Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| Quarterly Report Pursuant To Section 13 or 15(d) of the Securities
Exchange Act Of 1934
For the quarterly period ended March 31, 2014
| | Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act Of 1934
For the transition period from __________ to __________
Commission File Number: 000-54231
AMERICANN, INC
------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 27-4336843
--------------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1942 Broadway
Boulder, CO 80302
-----------------------------------
(Address of principal executive offices, including Zip Code)
(303) 862-9000 (Issuer's telephone number, including area code)
Nevada Health Scan, Inc.
---------------------------------------
(Former name or former address if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 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 [x] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer," "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
[x]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes? [ ] No [x]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 15,750,000 common stock as of May 20,
2014.
Americann, Inc.
(fka Nevada Health Scan, Inc.)
Balance Sheet
(Unaudited) (A Development Stage Company)
March 31, September 30,
2014 2013
--------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 572,300 $ -
Prepaid expenses 30,000 -
Total Current Assets 602,300 0
---------- ---------
TOTAL ASSETS $ 602,300 $ 0
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,849 $ -
Related party payables 5,600 -
---------- ---------
TOTAL LIABILITIES 11,449 -
---------- ---------
SHAREHOLDERS' EQUITY
Preferred stock, $0.0001 par value per share;
Authorized 20,000,000 Shares; Issued and
outstanding -0- shares. - -
Common Stock, $0.0001 per share;
Authorized 100,000,000 Shares; Issued and
outstanding 15,728,667 and 16,100,000 at
March 31, 2014 and September 30, 2013 respectively 1,573 1,610
Capital paid in excess of par value 1,395,876 661,839
(Deficit) accumulated during the development stage (806,598) (663,449)
---------- ---------
TOTAL SHAREHOLDERS' (Deficit) 590,851 -
---------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 602,300 $ 0
========== =========
See Accompanying Notes To These Unaudited Condensed Financial Statements.
2
Americann, Inc.
(fka Nevada Health Scan, Inc.)
Unaudited Condensed Statement Of Operations
(A Development Stage Company)
------------------------------------------------------------------------------
3 Months Ended 3 Months Ended
March 31, 2014 March 31, 2013
-------------- --------------
Revenue: $ - $ -
General & Administrative Expenses
Accounting 3,750 -
Contract services 34,140 -
Other G & A 21,463 1,085
Legal 71,950 -
Stock Transfer Fee 799 -
Travel 5,347 -
--------- ----------
Total G & A 137,449 1,085
--------- ----------
(Loss) from operations (137,449) (1,085)
--------- ----------
Other income debt forgiveness - -
--------- ----------
Net (loss) $(137,449) $ (1,085)
========= ==========
Basic and diluted (Loss) per common share $ (0.01) $ 0.00
========= ==========
Weighted Average Common Shares Outstanding 15,625,222 16,100,000
========== ==========
See Accompanying Notes To These Unaudited Condensed Financial Statements.
3
Americann, Inc.
(fka Nevada Health Scan, Inc.)
Unaudited Condensed Statement Of
Operations
-------------------------------------------------------------------------------
6 Months 6 Months June 25, 2010
Ended Ended (inception)
March 31, March 31, through
2014 2013 March 31, 2014
-------- -------- --------------
Revenue: $ - $ - $ -
General & Administrative Expenses
Accounting 8,650 - 10,150
Contract services 34,140 34,140
Legal 71,950 - 71,950
Other G & A 21,663 2,880 695,492
Stock Transfer Fee 1,399 - 4,620
Travel 5,347 - 5,347
-------- -------- ---------
Total G & A 143,149 2,880 821,699
-------- -------- ---------
(Loss) from operations (143,149) (2,880) (821,699)
-------- -------- ---------
Other income debt forgiveness - - 15,101
-------- -------- ---------
Net (loss) $(143,149) $ (2,880) $(806,598)
========= ======== =========
Basic and diluted (Loss) per
common share $ (0.01) $ 0.00
========= ========
Weighted Average Common Shares
Outstanding 15,865,220 16,100,000
========== ==========
See Accompanying Notes To These Unaudited Condensed Financial Statements.
4
Americann, Inc.
(fka Nevada Health Scan, Inc.)
