CIMG (IMG) 10-Q 12 Feb 14 2014 Q1 Quarterly report Financial data

Document_And_Entity_Informatio

Document And Entity Information	3 Months Ended
	Dec. 31, 2013	Feb. 11, 2014
Document and Entity Information [Abstract]	'	'
Entity Registrant Name	'NuZee, Inc.	'
Document Type	'10-Q	'
Current Fiscal Year End Date	'--09-30	'
Entity Common Stock, Shares Outstanding	'	28,991,690
Amendment Flag	'false	'
Entity Central Index Key	'0001527613	'
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Well-known Seasoned Issuer	'No	'
Document Period End Date	31-Dec-13	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'

NuZee_Inc_Consolidated_Balance

NuZee, Inc. - Consolidated Balance Sheet (USD $)	Dec. 31, 2013	Sep. 30, 2013
Current Assets	'	'
Cash	$686,946	$1,110,661
Accounts Receivable	'	13,195
Related Party Receivables	'	139,661
Inventories	35,421	'
Prepaid expenses and deposits	62,919	16,896
Total current assets	785,286	1,280,413
Equipment, net	10,122	8,663
Total Assets	795,408	1,289,076
Current Liabilities	'	'
Accounts payable	60,360	55,822
Advances from Stockholders'	'	50,000
Other Current Liabilities	'	9,563
Total Current Liabilities	60,360	115,385
Stockholders' Equity	'	'
Preferred stock; 100,000,000 shares authorized, $0.00001 par value; 0 shares issued and outstanding	0	0
Common stock; 100,000,000 shares authorized, $0.00001 par value; 28,991,690 and 37,957,790 shares issued and outstanding	290	380
Additional paid in capital	3,520,533	2,556,349
Accumulated deficit	-2,785,775	-1,383,038
Total Stockholders' Equity	735,048	1,173,691
Total Liabilities and Stockholders' Equity	$795,408	$1,289,076

NuZee_Inc_Consolidated_Balance1

NuZee, Inc. - Consolidated Balance Sheet (Parentheticals) (USD $)	Dec. 31, 2013	Sep. 30, 2013
Preferred stock par value (in Dollars per share)	$0.00	$0.00
Preferred stock, shares authorized (in Shares)	100,000,000	100,000,000
Preferred stock, shares issued (in Shares)	0	0
Preferred stock, shares outstanding (in Shares)	0	0
Common stock par value (in Dollars per share)	$0.00	$0.00
Common stock, shares authorized (in Shares)	100,000,000	100,000,000
Common stock, shares issued (in Shares)	28,991,690	37,957,790
Common stock, shares outstanding (in Shares)	28,991,690	37,957,790

NeZee_Inc_Consolidated_Stateme

NeZee, Inc. - Consolidated Statements of Operations (USD $)	3 Months Ended		26 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
Revenues	'	$36,825	$122,232
Cost of revenues	'	19,208	244,806
Gross profit (loss)	'	17,617	-122,574
Operating expenses	1,402,880	198,078	2,664,114
Loss from operations	-1,402,880	-180,461	-2,786,688
Other Income	143	608	913
Net loss	($1,402,737)	($179,853)	($2,785,775)
Basic and diluted loss per common share (in Dollars per share)	($0.05)	($0.01)	'
Basic and diluted weighted average number of common shares outstanding (in Shares)	31,135,757	31,486,956	'

NuZee_Inc_Consolidated_Stateme

NuZee, Inc. - Consolidated Statements of Cash Flows (USD $)	3 Months Ended		26 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
Operating Activities	'	'	'
Net loss	($1,402,737)	($179,853)	($2,785,775)
Adjustments to reconcile net loss to net cash	'	'	'
Stock-based compensation	1,053,755	'	1,053,755
Depreciation	468	93	1,179
Provision for obsolete inventory	'	'	141,903
Changes in operating assets and liabilities:	'	'	'
Accounts Receivable	13,195	-178	'
Related Party Receivables	'	-139,661	-139,661
Inventories	-35,421	41,551	-177,324
Prepaid expenses and deposits	-46,023	-71,502	-62,919
Accounts payable	4,538	-45,705	60,360
Other Current Liabilities	-9,563	-7,011	'
Net cash used by operating activities	-421,788	-402,266	-1,908,482
Investing Activities:	'	'	'
Purchase of furniture and equipment	-1,927	'	-11,301
Net cash used by investing activities	-1,927	'	-11,301
Financing Activities:	'	'	'
Advances from Stockholders	'	'	199,710
Proceeds from issuance of common stock	'	250,290	2,407,019
Net cash provided by financing activities	'	250,290	2,606,729
Net change in cash	-423,715	-151,976	686,946
Cash, beginning of period	1,110,661	165,484	'
Cash, end of period	686,946	13,508	686,946
Supplemental disclosure of cash flow information:	'	'	'
Cash paid for interest	0	0	0
Cash paid for taxes	0	0	0
Non Cash Investing and Financing Activities:	'	'	'
Common Stock issued for conversions of advance from stockholder	'	149,710	149,710
Common Stock issued in exchange for acquisition of intellectual property	'	'	42,818
Cancellation of common stocks	($139,661)	'	($182,479)

