Note 6 - Related Party Transactions

9 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE

6

. RELATED PARTY TRANSACTIONS

Strategic Capital Partners.

 At

June 30, 2017

and

September 30, 2016,

we had outstanding notes and accrued interest payable, inclusive of premium, to SCP of

$1,984,024

and

$2,024,297,

respectively.

Interest expense was

$36,925

and

$23,814

for the

three

months ended

June 30, 2017

and

2016,

respectively; and

$106,527

and

$69,266

for the

nine

months ended

June 30, 2017

and

2016.

There was

no

interest payable to related parties at

June 30, 2017.

Interest payable – related party of

$109,825

was included in the accompanying balance sheets at 

September 30, 2016.  

We made interest payments of

$236,625

during

2017,

and made

no

interest payments during

2016

associated with this related party notes payable.  During the

nine

months ended

June 30, 2017,

we received advances of

$0

and made payments of

$20,000.

During the

nine

months ended

June 30, 2016,

we received advances of

$227,500

and made

no

payments.

Coastal Compassion.

 On

April 7, 2016,

we signed agreements with Coastal Compassion Inc. (“CCI”). CCI is

one

of a limited number of non-profit organizations that has received a provisional or final registration to cultivate, process and sell medical cannabis by the Massachusetts Department of Public Health. CCI has agreed to become the initial tenant in our planned Massachusetts Medical Cannabis Center (“MMCC”). Tim Keogh, our Chief Executive Officer, is a Board Member of CCI.

Pursuant to the agreements, we agreed to provide CCI with financing of up to

$2.5

million for a

five

-year term at

18%

interest per year for construction and working capital required for CCI’s approved dispensary and cultivation center in Fairhaven, MA. For a

three

-year period beginning

April 1, 2016,

we agreed to consult with CCI in the design, construction and operation of the Fairhaven facility. CCI will owe us

$10,000

each month for these consulting services, but is

not

required to pay until

six

months after generating certain revenues. Although the DPH has approved our agreement with CCI relating to the development and lease terms of the MMCC, the actual lease agreement with CCI has

not

been finalized or approved by the DPH. We will need to secure significant capital to provide the financing to CCI.

As of

June 30, 2017,

we have provided financing to CCI of

$125,327,

which includes construction and working capital advances of

$119,635

and accrued interest of

$5,692.