Unaudited Condensed Statement Of
Cash Flows
(A Development Stage Company)
6 Months 6 Months June 25, 2010
Ended Ended (inception)
March 31, March 31, through March 31,
2014 2013 2014
-------- --------- ---------------
Cash Flows From Operating Activities:
Net (Loss) $(143,149) $ (2,880) $(806,598)
Adjustments to reconcile net loss to
net cash used in operating activities:
Gain on debt forgiveness (15,101)
Common stock issued per court
order - - 118,298
Warrants issued per court
order - - 545,151
Increase in prepaid
expenses (30,000) (30,000)
Increase (Decrease) in Accounts
Payable 5,849 - 5,849
--------- -------- ---------
Net Cash Flows (used) in
operations (167,300) (2,880) (182,401)
--------- -------- ---------
Cash Flows From Investing Activities:
Net Cash Flows (used) in Investing
activities - - -
--------- -------- ---------
Cash Flows From Financing Activities:
Common stock issued for cash 734,000 - 734,000
Proceed from related party debt 5,600 2,880 20,701
--------- -------- ---------
Net Cash Flows provided by financing
activities 739,600 2,880 754,701
--------- -------- ---------
Net Increase (Decrease) In Cash and
cash equivalents 572,300 0 572,300
Cash and cash equivalents at beginning
of period - - -
--------- -------- ---------
Cash and cash equivalents at end of
period 572,300 0 572,300
========= ======== =========
Supplementary Disclosure Of Cash Flow
Information:
Common stock issued at discount to
officers $ - $ - $ 500
======== ======== ========
Cash paid for interest $ - $ - $ -
======== ======== ========
Cash paid for income taxes $ - $ - $ -
======== ======== ========
See Accompanying Notes To These Unaudited Condensed Financial Statements.
5
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 1. NATURE AND BACKGROUND OF BUSINESS
Nevada Health Scan, Inc. ("the Company" or "the Issuer") was organized under
the laws of the State of Delaware on June 25, 2010. The Company was
established as part of the Chapter 11 reorganization of AP Corporate
Services, Inc. ("AP"). Under AP's Plan of Reorganization, as confirmed by
the U.S. Bankruptcy Court for the Central District of California, the Company
was incorporated to: (1) receive and own any interest which AP had in the
development of an MRI scanning facility; and (2) issue shares of its
common stock to AP's general unsecured creditors, to its administrative
creditors, and to its shareholders. See Note 4 to these financial statements for
more information.
Since the Company lacked the resources to effectively develop an MRI
facility, in June, 2012 the Company decided to promote medical tourism by
providing information on a website for those seeking to travel abroad for
healthcare services. The Company planned to generate revenue by selling
advertising to healthcare providers and related businesses including hotels and
travel agencies.
In September 2013 the Company abandoned its business plan relating to
promoting medical tourism.
On January 17, 2014, a privately held limited liability company acquired
approximately 93% of the Company's outstanding shares of common stock from
several of the Company's shareholders which resulted in a change in control of
the Company.
The Company's new business plan is to offer a comprehensive, turnkey
package of services that includes consulting, design, construction and financing
to approved and licensed marijuana operators throughout the United States and
worldwide. The Company's business plan is based on the anticipated growth of the
regulated marijuana market in the placecountry-regionUnited States and
worldwide.
6
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of the Company is presented to
assist in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management, which is
responsible for their integrity and objectivity. These accounting policies
conform to accounting principles generally accepted in the
placecountry-regionUnited States and have been consistently applied in the
preparation of the financial statements.
a. BASIS OF PRESENTATION
The financial statements as of March 31, 2014 and for the three and six months
ended march 31, 2014 and 2013 have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial
information on the same basis as the annual financial statements and in the
opinion of management, reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the Company's financial
position, results of operations and cash flows for the periods shown. The
results of operations for such periods are not necessarily indicative of the
results expected for a full year or for any future period. They do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. Therefore, these financial
statements should be read in conjunction with the Company's audited financial
statements and notes thereto for the year ended September 30, 2013 included on
Form 10-K/filed with the Securities and Exchange Commission on December 30,
2013.
b. LOSS PER SHARE
The Company computes net loss per share in accordance with the FASB Accounting
Standards Codification ("ASC"). The ASC specifies the computation, presentation
and disclosure requirements for loss per share for entities with publicly held
common stock.
Basic loss per share amounts is computed by dividing the net loss by the
weighted average number of common shares outstanding. The equity instruments
such as warrants and options were not included in the loss per share
calculations because the inclusion would have been anti-dilutive.
c. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
7
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
d. CASH AND CASH EQUIVALENTS
For the Balance Sheet and Statements of Cash Flows, all highly liquid
investments with maturity of three months or less are considered to be cash
equivalents. The Company had a cash balance of $572,300 and
$-0- as of March 31, 2014 and December 31, 2013 respectively.
e. DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by ASC section 915-10-20.
