CIMG (IMG) 10-Q 14 Aug 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2015	Jul. 13, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	NuZee, Inc.
Trading Symbol	NUZE
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		27,758,950
Amendment Flag	false
Entity Central Index Key	1,527,613
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	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

NuZee, Inc. - Consolidated Bala

NuZee, Inc. - Consolidated Balance Sheets - USD ($)	Jun. 30, 2015	Sep. 30, 2014
Current assets:
Cash	$ 202,325	$ 238,160
Accounts receivable	29,844	5,205
Inventories	208,644	50,881
Prepaid expenses and deposits	166,620	69,099
Total current assets	607,433	363,345
Equipment, net	114,220	33,368
Total assets	721,653	396,713
Current liabilities:
Accounts payable	149,556	43,384
Convertible notes payable - related party	600,000
Other current liabilities	389	8,180
Total current liabilities	749,945	51,564
Stockholders' equity (deficit):
Common stock; 100,000,000 shares authorized, $0.00001 par value; 29,674,951 and 30,599,719 shares issued	297	306
Additional paid in capital	5,639,411	4,968,609
Accumulated deficit	(5,590,634)	(4,518,766)
Less: treasury stock, at cost (2,016,000 and 2,736,000 shares held in treasury, $0.03838 per share)	(77,366)	(105,000)
Total stockholders' equity (deficit)	(28,292)	345,149
Total liabilities and stockholders' equity (deficit)	$ 721,653	$ 396,713

NuZee, Inc. - Consolidated Bal3

NuZee, Inc. - Consolidated Balance Sheets (Parentheticals) - $ / shares	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Preferred stock; shares authorized	100,000,000	100,000,000
Preferred stock; par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred stock; shares issued	0	0
Preferred stock; shares outstanding	0	0
Common stock; shares authorized,	100,000,000	100,000,000
Common stock; par value (in Dollars per share)	$ 0.00001	$ 0.00001
Common stock; shares issued	29,674,951	30,599,719
Less: treasury stock	2,016,000	2,736,000
Less: treasury stock, per share (in Dollars per share)	$ 0.03838	$ 0.03838

NeZee, Inc. - Consolidated Stat

NeZee, Inc. - Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues	$ 29,811	$ 59,159	$ 86,412	$ 59,471
Cost of sales	23,005	55,828	63,960	56,016
Gross Profit (loss)	6,806	3,331	22,452	3,455
Operating expenses	369,957	618,605	1,093,286	2,677,620
Loss from operations	(363,151)	(615,274)	(1,070,834)	(2,674,165)
Other income	190		191
Other expense		(2,488)	(1,225)	(2,300)
Net loss	$ (362,961)	$ (617,762)	$ (1,071,868)	$ (2,676,465)
Basic and diluted loss per common share (in Dollars per share)	$ (0.01)	$ (0.02)	$ (0.04)	$ (0.09)
Basic and diluted weighted average number of common stock outstanding (in Shares)	27,770,018	29,687,894	27,876,954	30,010,231

NuZee, Inc. - Consolidated Stat

NuZee, Inc. - Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities:
Net loss	$ (1,071,868)	$ (2,676,465)
used by operating activities:
Depreciation	9,307	2,388
Option expense	32,038	1,480,480
Warrant expense	20,527	7,500
Change in operating assets and liabilities:
Accounts receivable	(24,639)	(10,333)
Inventories	(157,763)	(53,735)
Prepaid expenses and deposits	(97,521)	(75,838)
Accounts payable	106,172	41,734
Other current liabilities	(7,791)	7,398
Net cash used by operating activities	(1,191,538)	(1,276,871)
Investing activities:
Purchase of equipment	(90,159)	(4,241)
net cash used by investing activities	(90,159)	(4,241)
Financing activities:
Proceeds from issuance of convertible note payable	600,000
Proceeds from issuance of common stock	429,862	638,200
Proceeds from issuance of treasury stock	216,000
Net cash provided by financing activities	1,245,862	638,200
Net change in cash	(35,835)	(642,912)
Cash, beginning of period	238,160	1,110,661
Cash, end of period	202,325	467,749
Non-cash investing and financing activities:
Cancellation of common stocks	$ 15	$ 139,661

