shares of common stock		24,391,961		24,391,961		24,391,961		24,304,886
Dilutive effects of common share equivalents		-		-		-		-
Dilutive weighted average outstanding shares of common stock		24,391,961		24,391,961		24,391,961		24,304,886
Basic and diluted net income (loss) per share of common stock	$	0.00	$	0.00	$	0.00	$	(0.02	)

As of March 31, 2023 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 March 31, 2022 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.

XML

Note 7 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

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 Center (“MCC”). Plans for the property 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 March 31, 2023, the Company’s right-of-use assets were $6,743,575, the Company’s current maturities of operating lease liabilities were $11,735 and the Company’s noncurrent lease liabilities were $4,210,612. During the six months ended March 31, 2023, the Company had operating cash flows from operating leases of $196,708.

The table below presents lease related terms and discount rates as of March 31, 2023.

	As of March 31, 2023
Weighted average remaining lease term
Operating leases		43.50
Weighted average discount rate
Operating leases		7.9	%

The reconciliation of the maturities of the operating leases to the lease liabilities recorded in the Consolidated Balance Sheet as of March 31, 2023 are as follows:

2023		170,747
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		13,318,505
Total lease payments		14,855,252
Less: Interest		(10,632,905	)
	$	4,222,347
Less: operating lease liability, current portion		(11,735	)
Operating lease liability, long term	$	4,210,612

Office space

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

Lease expense for office space was $15,000 for the six months ended March 31, 2023 and 2022.

Aggregate rental expense under all leases totaled $240,688 and $234,561 for the six months ended March 31, 2023 and 2022, respectively.

XML

Note 8 - Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Equity [Text Block]

NOTE 8.  STOCKHOLDERS’ EQUITY

Common Stock. There was no common stock activity during the six months ended March 31, 2023.

Stock Options. There was no stock option activity during the six months ended March 31, 2023.

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 March 31, 2023		1,700,000	$	1.94		3.9	$	-
Vested and expected to vest at March 31, 2023		1,700,000	$	1.94		3.9	$	-
Exercisable at March 31, 2023		1,700,000	$	1.94		3.9	$	-

Stock option-based compensation expense associated with stock options was $0 and $119,346 for the six months ended March 31, 2023 and 2022, respectively.

Warrants. Warrant activity as of and for the three months ended March 31, 2023 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 March 31, 2023		2,211,650			1.32		1.60	$	-
Exercisable at March 31, 2023		2,211,650			1.32		1.60	$	-

XML

Note 9 - Income Taxes

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 9. INCOME TAXES

We did not record any income tax expense or benefit for the six months ended March 31, 2023 or 2022. We increased our valuation allowance and reduced our net deferred tax assets to zero. Our assessment of the realization of our deferred tax assets has not changed, and as a result we continue to maintain a full valuation allowance for our net deferred assets as of March 31, 2023 and September 30, 2022.

As of March 31, 2023, we did not have any unrecognized tax benefits. There were no significant changes to the calculation since September 30, 2022.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

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 six months ended March 31, 2023 and 2022, 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:

	March 31, 2023		September 30, 2022
Cash and cash equivalents	$	1,252,871	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,262,838	$	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:

	March 31, 2023			September 30, 2022
Buildings and improvements	$	7,808,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,160,427			7,960,427
Accumulated depreciation		(1,574,260	)		(1,348,466	)
Property and equipment, net	$	6,586,167		$	6,611,961

Depreciation expense for the six months ended March 31, 2023 and March 31, 2022 amounted to $225,794 and $224,961.

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).

XML

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

3 Months Ended

Mar. 31, 2023

Notes Tables

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

	March 31, 2023		September 30, 2022
Cash and cash equivalents	$	1,252,871	$	1,341,127
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	1,262,838	$	1,351,094

Property, Plant and Equipment [Table Text Block]

	March 31, 2023			September 30, 2022
Buildings and improvements	$	7,808,087		$	7,608,087
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,160,427			7,960,427
Accumulated depreciation		(1,574,260	)		(1,348,466	)
Property and equipment, net	$	6,586,167		$	6,611,961

XML

Note 3 - Notes Receivable (Tables)

3 Months Ended

Mar. 31, 2023

Notes Tables

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

	March 31, 2023		September 30, 2022
Note receivable from BASK, interest rate of 18.0%; monthly principal and interest payments of $4,422, maturing in 2023.	$	21,468	$	43,185
Total	$	21,468	$	43,185

XML

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

3 Months Ended

Mar. 31, 2023

Notes Tables

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

	Three months ended				Six months ended
	March 31,				March 31,
	2023		2022		2023		2022
Net income (loss) attributable to common stockholders	$	86,622	$	24,240	$	109,367	$	(508,788	)
Basic weighted average outstanding shares of common stock		24,391,961		24,391,961		24,391,961		24,304,886
Dilutive effects of common share equivalents		-		-		-		-
Dilutive weighted average outstanding shares of common stock		24,391,961		24,391,961		24,391,961		24,304,886
Basic and diluted net income (loss) per share of common stock	$	0.00	$	0.00	$	0.00	$	(0.02	)

