10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 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 February 12, 2024, the registrant had 24,391,961 shares of common stock outstanding.

AMERICANN, INC.

FORM 10-Q

TABLE OF CONTENTS

		PAGE NO.
PART I FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements:
	Consolidated Balance Sheets as of December 31, 2023 and September 30, 2023	3
	Consolidated Statements of Operations for the Three Months Ended December 31, 2023 and 2022	4
	Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended December 31, 2023 and 2022	5
	Consolidated Statements of Cash Flows for the Three Months Ended December 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	12
Item 4.	Controls and Procedures	14
PART II OTHER INFORMATION
Item 5.	Other Information	15
Item 6.	Exhibits	15
SIGNATURES		16

PART I:  FINANCIAL INFORMATION

ITEM 1.      UNAUDITED FINANCIAL STATEMENTS

AMERICANN, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	December 31, 2023			September 30, 2023
Assets
Current Assets:
Cash and cash equivalents	$	807,607		$	1,135,006
Restricted cash		9,967			9,967
Tenant receivable		379,064			103,450
Prepaid expenses and other current assets		22,797			23,415
Current portion of note receivable		63,998			62,116
Total current assets		1,283,433			1,333,954
Note receivable		326,157			337,884
Construction in progress		371,682			371,682
Property and Equipment, net		6,286,969			6,402,531
Operating lease - right-of-use asset		6,691,391			6,708,843
Total assets	$	14,959,632		$	15,154,894
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	86,775		$	87,247
Accounts payable - related party		-			15,000
Interest payable		42,042			40,686
Other payables		180			6,365
Operating lease liability, short term		12,446			12,204
Note payable - related party		581,646			581,646
Notes payable (net of unamortized discounts of $0)		4,500,000			4,500,000
Total current liabilities		5,223,089			5,243,148
Operating lease liability, long term		4,201,185			4,204,389
Total liabilities		9,424,274			9,447,537
Commitments and contingencies - see Note 6
Stockholders' Equity:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 24,391,961 shares issued and outstanding as of December 31, 2023 and September 30, 2023		2,439			2,439
Additional paid in capital		25,558,362			25,558,362
Accumulated deficit		(20,025,443	)		(19,853,444	)
Total stockholders' equity		5,535,358			5,707,357
Total liabilities and stockholders' equity	$	14,959,632		$	15,154,894

See accompanying notes to unaudited consolidated financial statements.

3

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended December 31,
	2023			2022
Rental income	$	475,629			734,766
Cost of revenues		780			13,615
Gross profit		474,849			721,151
Operating expenses:
Advertising and marketing		281			1,418
Professional fees		111,851			120,513
General and administrative expenses		403,610			391,306
Total operating expenses		515,742			513,237
(Loss) income from operations		(40,893	)		207,914
Other income (expense):
Interest income		7,951			1,663
Interest expense		(125,862	)		(186,832	)
Interest expense - related party		(13,195	)		-
Total other income (expense)		(131,106	)	$	(185,169	)
Net (loss)/income	$	(171,999	)	$	22,745
Basic and diluted (loss)/income per common share	$	(0.01	)	$	0.00
Weighted average common shares outstanding		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, 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
Balances, September 30, 2023		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(19,853,444	)	$	5,707,357
Net loss		-		-		-		-		-		(171,999	)		(171,999	)
Balances, December 31, 2023		-	$	-		24,391,961	$	2,439	$	25,558,362	$	(20,025,443	)	$	5,535,358

See accompanying notes to unaudited consolidated financial statements. 

5

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended December 31
	2023			2022
Cash flows from operating activities:
Net (loss)/income	$	(171,999	)	$	22,745
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
Depreciation and amortization		115,562			112,481
Amortization of right of use assets		17,452			17,228
Amortization of debt discount		-			48,706
Changes in operating assets and liabilities:
Tenant receivable		(275,614	)		8,912
Prepaid expenses		618			59,433
Accounts payable and accrued expenses		(472	)		(63,328	)
Operating lease liability		(2,962	)		(2,739	)
Accounts payable - related party		(15,000	)		(82,500	)
Interest payable		1,356			(7,476	)
Other payables		(6,185	)		(2,192	)
Net cash flows (used in) provided by operations		(337,244	)		111,270
Cash flows from investing activities:
Additions to construction in progress		-			(40,684	)
Payments received on notes receivable		9,845			11,604
Net cash flows provided by (used in) investing activities		9,845			(29,080	)
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		(327,399	)		(67,810	)
Cash, cash equivalents, and restricted cash at beginning of period		1,144,973			1,351,094
Cash, cash equivalents, and restricted cash at end of period	$	817,574		$	1,283,284
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	$	137,701		$	145,602
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 operates 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, 2023, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the three months ended December 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 22, 2023. 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 the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2023 as reported in the Form 10-K have been omitted.

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

Significant Accounting Policies

Restricted Cash

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

	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	807,607	$	1,135,006
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	817,574	$	1,144,973

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

Property and Equipment, net

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

	December 31, 2023			September 30, 2023
Buildings and improvements	$	7,854,548		$	7,854,548
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,206,888			8,206,888
Accumulated depreciation		(1,919,919	)		(1,804,357	)
Property and equipment, net	$	6,286,969		$	6,402,531

Depreciation expense for the three months ended December 31, 2023 and December 31, 2022 amounted to $115,562 and $112,481.