Although the Company's planned principal operations have commenced it is still
devoting substantially all of its efforts on establishing the business. All
losses accumulated since inception has been considered as part of the Company's
development stage activities.
f. INCOME TAXES
The Company follows the accrual method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on the deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. At March 31, 2014, a full deferred tax asset valuation allowance
has been provided and no deferred tax asset has been recorded.
g. IMPACT OF NEW ACCOUNTING STANDARDS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position, or cash flow.
NOTE 3. GOING CONCERN
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have any
cash or other assets, nor does it have operations or a source of revenue
sufficient to cover its operating costs and allow it to continue as a going
concern.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
8
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 4. STOCKHOLDERS' EQUITY
COMMON STOCK:
The Company's first issuance of common stock, totaling 1,085,000 shares, took
place on June 25, 2010 pursuant to the Chapter 11 Plan of Reorganization
confirmed by the U.S. Bankruptcy Court in the matter of AP Corporate Services,
Inc. ("AP"). The Court ordered the distribution of shares in Nevada Health Scan,
Inc. to all general unsecured creditors of AP, with these creditors to receive
their PRO RATA share (according to amount of debt held) of a pool of 80,000
shares in the Company. The Court also ordered the distribution of shares in the
Company to all shareholders of AP, with these shareholders to receive their PRO
RATA share (according to number of shares held) of a pool of 5,000 shares in the
Company. The Court also ordered the distribution of shares in the Company to all
administrative creditors of AP, with these creditors to receive one share of
common stock in the Company for each $0.10 of AP's administrative debt which
they held. The value of these shares was calculated by the intrinsic value. AP
has a total claim of $ 743,449 by the unsecured creditors and $80,000 cash were
settled at the date of liquidation. The remaining claims were settled by the
issuance of common stock and warrants issued per court order. The Company
allocates the remaining claims of $663,449 to the common stock and warrants
issued.
The Court also ordered the distribution of five million warrants in the Company
to all administrative creditors of AP, with these creditors to receive five
warrants in the Company for each $0.10 of AP's administrative debt which they
held. These creditors received an aggregate of 5,000,000 warrants consisting of
1,000,000 "A Warrants" each convertible into one share of common stock at an
exercise price of $1.00; 1,000,000 "B Warrants" each convertible into one share
of common stock at an exercise price of $2.00; 1,000,000 "C Warrants" each
convertible into one share of common stock at an exercise price of $3.00;
1,000,000 "D Warrants" each convertible into one share of common stock at an
exercise price of $4.00; and 1,000,000 "E Warrants" each convertible into one
share of common stock at an exercise price of $5.00. All warrants are
exercisable at any time prior to January 4, 2014. This warrant distribution also
took place on June 25, 2010.
On December 27, 2013, the Company extended the maturity date to January 4, 2015.
The estimated fair market value of these warrants as a result of the extension
was deminimus. As a result the extension has no material impact on the Company's
results of operations.
9
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 4. STOCKHOLDERS' EQUITY (Continued)
COMMON STOCK: (Continued)
On January 17, 2014, Strategic Capital Partners, LLC ("SCP") acquired 14,950,000
shares of the Company's outstanding common stock, as well as warrants to
purchase 5,000,000 shares of the Company's common stock from several private
parties. As a result of the acquisition, SCP owns approximately 93% of the
Company's common stock which resulted in a change of control of the Company. In
connection with the acquisition:
o Benjamin J. Barton, the owner of SCP, was appointed as a director of
the Company; and
o Dean Konstantine, Josephine Resma and Howard Behling resigned as
officers and directors of the Company.
On February 21, 2014, the Company' board of directors, declared a stock dividend
in the amount of four shares of common stock for each issued and outstanding
share of common stock. As the Company has an accumulated deficit the stock
dividend resulted in no amounts being capitalized out of retained earnings and
only the par value amount being capitalized out of paid in capital.
On March 20, 2014 the majority shareholder, Strategic Capital, returned
65,750,000 shares to the Company resulting in a return of capital of par value
only to additional paid in capital.
On March 20, 2014 the majority shareholder sold 300,000 shares of common stock
held by the majority shareholder to the former CEO.
On March 21, 2014 the Company issued 857,000 shares of common stock as part of a
Reg. D offering for $642,750 or $0.75 per share.
On March 31, 2014 the Company issued 121,667 shares of common stock as part of a
Reg. D offering for $91,250 or $0.75 per share.