1. BASIS OF PRESENTATION AND SU

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Jun. 30, 2015
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, 2014 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. Stock 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	9 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
Related Party Transactions Disclosure [Text Block]	2. RELATED PARTY TRANSACTIONS During February 2015, the Company issued a secured convertible promissory note in the sum of $600,000 to Masateru Higashida, the Company’s major shareholder. Interest calculated at the annual rate of zero percent (0%) for the period until April 2016. If the outstanding principle and all accrued and unpaid interest on the debt hereof (the “Debt”) is not repaid by the Company in full by the Repayment Date, the Debt or any portion thereof may be converted at the option of the Holder, upon written notice to the Company at any time after the Repayment Date, into that number of shares of the Company’s Common Stock equal to the Debt or that portion thereof that the Holder elects to convert, divided by price per share of $0.51. This note shall by cancelled on the date of conversion of the entirety of the Debt. During the third quarter of current year, there were no transactions with a related party.

3. COMMON STOCK

3. COMMON STOCK	9 Months Ended
	Jun. 30, 2015
Stockholders' Equity Note [Abstract]
Stockholders' Equity Note Disclosure [Text Block]	3. C O MM O N S T O C K During November 2014, the Company resold 130,000 shares of treasury stock at $0.30 per share, for an aggregate purchase price of $39,000. During December 2014, the Company resold 450,000 shares of treasury stock at $0.30 per share, for an aggregate purchase price of $135,000. During December 2014, the Company sold 20,000 shares of common stock at $0.66 per share, for an aggregate purchase price of $13,200. During January 2015, the Company cancelled 1,160,000 shares of common stock. During January 2015, the Company resold 140,000 shares of treasury stock at $0.30 per share, for an aggregate purchase price of $42,000. During March 2015, the Company sold 20,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $14,000. During April 2015, the Company sold 473,803 shares of common stock at $0.30 per share, for an aggregate purchase price of $331,662. During May 2015, the Company sold 20,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $14,000. During June 2015, the Company sold 81,429 shares of common stock at $0.70 per share, for an aggregate purchase price of $57,000. During June 2015, the Company cancelled 380,000 shares of common stock.

4. STOCK OPTIONS

4. STOCK OPTIONS	9 Months Ended
	Jun. 30, 2015
Table Text Block Supplement [Abstract]
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	4. 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. During February 2015 the Company granted 45,000 options to employee. The right to exercise these options shall vest and become exercisable on the last day of business of December 31, 2015. The exercise price is $0.30 per share. During February 2015 the Company granted 100,000 options to consultants for services. The right to exercise these options shall vest and become exercisable following September 30, 2015. The exercise price is $0.30 per share. 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 nine months ended June 30, 2015: Risk-free interest rate 1% - 2% Expected option life 5 – 6 years Expected volatility 300% Expected dividend yield 0.0% During the nine months ended June 30, 2015, 151,041 options are exercisable and the Company recognized $32,038 of stock options expenses. Unamortized option expense as of June 30, 2015 for all options outstanding amounted to approximately $24,620.

5. STOCK WARRANTS

5. STOCK WARRANTS	9 Months Ended
	Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities Disclosure [Text Block]	5. STOCK WARRANTS During April 2014, the Company granted 100,000 warrants to advisors for services. The right to exercise these warrants shall vest in equal eight quarterly installments over the twenty-four (24) months following the date their vesting begins, subject to their continued engagement as a service provider though each such date. The exercise price equal to the current fair market value per share on the date of grant and will expire ten years from the grant date, unless terminated earlier as provided by the Warrant Agreements. The Black-Scholes warrant pricing model was used with the following weighted average assumptions for options granted during the nine months ended June 30th, 2015: Risk-free interest rate 2.53% Expected life 10 years Expected volatility 300% Expected dividend yield 0.0% During nine months ended June 30, 2015, the company had $20,527 warrant expenses. During nine months ended June 30, 2015, the company cancelled all warrants.

6. SUBSEQUENT EVENTS

6. SUBSEQUENT EVENTS	9 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
Subsequent Events [Text Block]	6. S U B S E Q U E N T E V E N T S During July 2015, the Company sold 100,000 new shares of common stock at $0.70 per share, for an aggregate purchase price of $70,000.