Leases

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

7

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).

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This may result in the earlier recognition of allowances for losses. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is adopted the new guidance under ASU 2016-13 in the first quarter of fiscal year 2024, and determined that the impact of the adoption on its financial statements is immaterial.

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 $20,025,443 and $19,853,444 at December 31, 2023 and September 30, 2023, 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.

NOTE 3. NOTE RECEIVABLE

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

	December 31, 2023			September 30, 2023
Note receivable from BASK, interest rate of 12.0%; monthly principal and interest payments of $8,898, maturing in 2028.		390,155			400,000
		390,155			400,000
Less: Current portion		(63,998	)		(62,116	)
	$	326,157		$	337,884

NOTE 4.  NOTES PAYABLE

Unrelated

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.

8

On December 4, 2020, the loan was modified and increased by $500,000 and the maturity date of the loan was extended to August 1, 2023. All other provisions of the original loan remained 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.

In July 2023, the maturity date was further extended to December 1, 2023. On November 30, 2023, the maturity of the loan was extended to January 31, 2024. All other provisions of the previously modified 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 $7,500 which was expensed when incurred. On January 31, 2024, the maturity date of the loan was further extended until April 15, 2024. All other provisions of the previously modified loan remain the same.

At December 31, 2023, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $0. 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 $0 and $48,706 for the three months ended December 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 December 31, 2023 and September 30, 2023, the outstanding principal on this note was $0.

BASK. 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. During the three months ended December 31, 2022, the Company received payments of $11,604 on this loan. At December 31, 2023 and September 30, 2023, the outstanding balance on the note receivable was $0.

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 $138,762 and a revenue participation fee equivalent to 15% of BASK’s gross revenues. The BASK tenant receivable balance was $379,064 and $103,450 as of December 31, 2023 and September 30, 2023, respectively.

Related Party

SCP. On September 30, 2019, we entered into an amended note with Strategic Capital Partners, LLC (“SCP”), an entity controlled by Benjamin J. Barton, one of our officers and directors and principal shareholders, 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. In December 2023, the note was further extended to March 31, 2024.

Accrued interest on the note was $0 at December 31, 2023 and September 30, 2023, respectively.

At December 31, 2023 and September 30, 2023, the outstanding principal on this note was $581,646.

During the year ended September 30, 2023, the Company also incurred $180,000 of consulting expenses with SCP and paid $247,500. As of September 30, 2023, $15,000 remained unpaid. During the three months ended December 31, 2023, the Company incurred $45,000 of consulting expenses with SCP and paid $60,000. As of December 31, 2023, $0 remains outstanding.

NOTE 5. INCOME/LOSS PER SHARE

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

	Three months ended
	December 31,
	2023			2022
Net income (loss) attributable to common stockholders	$	(171,999	)	$	22,745
Basic weighted average outstanding shares of common stock		24,391,961			24,391,961
Dilutive effects of common share equivalents		-			-
Dilutive weighted average outstanding shares of common stock		24,391,961			24,391,961
Basic and diluted net income (loss) per share of common stock	$	(0.01	)	$	0.00

As of December 31, 2023 we excluded 1,700,000 of stock options, 2,148,000 of warrants from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive.

As of December 31, 2022 we excluded 1,700,000 of stock options, 2,211,650 of warrants and 100,000 shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive.

9

NOTE 6.  COMMITMENTS AND CONTINGENCIES

Operating Leases

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 from SCP, a related party. See Note 4.

Lease expense for office space was $7,500 for the three months ended December 31, 2023 and 2022.

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 Cannabis 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 for any structure built on the property; or (c) 1.5% of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but not down) every five (5) years by any increase in the Consumer Price Index.

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

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

As of December 31, 2023, the Company’s right-of-use assets were $6,691,391, the Company’s current maturities of operating lease liabilities were $12,446, and the Company’s noncurrent lease liabilities were $4,201,185. During the three months ended December 31, 2023, the Company had operating cash flows from operating leases of $85,375.

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

	As of December 31, 2023
Weighted average remaining lease term
Operating leases		42.70
Weighted average discount rate
Operating leases		7.9	%

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

2023		256,125
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		12,977,000
Total lease payments		14,599,125
Less: Interest		(10,385,494	)
	$	4,213,631
Less: operating lease liability, current portion		(12,446	)
Operating lease liability, long term	$	4,201,185

Aggregate rental expense under all leases totaled $120,344 for the three months ended December 31, 2023 and 2022.

10

NOTE 7.  STOCKHOLDERS’ EQUITY

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

Stock Options. There was no stock option activity during the three months ended December 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, 2023		1,700,000	$	1.94		3.4	$	-
Outstanding as of December 31, 2023		1,700,000	$	1.94		3.2	$	-
Vested and expected to vest at December 31, 2023		1,700,000	$	1.94		3.2	$	-
Exercisable at December 31, 2023		1,700,000	$	1.94		3.2	$	-

Stock option-based compensation expense associated with stock options was $0 for the three months ended December 31, 2023 and 2022.