10
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 5. INCOME TAXES
The Company has not had any business activity and has not made any U.S. federal
income tax provision since its inception on June 25, 2010.
NOTE 6. RELATED PARTY TRANSACTIONS
During the six-month period ended March 31, 2014, the President of the Company
advanced $5,600 to cover certain expenses. This cash advance was evidenced by a
non-interest bearing note and is recorded under related party payables in the
Company's condensed Balance Sheet.
The Company neither owns nor leases any real or personal property. The Vice
President of the Company has provided office space and services without charge.
Such costs are immaterial to the financial statements and accordingly, have not
been reflected therein.
NOTE 7. WARRANTS
On June 25, 2010 (inception), the Company issued 5,000,000 warrants (Series
A-F). Each warrant allows the holder to purchase one share of the Company's
common stock. These warrants were to expire on January 4, 2014. On February 14
the Company issued 1,800,000 warrants (Series F-G) to Strategic Capital
Partners, LLC, the largest shareholder. These warrants expire January 22, 2018.
The terms of these warrants are shown below.
Shares Issuable Upon
Series Exercise of Warrants Exercise Price
A 1,000,000 $1.00
B 1,000,000 $2.00
C 1,000,000 $3.00
D 1,000,000 $4.00
E 1,000,000 $5.00
F 1,200,000 $8.00
G 600,000 $12.00
11
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 7. WARRANTS (Continued)
On December 27, 2013, the Company extended the maturity date to January 4, 2015
for the Series A to E warrants. The estimated fair market value before and after
this modification which resulted in a deminimus estimated fair market value. As
a result the modification did not have an impact on the Company's operations and
the Company did not record any additional expense..
NOTE 8. COMMITMENT AND CONTINGENCIES
On January 22, 2014, the Company entered into an employment agreement with Mr.
Czarkowski, which was terminated in March of 2014 resulting in cancellation of
certain options and replaced with a consulting agreement. The consulting
agreement has an initial term of two years and provides that the Company will
pay Mr. Czarkowski $12,000 per month during the term of the agreement which is
being recorded under contract services in the accompanying condensed statement
of operations.
Pursuant to the employment agreement, Strategic Capital Partners, LLC, the
Company's largest shareholder, originally sold 2,000,000 shares of the Company's
common stock to Mr. Czarkowski at a price of $0.02 per share. As a result of his
termination, the shares were returned and the parties entered into a share
purchase agreement in by which Strategic Capital Partners sold 300,000 shares to
Mr. Czarkowski at a price of $0.02 per share.
The Company also originally granted Mr. Czarkowski options to purchase up to
1,200,000 shares of the Company's common stock. The options grants were
cancelled. The Company granted new options to Mr. Czarkowski pursuant to the
consulting agreement. The new options are as follows:
Shares Issuable
Upon Exercise Option Vesting
of Option Exercise Price Date (1) Expiration Date
--------------- -------------- --------- ---------------
100,000 $ 8.00 1/20/2015 1/20/2018
100,000 $12.00 7/20/2015 1/20/2018
(1) Options are subject to certain vesting requirements.
12
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 8. COMMITMENT AND CONTINGENCIES (Continued)
The Company valued the options using the Black-Scholes option pricing model
resulting in a total fair market value of approximately $25,000 which will be
amortized to stock based expense on the vesting dates. To date no expense has
been recognized pursuant to these options.
On March 25, 2014, the Company entered into an employment agreement with Mr.
Keogh. The agreement: (i) has an initial term of three years; (ii) requires that
Mr. Keogh devote at least 50% of his time to the Company and; (iii) provides
that the Company will pay Mr. Keogh $12,000 per month during the term of the
agreement. Pursuant to the employment agreement, Strategic Capital Partners,
LLC, the Company's largest shareholder, sold 300,000 shares of the Company's
common stock to Mr. Keogh at a price of $0.02 per share. As the purchase price
was estimated to be the fair market value of the stock, the Company was not
required to recognize any expense related to this transaction.
Of these 1,200,000 shares, 300,000 shares vested on March 25, 2014 and 900,000
are subject to the following vesting requirements provided that Mr. Keogh is
employed the Company on the applicable vesting date: (i) 300,000 Shares will
vest on the earlier of March 20, 2015 or the date the Company receives at least
$15,000,000 from the sale of its debt or equity securities; (ii) 300,000 Shares
will vest on the earlier of March 20, 2016 or the date the Company receives at
least $30,000,000 from the sale of its debt or equity securities; and (iii)
300,000 Shares will vest on the earlier March 19, 2017 or the date the Company
receives at least $45,000,000 from the sale of its debt or equity securities.
