Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 14, 2020 | Mar. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | NuZee, Inc. | ||
Entity Central Index Key | 0001527613 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 76,301,028 | ||
Entity Common Stock, Shares Outstanding | 14,904,064 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash | $ 4,398,545 | $ 1,326,040 |
Accounts receivable, net | 195,610 | 540,310 |
Inventories, net | 245,370 | 500,986 |
Prepaid expenses and other current assets | 645,375 | 372,456 |
Other current assets - Related party | 460 | |
Total current assets | 5,484,900 | 2,740,252 |
Property and equipment, net | 1,668,348 | 1,875,591 |
Other assets: | ||
Right-of-use asset - operating lease | 652,197 | |
Right-of-use asset - finance lease | 105,825 | |
Investment | 183,314 | |
Other assets | 80,559 | 634,701 |
Total other assets | 1,021,895 | 634,701 |
Total assets | 8,175,143 | 5,250,544 |
Current liabilities: | ||
Accounts payable | 49,778 | 341,095 |
Current portion of long-term loan payable | 56,072 | 101,148 |
Current portion of lease liability - operating lease | 263,678 | |
Current portion of lease liability - finance lease | 21,598 | |
Accrued expenses | 703,069 | 480,864 |
Deferred income | 34,000 | |
Other current liabilities | 104,525 | 50,997 |
Other current liabilities - Related party | 2,812 | |
Total current liabilities | 1,232,720 | 976,916 |
Non-current liabilities: | ||
Lease liability - operating lease, net of current portion | 395,713 | |
Lease liability - finance lease, net of current portion | 78,400 | |
Loan payable - long term, net of current portion | 56,845 | 156,816 |
Other noncurrent liabilities | 21,707 | 1,750 |
Total non-current liabilities | 552,665 | 158,566 |
Total liabilities | 1,785,385 | 1,135,482 |
Stockholders' equity : | ||
Common stock; 100,000,000 shares authorized, $0.00001 par value; 14,570,105 and 13,617,366 shares issued | 146 | 137 |
Additional paid in capital | 40,472,229 | 28,898,344 |
Accumulated deficit | (34,272,778) | (24,795,687) |
Accumulated other comprehensive income (loss) | 190,161 | (90,635) |
Total NuZee Inc.'s stockholders' equity | 6,389,758 | 4,012,159 |
Noncontrolling interest | 102,903 | |
Total stockholders' equity | 6,389,758 | 4,115,062 |
Total liabilities and stockholders' equity | $ 8,175,143 | $ 5,250,544 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares issued | 14,570,105 | 13,617,366 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues, net | $ 1,403,131 | $ 1,793,590 |
Cost of sales | 1,642,084 | 1,498,473 |
Gross profit (loss) | (238,953) | 295,117 |
Operating expenses | 9,094,132 | 12,399,282 |
Loss from operations | (9,333,085) | (12,104,165) |
Other income | 30,388 | 39,237 |
Income from equity method investment | 23,314 | |
Other expense | (223,558) | (144,741) |
Interest expense | (21,243) | (5,267) |
Net loss | (9,524,184) | (12,214,936) |
Net loss attributable to noncontrolling interest | (47,093) | (26,971) |
Net loss attributable to NuZee, Inc. | $ (9,477,091) | $ (12,187,965) |
Basic and diluted loss per common share | $ (0.68) | $ (0.88) |
Basic and diluted weighted average number of common stock outstanding | 13,867,643 | 13,867,643 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Net loss | $ (9,524,184) | $ (12,214,936) |
Foreign currency translation | 224,986 | (22,925) |
Total other comprehensive income (loss), net of tax | 224,986 | (22,925) |
Comprehensive income (loss) | (9,299,198) | (12,237,861) |
Parent [Member] | ||
Net loss | (9,477,091) | (12,187,965) |
Foreign currency translation | 280,796 | (59,668) |
Total other comprehensive income (loss), net of tax | 280,796 | (59,668) |
Comprehensive income (loss) | (9,196,295) | (12,247,633) |
Noncontrolling Interest [Member] | ||
Net loss | (47,093) | (26,971) |
Foreign currency translation | (55,810) | 36,743 |
Total other comprehensive income (loss), net of tax | (55,810) | 36,743 |
Comprehensive income (loss) | $ (102,903) | $ 9,772 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Beginning balance at Sep. 30, 2018 | $ 132 | $ 14,957,491 | $ (12,607,722) | $ 93,131 | $ (30,967) | $ 2,412,065 |
Beginning balance, shares at Sep. 30, 2018 | 13,194,591 | |||||
Common shares issued for cash | $ 4 | 5,947,918 | 5,947,922 | |||
Common shares issued for cash, shares | 366,814 | |||||
Common stock issued to settle payables | 123,923 | 123,923 | ||||
Common stock issued to settle payables, shares | 5,961 | |||||
Stock option expense | 7,859,141 | 7,859,141 | ||||
Common stock issued for services | $ 1 | 37,499 | 37,500 | |||
Common stock issued for services, shares | 50,000 | |||||
Stock issuance costs | (27,628) | $ (27,628) | ||||
Exercise of stock options, shares | ||||||
Other comprehensive gain / (loss) | 36,743 | (59,668) | $ (22,925) | |||
Net income (loss) | (12,187,965) | (26,971) | (12,214,936) | |||
Ending balance at Sep. 30, 2019 | $ 137 | 28,898,344 | (24,795,687) | 102,903 | (90,635) | 4,115,062 |
Ending balance, shares at Sep. 30, 2019 | 13,617,366 | |||||
Common shares issued for cash | $ 9 | 7,354,969 | 7,354,978 | |||
Common shares issued for cash, shares | 916,738 | |||||
Stock option expense | 4,167,616 | 4,167,616 | ||||
Exercise of stock options | 51,300 | $ 51,300 | ||||
Exercise of stock options, shares | 36,001 | 36,001 | ||||
Other comprehensive gain / (loss) | (55,810) | 280,796 | $ 224,986 | |||
Net income (loss) | (9,477,091) | (47,093) | (9,524,184) | |||
Ending balance at Sep. 30, 2020 | $ 146 | $ 40,472,229 | $ (34,272,778) | $ 190,161 | $ 6,389,758 | |
Ending balance, shares at Sep. 30, 2020 | 14,570,105 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net loss | $ (9,524,184) | $ (12,214,936) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and Amortization | 408,489 | 452,207 |
Noncash lease expense | 161,989 | |
Loss on sale of assets | 43,163 | 6,096 |
Stock option expense | 4,167,616 | 7,859,141 |
Common stock issued for services | 37,500 | |
Allowance for (recovery of) doubtful accounts | 4,285 | (30,313) |
Loss on settlement of payables | 91,684 | |
Inventory impairment | 86,287 | |
Gain on disposal of a subsidiary | (95,555) | |
Loss on realization of AOCI upon disposal of a subsidiary | 245,607 | |
Income from equity method investment | (23,314) | |
Change in operating assets and liabilities: | ||
Accounts receivable | 333,933 | (365,364) |
Accounts receivable - Related party | 222 | |
Inventories | 157,845 | (366,109) |
Prepaid expenses and other current assets | (66,794) | (277,738) |
Other current assets - Related party | 33,428 | |
Other assets | (79,123) | (451) |
Accounts payable | (155,174) | (19,490) |
Deferred income | 34,000 | |
Lease liability - operating lease | (136,120) | |
Accrued expense and other current liabilities | 180,837 | 371,088 |
Other current liabilities - related party | 30 | |
Other noncurrent liabilities | 19,957 | (4,567) |
Net cash used by operating activities | (4,236,256) | (4,400,601) |
Investing activities: | ||
Purchase of equipment | (119,838) | (1,469,128) |
Proceeds from sales of equipment | 110,000 | 23,600 |
Proceeds from sale of a subsidiary | 3,142 | |
Cash paid for deposit on equipment | (592,440) | |
Net cash used by investing activities | (6,696) | (2,037,968) |
Financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 7,580,067 | 5,947,922 |
Payments of stock issuance costs | (264,018) | (27,628) |
Repayment of loans | (97,847) | (54,350) |
Repayment under finance lease | (19,025) | |
Proceeds from the exercise of stock options | 51,300 | |
Borrowing of loans | 138,953 | |
Net cash provided by financing activities | 7,250,477 | 6,004,897 |
Effect of foreign exchange on cash and cash equivalents | 64,980 | (46,954) |
Net change in cash | 3,072,505 | (480,626) |
Cash, beginning of period | 1,326,040 | 1,806,666 |
Cash, end of period | 4,398,545 | 1,326,040 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 21,243 | 1,500 |
Cash paid for taxes | 800 | 800 |
Noncash investing and financing activities: | ||
Auto purchased on loan | 38,127 | |
Equipment purchased on account | 124,540 | |
Common stock issued to settle payables | 32,239 | |
Recognition of ROU asset and lease liability upon adoption of ASU 2016-02 | 517,263 | |
Recognition of ROU asset and lease liability during the period | 278,248 | |
Reclassification of common stock offering costs to additional paid-in capital | 1,225,495 | |
Finance lease of equipment to pay off accounts payable | 124,500 | |
Contribution of machines to NuZee Latin America | 160,000 | |
Stock issuance cost accrued | $ 200,724 |
Organization
Organization | 12 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. ORGANIZATION NuZee, Inc. (the “Company”, “we”, “our”, “us’) was incorporated on November 9, 2011 in Nevada. The Company is a specialty coffee company and the Company believes it is the leading single serve pour over coffee co-packer in the United States. We believe we are the only commercial-scale producer of single serve pour over coffee within the North American market. We look to leverage our position as a co-packer at the forefront of the North American single serve pour over coffee market to revolutionize the way single serve coffee is enjoyed in the United States. While the United States is our core market, we also have single serve pour over coffee manufacturing and sales operations in Korea and a joint venture in Latin America. On September 28, 2020, the Company entered into a Stock Transfer Agreement with Eguchi Holdings Co., Ltd. (“EHCL”), pursuant to which the Company agreed to sell all of its equity interests in its majority-owned subsidiary, NuZee JAPAN Co., Ltd. (“NuZee JP”), representing 70% of the outstanding equity interests of NuZee JP, to EHCL for an aggregate sale price of approximately $34,000. We have two international subsidiaries in NuZee KOREA Ltd. (“NuZee KR”) and NuZee Investments Co., Ltd. (“NuZee INV”) in Japan, both of which are wholly owned subsidiaries of the Company. On October 28, 2019, we completed a l-for-3 reverse stock split, which became effective on November 12, 2019. All share and per share information included in these financial statements and notes thereto give effect to the reverse stock split. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects and have been consistently applied in preparing the accompanying financial statements. Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net loss. Earnings per Share Basic earnings per common share is equal to net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. The Company incurred a net loss for the years ended September 30, 2020 and 2019, respectively and therefore, basic and diluted earnings per share for those periods are the same because all potential common equivalent shares would be antidilutive. Capital Resources Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company has generated limited revenues from its principal operations, and there is no assurance of future revenues. As of September 30, 2020, the Company had cash of $4,398,545 and working capital of $4,252,180. However, the Company has not attained profitable operations since inception. During the fiscal year ended September 30, 2020, the Company completed an offering pursuant to Securities Act registration exemptions as well as a registered underwritten public offering and raised an aggregate of approximately $7,354,978 in net proceeds. In addition, in October and November of 2020, the Company raised an additional aggregate of $2,962,387 from a registered direct investment and an offering pursuant to Securities Act registration exemptions. The Company exceeded its capital raising predications thus mitigating any substantial doubt about the Company’s ability to continue as a going concern as defined by ASU 2014-05 and its ability to satisfy the estimated liquidity needs for the twelve months from the issuance of the financial statements. Use of Estimates In preparing these consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Fair Value of Financial Instruments Fair value is an estimate of the exit price, representing the amount that would be received to, sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction cost. Fair value measurement under generally accepted accounting principles provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3: Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis. The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate fair value because of the short-term nature of these instruments. The carrying amount of long-term debt approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar remaining maturities. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instruments when available. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Cash and Cash Equivalents The Company considers all highly-liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of September 30, 2020 and 2019. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may or may not maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. Accounts Receivable Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Bad debts expense or write offs of receivables are determined on the basis of loss experience, known and inherent risks in the receivable portfolio and current economic conditions. The Company recognized $119,569 of allowance for doubtful accounts as of September 30, 2019 and none for the year ended September 30, 2020. Major Customers For the years ended September 30, 2020 and 2019, revenue was primarily from major customers disclosed below. For the year ended September 30, 2020: Customer Name Sales Amount % of Total Accounts % of Total Customer K $ 284,099 20 % $ 3,291 2 % Customer JP $ 158,208 11 % — 0 % Customer WP $ 394,674 28 % $ 133,601 68 % For the year ended September 30, 2019: Customer Name Sales Amount % of Total Accounts % of Total Customer K $ 344,275 19 % $ 330,121 61 % Customer M $ 333,855 19 % $ 35,577 7 % Customer WP $ 282,905 16 % $ 74,633 14 % Lease In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the consolidated balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the consolidated balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company implemented ASU No. 2016-02 on October 1, 2019. The Company elected the practical expedient under ASU 2018-11 “Leases: Targeted Improvements” which allows the Company to apply the transition provision for Topic 842 at the Company’s adoption date instead of at the earlies comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at October 1, 2019 but without retrospective application. In addition, the Company elected the optional practical expedient permitted under the transition guidance which allows the Company to carry forward the historical accounting treatment for existing lease upon adoption. No impact was recorded to the income statement or beginning retained earnings for Topic 842. Beginning October 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present value of lease payments, including annual rent increases, over the lease term at commencement date. Operating leases in effect prior to October 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of October 1, 2019. Because the lease in question did not have an implicit rate of return, we used our incremental secured borrowing rate based on lease term information available as of the adoption date or lease commencement date in determining the present value of lease payments. The incremental borrowing rate on ROU Asset lease is 5%. The Company does a quarterly analysis of leases to determine if there are any operating leases that require recognition under ASC 842. As of October 1, 2019, the Company had one significant long-term operating lease for office and manufacturing space in Plano, Texas. The leased property in Plano, Texas, has a remaining lease term through June 2024. The lease has an option to extend beyond the stated termination date, but exercise of this option is not probable. The Company did not apply the recognition requirements of ASC 842 to operating leases with a remaining lease term of 12 months or less. The impact of ASU No. 2016-02 (“Leases (Topic 842)” on our consolidated balance sheet beginning October 1, 2019, through the recognition of ROU assets and lease liabilities for operating leases are as follows: October 1, 2019 ROU Asset $ 517,263 Lease Liability $ 517,263 During the current year analysis of leases, we determined to renew the office and manufacturing space in Vista, CA through January 31, 2022, which was previously scheduled to be vacated at June 30, 2020. Additionally, the Korean office and manufacturing space lease was extended through June 2022 and an apartment lease was signed through June 2022. Accordingly, we have added ROU assets and lease liabilities related to those leases at June 30, 2020. The direct-leased property in Vista, California has a remaining lease term through January 2022. The leased properties in both Korea and Vista, California have options to extend beyond the stated termination date, but exercise of these options are not probable. The sub-leased property in Vista, California, is leased month-to-month and has been calculated as a ROU Asset co-terminus with the direct-leased property. In September 2020, we entered into an 18-month sublease effective October 1, 2020 reducing our space and term in Plano, Texas. Accordingly, this lease has been added to our right-of-use asset balance at September 30, 2020. This lease is for the Company’s principal executive office located at 1401 Capital Avenue, Suite B, Plano, Texas 75074. Effective September 1, 2020, we converted our month-to-month sublease in Vista, California to a 17-month sublease ending January 31, 2022 which is co-terminus with our direct lease in Vista. The month-to-month sublease was recognized as a right-of-use asset in our June 30, 2020 analysis. The terms of the 17-month lease are similar to the terms used to value the right-of-use asset at June 30, 2020. As of September 30, 2020, our operating leases had a weighted average remaining lease term of 2.6 years and a weighted-average discount rate of 5%. Other information related to our operating leases is as follows: ROU Asset – October 1, 2019 $ 517,263 ROU Asset added during the period 278,248 Amortization during the period (143,314 ) ROU Asset – September 30, 2020 $ 652,197 Lease Liability – October 1, 2019 $ 517,263 Lease Liability added during the period 278,248 Amortization during the period (136,120 ) Lease Liability – September 30, 2020 $ 659,391 Lease Liability – Short-Term $ 263,678 Lease Liability – Long-Term 395,713 Lease Liability – Total $ 659,391 The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of September 30, 2020: Amounts due within 12 months of September 30, 2021 $ 287,612 2022 201,262 2023 127,036 2024 97,405 2025 - Total Minimum Lease Payments 713,315 Less Effect of Discounting (53,924 ) Present Value of Future Minimum Lease Payments 659,391 Less Current Portion of Operating Lease Obligations 263,678 Long-Term Operating Lease Obligations $ 395,713 On October 9, 2019, the Company entered into a lease agreement with Alliance Funding Group which provided for a sale lease back on certain packing equipment. The terms of this agreement require us to pay $2,987 per month for the next 60 months. As part of this agreement, Alliance Funding Group provided our equipment supplier with $124,500 for the purchase of this equipment. This transaction was accounted for as a financing lease. As of September 30, 2020, our financing lease had a remaining lease term of 3.75 years and a discount rate of 12.75%. The interest expense on finance lease liabilities for the year ended September 30, 2020 was $14,088. The following summarizes ROU assets under finance leases at September 30, 2020: ROU asset-finance lease at October 9, 2019 $ 124,500 Amortization (18,675 ) ROU asset-finance lease at September 30, 2020 $ 105,825 The table below summarizes future minimum finance lease payments at September 30, 2020 for the 12 months ended September 30: 2021 $ 33,113 2022 33,113 2023 33,113 2024 27,594 2025 — Total Minimum Lease Payments 126,933 Amount representing interest (26,935 ) Present Value of Minimum Lease Payments 99,998 Current Portion of Finance Lease Obligations 21,598 Finance Lease Obligations, Less Current Portion $ 78,400 During the year ended September 30, 2020, we had the following cash and non-cash activities associated with our leases: Operating cash outflows from operating leases: $ 168,692 Operating cash outflows from finance leases: $ 14,088 Financing cash outflows from finance lease: $ 19,025 Non-cash transactions: Recognition of ROU asset and lease liability of operating lease upon adoption of ASU 2016-02: $ 517,263 Additions to ROU assets obtained from: New operating lease $ 278,248 New finance lease $ 124,500 The Company leases office space with terms ranging from month to month to 61 months. Rent expense included in general and administrative expense for the nine months ended June 30, 2020 and 2019 was $317,725 and $169,624, respectively. In September 2020, we subleased the space at 1700 Capital Avenue in Plano, Texas, effective October 1, 2020 under favorable terms that are co-terminus with the original lease ending June 30, 2024. Future minimum lease payments to be received under that sublease as of September 30, 2020, for each of the fiscal years are as follows: 2021 $ 90,030 2022 $ 123,277 2023 $ 126,971 2024 $ 97,377 Total Minimum Lease Payments to be Received $ 437,655 Principles of Consolidation The Company prepares its financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its majority owned subsidiary which has a fiscal year end of September 30. All significant intercompany accounts, balances and transactions have been eliminated in the consolidation. The Company consolidates NuZee KR and NuZee INV in accordance with ASC 810, and specifically ASC 810-10-15-8 which states, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, or over 50% of the outstanding voting shares of another entity is a condition pointing toward consolidation. NuZee KR and NuZee INV are wholly owned subsidiaries of the Company. NuZee JP was 70% owned by the Company but on September 28, 2020, the Company sold the 70% ownership. The results of NuZee JP have been consolidated until the disposal date. Foreign Currency Translation The financial position and results of operations of the Company’s foreign subsidiary is measured using the foreign subsidiary’s local currency as the functional currency. Revenues and expenses of such subsidiary has been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity, unless there is a sale or complete liquidation of the underlying foreign investment. Foreign currency translation adjustment attributable to Nuzee, Inc. recorded to other comprehensive loss (gain) amounted to ($280,796) and $59,668 as of September 30, 2020 and 2019, respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign currency transaction (gains) losses included in the consolidated statements of operations totaled $(1,024) and $(1,615) for the years ended September 30, 2020 and 2019, respectively. Equity Method Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and consolidated statements of operations; however, the Company’s share of the earnings or losses of the Investee company is reflected in the caption ‘‘Equity in loss of unconsolidated affiliate’’ in the consolidated statements of operations. The Company’s carrying value in an equity method investee company is reflected in the caption ‘‘Investment in unconsolidated affiliate’’ in the Company’s consolidated balance sheets. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. On January 9, 2020, a joint venture agreement was signed between Industrial Marino, S.A. de C.V. (50%) and the Company (50%) forming NuZee LATIN AMERICA, S.A. de C.V. (“NLA”). NLA was formed pursuant to the laws of Mexico, with corporate domicile in Mazatlan, Mexico. As part of the capitalization of NLA, the Company contributed two co-packing machines to the joint venture. These machines had an aggregate carrying cost of $313,012. The Company received $110,000 in cash for this contribution and recorded an investment in NLA of $160,000 and a loss of $43,012 on the contribution of the machines to NLA. The Company accounts for NLA using the equity method of accounting since the management of day to day operations at NLA ultimately lies with its partner as the operations of NLA are based in its partners facilities as well as our partner appoints the Chariman of the joint Board. As of September 30, 2020, the only activity in NLA was the contribution of two machines as described above and other start up related activities and $23,314 of income was recognized under the equity method of accounting, mainly due to foreign currency transaction gains. Goodwill The Company evaluates goodwill on an annual basis or more frequently if management believes indicators of impairment exist. Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill. The amount, by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss. During the year ended September 30, 2019, it was determined that the entire amount of the carrying amount of goodwill was impaired and as a result, goodwill of $17,112 was written off during the year. Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605). The new standard’s core principle is that an entity will recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in the standard are applied in five steps: 1) Identify the contract(s) with a customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations in the contract; and 5) Recognize revenue when (or as) the entity satisfies a performance obligation. We adopted Topic 606 as of October 1, 2018 on a modified retrospective basis. The adoption of Topic 606 did not have a material impact on our consolidated financial statements, including the presentation of revenues in our Consolidated Statements of Operations. Return and Exchange Policy The Company provides a 30-day money-back guarantee if a buyer is not satisfied with a product. All of the products are thoroughly inspected and securely packaged before they are shipped to ensure buyers receive the best possible product. If for any reason buyers are unsatisfied with the products, they can return them and the Company will exchange or refund the purchase minus any shipping charges. For the wholesale customers, return policies varies based on their specific agreements with customers. Under chargebacks agreements with the customers, the Company agrees to reimburse the seller for a portion of the costs incurred by the seller to advertise and promote certain of the Company’s products. The Company estimates, accrues and recognizes such chargebacks. These amounts are included in the determination of net sales. As of September 30, 2020 and September 30, 2019, the Company had none and $119,569 of sales allowances for estimated chargebacks and returns, respectively. Revenue recognized is net of sales allowances. Cost Recognition Cost of products sold is primarily comprised of direct materials consumed in the manufacturing of co-packing arrangements or the production of our own products for resale. Cost of products sold also includes directly related labors’ salaries and other overhead cost. Selling, General and Administrative Expense Selling, general and administrative expense (SG&A) is primarily comprised of marketing expenses, research and development costs, administrative and other indirect overhead costs, depreciation expense and other miscellaneous operating items. Personnel expenses, occupying a majority portion of SG&A, were $1,433,330 and $1,042,788 for the years ended September 30, 2020 and 2019, respectively. In some situations, the Company covers shipping fees and the shipping and handling expenses are recorded under operating expenses in the consolidated statements of operations. Advertising Expenses The Company expenses advertising costs when incurred. Advertising expense for the years ended September 30, 2020 and 2019 is as follows: September 30, 2020 September 30, 2019 Advertising $ 98,176 $ 57,357 Research and Development Research and development expenses are expensed in the consolidated statements of operations as incurred in accordance with FASB ASC 730, Research and Development. For the years ended September 30, 2020 and 2019, respectively, research and development expenses amounted to $11,399 and $1,825. Prepaid expenses and other current assets The Company prepaid expenses and other current assets for the years ended September 30, 2020 and 2019 is as follows: September 30, 2020 September 30, 2019 Prepaid expenses and other current assets $ 645,375 $ 372,456 The Prepaid expenses and other current assets balance mainly consists of deferred financing costs of $464,742 and $225,089 as of September 30, 2020 and 2019, respectively. Inventory Inventory, consisting principally of raw materials, work in process and finished goods held for production and sale, is stated at the lower of cost or net realizable value, cost being determined using the weighted average cost method. The Company reviews inventory levels at least quarterly and records a valuation allowance when appropriate. At September 30, 2020 and 2019, the carrying value of inventory of $245,370 and $500,986 respectively, reflected on the consolidated balance sheets is net of this adjustment. September 30, 2020 September 30, 2019 Raw materials $ 176,231 $ 327,985 Finished goods 69,139 173,001 Less - Inventory reserve - - Total $ 245,370 $ 500,986 Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation. The Company generally depreciates property and equipment on a straight-line basis over the estimated useful lives of the assets after the assets are placed in service except for NuZee KR which uses the declining balance method. Office equipment is depreciated over a 3-year life, furniture over a 7-year life, and other equipment over a 5-year life. Depreciation expense for the years ended September 30, 2020 and 2019 was $408,489 and $400,671 respectively. Repair and maintenance costs are expensed as incurred. Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of property and equipment that exceed $1,000 are capitalized. Property and equipment as of September 30, 2020 and 2019 consist of: September 30, 2020 September 30, 2019 Furniture & Fixture $ — $ 85,872 Machinery & Equipment 2,495,098 2,317,929 Vehicles 60,865 63,727 Leasehold Improvements 114,936 65,113 Less - Accumulated Depreciation (1,002,551 ) (657,050 ) Net Property and Equipment $ 1,668,348 $ 1,875,591 The Company is required to make deposits or prepayments and progress payments on equipment purchases before the Company receives possession and title. As a result, the Company accounts for such payments as Other Assets until it has possession at which time the equipment is recorded as Property and Equipment. Deposits for purchase of equipment as of September 30, 2019 is $592,440. There were no such deposits as of September 30, 2020. Samples The Company distributes samples of its products as a component of its marketing program. Costs for samples are expensed at the time the samples are produced and recorded under operating expenses in the consolidated statements of operations. Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicated that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. There were no such events or changes in circumstances indicating that their carrying amount may not be recoverable for the fiscal years ended September 30, 2020 and 2019. Intangible Assets Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible asset consists of customer list which, recognized as a result of the acquisition of NuZee JP. As of September 30, 2019, the Company evaluated its intangible asset and as a result of this evaluation the balance was written off. September 30, 2020 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amortized intangible assets: Customer List $ 57,374 $ (57,374 ) - Total $ 57,374 $ (57,374 ) - Aggregate amortization expense for the year ended September 30, 2019, totaled $34,424. There was no such expense for the year ended September 30, 2020. Income Taxes In accordance with ASC 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. The Company also follows the guidance related to accounting for income ta |
Loans
Loans | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Loans | 3. LOANS On April 1, 2019, we purchased a delivery van from Ford Motor Credit for $41,627. The Company paid $3,500 as a down payment and financed $38,127 for 60 months at a rate of 2.9%. The loan is secured by the van. The outstanding balance on the loan at September 30, 2020 and 2019 amounted to $27,916 and $35,196, respectively. On February 15, 2019 NuZee KR entered into equipment financing for production equipment with ShinHan Bank for $60,563. In June 28, 2019 NuZee KR purchased additional equipment and increased the loan with ShinHan Bank by $86,518. The financing has a term of 36 months at a rate of 4.33%. Principal payments began in July 2019. The outstanding balance on this loan at September 30, 2020 and 2019 amounted to $85,001 and $130,070, respectively. On June 30, 2016, NuZee JP entered into a loan agreement with Tono Shinyo Kinko Bank. The Company borrowed the sum of approximately $145,758 to be repaid on or before June 5, 2021 at an annual interest rate of 1.2%. The loan is unsecured and guaranteed by a director. The outstanding balance on the loan at September 30, 2019 amounted to $48,619. On January 27, 2017, NuZee JP entered into a loan agreement with Nihon Seisaku Kouko. The Company borrowed the sum of approximately $87,268 to be repaid on or before January 20, 2022 at an interest rate of 0.16%. The loan is unsecured and not guaranteed by a director. The outstanding balance on the loan at September 30, 2019 amounted to $44,087. Both of these loans were deconsolidated as part of the sale of NuZee JP on September 28, 2020. The loan payments required for the next five years are as follows: Ford Motor Credit ShinHan Bank Total 2021 $ 7,500 $ 48,572 Total Current Portion 7,500 $ 48,572 $ 56,072 2022 7,720 $ 36,429 2023 7,947 2024 4,749 Total Long-Term Portion 20,416 $ 36,429 $ 56,845 Grand Total $ 27,916 $ 85,001 $ 112,917 |
Geographic Concentrations
Geographic Concentrations | 12 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Geographic Concentrations | 4. GEOGRAPHIC CONCENTRATIONS The Company is organized based on fundamentally one business segment although it does sell its products on a world-wide basis. Information about the Company’s geographic operations for years ended September 30, 2020 and 2019 are as follows: Twelve Months Ended September 30, 2020 Twelve Months Ended September 30, 2019 Net Revenue: North America $ 1,025,151 $ 1,111,243 Japan 261,759 656,845 South Korea 116,221 25,502 $ 1,403,131 $ 1,793,590 September 30, 2020 September 30, 2019 Property and equipment, net: North America $ 1,422,575 $ 1,471,859 Japan 2,813 6,329 South Korea 242,960 397,403 $ 1,668,348 $ 1,875,591 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5. RELATED PARTY TRANSACTIONS Sales, Purchases and Operating Expenses For the years ended September 30, 2020 and 2019, NuZee JP sold their products to EHCL, and the sales to them totaled approximately $3,843 and $6,120 respectively. The corresponding accounts receivable balance from EHCL was ($106) as of September 30, 2019. As our entire ownership interest in NuZee JP was sold to EHCL on September 28, 2020, there was no accounts receivable balance at September 30, 2020. NuZee INV has, in prior years, leased an employee to Contlus, Inc. (“Contlus”). Contlus is the Company’s related party as the Company holds 50% of Contlus’s issued shares. Contlus had a payable balance of $33,451, and as this balance was deemed uncollectible, it was written off at September 30, 2019. For the year ended September 30, 2020, we sold $10,810 of materials to NuZee Latin America. Rent During October 2016, NuZee JP entered into a rental agreement of an office space with NuZee Co., Ltd., which is 100% owned by Masateru Higashida. The Company pays $1,169 per month for the office on the last day of each month on behalf of NuZee JP. There is no set expiration date on the agreement. As of September 30, 2019, NuZee JP has a payable balance to NuZee Co., Ltd. of $1,552 and NuZee JP has a receivable balance from NuZee Co. of $460. As NuZee JP was sold to EHCL on September 28, 2020, there was no accounts receivable or accounts payable balance at September 30, 2020. During September 2016, the NuZee JP entered into a rental agreement of an office space and warehouse with EHCL. The Company pays $609 per month for the office and the warehouse on the last day of each month. The initial term of this agreement is 3 years and is renewed on a month to month basis after the initial term. At September 30, 2019, the payable balance under this lease was $1,154. As NuZee JP was sold to EHCL on September 28, 2020, there was no accounts payable balance at September 30, 2020. During February 2015, NuZee JP entered into a rental agreement of a warehouse with Eguchi Steel Co., Ltd (“ESCL”). The Company pays $449 per month for the warehouse on the last day of each month. There is no set expiration date on the agreement. |
Common Stock
Common Stock | 12 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Common Stock | 6. COMMON STOCK During the year ended September 30, 2019, the Company sold 366,814 shares of common stock at a weighted average price of $16.22 per share, for an aggregate purchase price of $5,947,922. 26,203 shares were sold to NuZee Co., Ltd. for a total purchase price of $459,855. The proceeds were used for general corporate purposes. During the year ended September 30, 2019, the Company issued 5,961 shares of common stock to settle payables amounting to $32,239. The Company recognized a loss on settlement of payables of $91,684 for the year ended September 30, 2019. During the year ended September 30, 2019, the Company issued 50,000 shares of common stock to satisfy a previously committed service obligation of $37,500. During the year ended September 30, 2020, the Company sold (i) 111,738 shares of common stock at a weighted average net price of $17.25 per share, for an aggregate net proceeds of $1,927,338 pursuant to private offerings of common stock and (ii) 805,000 shares of common stock at a price of $9.00 per share for aggregate net proceeds of $5,427,640, after deducting underwriting discounts and commissions and offering expenses payable by us (including $225,089 of offering expenses paid in the year ended September 30, 2019), pursuant to the Company’s underwritten public offering of common stock and the related underwriting agreement dated June 18, 2020. Exercise of options In July and August of 2020, 36,001 shares were issued upon the exercise of stock options. As part of this exercise, the Company received $51,300 in proceeds. |
Stock Options and Warrants