Warrants. Warrant activity as of and for the three months ended December 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, 2023		2,148,000		1.33		1.13	$	-
Outstanding as of December 31, 2023		2,148,000		1.33		0.88	$	-
Exercisable at December 31, 2023		2,148,000		1.33		0.88	$	-

NOTE 8. INCOME TAXES

We did not record any income tax expense or benefit for the three months ended December 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 tax assets as of December 31, 2023 and September 30, 2023.

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

NOTE 9. SUBSEQUENT EVENTS

On January 31, 2024, the maturity date of the $4,500,000 loan, was extended to April 15, 2024. All other provisions of the original loan remain the same.

11

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, 2023 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 turnover rent (i.e., a revenue participation fee).  

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. 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 may replicate the brands, technology and innovations developed at its MCC project to additional markets.

12

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. 

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

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

RESULTS OF OPERATIONS 

Total Revenues

During the three months ended December 31, 2023 and 2022, we generated $475,629 and $734,766 in revenue, respectively. The decrease in revenue is due to pricing compression of cannabis products in Massachusetts, a decrease in Bask’s retail revenue from products produced at AmeriCann’s building, and a seasonal decrease in wholesale sales of products produced in AmeriCann’s building.

Cost of Revenues

During the three months ended December 31, 2023 and 2022, we incurred $780 and $13,615 of costs 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 $281 and $1,418 for the three months ended December 31, 2023 and 2022, respectively. The decrease is due to lower marketing expenses in 2024.

Professional Fees  

Professional fees were $111,851 and $120,513 for the three months ended December 31, 2023 and 2022, respectively. The decrease is primarily due to a decrease in consulting fees.

General and Administrative Expenses

General and administrative expenses were $403,610 and $391,306 for the three months ended December 31, 2023 and 2022, respectively. The increase is primarily due to increase in licenses and fees.

Interest Income

Interest income was $7,951 and $1,663 for the three months ended December 31, 2023 and 2022, respectively.  The increase is a result of a new note receivable.

Interest Expense

Interest expense was $139,057 and $186,832 for the three months ended December 31, 2023 and 2022, respectively. The decrease is primarily attributable to decrease in amortization of debt discounts.

Net Operating Income/Loss 

We had a net loss of $(171,999) and net income of $22,745 for the three months ended December 31, 2023 and 2022, respectively. The increase in net loss is attributed primarily to the decrease in revenue as a result of pricing compression of cannabis products in Massachusetts. 

13

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 $20,025,443 and $19,853,444 at December 31, 2023 and September 30, 2023, 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 will need to raise additional funds for the expansion of the MCC.  When Management determines expansion opportunities exist the Company may finance construction with cash from operations, a sale-lease-back, refinancing and expand existing debt, issuance of new debt, or sales of equity. 

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

Notes Payable

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

Analysis of Cash Flows 

During the three months ended December 31, 2023, our net cash flows used in operations were $(337,244) as compared to net cash flows provided by operations of $111,270 for the three months ended December 31, 2022. The decrease is primarily due to a decrease in our net income during the three months ended December 31, 2023 and timing of working capital payments.

Cash flows provided by (used in) investing activities were $9,845 and $(29,080) for the three months ended December 31, 2023 and 2022, respectively, consisting of payments received on notes receivable.

Cash flows used in financing activities were $0 and $150,000 for the three months ended December 31, 2023 and 2022, respectively, consisting of principal payments on notes payable in 20022.

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

OFF-BALANCE SHEET ARRANGEMENTS

As of December 31, 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 22, 2023, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective as of September 30, 2023 at the reasonable assurance level, as a result of a material weaknesses primarily related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP, limited or no segregation of duties, and lack of independent directors.

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

Change in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarterly period ended December 31, 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.

14

PART II OTHER INFORMATION

ITEM 5. OTHER INFORMATION

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarterly period ending December 31, 2023.

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).

15

SIGNATURES

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

	AMERICANN, INC.
Dated: February 14, 2024	By:	/s/ Timothy Keogh
		Timothy Keogh
		Principal Executive Officer
	By:	/s/ Benjamin Barton
		Benjamin Barton
		Principal Financial and Accounting Officer

16

EX-31.1

Exhibit 31.1

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

I, Timothy Keogh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended December 31, 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: February 14, 2024

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

EX-31.2

Exhibit 31.2

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

I, Benjamin Barton, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended December 31, 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: February 14, 2024

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

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of AmeriCann, Inc. (the “Company”) for the quarter ended December 31, 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 February 14, 2024