XML

Note 7 - Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Notes Tables

Lease Related Terms and Discount Rates [Table Text Block]

	As of March 31, 2023
Weighted average remaining lease term
Operating leases		43.50
Weighted average discount rate
Operating leases		7.9	%

Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

2023		170,747
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		13,318,505
Total lease payments		14,855,252
Less: Interest		(10,632,905	)
	$	4,222,347
Less: operating lease liability, current portion		(11,735	)
Operating lease liability, long term	$	4,210,612

XML

Note 8 - Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31, 2023		1,700,000	$	1.94		3.9	$	-
Vested and expected to vest at March 31, 2023		1,700,000	$	1.94		3.9	$	-
Exercisable at March 31, 2023		1,700,000	$	1.94		3.9	$	-

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

						Weighted
				Weighted		Average
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(Years)		Value
Outstanding as of September 30, 2022		4,026,650			1.21		0.80	$	-
Expired		(1,815,000	)		1.50
Outstanding as of March 31, 2023		2,211,650			1.32		1.60	$	-
Exercisable at March 31, 2023		2,211,650			1.32		1.60	$	-

XML

Note 1 - Nature of Business and Basis of Presentation (Details Textual) - USD ($)	6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Depreciation	$ 225,794	$ 224,961
Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life	20 years

XML

Note 1 - Nature of Business and Basis of Presentation - Restricted Cash (Details) - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Cash and cash equivalents	$ 1,252,871	$ 1,341,127
Restricted cash	9,967	9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$ 1,262,838	$ 1,351,094

XML

Note 1 - Description of Business and Significant Accounting Policies - Property, Plant and Equipment, Net (Details) - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Property, plant, and equipment gross	$ 8,160,427	$ 7,960,427
Building and Building Improvements [Member]
Property, plant, and equipment gross	7,808,087	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	(1,574,260)	(1,348,466)
Property and equipment, net	$ 6,586,167	$ 6,611,961

XML

Note 2 - Going Concern (Details Textual) - USD ($)	Mar. 31, 2023	Sep. 30, 2022
Retained Earnings (Accumulated Deficit)	$ 19,649,322	$ 19,758,689

XML

Note 3 - Notes Receivable - Schedule of Notes Receivable (Details) - USD ($)	Mar. 31, 2023	Sep. 30, 2022	Aug. 15, 2018
Note receivable	$ 21,468	$ 43,185
BASK [Member]
Note receivable	$ 21,468	$ 43,185	$ 129,634

XML

Note 3 - Notes Receivable - Schedule of Notes Receivable (Details) (Parentheticals) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2023	Sep. 30, 2022
Note Receivable, Interest Rate	18.00%	18.00%
Note Receivable, Periodic Payment	$ 4,422	$ 4,422

XML

Note 4 - Notes Payable (Details Textual) - USD ($)						1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Oct. 05, 2022	Feb. 25, 2021	Dec. 04, 2020	Aug. 25, 2020	Aug. 02, 2019	Feb. 28, 2021	Mar. 31, 2023	Mar. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2022	Dec. 31, 2022	Dec. 15, 2021	Sep. 30, 2019	Feb. 12, 2018
Amortization of Debt Discount (Premium)									$ 97,412	$ 51,953
Class of Warrant or Right, Exercise Price of Warrants or Rights							$ 1.32		$ 1.32		$ 1.21
Class of Warrant or Right, Outstanding							2,211,650		2,211,650		4,026,650
Notes Payable, Current							$ 4,435,059		$ 4,435,059		$ 4,337,647
Interest Payable, Current							42,042		42,042		53,964
Operating Expenses							479,249	$ 471,749	992,486	1,479,863
Related Party [Member]
Notes Payable, Noncurrent							581,646		581,646		581,646
February 2018 Convertible Notes [Member]
Notes Payable, Current							0		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] | Consulting Services [Member]
Operating Expenses									90,000		180,000
Related Party Transaction, Amounts of Transaction									172,500		195,000
Strategic Capital Partners [Member] | Related Party [Member]
Notes Payable, Current														$ 1,756,646
Strategic Capital Partners [Member] | Related Party [Member] | Consulting Services [Member]
Accounts Payable							0		0		82,500
Strategic Capital Partners [Member] | Promissory Notes [Member] | Related Party [Member]
Interest Payable, Current							0		0		4,303
Notes Payable, Related Parties							581,646		581,646		581,646
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		$ 300,000		$ 153,000	$ 4,000,000
Debt Instrument, Interest Rate, Stated Percentage		11.00%		10.00%	11.00%
Repayments of Long-Term Debt						$ 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			$ 500,000
Amortization of Debt Discount (Premium)									97,412	$ 51,953
Debt Instrument, Unamortized Discount					$ 52,392		64,941		64,941
Notes Payable, Noncurrent							4,500,000		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							$ 0		$ 0		$ 150,000	$ 150,000	$ 150,000
Repayments of Debt	$ 159,140
Interest Payable, Current	$ 9,140