For purposes of the foregoing, traditional financing from banks or similar
financial institutions will not be given effect and the required amounts to be
raised will be cumulative.
If during the term of the employment agreement Mr. Keogh is Terminated other
than For Cause, there is a Change in Control, or Mr. Keogh terminates the
employment agreement for Good Reason, then, all shares which have not yet vested
will immediately vest.
All shares that are not vested at the time of termination of Mr. Keogh's
employment, if such termination is a Termination for Cause or a Voluntary
Termination, will be repurchased by the Company at a price of $0.001 per share.
Any shares which are not vested and which are not required to be purchased by
the Company will be returned to treasury and cancelled.
13
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 8. COMMITMENT AND CONTINGENCIES (Continued)
In addition the Company granted Mr. Keogh an option to purchase the Company's
common stock pursuant to the following terms.
Shares Issuable
Upon Exercise Option Vesting
of Option Exercise Price Date (1) Expiration Date
--------------- -------------- --------- ---------------
400,000 $ 8.00 3/20/2015 3/20/2018
400,000 $12.00 3/20/2016 3/20/2018
(1) The vesting date is the date the options may first be exercised. The
vesting conditions for the shares, as described above, will apply to the
options, except the vesting dates for the options will control and any
unvested options will not be purchased by the Company.
The Company valued the options using the Black Scholes option pricing model
resulting in a total value of approximately $95,000 to be amortized to stock
based compensation expense on the vesting date. To date, no expense has been
recognized as of March 31, 2014.
14
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 8. COMMITMENT AND CONTINGENCIES (Continued)
The fair value of options and warrants granted during the period were estimated
on the date of grant using the Black Scholes option pricing model and the
following assumptions:
Year of option grant 2014
--------------------- -------
Market value of stock on grant date $0.02
Risk free interest rate 2.62%
Dividend yield 0%
Volatility factor 100%
Weighted average expected life 24 Months
Expected forfeiture rate 0%
Stock option activity is presented below.
Weighted Weighted
Average Average Aggregate
Number of Expected Contractual Intrinsic
Shares Price Term (Years) Value
---------- -------- ------------ ---------
Outstanding at September 30,
2013 - - - -
Granted 2,200,000 9.60 4 -
Cancelled (1,200,000) (9.30) - -
---------- -------- -------- --------
Outstanding at March 31, 2014 1,000,000 10.00 -
========== ======== ======== ========
Expected to Vest at March 31,
2014 1,000,000 -
========= ========
Total remainder of stock compensation expense to be recognized through the
vesting date of the above options as of March 31, 2014 will be approximately
$120,000.
15
AMERICANN, INC.
(fka NEVADA HEALTH SCAN, INC.)
(A Development Stage Company)
Notes To Unaudited Financial Statements
For the three and six month period ended March 31, 2014
NOTE 9. SUBSEQUENT EVENTS
In preparing these financial statements, the Company has evaluated events and
transactions for potential recognition or disclosure through May 16, 2014, the
date the financial statements were available to be issued.
16
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
BUSINESS AND PLAN OF OPERATION
The Company was incorporated on June 25, 2010 under the laws of the State
of Delaware. The Company was established as part of the Chapter 11
reorganization of AP Corporate Services, Inc. ("AP"). Under AP's Plan of
Reorganization, as confirmed by the U.S. Bankruptcy Court for the Central
District of California, the Company was incorporated to: (i) hold any interest
which AP retained in the development of an MRI facility in Nevada; and (ii)
issue shares of its common stock to AP's general unsecured creditors, to its
administrative creditors, and to its shareholders in order to enhance their
opportunity to recover from the bankruptcy estate.
Since the Company lacked the resources to effectively develop an MRI
facility in June, 2012, the Company decided to promote medical tourism by
providing information on a website for those seeking to travel abroad for
healthcare services. The Company planned to generate revenue by selling
advertising to healthcare providers and related businesses including hotels and
travel businesses.
In September 2013 the Company abandoned its business plan relating to
promoting medical tourism.
On January 17, 2014 Strategic Capital Partners, LLC, ("SCP") a firm
controlled by Benjamin J. Barton acquired 14,950,000 shares of the Company's
issued and outstanding common stock.
In connection with the acquisition:
o Mr. Barton was appointed as a director of the Company, and
o Dean Konstantine, Josephine Resma and Howard Behling resigned as
officers and directors of the Company.