Stock Options and Warrants | 12 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options and Warrants | 7. STOCK OPTIONS AND WARRANTS From April to September 2019, the Company issued 203,333 options to employees and 33,333 options to non-employees. The right to excise these options shall vest and become exercisable on over a period of 4 years for employees and 5 years for non-employees. The exercise price is $19.50 per share for the non-employee options and $19.89 weighted average exercise per share for the employee options. The options will expire ten years from the grant date, unless terminated earlier as provided by the option agreements. Also in 2019, the Company issued 250,000 options to certain employees with milestone based vesting. The exercise price $18.90 per share for these options and the options will expire ten years from the grant date, unless terminated earlier as provided by the option agreements. During June 2020, the Company issued 23,334 options to a consultant with and exercise price of $1.53 per share. During August 2020, the Company issued 45,000 options to consultants for an average exercise price of $19.67 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 a representative peer group of small public companies in their industry segment as the Company has a limited stock history. The expected term of options granted was determined using the simplified method under SAB 107 and represents the mid-point between the vesting term and the contractual term. In some cases certain options did not qualify for the simplified method so the contractual term was used as the expected term. The risk-free rate is calculated using the U.S. Treasury yield curve, and is based on the expected term of the option. The Black-Scholes option pricing model was used with the following weighted average assumptions for options granted during the twelve months ended September 30, 2020 and 2019, respectively: For employees September 30, 2020 September 30, 2019 Risk-free interest rate None 1.55% - 3.11% Expected option life None 10 years Expected volatility None 2776% - 2884% Expected dividend yield None 0.00% Exercise price None $19.50 - $25.50 For non-employees September 30, 2020 September 30, 2019 Risk-free interest rate 0.81 - 2.44% 2.55% Expected option life 5.64 – 10 years 10 years Expected volatility 814 - 996% 2669% Expected dividend yield 0.00% 0.00% Exercise price $1.53 - $22.20 $19.50 The Company is expensing these stock option awards on a straight-line basis over the requisite service period. The Company recognized stock option expense of $4,167,616 and $7,859,141 for the years ended September 30, 2020 and 2019. Unamortized option expense as of September 30, 2020, for all options outstanding amounted to approximately $4,040,563. These costs are expected to be recognized over a weighted-average period of 1.9 years. For the year ended September 30, 2020, 223,333 options were forfeited. 173,333 options forfeited because of the termination of employment and 50,000 options forfeited because the performance conditions were not met. The following table summarizes stock option activity for the year ended September 30, 2020. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2019 1,811,667 $ 6.86 8.4 $ 33,705,960 Granted 68,334 13.47 Exercised (36,001 ) 1.71 Expired — — Forfeited (223,333 ) 17.9 Outstanding at September 30, 2020 1,620,667 $ 5.74 7.3 $ 19,112,118 Exercisable at September 30, 2020 857,750 $ 5.93 7.3 $ 9,978,995 The following table summarizes stock option activity for the year ended September 30, 2019. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2018 1,330,000 $ 2.34 8.9 $ 4,407,160 Granted 486,667 19.36 Exercised Expired Forfeited (5,000 ) 19.50 Outstanding at September 30, 2019 1,811,667 $ 6.86 8.4 33,705,960 Exercisable at September 30, 2019 533,333 $ 2.35 8.0 12,019,960 A summary of the status of the Company’s unvested shares as of September 30, 2020 and 2019, are presented below: Number of Weighted Average Grant Nonvested Shares Date Fair Value Nonvested shares at September 30, 2018 1,103,333 $ 9.14 Granted 486,667 $ 20.23 Exercised - - Forfeited (5,000 ) $ 19.50 Vested (230,000 ) $ 11.48 Nonvested shares at September 30, 2019 1,355,000 $ 12.69 Granted 68,334 $ 13.57 Exercised (23,334 ) $ 1.95 Forfeited (223,333 ) $ 18.88 Vested (413,750 ) $ 13.94 Nonvested shares at September 30, 2020 762,917 $ 10.60 On June 23, 2020, as part of our agreement with Benchmark Company, LLC, the underwriter of the Company’s registered public offering of common stock, we issued 40,250 warrants to purchase our common stock at an exercise price of $9.00 a share. These warrants are exercisable beginning on December 23, 2020 and expire on June 18, 2025. The following table summarizes warrant activity for the year ended September 30, 2020: Weighted Weighted Average Number of Average Remaining Aggregate Warrants Price Life (years) Value Outstanding at September 30, 2019 - $ - $ - Granted 40,250 9.00 Exercised - - Expired - - Forfeited - - Outstanding at September 30, 2020 40,250 $ 9.00 4.7 321,598 Exercisable at September 30, 2020 - $ - $ - |
Income Tax
Income Tax | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 8. INCOME TAX As of September 30, 2020, and, 2019, there were no differences between financial reporting and tax bases of assets and liabilities. The Company will have tax losses available to be applied against future years’ income as result of the losses incurred. However, due to the losses incurred in the period and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carry forward will not be realized through the reduction of future income tax payments. Accordingly, a 100% valuation allowance has been recorded for deferred income tax assets. Cumulative net operating loss carry forward is $19,602,755 and $15,514,565 as of September 30, 2020 and 2019, respectively, and will begin expiring in 2033. The earliest tax year which remains subject to examination is 2016. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The Company used an effective tax rate of 30% to deferred tax assets because of this tax rule change. Deferred tax assets consisted of the following as of September 30, 2020 and 2019: 2020 2019 Net Operating Losses $ 5,880,827 $ 4,654,370 Valuation Allowance (5,880,827 ) (4,654,370 ) |
Contingencies
Contingencies | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 9. CONTINGENCIES From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. The results of any future litigation cannot be predicted with certainty, and, regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Matters that are probable of unfavorable outcomes to us and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, our estimates of the outcomes of such matters and our experience in contesting, litigating and settling similar matters. |
Sale of NuZee JP
Sale of NuZee JP | 12 Months Ended |
Sep. 30, 2020 | |
Sale Of Nuzee Jp | |
Sale of NuZee JP | 10. SALE OF NUZEE JP On September 28, 2020, the Company entered into a Stock Transfer Agreement with EHCL, pursuant to which the Company agreed to sell all of its equity interests in its majority-owned subsidiary, NuZee JP, representing 70% of the outstanding equity interests of NuZee JP, to EHCL for an aggregate sale price of approximately $34,000. The gain from the deconsolidation of NuZee JP was $95,555 and the realized loss of cumulated translation adjustment totaled $245,607. The net loss from this transaction was presented as Other expense in Consolidated Statements of Operations. EHCL is controlled by Mr. Katsuyoshi Eguchi, who serves as the chief executive officer of NuZee JP and is also the beneficial owner of more than five percent of the Company’s common stock. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | 11. SUBSEQUENT EVENTS On October 7, 2020, we issued 15,000 options to a consultant at an exercise price of $16.79 per share. On October 26, 2020 (the “Execution Date”), we entered into a Common Stock Purchase Agreement with Triton Funds LP (the “Investor”) pursuant to which we were entitled to offer to the Investor and sell to the Investor shares of common stock having an aggregate offering price of up to $1,000,000 during a seven calendar-day period commencing on the Execution Date. Pursuant to the agreement with the Investor, we sold 72,955 shares of common stock to the Investor for aggregate proceeds of $659,070. On November 4, 2020, we issued 228,323 options to each of our three independent Board members at an exercise price of $10.15 per share as compensation for their Board service. One half of the options were fully vested on the grant date. The remainder of the options vest in two equal installments on November 4, 2021 and November 4, 2022. In November 2020, pursuant to Securities Act registration exemptions under Regulation S and/or Section 4(a)(2) of the Securities Act, we sold 252,004 shares of common stock at $9.14 per share, for an aggregate purchase price of approximately $2.3 million. On December 5, 2020, 9,000 shares were issued upon the exercise of stock options. As part of this exercise, the Company received $9,180 in proceeds. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Reclassification | Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net loss. |
Earnings per Share | Earnings per Share Basic earnings per common share is equal to net earnings or loss divided by the weighted average of shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. The Company incurred a net loss for the years ended September 30, 2020 and 2019, respectively and therefore, basic and diluted earnings per share for those periods are the same because all potential common equivalent shares would be antidilutive. |
Capital Resources | Capital Resources Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company has generated limited revenues from its principal operations, and there is no assurance of future revenues. As of September 30, 2020, the Company had cash of $4,398,545 and working capital of $4,252,180. However, the Company has not attained profitable operations since inception. During the fiscal year ended September 30, 2020, the Company completed an offering pursuant to Securities Act registration exemptions as well as a registered underwritten public offering and raised an aggregate of approximately $7,354,978 in net proceeds. In addition, in October and November of 2020, the Company raised an additional aggregate of $2,962,387 from a registered direct investment and an offering pursuant to Securities Act registration exemptions. The Company exceeded its capital raising predications thus mitigating any substantial doubt about the Company’s ability to continue as a going concern as defined by ASU 2014-05 and its ability to satisfy the estimated liquidity needs for the twelve months from the issuance of the financial statements. |
Use of Estimates | Use of Estimates In preparing these consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is an estimate of the exit price, representing the amount that would be received to, sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction cost. Fair value measurement under generally accepted accounting principles provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3: Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis. The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate fair value because of the short-term nature of these instruments. The carrying amount of long-term debt approximates fair value because the debt is based on current rates at which the Company could borrow funds with similar remaining maturities. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instruments when available. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly-liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of September 30, 2020 and 2019. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may or may not maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Bad debts expense or write offs of receivables are determined on the basis of loss experience, known and inherent risks in the receivable portfolio and current economic conditions. The Company recognized $119,569 of allowance for doubtful accounts as of September 30, 2019 and none for the year ended September 30, 2020. |
Major Customers | Major Customers For the years ended September 30, 2020 and 2019, revenue was primarily from major customers disclosed below. For the year ended September 30, 2020: Customer Name Sales Amount % of Total Accounts % of Total Customer K $ 284,099 20 % $ 3,291 2 % Customer JP $ 158,208 11 % — 0 % Customer WP $ 394,674 28 % $ 133,601 68 % For the year ended September 30, 2019: Customer Name Sales Amount % of Total Accounts % of Total Customer K $ 344,275 19 % $ 330,121 61 % Customer M $ 333,855 19 % $ 35,577 7 % Customer WP $ 282,905 16 % $ 74,633 14 % |