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

XML

Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2023	Feb. 12, 2024
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 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	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Dec. 31, 2023	Sep. 30, 2023
Assets
Cash and cash equivalents	$ 807,607	$ 1,135,006
Restricted cash	9,967	9,967
Tenant receivable	379,064	103,450
Prepaid expenses and other current assets	22,797	23,415
Current portion of note receivable	63,998	62,116
Total current assets	1,283,433	1,333,954
Note receivable	326,157	337,884
Operating lease - right-of-use asset	6,691,391	6,708,843
Total assets	14,959,632	15,154,894
Current Liabilities:
Accounts payable and accrued expenses	86,775	87,247
Interest Payable, Current	42,042	40,686
Other payables	180	6,365
Operating lease liability, short term	12,446	12,204
Notes payable (net of unamortized discounts of $0)	4,500,000	4,500,000
Total current liabilities	5,223,089	5,243,148
Operating lease liability, long term	4,201,185	4,204,389
Total liabilities	9,424,274	9,447,537
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.0001 par value; 100,000,000 shares authorized; 24,391,961 shares issued and outstanding as of December 31, 2023 and September 30, 2023	2,439	2,439
Additional paid in capital	25,558,362	25,558,362
Accumulated deficit	(20,025,443)	(19,853,444)
Total stockholders' equity	5,535,358	5,707,357
Total liabilities and stockholders' equity	14,959,632	15,154,894
Related Party [Member]
Current Liabilities:
Accounts payable - related party	0	15,000
Note payable - related party	581,646	581,646
Construction in Progress [Member]
Assets
Construction in progress	371,682	371,682
Property Plant and Equipment Excluding Construction in Progress [Member]
Assets
Construction in progress	$ 6,286,969	$ 6,402,531

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Note payable, discount, noncurrent	$ 0
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized (in shares)	20,000,000	20,000,000
Preferred Stock, Shares Outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized (in shares)	100,000,000	100,000,000
Common Stock, Shares, Issued (in shares)	24,391,961	24,391,961
Common Stock, Shares, Outstanding (in shares)	24,391,961	24,391,961

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Rental income	$ 475,629	$ 734,766
Cost of revenues	780	13,615
Gross profit	474,849	721,151
Operating expenses:
Advertising and marketing	281	1,418
Professional fees	111,851	120,513
General and administrative expenses	403,610	391,306
Total operating expenses	515,742	513,237
Income (loss) from operations	(40,893)	207,914
Other income (expense):
Interest income	7,951	1,663
Total other income (expense)	(131,106)	(185,169)
Net income (loss)	$ (171,999)	$ 22,745
Basic and diluted income (loss) per common share (in dollars per share)	$ (0.01)	$ 0
Weighted average common shares outstanding (in shares)	24,391,961	24,391,961
Nonrelated Party [Member]
Other income (expense):
Interest expense	$ (125,862)	$ (186,832)
Related Party [Member]
Other income (expense):
Interest expense	$ (13,195)	$ 0

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, December 31, 2022		$ (2,439)	$ (25,558,362)	$ 19,758,689	$ (5,802,112)
Balances (in shares) at Sep. 30, 2022	0	24,391,961
Balances, September 30, 2022 at Sep. 30, 2022		$ 2,439	25,558,362	(19,758,689)	5,802,112
Net income (loss)	$ 0	$ 0	0	22,745	22,745
Balances, September 30, 2023 (in shares) at Sep. 30, 2022	0	(24,391,961)
Balances (in shares) at Dec. 31, 2022	0	24,391,961
Balances, December 31, 2022 at Dec. 31, 2022	$ 0	$ 2,439	25,558,362	19,735,944	5,824,857
Balances, December 31, 2022	0	(2,439)	(25,558,362)	$ (19,735,944)	(5,824,857)
Balances, December 31, 2022		$ (2,439)	(25,558,362)		$ (5,707,357)
Balances (in shares) at Sep. 30, 2023		24,391,961		19,853,444	5,707,357
Balances, September 30, 2022 at Sep. 30, 2023		$ 2,439	25,558,362		$ 5,707,357
Net income (loss)	$ 0	$ 0	0	$ (171,999)	$ (171,999)
Balances, September 30, 2023 (in shares) at Sep. 30, 2023		(24,391,961)		(19,853,444)	(5,707,357)
Balances (in shares) at Dec. 31, 2023	0	24,391,961
Balances, December 31, 2022 at Dec. 31, 2023	$ 0	$ 2,439	25,558,362	$ 20,025,443	$ 5,535,358
Balances, December 31, 2022	$ 0	$ (2,439)	$ (25,558,362)	$ (20,025,443)	$ (5,535,358)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income (loss)	$ (171,999)	$ 22,745
us-gaap_AdjustmentsNoncashItemsToReconcileNetIncomeLossToCashProvidedByUsedInOperatingActivitiesAbstract
Depreciation and amortization	115,562	112,481
Amortization of right of use assets	17,452	17,228
Amortization of debt discount	0	48,706
Changes in operating assets and liabilities:
acan_IncreaseDecreaseInTenantReceivable	(275,614)	8,912
Prepaid expenses	618	59,433
Accounts payable and accrued expenses	(472)	(63,328)
Operating lease liability	(2,962)	(2,739)
Interest payable	1,356	(7,476)
Other payables	(6,185)	(2,192)
Net cash flows (used in) provided by operations	(337,244)	111,270
Cash flows from investing activities:
Additions to construction in progress	0	(40,684)
Payments received on notes receivable	9,845	11,604
Net cash flows provided by (used in) investing activities	9,845	(29,080)
Cash flows from financing activities:
Principal payments on notes payable	0	(150,000)
Net cash flows (used in) financing activities	0	(150,000)
Net change in cash, cash equivalents, and restricted cash	(327,399)	(67,810)
Cash, cash equivalents, and restricted cash at beginning of period	1,144,973	1,351,094
Cash, cash equivalents, and restricted cash at end of period	817,574	1,283,284
Supplementary Disclosure of Cash Flow Information:
Cash paid for interest	137,701	145,602
Cash paid for income taxes	0	0
Related Party [Member]
Changes in operating assets and liabilities:
Accounts payable	$ (15,000)	$ (82,500)

XML

Note 1 - Nature of Business and Basis of Presentation

3 Months Ended

Dec. 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 operates 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, 2023, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the three months ended December 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 22, 2023. 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 the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2023 as reported in the Form 10-K have been omitted.