1_BASIS_OF_PRESENTATION_AND_SU

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Dec. 31, 2013
Accounting Policies [Abstract]	'
Significant Accounting Policies [Text Block]	'
	1.      BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	The accompanying unaudited interim financial statements of Nuzee, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the initial period ended September 30, 2013 as filed with the SEC. 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 consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the annual report on Form 10-K have been omitted.
	Going Concern
	The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has had recurring losses, large accumulated deficits, is dependent on the shareholder to provide additional funding for operating expenses and has no recurring revenues. These items raise substantial doubt about the Company’s ability to continue as a going concern.
	Equity based payments
	The Company accounts for equity instruments issued to employees in accordance with ASC 718 "Stock Compensation". Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method.

2_RELATED_PARTY_TRANSACTIONS

2. RELATED PARTY TRANSACTIONS	3 Months Ended
	Dec. 31, 2013
Related Party Transactions [Abstract]	'
Related Party Transactions Disclosure [Text Block]	'
	2.      RELATED PARTY TRANSACTIONS
	During the fiscal year ended September 30, 2013, the Company issued 1,247,583 shares to convert $149,710 due to its majority shareholder.  The Company also received $50,000 in exchange for a note, from its majority shareholder, which are due on January 9, 2016 and bear interest rate of 2% per annum.
	During the fiscal year ended September 30, 2013, the Company made a deposit of $139,661 towards the purchase of skin care products, for resale, from an entity controlled by the Company’s majority shareholder. Subsequent to this commitment, the Company decided to discontinue the sale of skin care products, and cancelled the purchase order.
	During October 2013, the Company entered into a Compromise Agreement with the Company’s majority shareholder to settle the related party receivable. In consideration of the compromises contained in the agreement the Company’s majority shareholder agreed to forgive a note in the amount of $50,000, cancel 8,966,100 shares, and the Company forgave the related party receivable of $139,661.

3_INTELLECTUAL_PROPERTY

3. INTELLECTUAL PROPERTY	3 Months Ended
	Dec. 31, 2013
Disclosure Text Block [Abstract]	'
Intangible Assets Disclosure [Text Block]	'
	3. INTELLECTUAL PROPERTY
	On September 17, 2012 the Company issued 3,040,000 shares at the estimated fair market value of $.014085 per share in exchange for an assignment of certain intellectual property rights to one of the Company’s principal product offerings. These shares were valued at $42,818.
	The Company in July 2013 did not receive the value represented to it in connection with the issuance of 3,040,000 of these shares, and as a result, revoked such issuance.

4_COMMON_STOCK

4. COMMON STOCK	3 Months Ended
	Dec. 31, 2013
Stockholders' Equity Note [Abstract]	'
Stockholders' Equity Note Disclosure [Text Block]	'
	4. COMMON STOCK
	During the fiscal year ended September 30, 2012, the Company entered into subscription agreements with accredited investors and sold 27,360,00 shares at $0.0001 and $0.14085 per share, for an aggregate purchase price of $304,589.
	During the fiscal year ended September 30, 2013, the Company entered into subscription agreements with accredited investors and sold 7,150,207 shares at $0.12, $0.22 and $0.48 per share, for an aggregate purchase price of $2,102,430.

5_REVERSE_MERGER

5. REVERSE MERGER	3 Months Ended
	Dec. 31, 2013
Business Combinations [Abstract]	'
Business Combination Disclosure [Text Block]	'
	5.  REVERSE MERGER
	During April, 2013 Havana Furnishings Inc. consummated a share exchange with Nuzee, Co., Ltd. in which Havana Furnishings Inc. issued 33,733,333 common shares in exchange for 100% of the outstanding shares of Nuzee, Co., Ltd. Also as part of this transaction, the Company changed its name from Havana Furnishings Inc. to Nuzee, Inc. Immediately prior to the closing, Havana Furnishings Inc. had 2,200,000 shares issued and outstanding.
	For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of Havana Furnishings Inc., with Nuzee, Co., Ltd. is considered the accounting acquirer, and the financial statements of the accounting acquirer became the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 33,733,333 shares issued to the shareholder of Nuzee, Co., Ltd. and its designees in conjunction with the share exchange transaction have been presented as outstanding for all periods. The historical consolidated financial statements include the operations of the accounting acquirer for all periods presented.