XML

Note 5 - Tenant Receivable (Details Textual) - USD ($)	Jul. 26, 2019	Aug. 15, 2018	Mar. 31, 2023	Sep. 30, 2022
Note receivable			$ 21,468	$ 43,185
Note Receivable, Interest Rate			18.00%	18.00%
Tenant Receivable, Current			$ 267,655	$ 251,462
BASK [Member]
Note receivable		$ 129,634	21,468	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			267,655	251,462
BASK [Member] | Related Party [Member]
Note receivable			$ 21,468	$ 43,185

XML

Note 6 - Income (Loss) Per Share (Details Textual) - shares	6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
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

XML

Note 6 - Income (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended				6 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2023	Mar. 31, 2022
Net income (loss)	$ 86,622	$ 22,745	$ 24,240	$ (533,028)	$ 109,367	$ (508,788)
Weighted average common shares outstanding (in shares)	24,391,961		24,391,961		24,391,961	24,304,886
Dilutive effects of common share equivalents (in shares)	0		0		0	0
Dilutive weighted average outstanding shares of common stock (in shares)	24,391,961		24,391,961		24,391,961	24,304,886
Basic and diluted income (loss) per common share (in dollars per share)	$ 0.00		$ 0.00		$ 0.00	$ (0.02)

XML

Note 7 - Commitments and Contingencies (Details Textual)				6 Months Ended
	Sep. 01, 2021 USD ($)	Sep. 01, 2019	Oct. 17, 2016 USD ($) a	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Oct. 01, 2019 USD ($)
Operating Lease, Right-of-Use Asset				$ 6,743,575		$ 6,778,085	$ 6,980,957
Operating Lease, Liability				4,222,347			4,256,869
Operating Lease, Liability, Current				11,735		11,283
Operating Lease, Liability, Noncurrent				4,210,612		$ 4,216,596
Operating Cash Flows from Operating Leases				196,708
Operating Lease, Expense				240,688	$ 234,561
Office Space in Denver, CO [Member]
Operating Leases, Monthly Payment				2,500
Operating Lease, Expense				$ 15,000	$ 15,000
BASK [Member]
Lessee, Operating Sublease, Term (Year)		15 years
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

XML

Note 7 - Commitments and Contingencies - Lease Related Terms and Discount Rates (Details)	Mar. 31, 2023
Operating leases (Year)	43 years 6 months
Operating leases	7.90%

XML

Note 7 - Commitments and Contingencies - Future Rental Payments Under Operating Leases (Details) - USD ($)	Mar. 31, 2023	Sep. 30, 2022	Oct. 01, 2019
2023	$ 170,747
2024	341,500
2025	341,500
2026	341,500
2027	341,500
Thereafter	13,318,505
Total lease payments	14,855,252
Less: Interest	(10,632,905)
Operating Lease, Liability	4,222,347		$ 4,256,869
Less: operating lease liability, current portion	(11,735)	$ (11,283)
Operating lease liability, long term	$ 4,210,612	$ 4,216,596

XML

Note 8 - Stockholders' Equity (Details Textual) - USD ($)	6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Expense	$ 0	$ 119,346

XML

Note 8 - Stockholders' Equity - Stock Option Activity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2023	Sep. 30, 2022
Exercisable at September 30, 2022 (in shares)	1,700,000	1,700,000
Exercisable at September 30, 2022 (in dollars per share)	$ 1.94	$ 1.94
Exercisable at September 30, 2022 (Year)	3 years 10 months 24 days	3 years 6 months
Outstanding as of March 31, 2023 (in dollars per share)	$ 1.94
Outstanding as of March 31, 2023 (Year)	3 years 10 months 24 days
Vested and expected to vest at March 31, 2023 (Year)	3 years 10 months 24 days

XML

Note 8 - Stockholders' Equity - Warrant Activity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Mar. 31, 2023	Sep. 30, 2022
Outstanding as of September 30, 2022 (in shares)	4,026,650
Outstanding as of September 30, 2022 (in dollars per share)	$ 1.21
Outstanding as of September 30, 2022 (Year)	1 year 7 months 6 days	9 months 18 days
Expired (in shares)	(1,815,000)
Expired (in dollars per share)	$ 1.50
Outstanding as of March 31, 2023 (in shares)	2,211,650	4,026,650
Outstanding as of March 31, 2023 (in dollars per share)	$ 1.32	$ 1.21
Exercisable at March 31, 2023 (in shares)	2,211,650
Exercisable at March 31, 2023 (in dollars per share)	$ 1.32
Exercisable at March 31, 2023 (Year)	1 year 7 months 6 days

XML

Note 9 - Income Taxes (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Expense (Benefit), Total	$ 0	$ 0