SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

AmeriCann, Inc. – ‘10-Q’ for 6/30/22

On:  Monday, 8/15/22, at 1:21pm ET   ·   For:  6/30/22   ·   Accession #:  1437749-22-20474   ·   File #:  0-54231

Previous ‘10-Q’:  ‘10-Q’ on 5/16/22 for 3/31/22   ·   Next:  ‘10-Q’ on 2/14/23 for 12/31/22   ·   Latest:  ‘10-Q’ on 2/14/24 for 12/31/23

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/15/22  AmeriCann, Inc.                   10-Q        6/30/22   52:3.7M                                   RDG Filings/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    621K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     19K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     19K 
 4: EX-32       Certification -- §906 - SOA'02                      HTML     17K 
10: R1          Document And Entity Information                     HTML     63K 
11: R2          Consolidated Balance Sheets (Current Period         HTML    120K 
                Unaudited)                                                       
12: R3          Consolidated Balance Sheets (Current Period         HTML     36K 
                Unaudited) (Parentheticals)                                      
13: R4          Consolidated Statements of Operations (Unaudited)   HTML     77K 
14: R5          Consolidated Statements of Changes in               HTML     58K 
                Stockholders' Equity (Unaudited)                                 
15: R6          Consolidated Statements of Cash Flows (Unaudited)   HTML     94K 
16: R7          Note 1 - Nature of Business and Basis of            HTML     42K 
                Presentation                                                     
17: R8          Note 2 - Going Concern                              HTML     21K 
18: R9          Note 3 - Notes and Other Receivables                HTML     25K 
19: R10         Note 4 - Notes Payable                              HTML     35K 
20: R11         Note 5 - Related Party Transactions                 HTML     22K 
21: R12         Note 6 - Income (Loss) Per Share                    HTML     35K 
22: R13         Note 7 - Commitments and Contingencies              HTML     40K 
23: R14         Note 8 - Stockholders' Equity                       HTML     59K 
24: R15         Note 9 - Income Taxes                               HTML     22K 
25: R16         Significant Accounting Policies (Policies)          HTML     46K 
26: R17         Note 1 - Nature of Business and Basis of            HTML     33K 
                Presentation (Tables)                                            
27: R18         Note 3 - Notes and Other Receivables (Tables)       HTML     25K 
28: R19         Note 6 - Income (Loss) Per Share (Tables)           HTML     33K 
29: R20         Note 7 - Commitments and Contingencies (Tables)     HTML     31K 
30: R21         Note 8 - Stockholders' Equity (Tables)              HTML     55K 
31: R22         Note 1 - Nature of Business and Basis of            HTML     22K 
                Presentation (Details Textual)                                   
32: R23         Note 1 - Nature of Business and Basis of            HTML     24K 
                Presentation - Restricted Cash (Details)                         
33: R24         Note 1 - Description of Business and Significant    HTML     30K 
                Accounting Policies - Property, Plant and                        
                Equipment, Net (Details)                                         
34: R25         Note 2 - Going Concern (Details Textual)            HTML     31K 
35: R26         Note 3 - Notes and Other Receivables - Schedule of  HTML     23K 
                Notes Receivable (Details)                                       
36: R27         Note 3 - Notes and Other Receivables - Schedule of  HTML     19K 
                Notes Receivable (Details) (Parentheticals)                      
37: R28         Note 4 - Notes Payable (Details Textual)            HTML    151K 
38: R29         Note 5 - Related Party Transactions (Details        HTML     34K 
                Textual)                                                         
39: R30         Note 6 - Income (Loss) Per Share (Details Textual)  HTML     23K 
40: R31         Note 6 - Income (Loss) Per Share - Schedule of      HTML     42K 
                Earnings Per Share, Basic and Diluted (Details)                  
41: R32         Note 7 - Commitments and Contingencies (Details     HTML     88K 
                Textual)                                                         
42: R33         Note 7 - Commitments and Contingencies - Lease      HTML     19K 
                Related Terms and Discount Rates (Details)                       
43: R34         Note 7 - Commitments and Contingencies - Future     HTML     38K 
                Rental Payments Under Operating Leases (Details)                 
44: R35         Note 8 - Stockholders' Equity (Details Textual)     HTML     22K 
45: R36         Note 8 - Stockholders' Equity - Stock Option        HTML     38K 
                Activity (Details)                                               
46: R37         Note 8 - Stockholders' Equity - Warrant Activity    HTML     29K 
                (Details)                                                        
47: R38         Note 9 - Income Taxes (Details Textual)             HTML     20K 
50: XML         IDEA XML File -- Filing Summary                      XML     92K 
48: XML         XBRL Instance -- acan20220630_10q_htm                XML    770K 
49: EXCEL       IDEA Workbook of Financial Reports                  XLSX     73K 
 6: EX-101.CAL  XBRL Calculations -- acan-20220630_cal               XML    103K 
 7: EX-101.DEF  XBRL Definitions -- acan-20220630_def                XML    771K 
 8: EX-101.LAB  XBRL Labels -- acan-20220630_lab                     XML    670K 
 9: EX-101.PRE  XBRL Presentations -- acan-20220630_pre              XML    787K 
 5: EX-101.SCH  XBRL Schema -- acan-20220630                         XSD    125K 
51: JSON        XBRL Instance as JSON Data -- MetaLinks              257±   403K 
52: ZIP         XBRL Zipped Folder -- 0001437749-22-020474-xbrl      Zip    141K 