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

Significant Accounting Policies

Restricted Cash

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

	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	807,607	$	1,135,006
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	817,574	$	1,144,973

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

Property and Equipment, net

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

	December 31, 2023			September 30, 2023
Buildings and improvements	$	7,854,548		$	7,854,548
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,206,888			8,206,888
Accumulated depreciation		(1,919,919	)		(1,804,357	)
Property and equipment, net	$	6,286,969		$	6,402,531

Depreciation expense for the three months ended December 31, 2023 and December 31, 2022 amounted to $115,562 and $112,481.

Leases

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

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

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

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This may result in the earlier recognition of allowances for losses. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is adopted the new guidance under ASU 2016-13 in the first quarter of fiscal year 2024, and determined that the impact of the adoption on its financial statements is immaterial.

XML

Note 2 - Going Concern

3 Months Ended

Dec. 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 $20,025,443 and $19,853,444 at December 31, 2023 and September 30, 2023, 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

Dec. 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 December 31, 2023 and September 30, 2023, consisted of the following:

	December 31, 2023			September 30, 2023
Note receivable from BASK, interest rate of 12.0%; monthly principal and interest payments of $8,898, maturing in 2028.		390,155			400,000
		390,155			400,000
Less: Current portion		(63,998	)		(62,116	)
	$	326,157		$	337,884

XML

Note 4 - Notes Payable

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 4.  NOTES PAYABLE

Unrelated

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 and the maturity date of the loan was extended to August 1, 2023. All other provisions of the original loan remained 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.

In July 2023, the maturity date was further extended to December 1, 2023. On November 30, 2023, the maturity of the loan was extended to January 31, 2024. All other provisions of the previously modified 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 $7,500 which was expensed when incurred. On January 31, 2024, the maturity date of the loan was further extended until April 15, 2024. All other provisions of the previously modified loan remain the same.

At December 31, 2023, the outstanding principal on this note was $4,500,000 and the unamortized debt discount was $0. 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 $0 and $48,706 for the three months ended December 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 December 31, 2023 and September 30, 2023, the outstanding principal on this note was $0.

BASK. 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. During the three months ended December 31, 2022, the Company received payments of $11,604 on this loan. At December 31, 2023 and September 30, 2023, the outstanding balance on the note receivable was $0.

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 $138,762 and a revenue participation fee equivalent to 15% of BASK’s gross revenues. The BASK tenant receivable balance was $379,064 and $103,450 as of December 31, 2023 and September 30, 2023, respectively.

Related Party

SCP. On September 30, 2019, we entered into an amended note with Strategic Capital Partners, LLC (“SCP”), an entity controlled by Benjamin J. Barton, one of our officers and directors and principal shareholders, 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. In December 2023, the note was further extended to March 31, 2024.

Accrued interest on the note was $0 at December 31, 2023 and September 30, 2023, respectively.

At December 31, 2023 and September 30, 2023, the outstanding principal on this note was $581,646.

During the year ended September 30, 2023, the Company also incurred $180,000 of consulting expenses with SCP and paid $247,500. As of September 30, 2023, $15,000 remained unpaid. During the three months ended December 31, 2023, the Company incurred $45,000 of consulting expenses with SCP and paid $60,000. As of December 31, 2023, $0 remains outstanding.

XML

Note 5 - Income Loss Per Share

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 5. INCOME/LOSS PER SHARE

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

	Three months ended
	December 31,
	2023			2022
Net income (loss) attributable to common stockholders	$	(171,999	)	$	22,745
Basic weighted average outstanding shares of common stock		24,391,961			24,391,961
Dilutive effects of common share equivalents		-			-
Dilutive weighted average outstanding shares of common stock		24,391,961			24,391,961
Basic and diluted net income (loss) per share of common stock	$	(0.01	)	$	0.00

As of December 31, 2023 we excluded 1,700,000 of stock options, 2,148,000 of warrants from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive.

As of December 31, 2022 we excluded 1,700,000 of stock options, 2,211,650 of warrants and 100,000 shares that would be issued from conversion of outstanding convertible notes from the computation of diluted net income (loss) per share since the intrinsic value of these instruments was zero with the effect being anti-dilutive.

XML

Note 6 - Commitments and Contingencies

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 6.  COMMITMENTS AND CONTINGENCIES

Operating Leases

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 from SCP, a related party. See Note 4.

Lease expense for office space was $7,500 for the three months ended December 31, 2023 and 2022.