Lease | Lease In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the consolidated balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the consolidated balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. The Company implemented ASU No. 2016-02 on October 1, 2019. The Company elected the practical expedient under ASU 2018-11 “Leases: Targeted Improvements” which allows the Company to apply the transition provision for Topic 842 at the Company’s adoption date instead of at the earlies comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at October 1, 2019 but without retrospective application. In addition, the Company elected the optional practical expedient permitted under the transition guidance which allows the Company to carry forward the historical accounting treatment for existing lease upon adoption. No impact was recorded to the income statement or beginning retained earnings for Topic 842. Beginning October 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present value of lease payments, including annual rent increases, over the lease term at commencement date. Operating leases in effect prior to October 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of October 1, 2019. Because the lease in question did not have an implicit rate of return, we used our incremental secured borrowing rate based on lease term information available as of the adoption date or lease commencement date in determining the present value of lease payments. The incremental borrowing rate on ROU Asset lease is 5%. The Company does a quarterly analysis of leases to determine if there are any operating leases that require recognition under ASC 842. As of October 1, 2019, the Company had one significant long-term operating lease for office and manufacturing space in Plano, Texas. The leased property in Plano, Texas, has a remaining lease term through June 2024. The lease has an option to extend beyond the stated termination date, but exercise of this option is not probable. The Company did not apply the recognition requirements of ASC 842 to operating leases with a remaining lease term of 12 months or less. The impact of ASU No. 2016-02 (“Leases (Topic 842)” on our consolidated balance sheet beginning October 1, 2019, through the recognition of ROU assets and lease liabilities for operating leases are as follows: October 1, 2019 ROU Asset $ 517,263 Lease Liability $ 517,263 During the current year analysis of leases, we determined to renew the office and manufacturing space in Vista, CA through January 31, 2022, which was previously scheduled to be vacated at June 30, 2020. Additionally, the Korean office and manufacturing space lease was extended through June 2022 and an apartment lease was signed through June 2022. Accordingly, we have added ROU assets and lease liabilities related to those leases at June 30, 2020. The direct-leased property in Vista, California has a remaining lease term through January 2022. The leased properties in both Korea and Vista, California have options to extend beyond the stated termination date, but exercise of these options are not probable. The sub-leased property in Vista, California, is leased month-to-month and has been calculated as a ROU Asset co-terminus with the direct-leased property. In September 2020, we entered into an 18-month sublease effective October 1, 2020 reducing our space and term in Plano, Texas. Accordingly, this lease has been added to our right-of-use asset balance at September 30, 2020. This lease is for the Company’s principal executive office located at 1401 Capital Avenue, Suite B, Plano, Texas 75074. Effective September 1, 2020, we converted our month-to-month sublease in Vista, California to a 17-month sublease ending January 31, 2022 which is co-terminus with our direct lease in Vista. The month-to-month sublease was recognized as a right-of-use asset in our June 30, 2020 analysis. The terms of the 17-month lease are similar to the terms used to value the right-of-use asset at June 30, 2020. As of September 30, 2020, our operating leases had a weighted average remaining lease term of 2.6 years and a weighted-average discount rate of 5%. Other information related to our operating leases is as follows: ROU Asset – October 1, 2019 $ 517,263 ROU Asset added during the period 278,248 Amortization during the period (143,314 ) ROU Asset – September 30, 2020 $ 652,197 Lease Liability – October 1, 2019 $ 517,263 Lease Liability added during the period 278,248 Amortization during the period (136,120 ) Lease Liability – September 30, 2020 $ 659,391 Lease Liability – Short-Term $ 263,678 Lease Liability – Long-Term 395,713 Lease Liability – Total $ 659,391 The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the lease liabilities recorded on the Consolidated Balance Sheet as of September 30, 2020: Amounts due within 12 months of September 30, 2021 $ 287,612 2022 201,262 2023 127,036 2024 97,405 2025 - Total Minimum Lease Payments 713,315 Less Effect of Discounting (53,924 ) Present Value of Future Minimum Lease Payments 659,391 Less Current Portion of Operating Lease Obligations 263,678 Long-Term Operating Lease Obligations $ 395,713 On October 9, 2019, the Company entered into a lease agreement with Alliance Funding Group which provided for a sale lease back on certain packing equipment. The terms of this agreement require us to pay $2,987 per month for the next 60 months. As part of this agreement, Alliance Funding Group provided our equipment supplier with $124,500 for the purchase of this equipment. This transaction was accounted for as a financing lease. As of September 30, 2020, our financing lease had a remaining lease term of 3.75 years and a discount rate of 12.75%. The interest expense on finance lease liabilities for the year ended September 30, 2020 was $14,088. The following summarizes ROU assets under finance leases at September 30, 2020: ROU asset-finance lease at October 9, 2019 $ 124,500 Amortization (18,675 ) ROU asset-finance lease at September 30, 2020 $ 105,825 The table below summarizes future minimum finance lease payments at September 30, 2020 for the 12 months ended September 30: 2021 $ 33,113 2022 33,113 2023 33,113 2024 27,594 2025 — Total Minimum Lease Payments 126,933 Amount representing interest (26,935 ) Present Value of Minimum Lease Payments 99,998 Current Portion of Finance Lease Obligations 21,598 Finance Lease Obligations, Less Current Portion $ 78,400 During the year ended September 30, 2020, we had the following cash and non-cash activities associated with our leases: Operating cash outflows from operating leases: $ 168,692 Operating cash outflows from finance leases: $ 14,088 Financing cash outflows from finance lease: $ 19,025 Non-cash transactions: Recognition of ROU asset and lease liability of operating lease upon adoption of ASU 2016-02: $ 517,263 Additions to ROU assets obtained from: New operating lease $ 278,248 New finance lease $ 124,500 The Company leases office space with terms ranging from month to month to 61 months. Rent expense included in general and administrative expense for the nine months ended June 30, 2020 and 2019 was $317,725 and $169,624, respectively. In September 2020, we subleased the space at 1700 Capital Avenue in Plano, Texas, effective October 1, 2020 under favorable terms that are co-terminus with the original lease ending June 30, 2024. Future minimum lease payments to be received under that sublease as of September 30, 2020, for each of the fiscal years are as follows: 2021 $ 90,030 2022 $ 123,277 2023 $ 126,971 2024 $ 97,377 Total Minimum Lease Payments to be Received $ 437,655 |
Principles of Consolidation | Principles of Consolidation The Company prepares its financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its majority owned subsidiary which has a fiscal year end of September 30. All significant intercompany accounts, balances and transactions have been eliminated in the consolidation. The Company consolidates NuZee KR and NuZee INV in accordance with ASC 810, and specifically ASC 810-10-15-8 which states, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, or over 50% of the outstanding voting shares of another entity is a condition pointing toward consolidation. NuZee KR and NuZee INV are wholly owned subsidiaries of the Company. NuZee JP was 70% owned by the Company but on September 28, 2020, the Company sold the 70% ownership. The results of NuZee JP have been consolidated until the disposal date. |
Foreign Currency Translation | Foreign Currency Translation The financial position and results of operations of the Company’s foreign subsidiary is measured using the foreign subsidiary’s local currency as the functional currency. Revenues and expenses of such subsidiary has been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity, unless there is a sale or complete liquidation of the underlying foreign investment. Foreign currency translation adjustment attributable to Nuzee, Inc. recorded to other comprehensive loss (gain) amounted to ($280,796) and $59,668 as of September 30, 2020 and 2019, respectively. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign currency transaction (gains) losses included in the consolidated statements of operations totaled $(1,024) and $(1,615) for the years ended September 30, 2020 and 2019, respectively. |
Equity Method | Equity Method Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and consolidated statements of operations; however, the Company’s share of the earnings or losses of the Investee company is reflected in the caption ‘‘Equity in loss of unconsolidated affiliate’’ in the consolidated statements of operations. The Company’s carrying value in an equity method investee company is reflected in the caption ‘‘Investment in unconsolidated affiliate’’ in the Company’s consolidated balance sheets. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. On January 9, 2020, a joint venture agreement was signed between Industrial Marino, S.A. de C.V. (50%) and the Company (50%) forming NuZee LATIN AMERICA, S.A. de C.V. (“NLA”). NLA was formed pursuant to the laws of Mexico, with corporate domicile in Mazatlan, Mexico. As part of the capitalization of NLA, the Company contributed two co-packing machines to the joint venture. These machines had an aggregate carrying cost of $313,012. The Company received $110,000 in cash for this contribution and recorded an investment in NLA of $160,000 and a loss of $43,012 on the contribution of the machines to NLA. The Company accounts for NLA using the equity method of accounting since the management of day to day operations at NLA ultimately lies with its partner as the operations of NLA are based in its partners facilities as well as our partner appoints the Chariman of the joint Board. As of September 30, 2020, the only activity in NLA was the contribution of two machines as described above and other start up related activities and $23,314 of income was recognized under the equity method of accounting, mainly due to foreign currency transaction gains. |
Goodwill | Goodwill The Company evaluates goodwill on an annual basis or more frequently if management believes indicators of impairment exist. Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, management performs the second step of the goodwill impairment test. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill. The amount, by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss. During the year ended September 30, 2019, it was determined that the entire amount of the carrying amount of goodwill was impaired and as a result, goodwill of $17,112 was written off during the year. |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) “Revenue from Contracts with Customers.” Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605). The new standard’s core principle is that an entity will recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in the standard are applied in five steps: 1) Identify the contract(s) with a customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations in the contract; and 5) Recognize revenue when (or as) the entity satisfies a performance obligation. We adopted Topic 606 as of October 1, 2018 on a modified retrospective basis. The adoption of Topic 606 did not have a material impact on our consolidated financial statements, including the presentation of revenues in our Consolidated Statements of Operations. |
Return and Exchange Policy | Return and Exchange Policy The Company provides a 30-day money-back guarantee if a buyer is not satisfied with a product. All of the products are thoroughly inspected and securely packaged before they are shipped to ensure buyers receive the best possible product. If for any reason buyers are unsatisfied with the products, they can return them and the Company will exchange or refund the purchase minus any shipping charges. For the wholesale customers, return policies varies based on their specific agreements with customers. Under chargebacks agreements with the customers, the Company agrees to reimburse the seller for a portion of the costs incurred by the seller to advertise and promote certain of the Company’s products. The Company estimates, accrues and recognizes such chargebacks. These amounts are included in the determination of net sales. As of September 30, 2020 and September 30, 2019, the Company had none and $119,569 of sales allowances for estimated chargebacks and returns, respectively. Revenue recognized is net of sales allowances. |
Cost Recognition | Cost Recognition Cost of products sold is primarily comprised of direct materials consumed in the manufacturing of co-packing arrangements or the production of our own products for resale. Cost of products sold also includes directly related labors’ salaries and other overhead cost. |
Selling, General and Administrative Expense | Selling, General and Administrative Expense Selling, general and administrative expense (SG&A) is primarily comprised of marketing expenses, research and development costs, administrative and other indirect overhead costs, depreciation expense and other miscellaneous operating items. Personnel expenses, occupying a majority portion of SG&A, were $1,433,330 and $1,042,788 for the years ended September 30, 2020 and 2019, respectively. In some situations, the Company covers shipping fees and the shipping and handling expenses are recorded under operating expenses in the consolidated statements of operations. |
Advertising Expenses | Advertising Expenses The Company expenses advertising costs when incurred. Advertising expense for the years ended September 30, 2020 and 2019 is as follows: September 30, 2020 September 30, 2019 Advertising $ 98,176 $ 57,357 |
Research and Development | Research and Development Research and development expenses are expensed in the consolidated statements of operations as incurred in accordance with FASB ASC 730, Research and Development. For the years ended September 30, 2020 and 2019, respectively, research and development expenses amounted to $11,399 and $1,825. |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets The Company prepaid expenses and other current assets for the years ended September 30, 2020 and 2019 is as follows: September 30, 2020 September 30, 2019 Prepaid expenses and other current assets $ 645,375 $ 372,456 The Prepaid expenses and other current assets balance mainly consists of deferred financing costs of $464,742 and $225,089 as of September 30, 2020 and 2019, respectively. |