PART I:  FINANCIAL INFORMATION

ITEM 1.      UNAUDITED FINANCIAL STATEMENTS

AMERICANN, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

See accompanying notes to unaudited consolidated financial statements.

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

See accompanying notes to unaudited consolidated financial statements.

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

See accompanying notes to unaudited consolidated financial statements. 

AMERICANN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

See accompanying notes to unaudited consolidated financial statements.   

AMERICANN, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended September 30, 2021 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K

Forward-Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (“the Exchange Act”), which are subject to the “safe harbor” created by those sections. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “should,” “could,” “predicts,” “potential,” “continue,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. All forward-looking statements in this Form 10-Q are made based on our current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. In evaluating these statements, you should specifically consider various factors, uncertainties and risks that could affect our future results or operations. These factors, uncertainties and risks may cause our actual results to differ materially from any forward-looking statement set forth in this Form 10-Q. You should carefully consider these risk and uncertainties described and other information contained in the reports we file with or furnish to the SEC before making any investment decision with respect to our securities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

OVERVIEW

AmeriCann designs, develops, leases and plans to operate state-of-the-art cannabis cultivation, processing and manufacturing facilities. AmeriCann’s team includes board members, consultants, engineers and architects who specialize in real estate development, traditional horticulture, lean manufacturing, medical research, facility construction, regulatory compliance, security, marijuana cultivation and genetics, extraction processes, and infused product development.

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

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

The increase in Operating Revenue for the quarter ending June 30, 2022 is result of increased cultivation yields and increases in the production and sale of manufactured goods from the Massachusetts Cannabis Center.

A summary of operational highlights included the following:

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

AmeriCann plans to replicate the brands, technology and innovations developed at its MCC project to new markets throughout the country as a multi-state operator. The outlook for new states continues to improve with legislation recently passing in New York, New Jersey, Connecticut, Virginia and New Mexico. Several additional states are expected to pass adult use regulations including Pennsylvania and Rhode Island in the near term which will create additional opportunities for AmeriCann’s business model.

COVID-19 Pandemic

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

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

SIGNIFICANT ACCOUNTING POLICIES

Leases

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

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 June 30, 2022 and 2021, we generated $797,734 and $584,546 in revenue, respectively. During the nine months ended June 30, 2022 and 2021, we generated $2,116,045 and $1,293,475 in revenue, respectively. The increase in revenues is due to higher rental revenue and participation fee revenues as a result of increased cultivation yields and increases in the production and sale of manufactured goods from the Massachusetts Cannabis Center.

Advertising and Marketing Expenses

Advertising and marketing expenses were $9,968 and $16,451 for the three months ended June 30, 2022 and 2021, respectively. During the nine months ended June 30, 2022 and 2021, the advertising and marketing expenses were $33,106 and $25,080, respectively. The increase is due to additional social media and marketing expenses in 2022.

Professional Fees  

Professional fees were $71,226 and $71,335 for the three months ended June 30, 2022 and 2021, respectively. During the nine months ended June 30, 2022 and 2021, the professional fees were $282,462 and $253,607, respectively.