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 Cannabis 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 for any structure built on the property; or (c) 1.5% of all gross monthly sales of products sold by the Company, any assignee of the Company, or any subtenant of the Company. The lease payments will be adjusted up (but not down) every five (5) years by any increase in the Consumer Price Index.

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

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

As of December 31, 2023, the Company’s right-of-use assets were $6,691,391, the Company’s current maturities of operating lease liabilities were $12,446, and the Company’s noncurrent lease liabilities were $4,201,185. During the three months ended December 31, 2023, the Company had operating cash flows from operating leases of $85,375.

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

	As of December 31, 2023
Weighted average remaining lease term
Operating leases		42.70
Weighted average discount rate
Operating leases		7.9	%

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

2023		256,125
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		12,977,000
Total lease payments		14,599,125
Less: Interest		(10,385,494	)
	$	4,213,631
Less: operating lease liability, current portion		(12,446	)
Operating lease liability, long term	$	4,201,185

Aggregate rental expense under all leases totaled $120,344 for the three months ended December 31, 2023 and 2022.

XML

Note 7 - Stockholders' Equity

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Equity [Text Block]

NOTE 7.  STOCKHOLDERS’ EQUITY

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

Stock Options. There was no stock option activity during the three months ended December 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, 2023		1,700,000	$	1.94		3.4	$	-
Outstanding as of December 31, 2023		1,700,000	$	1.94		3.2	$	-
Vested and expected to vest at December 31, 2023		1,700,000	$	1.94		3.2	$	-
Exercisable at December 31, 2023		1,700,000	$	1.94		3.2	$	-

Stock option-based compensation expense associated with stock options was $0 for the three months ended December 31, 2023 and 2022.

Warrants. Warrant activity as of and for the three months ended December 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, 2023		2,148,000		1.33		1.13	$	-
Outstanding as of December 31, 2023		2,148,000		1.33		0.88	$	-
Exercisable at December 31, 2023		2,148,000		1.33		0.88	$	-

XML

Note 8 - Income Taxes

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 8. INCOME TAXES

We did not record any income tax expense or benefit for the three months ended December 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 tax assets as of December 31, 2023 and September 30, 2023.

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

XML

Note 9 - Subsequent Events

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 9. SUBSEQUENT EVENTS

On January 31, 2024, the maturity date of the $4,500,000 loan, was extended to April 15, 2024. All other provisions of the original loan remain the same.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The (a) consolidated balance sheet as of September 30, 2023, which has been derived from audited financial statements, and (b) the unaudited financial statements as of and for the three months ended December 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 22, 2023. 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 the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2023 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 Cash

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

	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	807,607	$	1,135,006
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	817,574	$	1,144,973

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

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

Property and Equipment, net

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

	December 31, 2023			September 30, 2023
Buildings and improvements	$	7,854,548		$	7,854,548
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,206,888			8,206,888
Accumulated depreciation		(1,919,919	)		(1,804,357	)
Property and equipment, net	$	6,286,969		$	6,402,531

Depreciation expense for the three months ended December 31, 2023 and December 31, 2022 amounted to $115,562 and $112,481.

Lessee, Leases [Policy Text Block]

Leases

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

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

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

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This may result in the earlier recognition of allowances for losses. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is adopted the new guidance under ASU 2016-13 in the first quarter of fiscal year 2024, and determined that the impact of the adoption on its financial statements is immaterial.

XML

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

3 Months Ended

Dec. 31, 2023

Notes Tables

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

	December 31, 2023		September 30, 2023
Cash and cash equivalents	$	807,607	$	1,135,006
Restricted cash		9,967		9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$	817,574	$	1,144,973

Property, Plant and Equipment [Table Text Block]

	December 31, 2023			September 30, 2023
Buildings and improvements	$	7,854,548		$	7,854,548
Computer equipment		349,576			349,576
Furniture and equipment		2,764			2,764
Total		8,206,888			8,206,888
Accumulated depreciation		(1,919,919	)		(1,804,357	)
Property and equipment, net	$	6,286,969		$	6,402,531

XML

Note 3 - Notes Receivable (Tables)

3 Months Ended

Dec. 31, 2023

Notes Tables

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

	December 31, 2023			September 30, 2023
Note receivable from BASK, interest rate of 12.0%; monthly principal and interest payments of $8,898, maturing in 2028.		390,155			400,000
		390,155			400,000
Less: Current portion		(63,998	)		(62,116	)
	$	326,157		$	337,884

XML

Note 5 - Income Loss Per Share (Tables)

3 Months Ended

Dec. 31, 2023

Notes Tables

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

	Three months ended
	December 31,
	2023			2022
Net income (loss) attributable to common stockholders	$	(171,999	)	$	22,745
Basic weighted average outstanding shares of common stock		24,391,961			24,391,961
Dilutive effects of common share equivalents		-			-
Dilutive weighted average outstanding shares of common stock		24,391,961			24,391,961
Basic and diluted net income (loss) per share of common stock	$	(0.01	)	$	0.00

XML

Note 6 - Commitments and Contingencies (Tables)

3 Months Ended

Dec. 31, 2023

Notes Tables

Lease Related Terms and Discount Rates [Table Text Block]