Accounting Policies, by Policy

Accounting Policies, by Policy (Policies)	9 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Basis of Accounting, 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, 2014 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	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
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	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 (Details) - Feb. 28, 2015 - USD ($)	Total
Related Party Transactions [Abstract]
Notes Payable, Related Parties	$ 600,000
Short-term Debt, Interest Rate Increase	0.00%
Debt Instrument, Convertible, Conversion Price	$ 0.51

3. COMMON STOCK (Details)

3. COMMON STOCK (Details) - USD ($)	Mar. 31, 2015	Dec. 15, 2014	Jun. 30, 2015	May. 31, 2015	Apr. 30, 2015	Mar. 31, 2015	Jan. 31, 2015	Dec. 31, 2014	Nov. 30, 2014	Jul. 31, 2015
3. COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, New Issues			81,429	20,000	473,803	20,000		20,000
Shares Issued, Price Per Share (in Dollars per share)	$ 0.70		$ 0.70	$ 0.70	$ 0.30	$ 0.70	$ 0.30	$ 0.66		$ 0.70
Proceeds from Issuance or Sale of Equity (in Dollars)	$ 14,000	$ 135,000	$ 57,000	$ 14,000	$ 331,662		$ 42,000	$ 13,200	$ 39,000
Development Stage Entities, Stock Issued, Shares, Issued for Cash		450,000
CancellationOfCommonStock			380,000				1,160,000
Stock Repurchased During Period, Shares							140,000
IssuedAt0.22PerShare
3. COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, New Issues									130,000
IssuedAt0.48PerShare
3. COMMON STOCK (Details) [Line Items]
Shares Issued, Price Per Share (in Dollars per share)									$ 0.30
IssuedAt0.12PerShare
3. COMMON STOCK (Details) [Line Items]
Shares Issued, Price Per Share (in Dollars per share)		$ 0.30

4. STOCK OPTIONS (Details)

4. STOCK OPTIONS (Details) - USD ($)	1 Months Ended			6 Months Ended	9 Months Ended	61 Months Ended
	Feb. 28, 2015	Feb. 14, 2015	Oct. 31, 2013	Mar. 31, 2015	Jun. 30, 2015	Mar. 31, 2020
Table Text Block Supplement [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures			3,471,665
PercentageOfExercisableOptions			25.00%
Investment Options, Exercise Price	$ 0.30	$ 0.30	$ 0.48
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	100,000	45,000		151,041
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate					2.00%
Fair Value Assumptions, Expected Term					10 years	5 years
Fair Value Assumptions, Weighted Average Volatility Rate						300.00%
Fair Value Assumptions, Expected Dividend Rate					0.00%	0.00%
Allocated Share-based Compensation Expense					$ 32,038
UnamortizedOptionExpense					$ 24,620

5. STOCK WARRANTS (Details)

5. STOCK WARRANTS (Details) - shares	9 Months Ended	61 Months Ended
	Jun. 30, 2015	Mar. 31, 2020	Apr. 29, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Class of Warrant or Right, Outstanding (in Shares)			100,000
Fair Value Assumptions, Risk Free Interest Rate	2.53%
Fair Value Assumptions, Expected Term	10 years	5 years
Fair Value Assumptions, Expected Volatility Rate	300.00%
Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%
Debt Conversion, Converted Instrument, Warrants or Options Issued (in Shares)	20,527

6. SUBSEQUENT EVENTS (Details)

6. SUBSEQUENT EVENTS (Details) - USD ($)	Jul. 31, 2015	Jun. 30, 2015	May. 31, 2015	Apr. 30, 2015	Mar. 31, 2015	Jan. 31, 2015	Dec. 31, 2014	Sep. 30, 2014
Subsequent Events [Abstract]
Common Stock, Shares, Issued	100,000	29,674,951						30,599,719
Shares Issued, Price Per Share	$ 0.70	$ 0.70	$ 0.70	$ 0.30	$ 0.70	$ 0.30	$ 0.66
Common Stock, Value, Issued	$ 70,000	$ 297						$ 306

Uncategorized Items - nuze-2015

Label	Element	Value
Net loss	us-gaap_NetIncomeLoss	$ (362,961)
Net loss	us-gaap_NetIncomeLoss	$ (617,762)