6_STOCK_OPTIONS

6. STOCK OPTIONS	3 Months Ended
	Dec. 31, 2013
Table Text Block Supplement [Abstract]	'
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	'
	6.  STOCK OPTIONS
	During October 2013 the Company granted 3,471,665 options to employee. The right to exercise these options shall vest and become 25% exercisable on the first anniversary of when granted, with the exception that 100% of options issued to one employee vested immediately. The remaining options shall vest and become exercisable ratably over the next 36 months, with the exception that options issued to 2 employees shall vest and become exercisable over 18 months and option issued to one employee shall vest and become exercisable as of the effective date of the Option Agreement. The exercise price is $0.48 per share and will expire ten years from the grant date, unless terminated earlier as provided by the Option Agreements.
	The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model using the assumptions noted as follows: expected volatility was based on historical trading in the company's stock. The expected term of options granted was determined using the simplified method under SAB 107 and represents one-half the exercise period. The risk-free rate is calculated using the U.S. Treasury yield curve, and is based on the expected term of the option. The Company has estimated there will be no forfeitures.
	The Black-Scholes option pricing model was used with the following weighted average assumptions for options granted during the three months ended  December 31, 2013:
	Risk-free interest rate 1% - 2%
	Expected option life 5 – 6 years
	Expected volatility 300%
	Expected dividend yield 0.0 & 0.0%
	At December 31, 2013, 1,657,778 options are exercisable and the Company recognized $1,053,755 of stock options expenses during the three months ended December 31, 2013

Accounting_Policies_by_Policy_

Accounting Policies, by Policy (Policies)	3 Months Ended
	Dec. 31, 2013
Accounting Policies [Abstract]	'
Consolidation, Policy [Policy Text Block]	'
	The accompanying unaudited interim financial statements of Nuzee, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the initial period ended September 30, 2013 as filed with the SEC. 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 consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the annual report on Form 10-K have been omitted
Going Concern Note	'Going ConcernThe accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has had recurring losses, large accumulated deficits, is dependent on the shareholder to provide additional funding for operating expenses and has no recurring revenues. These items raise substantial doubt about the Company's ability to continue as a going concern
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	'
	Equity based payments
	The Company accounts for equity instruments issued to employees in accordance with ASC 718 "Stock Compensation". Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method

2_RELATED_PARTY_TRANSACTIONS_D

2. RELATED PARTY TRANSACTIONS (Details) (USD $)	1 Months Ended	12 Months Ended	39 Months Ended
	Oct. 31, 2013	Sep. 30, 2013	Jan. 09, 2016
Related Party Transactions [Abstract]	'	'	'
Stock Issued During Period, Shares, Conversion of Convertible Securities (in Shares)	'	1,247,583	'
Proceeds from Convertible Debt	'	$149,710	'
Due to Related Parties	'	'	50,000
Short-term Debt, Interest Rate Increase	'	'	2.00%
Deposits Assets	'	139,661	'
Debt Instrument, Decrease, Forgiveness	50,000	'	'
RelatedPartyDebtForgivenessinShares (in Shares)	8,966,100	'	'
RelatedPartyDebtForgiveness	$139,661	'	'

3_INTELLECTUAL_PROPERTY_Detail

3. INTELLECTUAL PROPERTY (Details) (USD $)	0 Months Ended	10 Months Ended
	Sep. 17, 2012	Jul. 31, 2013	Dec. 31, 2013	Sep. 30, 2012
Disclosure Text Block [Abstract]	'	'	'	'
Stock Issued During Period, Shares, Purchase of Assets	3,040,000	'	'	'
Shares Issued, Price Per Share (in Dollars per share)	$14,085	'	'	$0.14
Intangible Assets, Net (Excluding Goodwill) (in Dollars)	$42,818	'	$35,421	'
Stock Issued During Period, Shares, Share-based Compensation, Forfeited	'	3,040,000	'	'

4_COMMON_STOCK_Details

4. COMMON STOCK (Details) (USD $)	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2013	Sep. 17, 2012
4. COMMON STOCK (Details) [Line Items]	'	'	'	'
Stock Issued During Period, Shares, New Issues (in Shares)	7,150,207	2,736,000	'	'
Common Stock, Par or Stated Value Per Share	$0.00	$0.00	$0.00	'
Shares Issued, Price Per Share	'	$0.14	'	$14,085
Proceeds from Issuance or Sale of Equity (in Dollars)	$2,102,430	$304,589	'	'
IssuedAt0.12PerShare	'	'	'	'
4. COMMON STOCK (Details) [Line Items]	'	'	'	'
Shares Issued, Price Per Share	$0.12	'	'	'
IssuedAt0.22PerShare	'	'	'	'
4. COMMON STOCK (Details) [Line Items]	'	'	'	'
Shares Issued, Price Per Share	$0.22	'	'	'
IssuedAt0.48PerShare	'	'	'	'
4. COMMON STOCK (Details) [Line Items]	'	'	'	'
Shares Issued, Price Per Share	$0.48	'	'	'

5_REVERSE_MERGER_Details

5. REVERSE MERGER (Details)	1 Months Ended
	Apr. 30, 2013
Business Combinations [Abstract]	'
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares)	33,733,333
Sale of Stock, Percentage of Ownership after Transaction	100.00%

6_STOCK_OPTIONS_Details

6. STOCK OPTIONS (Details) (USD $)	1 Months Ended	3 Months Ended
	Oct. 31, 2013	Dec. 31, 2013
Table Text Block Supplement [Abstract]	'	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)	3,471,665	1,657,778
Investment Options, Exercise Price (in Dollars per share)	$0.48	'
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	-2.00%	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term	'6 years	'
Fair Value Assumptions, Expected Volatility Rate	300.00%	'
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%	'
Allocated Share-based Compensation Expense (in Dollars)	'	$1,053,755