Inventory | Inventory Inventory, consisting principally of raw materials, work in process and finished goods held for production and sale, is stated at the lower of cost or net realizable value, cost being determined using the weighted average cost method. The Company reviews inventory levels at least quarterly and records a valuation allowance when appropriate. At September 30, 2020 and 2019, the carrying value of inventory of $245,370 and $500,986 respectively, reflected on the consolidated balance sheets is net of this adjustment. September 30, 2020 September 30, 2019 Raw materials $ 176,231 $ 327,985 Finished goods 69,139 173,001 Less - Inventory reserve - - Total $ 245,370 $ 500,986 |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation. The Company generally depreciates property and equipment on a straight-line basis over the estimated useful lives of the assets after the assets are placed in service except for NuZee KR which uses the declining balance method. Office equipment is depreciated over a 3-year life, furniture over a 7-year life, and other equipment over a 5-year life. Depreciation expense for the years ended September 30, 2020 and 2019 was $408,489 and $400,671 respectively. Repair and maintenance costs are expensed as incurred. Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of property and equipment that exceed $1,000 are capitalized. Property and equipment as of September 30, 2020 and 2019 consist of: September 30, 2020 September 30, 2019 Furniture & Fixture $ — $ 85,872 Machinery & Equipment 2,495,098 2,317,929 Vehicles 60,865 63,727 Leasehold Improvements 114,936 65,113 Less - Accumulated Depreciation (1,002,551 ) (657,050 ) Net Property and Equipment $ 1,668,348 $ 1,875,591 The Company is required to make deposits or prepayments and progress payments on equipment purchases before the Company receives possession and title. As a result, the Company accounts for such payments as Other Assets until it has possession at which time the equipment is recorded as Property and Equipment. Deposits for purchase of equipment as of September 30, 2019 is $592,440. There were no such deposits as of September 30, 2020. |
Samples | Samples The Company distributes samples of its products as a component of its marketing program. Costs for samples are expensed at the time the samples are produced and recorded under operating expenses in the consolidated statements of operations. |
Long-Lived Assets | Long-Lived Assets The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicated that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and a current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. There were no such events or changes in circumstances indicating that their carrying amount may not be recoverable for the fiscal years ended September 30, 2020 and 2019. |
Intangible Assets | Intangible Assets Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible asset consists of customer list which, recognized as a result of the acquisition of NuZee JP. As of September 30, 2019, the Company evaluated its intangible asset and as a result of this evaluation the balance was written off. September 30, 2020 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amortized intangible assets: Customer List $ 57,374 $ (57,374 ) - Total $ 57,374 $ (57,374 ) - Aggregate amortization expense for the year ended September 30, 2019, totaled $34,424. There was no such expense for the year ended September 30, 2020. |
Income Taxes | Income Taxes In accordance with ASC 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of September 30, 2020 and 2019. |
Related Parties | Related parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
Stock-based Compensation | Stock-based Compensation We account for share-based awards issued to employees in accordance with Accounting Standards Codification (ASC) 718, “Compensation-Stock Compensation”. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period, which is normally the vesting period. Share-based compensation to directors is treated in the same manner as share-based compensation to employees, regardless of whether the directors are also employees. In June 2018, the FASB issued ASU 2018-07 which simplifies several aspects of the accounting for non-employee transactions by stipulating that the existing accounting guidance for share-based payments to employees (accounted for under ASC Topic 718, “Compensation-Stock Compensation”) will also apply to non-employee share-based transactions (accounted for under ASC Topic 505, “Equity”). The Company implemented ASU 2018-07 on October 1, 2019 and the impact of the implementation is not material to the financial statements. We estimate the fair value of share-based payments using the Black Scholes option-pricing model for common stock options and warrants and the closing price of our common stock for common share issuances. We recognized forfeitures as they occurred. |
Comprehensive Income/Loss | Comprehensive income/loss Comprehensive income/loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income/loss are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income/loss pertain to foreign currency translation adjustments. |
Non-controlling Interests | Non-controlling Interests Non-controlling interests represent third-party ownership in the net assets of the Company’s consolidated subsidiary and are presented as a component of equity. |
Segment Information | Segment Information ASC Topic 280, “Disclosures about Segments of an Enterprise and Related Information,” established standards for the way that public business enterprises report information about operating segments in annual financial statements and requires those enterprises to report selected information about operating segments in interim financial reports issued to stockholders. Management has determined that the Company operates in one business segment, which is the commercialization and development of functional beverages. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. The ASU was issued to address the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The ASU, among other things, eliminates the need to consider the effects of down round features when analyzing convertible debt, warrants and other financing instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The amendments are effective for fiscal years beginning after December 15, 2018, and should be applied retrospectively. The Company implemented ASU 2017-11 on October 1, 2019, and the impact of the implementation is not material to the financial statements. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Revenue by Major Customers | For the years ended September 30, 2020 and 2019, revenue was primarily from major customers disclosed below. For the year ended September 30, 2020: Customer Name Sales Amount % of Total Accounts % of Total Customer K $ 284,099 20 % $ 3,291 2 % Customer JP $ 158,208 11 % — 0 % Customer WP $ 394,674 28 % $ 133,601 68 % For the year ended September 30, 2019: Customer Name Sales Amount % of Total Accounts % of Total Customer K $ 344,275 19 % $ 330,121 61 % Customer M $ 333,855 19 % $ 35,577 7 % Customer WP $ 282,905 16 % $ 74,633 14 % |
Schedule of ROU Assets and Lease Liability | The impact of ASU No. 2016-02 (“Leases (Topic 842)” on our consolidated balance sheet beginning October 1, 2019, through the recognition of ROU assets and lease liabilities for operating leases are as follows: October 1, 2019 ROU Asset $ 517,263 Lease Liability $ 517,263 |
Schedule of Other Information Related to Operating Lease | Other information related to our operating leases is as follows: ROU Asset – October 1, 2019 $ 517,263 ROU Asset added during the period 278,248 Amortization during the period (143,314 ) ROU Asset – September 30, 2020 $ 652,197 Lease Liability – October 1, 2019 $ 517,263 Lease Liability added during the period 278,248 Amortization during the period (136,120 ) Lease Liability – September 30, 2020 $ 659,391 Lease Liability – Short-Term $ 263,678 Lease Liability – Long-Term 395,713 Lease Liability – Total $ 659,391 |
Schedule of Future Minimum Rental Payments for Operating Leases | Amounts due within 12 months of September 30, 2021 $ 287,612 2022 201,262 2023 127,036 2024 97,405 2025 - Total Minimum Lease Payments 713,315 Less Effect of Discounting (53,924 ) Present Value of Future Minimum Lease Payments 659,391 Less Current Portion of Operating Lease Obligations 263,678 Long-Term Operating Lease Obligations $ 395,713 |
Summary of ROU Assets Under Finance Leases | The following summarizes ROU assets under finance leases at September 30, 2020: ROU asset-finance lease at October 9, 2019 $ 124,500 Amortization (18,675 ) ROU asset-finance lease at September 30, 2020 $ 105,825 |
Schedule of Future Minimum Lease Payments for Finance Leases | The table below summarizes future minimum finance lease payments at September 30, 2020 for the 12 months ended September 30: 2021 $ 33,113 2022 33,113 2023 33,113 2024 27,594 2025 — Total Minimum Lease Payments 126,933 Amount representing interest (26,935 ) Present Value of Minimum Lease Payments 99,998 Current Portion of Finance Lease Obligations 21,598 Finance Lease Obligations, Less Current Portion $ 78,400 |
Schedule of Cash and Non-cash Activities of Leases | During the year ended September 30, 2020, we had the following cash and non-cash activities associated with our leases: Operating cash outflows from operating leases: $ 168,692 Operating cash outflows from finance leases: $ 14,088 Financing cash outflows from finance lease: $ 19,025 Non-cash transactions: Recognition of ROU asset and lease liability of operating lease upon adoption of ASU 2016-02: $ 517,263 Additions to ROU assets obtained from: New operating lease $ 278,248 New finance lease $ 124,500 |
Schedule of Future Minimum Lease Payments of Sublease | Future minimum lease payments to be received under that sublease as of September 30, 2020, for each of the fiscal years are as follows: 2021 $ 90,030 2022 $ 123,277 2023 $ 126,971 2024 $ 97,377 Total Minimum Lease Payments to be Received $ 437,655 |
Schedule of Advertising Expense | Advertising expense for the years ended September 30, 2020 and 2019 is as follows: September 30, 2020 September 30, 2019 Advertising $ 98,176 $ 57,357 |
Schedule of Prepaid Expenses and Other Current Assets | The Company prepaid expenses and other current assets for the years ended September 30, 2020 and 2019 is as follows: September 30, 2020 September 30, 2019 Prepaid expenses and other current assets $ 645,375 $ 372,456 |
Schedule of Inventory | September 30, 2020 September 30, 2019 Raw materials $ 176,231 $ 327,985 Finished goods 69,139 173,001 Less - Inventory reserve - - Total $ 245,370 $ 500,986 |
Schedule of Property and Equipment | Property and equipment as of September 30, 2020 and 2019 consist of: September 30, 2020 September 30, 2019 Furniture & Fixture $ — $ 85,872 Machinery & Equipment 2,495,098 2,317,929 Vehicles 60,865 63,727 Leasehold Improvements 114,936 65,113 Less - Accumulated Depreciation (1,002,551 ) (657,050 ) Net Property and Equipment $ 1,668,348 $ 1,875,591 |
Schedule of Intangible Assets | As of September 30, 2019, the Company evaluated its intangible asset and as a result of this evaluation the balance was written off. September 30, 2020 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amortized intangible assets: Customer List $ 57,374 $ (57,374 ) - Total $ 57,374 $ (57,374 ) - |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Loan Payments | The loan payments required for the next five years are as follows: Ford Motor Credit ShinHan Bank Total 2021 $ 7,500 $ 48,572 Total Current Portion 7,500 $ 48,572 $ 56,072 2022 7,720 $ 36,429 2023 7,947 2024 4,749 Total Long-Term Portion 20,416 $ 36,429 $ 56,845 Grand Total $ 27,916 $ 85,001 $ 112,917 |
Geographic Concentration (Table
Geographic Concentration (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of Geographic Operations | Information about the Company’s geographic operations for years ended September 30, 2020 and 2019 are as follows: Twelve Months Ended September 30, 2020 Twelve Months Ended September 30, 2019 Net Revenue: North America $ 1,025,151 $ 1,111,243 Japan 261,759 656,845 South Korea 116,221 25,502 $ 1,403,131 $ 1,793,590 September 30, 2020 September 30, 2019 Property and equipment, net: North America $ 1,422,575 $ 1,471,859 Japan 2,813 6,329 South Korea 242,960 397,403 $ 1,668,348 $ 1,875,591 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Weighted Average Assumptions for Fair Value Measurement of Options Granted | The Black-Scholes option pricing model was used with the following weighted average assumptions for options granted during the twelve months ended September 30, 2020 and 2019, respectively: For employees September 30, 2020 September 30, 2019 Risk-free interest rate None 1.55% - 3.11% Expected option life None 10 years Expected volatility None 2776% - 2884% Expected dividend yield None 0.00% Exercise price None $19.50 - $25.50 For non-employees September 30, 2020 September 30, 2019 Risk-free interest rate 0.81 - 2.44% 2.55% Expected option life 5.64 – 10 years 10 years Expected volatility 814 - 996% 2669% Expected dividend yield 0.00% 0.00% Exercise price $1.53 - $22.20 $19.50 |