	As of December 31, 2023
Weighted average remaining lease term
Operating leases		42.70
Weighted average discount rate
Operating leases		7.9	%

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

2023		256,125
2024		341,500
2025		341,500
2026		341,500
2027		341,500
Thereafter		12,977,000
Total lease payments		14,599,125
Less: Interest		(10,385,494	)
	$	4,213,631
Less: operating lease liability, current portion		(12,446	)
Operating lease liability, long term	$	4,201,185

XML

Note 7 - Stockholders' Equity (Tables)

3 Months Ended

Dec. 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, 2023		1,700,000	$	1.94		3.4	$	-
Outstanding as of December 31, 2023		1,700,000	$	1.94		3.2	$	-
Vested and expected to vest at December 31, 2023		1,700,000	$	1.94		3.2	$	-
Exercisable at December 31, 2023		1,700,000	$	1.94		3.2	$	-

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

					Weighted
			Weighted		Average
			Average		Contractual		Aggregate
	Number of		Exercise		Term		Intrinsic
	Shares		Price		(Years)		Value
Outstanding as of September 30, 2023		2,148,000		1.33		1.13	$	-
Outstanding as of December 31, 2023		2,148,000		1.33		0.88	$	-
Exercisable at December 31, 2023		2,148,000		1.33		0.88	$	-

XML

Note 1 - Nature of Business and Basis of Presentation (Details Textual) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Depreciation	$ 115,562	$ 112,481
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 ($)	Dec. 31, 2023	Sep. 30, 2023
Cash and cash equivalents	$ 807,607	$ 1,135,006
Restricted cash	9,967	9,967
Total cash, cash equivalents, and restricted cash shown in the cash flow statement	$ 817,574	$ 1,144,973

XML

Note 1 - Description of Business and Significant Accounting Policies - Property, Plant and Equipment, Net (Details) - USD ($)	Dec. 31, 2023	Sep. 30, 2023
Property, plant, and equipment gross	$ 8,206,888	$ 8,206,888
Building and Building Improvements [Member]
Property, plant, and equipment gross	7,854,548	7,854,548
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	(1,919,919)	(1,804,357)
Property and equipment, net	$ 6,286,969	$ 6,402,531

XML

Note 2 - Going Concern (Details Textual) - USD ($)	Dec. 31, 2023	Sep. 30, 2023
Retained Earnings (Accumulated Deficit)	$ 20,025,443	$ 19,853,444

XML

Note 3 - Notes Receivable - Schedule of Notes Receivable (Details) - USD ($)	Dec. 31, 2023	Sep. 30, 2023	Aug. 15, 2018
Note receivable	$ 326,157	$ 337,884
Notes and Other Receivables, Net	390,155	400,000
Less: Current portion	(63,998)	(62,116)
Financing Receivable, after Allowance for Credit Loss	326,157	337,884
BASK [Member]
Note receivable	0	0	$ 129,634
Financing Receivable, after Allowance for Credit Loss	0	0	$ 129,634
BASK [Member] | Notes Receivable, Interest Receivable 2028 [Member]
Note receivable	390,155	400,000
Financing Receivable, after Allowance for Credit Loss	$ 390,155	$ 400,000

XML

Note 3 - Notes Receivable - Schedule of Notes Receivable (Details) (Parentheticals) - USD ($)	2 Months Ended	3 Months Ended
	Dec. 12, 2023	Dec. 31, 2023	Sep. 30, 2023
Note Receivable, Interest Rate		12.00%	12.00%
Note Receivable, Periodic Payment	$ 8,898	$ 8,898

XML

Note 4 - Notes Payable (Details Textual) - USD ($)						3 Months Ended		12 Months Ended
	Oct. 05, 2022	Dec. 04, 2020	Aug. 02, 2019	Jul. 26, 2019	Aug. 15, 2018	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023	Jul. 31, 2023	Dec. 15, 2021	Sep. 30, 2020	Sep. 30, 2019	Feb. 12, 2018
Class of Warrant or Right, Exercise Price of Warrants or Rights						$ 1.33		$ 1.33
Class of Warrant or Right, Outstanding						2,148,000		2,148,000
Amortization of Debt Discount (Premium)						$ 0	$ 48,706
Notes Payable, Current						4,500,000		$ 4,500,000
Interest Payable, Current						42,042		40,686
Note receivable						$ 326,157		$ 337,884
Note Receivable, Interest Rate						12.00%		12.00%
Tenant Receivable, Current						$ 379,064		$ 103,450
Operating Expenses						515,742	513,237
Unrelated Party [Member] | Promissory Notes [Member]
Average Closing Price per Share			$ 4
Average Daily Volume Of Shares Trades			150,000
Payments of Debt Issuance Costs			$ 320,000
BASK [Member]
Note receivable					$ 129,634	0		0
Interest Receivable					$ 44,517
Note Receivable, Term					5 years
Note Receivable, Interest Rate					18.00%
Payments for Loans							11,604
BASK [Member] | Lease Agreement [Member]
Lessee, Operating Lease, Term of Contract				15 years
Annual Base Rent				$ 138,762
Operating Lease, Percentage of Leassee's Gross Revenue				15.00%
Tenant Receivable, Current						379,064		103,450
Strategic Capital Partners [Member]
Notes Payable, Current												$ 1,756,646
Strategic Capital Partners [Member] | Consulting Services [Member]
Operating Expenses						45,000		180,000
Related Party Transaction, Amounts of Transaction						60,000		247,500
Accounts Payable						0		15,000
Strategic Capital Partners [Member] | Promissory Notes [Member]
Interest Payable, Current						0		0
Notes Payable						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			$ 1.5
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			$ 1.5
Unrelated Party [Member]
Proceeds from Issuance of Long-Term Debt			$ 4,000,000
Debt Instrument, Interest Rate, Stated Percentage			11.00%
Unrelated Party [Member] | Promissory Notes [Member]
Proceeds from Issuance of Long-Term Debt		$ 500,000
Debt Instrument, Unamortized Discount			$ 52,392			0
Notes Payable, Noncurrent						4,500,000
Amortization of Debt Discount (Premium)						0	48,706
Unrelated Party [Member] | Promissory Notes [Member] | Broker [Member]
Debt Instrument, Fee Amount		$ 40,000							$ 7,500
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	$ 150,000			$ 150,000	$ 0
Repayments of Debt	$ 159,140
Interest Payable, Current	$ 9,140