General and Administrative Expenses

General and administrative expenses were $378,131 and $363,888 for the three months ended June 30, 2022 and 2021, respectively. During the nine months ended June 30, 2022 and 2021, the general and administrative expenses were $1,623,620 and $1,202,439, respectively. The increase is primarily a result of an increase in stock option compensation.

Interest Income

Interest income was $1,822 and $4,392 for the three months ended June 30, 2022 and 2021, respectively.  During the nine months ended June 30, 2022 and 2021, the interest income was $8,502 and $14,320, respectively. The decrease is a result of a decline in the principal balance of the BASK note receivable.

Interest Expense

Interest expense was $152,445 and $215,667 for the three months ended June 30, 2022 and 2021, respectively. During the nine months ended June 30, 2022 and 2021, the interest expense was $458,309 and $666,995, respectively. The decrease is primarily attributable to amortization of debt discounts.

Net Operating Income/Loss 

We had a net income of $162,734 and a net loss of $(98,955) for the three months ended June 30, 2022 and 2021, respectively. We had a net loss of $(346,054) and $(905,331) for the nine months ended June 30, 2022 and 2021, respectively. The increase in net income and decline in net loss is primarily due to higher revenues.

LIQUIDITY AND CAPITAL RESOURCES 

The accompanying unaudited consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $19,931,499 and $19,585,445 at June 30, 2022 and September 30, 2021, respectively, and had a net loss of $(346,054) and $(905,331) for the nine months ended June 30, 2022 and 2021, respectively. While the Company is attempting to increase operations and generate additional revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds through the sale of its securities. 

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

Notes Payable

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

Analysis of Cash Flows 

During the nine months ended June 30, 2022, our net cash flows provided by operations were $484,493 as compared to net cash flows used in operations of $423,232 for the nine months ended June 30, 2021. The increase is primarily due to a decrease in our net loss during the nine months ended June 30, 2022.

Cash flows (used) provided by investing activities were $(195,436) and $(9,196) for the nine months ended June 30, 2022 and 2021, respectively, consisting of payments received on notes receivable offset by additions to construction in progress.

Cash flows provided by financing activities were $0 for the nine months ended June 30, 2022. Cash flows provided by financing activities were $1,147,000 for the nine months ended June 30, 2021, consisting of proceeds from note payable offset by principal payments on notes payable.

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

OFF-BALANCE SHEET ARRANGEMENTS

As of June 30, 2022, we did not have any off-balance sheet arrangements.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this Quarterly Report on Form 10-Q.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective for the same reasons that our internal control over financial reporting was not effective.

Internal Control over Financial Reporting

As indicated in our Form 10-K filed on December 6, 2021, our Principal Executive Officer and Principal Financial Officer concluded that our internal control over financial reporting was not effective as of September 30, 2021 at the reasonable assurance level, as a result of a material weaknesses primarily related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP, limited or no segregation of duties, and lack of independent directors.

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

Change in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarterly period ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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

PART II OTHER INFORMATION

ITEM 1.         LEGAL PROCEEDINGS

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

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

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

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

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

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

ITEM 6. EXHIBITS

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.

---

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing		Date		Other Filings
		12/31/24
		8/2/24
		8/1/23
		12/31/22
Filed on:		8/15/22
		8/7/22
		8/2/22
For Period end:		6/30/22
		4/17/22
		3/31/22		10-Q
		12/31/21		10-Q
		12/20/21
		12/15/21
		12/6/21		10-K
		10/17/21
		10/12/21
		9/30/21		10-K
		8/25/21
		8/2/21
		6/30/21		10-Q
		3/31/21		10-Q
		2/25/21		8-K
		12/31/20		10-Q
		12/4/20
		10/12/20
		9/30/20		10-K
		8/25/20
		12/31/19		10-Q,  NT 10-K,  NT 10-Q
		10/1/19
		9/30/19		10-K,  NT 10-K
		9/1/19
		8/9/19
		8/2/19		8-K,  EFFECT
		7/26/19
		8/15/18
		2/12/18		8-K
		10/17/16		8-K
		10/14/16
		9/30/16		10-K,  NT 10-K
		7/14/16		8-K
		5/1/16
		4/7/16
		2/1/16
		1/14/15		8-K
		6/25/10
				List all Filings

↑Top

---

Filing Submission 0001437749-22-020474   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

---

---

Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help — Fri., Apr. 26, 3:46:59.2am ET