Summary of Stock Option Activity | The following table summarizes stock option activity for the year ended September 30, 2020. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2019 1,811,667 $ 6.86 8.4 $ 33,705,960 Granted 68,334 13.47 Exercised (36,001 ) 1.71 Expired — — Forfeited (223,333 ) 17.9 Outstanding at September 30, 2020 1,620,667 $ 5.74 7.3 $ 19,112,118 Exercisable at September 30, 2020 857,750 $ 5.93 7.3 $ 9,978,995 The following table summarizes stock option activity for the year ended September 30, 2019. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2018 1,330,000 $ 2.34 8.9 $ 4,407,160 Granted 486,667 19.36 Exercised Expired Forfeited (5,000 ) 19.50 Outstanding at September 30, 2019 1,811,667 $ 6.86 8.4 33,705,960 Exercisable at September 30, 2019 533,333 $ 2.35 8.0 12,019,960 |
Summary of Unvested Shares | A summary of the status of the Company’s unvested shares as of September 30, 2020 and 2019, are presented below: Number of Weighted Average Grant Nonvested Shares Date Fair Value Nonvested shares at September 30, 2018 1,103,333 $ 9.14 Granted 486,667 $ 20.23 Exercised - - Forfeited (5,000 ) $ 19.50 Vested (230,000 ) $ 11.48 Nonvested shares at September 30, 2019 1,355,000 $ 12.69 Granted 68,334 $ 13.57 Exercised (23,334 ) $ 1.95 Forfeited (223,333 ) $ 18.88 Vested (413,750 ) $ 13.94 Nonvested shares at September 30, 2020 762,917 $ 10.60 |
Schedule of Warrant Activity | The following table summarizes warrant activity for the year ended September 30, 2020: Weighted Weighted Average Number of Average Remaining Aggregate Warrants Price (years) Value Outstanding at September 30, 2019 - $ - $ - Granted 40,250 9.00 Exercised - - Expired - - Forfeited - - Outstanding at September 30, 2020 40,250 $ 9.00 4.7 321,598 Exercisable at September 30, 2020 - $ - $ - |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | Deferred tax assets consisted of the following as of September 30, 2020 and 2019: 2020 2019 Net Operating Losses $ 5,880,827 $ 4,654,370 Valuation Allowance (5,880,827 ) (4,654,370 ) |
Organization (Details Narrative
Organization (Details Narrative) - USD ($) | Sep. 28, 2020 | Sep. 28, 2020 | Oct. 28, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Equity percentage | 70.00% | 70.00% | |||
Common stock issued value | $ 7,354,978 | $ 5,947,922 | |||
Reverse stock split | l-for-3 reverse stock split | ||||
Stock Transfer Agreement [Member] | |||||
Common stock issued value | $ 34,000 | ||||
NuZee JAPAN Co., Ltd [Member] | |||||
Equity percentage | 70.00% | 70.00% | |||
NuZee JAPAN Co., Ltd [Member] | Stock Transfer Agreement [Member] | |||||
Equity percentage | 70.00% | 70.00% | |||
Common stock issued value | $ 34,000 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Oct. 09, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 28, 2020 | Jan. 09, 2020 |
Cash | $ 4,398,545 | $ 4,398,545 | $ 1,326,040 | |||||
Working capital | 4,252,180 | 4,252,180 | ||||||
Proceeds from public offering | 7,354,978 | |||||||
Cash equivalents | ||||||||
Allowance for doubtful accounts | 119,569 | |||||||
Incremental borrowing rate on ROU Asset lease | 5.00% | |||||||
Weighted average remaining lease term | 2 years 7 months 6 days | 2 years 7 months 6 days | ||||||
Weighted-average discount rate | 5.00% | 5.00% | ||||||
Financing lease remaining lease term | 3 years 9 months | 3 years 9 months | ||||||
Financing lease discount rate | 12.75% | 12.75% | ||||||
Interest expense on finance lease liabilities | $ 14,088 | |||||||
Equity percentage | 70.00% | |||||||
Foreign currency translation adjustment | (280,796) | 59,668 | ||||||
Foreign currency transaction gain (loss) | (1,024) | (1,615) | ||||||
Cash contribution | 110,000 | |||||||
Goodwill | $ 17,112 | 17,112 | ||||||
Selling, general and administrative expense | 1,433,330 | 1,042,788 | ||||||
Research and development expenses | 11,399 | 1,825 | ||||||
Deferred financing costs | 464,742 | 464,742 | 225,089 | |||||
Inventory | 245,370 | 245,370 | 500,986 | |||||
Depreciation expense | $ 408,489 | 400,671 | ||||||
Property and equipment, description | Expenditures associated with upgrades and enhancements that improve, add functionality, or otherwise extend the life of property and equipment that exceed $1,000 are capitalized. | |||||||
Purchase of deposit equipment | 592,440 | |||||||
Amortization expense | 34,424 | |||||||
Income tax likelihood | Greater than 50% likelihood | |||||||
Unrecognized tax benefits | ||||||||
Office Equipment [Member] | ||||||||
Estimated useful life | 3 years | |||||||
Furniture [Member] | ||||||||
Estimated useful life | 7 years | |||||||
Other Equipment [Member] | ||||||||
Estimated useful life | 5 years | |||||||
Sales Returns and Allowances [Member] | ||||||||
Sales allowances | $ 119,569 | |||||||
Joint Venture Agreement [Member] | ||||||||
Machine carrying cost | $ 313,012 | |||||||
Equity Method Investee [Member] | Minimum [Member] | ||||||||
Equity percentage | 20.00% | 20.00% | ||||||
Equity Method Investee [Member] | Maximum [Member] | ||||||||
Equity percentage | 50.00% | 50.00% | ||||||
General and Administrative Expense [Member] | ||||||||
Weighted average remaining lease term | 61 months | |||||||
Rent expense | $ 317,725 | $ 169,624 | ||||||
Alliance Funding Group [Member] | ||||||||
Payment of equipment on lease | $ 124,500 | |||||||
NuZee JAPAN Co., Ltd [Member] | ||||||||
Equity percentage | 70.00% | |||||||
Industrial Marino, S.A. de C.V. and NuZee Latin America, S.A. de C.V. [Member] | Joint Venture Agreement [Member] | ||||||||
Equity percentage | 50.00% | |||||||
NLA [Member] | ||||||||
Cash contribution | $ 23,314 | |||||||
Gain on investments | 160,000 | |||||||
Loss on investments | 43,012 | |||||||
Lease Agreement [Member] | Alliance Funding Group [Member] | ||||||||
Weighted average remaining lease term | 60 months | |||||||
Payment of equipment on lease | $ 2,987 | |||||||
Sublease [Member] | ||||||||
Lease expiration date | Jun. 30, 2024 | |||||||
In October and November 2020 [Member] | ||||||||
Proceeds from public offering | $ 2,962,387 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Revenue by Major Customers (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Sales [Member] | Customer K [Member] | ||
Sales Amount | $ 284,099 | $ 344,275 |
Concentration risk percentage | 20.00% | 19.00% |
Sales [Member] | Customer JP [Member] | ||
Sales Amount | $ 158,208 | |
Concentration risk percentage | 11.00% | |
Sales [Member] | Customer WP [Member] | ||
Sales Amount | $ 394,674 | $ 282,905 |
Concentration risk percentage | 28.00% | 16.00% |
Sales [Member] | Customer M [Member] | ||
Sales Amount | $ 333,855 | |
Concentration risk percentage | 19.00% | |
Accounts Receivable [Member] | Customer K [Member] | ||
Accounts Receivable Amount | $ 3,291 | $ 330,121 |
Concentration risk percentage | 2.00% | 61.00% |
Accounts Receivable [Member] | Customer JP [Member] | ||
Accounts Receivable Amount | ||
Concentration risk percentage | 0.00% | |
Accounts Receivable [Member] | Customer WP [Member] | ||
Accounts Receivable Amount | $ 133,601 | $ 74,633 |
Concentration risk percentage | 68.00% | 14.00% |
Accounts Receivable [Member] | Customer M [Member] | ||
Accounts Receivable Amount | $ 35,577 | |
Concentration risk percentage | 7.00% |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of ROU Assets and Lease Liability (Details) - USD ($) | Sep. 30, 2020 | Oct. 02, 2019 | Sep. 30, 2019 |
ROU Asset | $ 652,197 | ||
Lease Liability | $ 659,391 | $ 517,263 | |
Topic 842 [Member] | |||
ROU Asset | $ 517,263 | ||
Lease Liability | $ 517,263 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Other Information Related to Operating Lease (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | |||
ROU Asset | |||
ROU Asset added during the period | 278,248 | ||
Amortization during the period | (143,314) | ||
ROU Asset | 652,197 | ||
Lease Liability | 517,263 | ||
Lease Liability added during the period | 278,248 | ||
Amortization during the period | (136,120) | ||
Lease Liability | 659,391 | ||
Lease Liability - Short-Term | $ 263,678 | ||
Lease Liability - Long-Term | 395,713 | ||
Lease Liability - Total | $ 517,263 | $ 659,391 | $ 517,263 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Accounting Policies [Abstract] | ||
2021 | $ 287,612 | |
2022 | 201,262 | |
2023 | 127,036 | |
2024 | 97,405 | |
2025 | ||
Total Minimum Lease Payments | 713,315 | |
Less Effect of Discounting | (53,924) | |
Present Value of Future Minimum Lease Payments | 659,391 | $ 517,263 |
Less Current Portion of Operating Lease Obligations | 263,678 | |
Long-Term Operating Lease Obligations | $ 395,713 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Summary of ROU Assets Under Finance Leases (Details) | 12 Months Ended |
Sep. 30, 2020USD ($) | |
ROU asset-finance lease | |
ROU asset-finance lease | 105,825 |
Finance Lease [Member] | |
ROU asset-finance lease | 124,500 |
Amortization | (18,675) |
ROU asset-finance lease | $ 105,825 |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Future Minimum Lease Payments for Finance Leases (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Accounting Policies [Abstract] | ||
2021 | $ 33,113 | |
2022 | 33,113 | |
2023 | 33,113 | |
2024 | 27,594 | |
2025 | ||
Total Minimum Lease Payments | 126,933 | |
Amount representing interest | (26,935) | |
Present Value of Minimum Lease Payments | 99,998 | |
Current Portion of Finance Lease Obligations | 21,598 | |
Finance Lease Obligations, Less Current Portion | $ 78,400 |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Cash and Non-cash Activities of Leases (Details) | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Accounting Policies [Abstract] | |
Operating cash outflows from operating leases: | $ 168,692 |
Operating cash outflows from finance leases: | 14,088 |
Financing cash outflows from finance lease: | 19,025 |
Recognition of ROU asset and lease liability of operating lease upon adoption of ASU 2016-02: | 517,263 |
Additions to ROU assets obtained from: New operating lease | 278,248 |
Additions to ROU assets obtained from: New finance lease | $ 124,500 |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Future Minimum Lease Payments of Sublease (Details) | Sep. 30, 2020USD ($) |
Accounting Policies [Abstract] | |
2021 | $ 90,030 |
2022 | 123,277 |
2023 | 126,971 |
2024 | 97,377 |
Total Minimum Lease Payments to be Received | $ 437,655 |
Basis of Presentation and Su_13
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Advertising Expense (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||
Advertising | $ 98,176 | $ 57,357 |
Basis of Presentation and Su_14
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Accounting Policies [Abstract] | ||
Prepaid expenses and other current assets | $ 645,375 | $ 372,456 |
Basis of Presentation and Su_15
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Accounting Policies [Abstract] | ||
Raw materials | $ 176,231 | $ 327,985 |
Finished goods | 69,139 | 173,001 |
Less - Inventory reserve | ||
Total | $ 245,370 | $ 500,986 |
Basis of Presentation and Su_16
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Accounting Policies [Abstract] | ||
Furniture & Fixture | $ 85,872 | |
Machinery & Equipment | 2,495,098 | 2,317,929 |
Vehicles | 60,865 | 63,727 |
Leasehold Improvements | 114,936 | 65,113 |
Less - Accumulated Depreciation | (1,002,551) | (657,050) |
Net Property and Equipment | $ 1,668,348 | $ 1,875,591 |
Basis of Presentation and Su_17
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Intangible Assets (Details) | Sep. 30, 2020USD ($) |
Gross Carrying Amount | $ 57,374 |
Accumulated Amortization | (57,374) |
Net Carrying Amount | |
Customer List [Member] | |
Gross Carrying Amount | 57,374 |
Accumulated Amortization | (57,374) |
Net Carrying Amount |
Loans (Details Narrative)
Loans (Details Narrative) - USD ($) | Jun. 28, 2019 | Apr. 02, 2019 | Feb. 15, 2019 | Jan. 27, 2017 | Jun. 30, 2016 | Sep. 30, 2020 | Sep. 30, 2019 |
Ford Motor Credit [Member] | |||||||
Debt outstanding | $ 27,916 | $ 35,196 | |||||
ShinHan Bank [Member] | |||||||
Debt outstanding | $ 85,001 | 130,070 | |||||
Tono Shinyo Kinko Bank [Member] | Loan Agreement [Member] | |||||||
Debt outstanding | 48,619 | ||||||
Tono Shinyo Kinko Bank [Member] | NuZee JAPAN Co., Ltd [Member] | Loan Agreement [Member] | |||||||
Financed amount | $ 145,758 | ||||||
Interest rate | 1.20% | ||||||
Maturity date | Jun. 5, 2021 | ||||||
Nihon Seisaku Kouko [Member] | Loan Agreement [Member] | |||||||
Debt outstanding | $ 44,087 | ||||||
Nihon Seisaku Kouko [Member] | NuZee JAPAN Co., Ltd [Member] | Loan Agreement [Member] | |||||||
Financed amount | $ 87,268 | ||||||
Interest rate | 0.16% | ||||||
Maturity date | Jan. 20, 2022 | ||||||
Van [Member] | Ford Motor Credit [Member] | |||||||
Purchase price | $ 41,627 | ||||||
Payment to purchase | 3,500 | ||||||
Financed amount | $ 38,127 | ||||||
Debt term | 60 months | ||||||
Interest rate | 2.90% | ||||||
Equipment [Member] | ShinHan Bank [Member] | NuZee Korea Ltd [Member] | |||||||
Financed amount | $ 60,563 | ||||||
Debt term | 36 months | ||||||
Interest rate | 4.33% | ||||||
Increase in debt | $ 86,518 |
Loans - Schedule of Loan Paymen
Loans - Schedule of Loan Payments (Details) | Sep. 30, 2020USD ($) |
Total Current Portion | $ 56,072 |
Total Long-Term Portion | 56,845 |
Grand Total | 112,917 |
Ford Motor Credit [Member] | |
2021 | 7,500 |
Total Current Portion | 7,500 |