XML

Note 5 - Income Loss Per Share (Details Textual) - shares	9 Months Ended
	Jun. 30, 2023	Jun. 30, 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	2,148,000	2,211,650
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		100,000

XML

Note 5 - Income Loss Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Net income (loss)	$ (171,999)	$ 22,745
Weighted average common shares outstanding (in shares)	24,391,961	24,391,961
Dilutive effects of common share equivalents (in shares)	0	0
Dilutive weighted average outstanding shares of common stock (in shares)	24,391,961	24,391,961
Basic and diluted income (loss) per common share (in dollars per share)	$ (0.01)	$ 0

XML

Note 6 - Commitments and Contingencies (Details Textual)				3 Months Ended
	Sep. 01, 2021 USD ($)	Sep. 01, 2019	Oct. 17, 2016 USD ($) a	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2023 USD ($)	Oct. 01, 2019 USD ($)
Operating Lease, Expense				$ 120,344	$ 120,344
Operating Lease, Right-of-Use Asset				6,691,391		$ 6,708,843	$ 6,980,957
Operating Lease, Liability				4,213,631			4,256,869
Operating Lease, Liability, Current				12,446		12,204
Operating Lease, Liability, Noncurrent				4,201,185		$ 4,204,389
Operating Cash Flows from Operating Leases				85,375
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			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
Office Space in Denver, CO [Member]
Operating Leases, Monthly Payment				2,500
Operating Lease, Expense				$ 7,500	$ 7,500

XML

Note 6 - Commitments and Contingencies - Lease Related Terms and Discount Rates (Details)	Dec. 31, 2023
Operating leases (Year)	42 years 8 months 12 days
Operating leases	7.90%

XML

Note 6 - Commitments and Contingencies - Future Rental Payments Under Operating Leases (Details) - USD ($)	Dec. 31, 2023	Sep. 30, 2023	Oct. 01, 2019
2023	$ 256,125
2024	341,500
2025	341,500
2026	341,500
2027	341,500
Thereafter	12,977,000
Total lease payments	14,599,125
Less: Interest	(10,385,494)
Operating Lease, Liability	4,213,631		$ 4,256,869
Less: operating lease liability, current portion	(12,446)	$ (12,204)
Operating lease liability, long term	$ 4,201,185	$ 4,204,389

XML

Note 7 - Stockholders' Equity (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Expense	$ 0	$ 0

XML

Note 7 - Stockholders' Equity - Stock Option Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Exercisable at September 30, 2023 (in shares)	1,700,000	1,700,000
Exercisable at September 30, 2023 (in dollars per share)	$ 1.94	$ 1.94
Exercisable at September 30, 2023 (Year)	3 years 2 months 12 days	3 years 4 months 24 days
Outstanding as of December 31, 2023 (in dollars per share)	$ 1.94
Outstanding as of December 31, 2023 (Year)	3 years 2 months 12 days
Vested and expected to vest at December 31, 2023 (Year)	3 years 2 months 12 days

XML

Note 7 - Stockholders' Equity - Warrant Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Outstanding as of September 30, 2023 (in shares)	2,148,000
Outstanding as of September 30, 2023 (in dollars per share)	$ 1.33
Outstanding as of September 30, 2023 (Year)	10 months 17 days	1 year 1 month 17 days
Outstanding as of December 31, 2023 (in shares)	2,148,000	2,148,000
Outstanding as of December 31, 2023 (in dollars per share)	$ 1.33	$ 1.33
Exercisable at December 31, 2023 (in shares)	2,148,000
Exercisable at December 31, 2023 (in dollars per share)	$ 1.33
Exercisable at December 31, 2023 (Year)	10 months 17 days

XML

Note 8 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Expense (Benefit), Total	$ 0	$ 0

XML

Note 9 - Subsequent Events (Details Textual)	Jan. 31, 2024 USD ($)
Subsequent Event [Member]
Loans Payable	$ 4,500,000