On January 22, 2014 Jay Czarkowski was appointed as a director and Chief
Executive Officer of the Company and Benjamin Barton was appointed the Chief
Financial officer of the Company. On March 19, 2014, Mr. Czarkowski resigned as
an officer and director of the Company.
On February 21, 2014 the Company changed its name from Nevada Health Scan,
Inc. to Americann, Inc. On the same day, the Company declared a stock dividend
in the amount of four shares of common stock for each issued and outstanding
share of common stock.
On February 24, 2014 SCP returned 65,750,000 shares to the Company.
17
During March and April 2014 the Company sold 1,000,000 shares of its
common stock to a group of private investors at a price of $0.75 per share. SCP
purchased 400,000 shares in this offering.
On March 25, 2014, Timothy Keogh was appointed Chief Executive Officer and
a director of the Company.
The Company plans to provide an essential set of services to the regulated
cannabis industry. The market research firm ArcView Group estimates the market
for the regulated cannabis industry for 2013 was $1.53 billion, expected to grow
to $2.53 billion in 2014 and $10.2 billion in ten years. Based on the ArcView
analysis, the cannabis industry is projected to grow faster than any other
industry in the country over the next decade.
While the industry is growing rapidly, the cannabis industry faces two
major obstacles that challenge its growth and profitability. The cultivation of
cannabis is a very capital-intensive enterprise. Many cannabis entrepreneurs do
not have access to the capital that is necessary to build the infrastructure to
meet growing demand. Traditional sources of financing, such as banks, are not
available currently to cannabis producers and retailers. Also, there is a
significant shortage of knowledge related to virtually all areas of the cannabis
business. When new states are added to the list of regulated cannabis markets,
there will be a scarcity of experience and expertise to serve the needs of
growers and retailers in these states.
The Company believes that since the industry is so new, there is
significant potential to transform the cannabis business through
professionalism, innovation and the application of technology.
The Company does not intend to cultivate, produce, distribute or sell
cannabis, but plans to provide a wide variety of essential services to licensed,
regulated cannabis growers and retailers. These services include financing,
cultivation center design, operational consulting, real estate development, and
research.
The Company plans to generate revenue and profits from several sources
including developing and selling cannabis cultivation facilities, interest
income from loans to licensed cannabis operators, consulting and the licensing
or sale of intellectual property.
The Company is based in Colorado, which by virtue of it being the first
state to implement cannabis access to adults for non-medical purposes, provides
an ideal environment for which to serve the growing cannabis industry as it
expands nationally.
RESULTS OF OPERATIONS
In January 2014 the Company began operating in accordance with its new
business plan. As of March 31, 2014 the Company had not generated any revenue.
18
Since the Company was inactive prior to January 2014, any comparison of
the Company's operating results for the three months ended March 31, 2014 and
its financial condition as of March 31, 2014 with any prior periods would not be
meaningful.
LIQUIDITY AND CAPITAL RESOURCES
The Company's sources and (uses) of funds for the three months ended March
31, 2014 are shown below:
Net cash provided by (used in) operations (167,300)
Sale of common stock 734,000
Loan from related party 5,600
The Company does not have any firm commitments from any person to provide
it with any capital.
See Note 2 to the financial statements included as part of this report for
a description of the Company's accounting policies and recent accounting
pronouncements.
Item 4. Controls and Procedures.
(a) The Company maintains a system of controls and procedures designed to
ensure that information required to be disclosed in reports filed or submitted
under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded,
processed, summarized and reported, within time periods specified in the SEC's
rules and forms and to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act, is
accumulated and communicated to the Company's management, including its
Principal Executive and Financial Officers, as appropriate to allow timely
decisions regarding required disclosure. As of March 31, 2014, the Company's
Principal Executive and Financial Officers evaluated the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Principal Executive and Financial Officers concluded
that the Company's disclosure controls and procedures were effective.
(b) Changes in Internal Controls. There were no changes in the Company's
internal control over financial reporting during the quarter ended March 31,
2014, that materially affected, or are reasonably likely to materially affect,
its internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 6. Exhibits
Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32 Certification pursuant to Section 906 of the Sarbanes-Oxley
Act.
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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.
May 19, 2014 By:/s/ Timothy Keogh
------------------------------
Timothy Keogh, Principal Executive
Officer
May 19, 2014 By:/s/ Benjamin Barton
------------------------------
Benjamin Barton, Principal
Financial and Accounting Officer
2