2022 | 7,720 |
2023 | 7,947 |
2024 | 4,749 |
Total Long-Term Portion | 20,416 |
Grand Total | 27,916 |
ShinHan Bank [Member] | |
2021 | 48,572 |
Total Current Portion | 48,572 |
2022 | 36,429 |
Total Long-Term Portion | 36,429 |
Grand Total | $ 85,001 |
Geographic Concentrations - Sch
Geographic Concentrations - Schedule of Geographic Operations (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Net Revenue | $ 1,403,131 | $ 1,793,590 |
Property and equipment, net | 1,668,348 | 1,875,591 |
North America [Member] | ||
Net Revenue | 1,025,151 | 1,111,243 |
Property and equipment, net | 1,422,575 | 1,471,859 |
Japan [Member] | ||
Net Revenue | 261,759 | 656,845 |
Property and equipment, net | 2,813 | 6,329 |
South Korea [Member] | ||
Net Revenue | 116,221 | 25,502 |
Property and equipment, net | $ 242,960 | $ 397,403 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2016 | Sep. 30, 2016 | Feb. 28, 2015 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 28, 2020 | |
Revenues | $ 1,403,131 | $ 1,793,590 | ||||
Equity percentage holds | 70.00% | |||||
Eguchi Holdings Co., Ltd. [Member] | ||||||
Accounts receivable | 106 | |||||
Contlus's [Member] | ||||||
Receivable write off | 33,451 | |||||
Contlus's [Member] | NuZee INV [Member] | ||||||
Equity percentage holds | 50.00% | |||||
NuZee Latin America [Member] | ||||||
Revenues | $ 10,810 | |||||
NuZee Latin America [Member] | Rental Agreement [Member] | ||||||
Rental agreement discription | NuZee JP entered into a rental agreement of an office space with NuZee Co., Ltd., which is 100% owned by Masateru Higashida. | |||||
NuZee JAPAN Co., Ltd [Member] | ||||||
Equity percentage holds | 70.00% | |||||
NuZee JAPAN Co., Ltd [Member] | Rental Agreement [Member] | ||||||
Accounts payable | 1,154 | |||||
NuZee JAPAN Co., Ltd [Member] | Eguchi Holdings Co., Ltd. [Member] | ||||||
Revenues | 3,843 | 6,120 | ||||
NuZee JAPAN Co., Ltd [Member] | Eguchi Holdings Co., Ltd. [Member] | Rental Agreement [Member] | ||||||
Rental agreement discription | The initial term of this agreement is 3 years and is renewed on a month to month basis after the initial term. | |||||
Rent per month | $ 609 | $ 449 | ||||
NuZee JAPAN Co., Ltd [Member] | NuZee Co., Ltd. [Member] | ||||||
Accounts receivable | 460 | |||||
Accounts payable | $ 1,552 | |||||
NuZee JAPAN Co., Ltd [Member] | NuZee Co., Ltd. [Member] | Rental Agreement [Member] | ||||||
Rent per month | $ 1,169 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2020 | Jul. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Aggregate purchase price of shares sold | $ 7,580,067 | $ 5,947,922 | ||
Shares issued for services value | 37,500 | |||
Offering expenses paid | $ 264,018 | $ 27,628 | ||
Shares were issued upon the exercise of stock options | 36,001 | 36,001 | 36,001 | |
Proceeds from issuance stock option exercise | $ 51,300 | $ 51,300 | $ 51,300 | |
Common Stock [Member] | ||||
Shares sold during period | 366,814 | |||
Weighted average price per share | $ 16.22 | |||
Share issued value to settle payable | 5,961 | |||
Share issued value to settle payable, values | $ 32,239 | |||
Loss on settlement of payables | $ 91,684 | |||
Shares issued for services, shares | 50,000 | |||
Shares issued for services value | $ 1 | |||
Offering expenses paid | $ 225,089 | |||
Shares were issued upon the exercise of stock options | 36,001 | |||
Common Stock [Member] | Private Offering [Member] | ||||
Shares sold during period | 111,738 | |||
Weighted average price per share | $ 17.25 | |||
Aggregate purchase price of shares sold | $ 1,927,338 | |||
Common Stock [Member] | NuZee Co., Ltd. [Member] | ||||
Shares sold during period | 26,203 | |||
Aggregate purchase price of shares sold | $ 459,855 | |||
Common Stock [Member] | Private Offering [Member] | ||||
Shares sold during period | 805,000 | |||
Weighted average price per share | $ 9 | |||
Aggregate purchase price of shares sold | $ 5,427,640 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details Narrative) - USD ($) | Jun. 23, 2020 | Aug. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Stock option vest and exercisable period | 7 years 3 months 19 days | 8 years | ||||
Stock option exercise price | $ 1.71 | |||||
Share issued under option vested | 413,750 | 230,000 | ||||
Stock option issued | 68,334 | 486,667 | ||||
Stock option expenses | $ 4,167,616 | $ 7,859,141 | ||||
Stock option forfiture during period | 223,333 | 5,000 | ||||
Warrant to purchase common stock | 40,250 | |||||
Warrant exercise price | $ 9 | |||||
Warrants exercisable date | Dec. 23, 2020 | |||||
Warrant expiration date | Jun. 18, 2025 | |||||
Termination of Employment [Member] | ||||||
Stock option forfiture during period | 173,333 | |||||
Performance Conditions [Member] | ||||||
Stock option forfiture during period | 50,000 | |||||
Stock Options [Member] | ||||||
Stock option vest and exercisable period | 1 year 10 months 25 days | |||||
Stock option exercise price | $ 18.90 | |||||
Option expiration period | 10 years | |||||
Stock option expenses | $ 4,167,616 | $ 7,859,141 | ||||
Unamortized option expense | $ 4,040,563 | |||||
Stock option forfiture during period | 223,333 | |||||
Consultant [Member] | ||||||
Stock option exercise price | $ 19.67 | $ 1.53 | ||||
Stock option issued | 45,000 | 23,334 | ||||
Certain Employees [Member] | ||||||
Share issued under option vested | 250,000 | |||||
Employee [Member] | ||||||
Stock options issued to employee | 203,333 | |||||
Stock option vest and exercisable period | 4 years | |||||
Stock option exercise price | $ 19.89 | |||||
Option expiration period | 10 years | |||||
Non-Employee [Member] | ||||||
Share issued share based compensation | 33,333 | |||||
Stock option vest and exercisable period | 5 years | |||||
Stock option exercise price | $ 19.50 | |||||
Option expiration period | 10 years |
Stock Options and Warrants - Sc
Stock Options and Warrants - Schedule of Weighted Average Assumptions for Fair Value Measurement of Options Granted (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
For Employees [Member] | ||
Risk-free interest rate | ||
Expected option life | 10 years | |
Expected volatility | ||
Expected dividend yield | 0.00% | |
Exercise price | ||
For Employees [Member] | Minimum [Member] | ||
Risk-free interest rate | 1.55% | |
Expected volatility | 2776.00% | |
Exercise price | $ 19.50 | |
For Employees [Member] | Maximum [Member] | ||
Risk-free interest rate | 3.11% | |
Expected volatility | 2884.00% | |
Exercise price | $ 25.50 | |
For Non-Employees [Member] | ||
Risk-free interest rate | 2.55% | |
Expected option life | 10 years | |
Expected volatility | 2669.00% | |
Expected dividend yield | 0.00% | 0.00% |
Exercise price | $ 19.50 | |
For Non-Employees [Member] | Minimum [Member] | ||
Risk-free interest rate | 0.81% | |
Expected option life | 5 years 7 months 21 days | |
Expected volatility | 814.00% | |
Exercise price | $ 1.53 | |
For Non-Employees [Member] | Maximum [Member] | ||
Risk-free interest rate | 2.44% | |
Expected option life | 10 years | |
Expected volatility | 996.00% | |
Exercise price | $ 22.20 |
Stock Options and Warrants - Su
Stock Options and Warrants - Summary of Stock Option Activity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2020 | Jul. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||||
Number of Options Outstanding, Beginning | 1,811,667 | 1,330,000 | ||
Number of Options, Granted | 68,334 | 486,667 | ||
Number of Options, Exercised | (36,001) | (36,001) | (36,001) | |
Number of Options, Expired | ||||
Number of Options, Forfeited | (223,333) | (5,000) | ||
Number of Options Outstanding, Ending | 1,620,667 | 1,811,667 | ||
Number of Options Exercisable | 857,750 | 533,333 | ||
Weighted Average Exercise Price, Beginning | $ 6.86 | $ 2.34 | ||
Weighted Average Exercise Price, Granted | 13.47 | 19.36 | ||
Weighted Average Exercise Price, Exercised | 1.71 | |||
Weighted Average Exercise Price, Expired | ||||
Weighted Average Exercise Price, Forfeited | 17.9 | 19.50 | ||
Weighted Average Exercise Price, Ending | 5.74 | 6.86 | ||
Weighted Average Exercise Price, Exercisable | $ 5.93 | $ 2.35 | ||
Weighted Average Remaining Contractual Life (years) Stock Options, Beginning | 8 years 4 months 24 days | 8 years 10 months 25 days | ||
Weighted Average Remaining Contractual Life (years) Stock Options, Ending Balance | 7 years 3 months 19 days | 8 years 4 months 24 days | ||
Weighted Average Remaining Contractual Life (years Vested and exercisable stock options | 7 years 3 months 19 days | 8 years | ||
Aggregate Intrinsic Value Options, Beginning | $ 33,705,960 | $ 4,407,160 | ||
Aggregate Intrinsic Value Options, Ending Balance | 19,112,118 | 33,705,960 | ||
Aggregate Intrinsic Value Options, Exercisable Stock Options | $ 9,978,995 | $ 12,019,960 |
Stock Options and Warrants - _2
Stock Options and Warrants - Summary of Unvested Shares (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Nonvested Shares, Beginning | 1,355,000 | 1,103,333 |
Number of Nonvested Shares, Granted | 68,334 | 486,667 |
Number of Nonvested Shares, Exercised | (23,334) | |
Number of Nonvested Shares, Forfeited | (223,333) | (5,000) |
Number of Nonvested Shares, Vested | (413,750) | (230,000) |
Number of Nonvested Shares, Ending | 762,917 | 1,355,000 |
Weighted Average Grant Date Fair Value Nonvested Shares Beginning | $ 12.69 | $ 9.14 |
Weighted Average Grant Date Fair Value, Granted | 13.57 | 20.23 |
Weighted Average Grant Date Fair Value, Exercised | 1.95 | |
Weighted Average Grant Date Fair Value, Forfeited | 18.88 | 19.50 |
Weighted Average Grant Date Fair Value, Vested | 13.94 | 11.48 |
Weighted Average Grant Date Fair Value Nonvested Shares Ending | $ 10.60 | $ 12.69 |
Stock Options and Warrants - _3
Stock Options and Warrants - Schedule of Warrant Activity (Details) | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Warrants Outstanding, Beginning | shares | |
Number of Warrants, Granted | shares | 40,250 |
Number of Warrants, Exercised | shares | |
Number of Warrants, Expired | shares | |
Number of Warrants, Forfeited | shares | |
Number of Warrants Outstanding, Ending | shares | 40,250 |
Number of Warrants Exercisable | shares | |
Weighted Average Exercise Price, Beginning | $ / shares | |
Weighted Average Exercise Price, Granted | $ / shares | 9 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Ending | $ / shares | 9 |
Weighted Average Exercise Price, Exercisable | $ / shares | |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Ending Balance | 4 years 8 months 12 days |
Aggregate Intrinsic Value Warrants Outstanding, Beginning | $ | |
Aggregate Intrinsic Value Warrants Outstanding, Ending Balance | $ | 321,598 |
Aggregate Intrinsic Value Warrants, Exercisable Stock Options | $ |
Income Tax (Details Narrative)
Income Tax (Details Narrative) | Dec. 22, 2017 | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Income Tax Disclosure [Abstract] | |||
Deferred income tax assets allowance percentage | 1 | ||
Net operating loss carry forward | $ 19,602,755 | $ 15,514,565 | |
Federal tax rate | 35.00% | 21.00% | |
Income tax examination, description | The Company used an effective tax rate of 30% to deferred tax assets because of this tax rule change. |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Assets (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Net Operating Losses | $ 5,880,827 | $ 4,654,370 |
Valuation Allowance | $ (5,880,827) | $ (4,654,370) |
Sale of NuZee JP (Details Narra
Sale of NuZee JP (Details Narrative) - USD ($) | Sep. 28, 2020 | Sep. 28, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Ownership percentage | 70.00% | 70.00% | ||
Common stock issued value | $ 7,354,978 | $ 5,947,922 | ||
Stock Transfer Agreement [Member] | ||||
Common stock issued value | $ 34,000 | |||
NuZee JAPAN Co., Ltd [Member] | ||||
Ownership percentage | 70.00% | 70.00% | ||
NuZee JAPAN Co., Ltd [Member] | Stock Transfer Agreement [Member] | ||||
Ownership percentage | 70.00% | 70.00% | ||
Common stock issued value | $ 34,000 | |||
Deconsolidation, gain (loss), amount | 95,555 | |||
Cumulated translation adjustment | $ 245,607 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - USD ($) | Dec. 05, 2020 | Nov. 04, 2020 | Oct. 26, 2020 | Oct. 07, 2020 | Nov. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Stock option issued | 68,334 | 486,667 | |||||
Common stock issued value | $ 7,354,978 | $ 5,947,922 | |||||
Proceeds from stock option | $ 7,580,067 | $ 5,947,922 | |||||
Subsequent Event [Member] | |||||||
Stock option issued | 9,000 | ||||||
Shares sold during period | 252,004 | ||||||
Proceeds from sale of stock, value | $ 2,300,000 | ||||||
Sale of stock, price per share | $ 9.14 | ||||||
Proceeds from stock option | $ 9,180 | ||||||
Subsequent Event [Member] | Common Stock Purchase Agreement [Member] | Triton Funds LP [Member] | Maximum [Member] | |||||||
Common stock issued value | $ 1,000,000 | ||||||
Subsequent Event [Member] | Investor [Member] | Common Stock Purchase Agreement [Member] | |||||||
Shares sold during period | 72,955 | ||||||
Proceeds from sale of stock, value | $ 659,070 | ||||||
Subsequent Event [Member] | Three Board Members [Member] | |||||||
Stock option issued | 228,323 | ||||||
Stock options, excercise price of shares | $ 10.15 | ||||||
Subsequent Event [Member] | Options [Member] | Consultant [Member] | |||||||
Stock option issued | 15,000 | ||||||
Stock options, excercise price of shares | $ 16.79 |