Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2021 | Feb. 04, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 001-39338 | |
Entity Registrant Name | NUZEE, INC. | |
Entity Central Index Key | 0001527613 | |
Entity Tax Identification Number | 38-3849791 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1401 Capital Avenue | |
Entity Address, Address Line Two | Suite B | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75074 | |
City Area Code | (760) | |
Local Phone Number | 295-2408 | |
Title of 12(b) Security | Common Stock, $0.00001 par value | |
Trading Symbol | NUZE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 18,209,697 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Current assets: | ||
Cash | $ 10,967,104 | $ 10,815,954 |
Accounts receivable, net | 795,301 | 555,238 |
Inventories, net | 384,198 | 573,464 |
Prepaid expenses and other current assets | 672,995 | 482,288 |
Total current assets | 12,819,598 | 12,426,944 |
Property and equipment, net | 640,322 | 674,024 |
Other assets: | ||
Right-of-use asset - operating lease | 542,162 | 386,587 |
Investment | 174,268 | 175,425 |
Other assets | 79,591 | 79,822 |
Total other assets | 796,021 | 641,834 |
Total assets | 14,255,941 | 13,742,802 |
Current liabilities: | ||
Accounts payable | 681,531 | 342,790 |
Current portion of long-term loan payable | 31,610 | 43,618 |
Current portion of lease liability - operating lease | 205,098 | 150,931 |
Current portion of lease liability - finance lease | 28,729 | 27,833 |
Accrued expenses | 129,513 | 274,009 |
Deferred income | 327,219 | 175,822 |
Other current liabilities | 95,043 | 138,631 |
Total current liabilities | 1,498,743 | 1,153,634 |
Non-current liabilities: | ||
Lease liability - operating lease, net of current portion | 348,937 | 247,656 |
Lease liability - finance lease, net of current portion | 43,830 | 50,567 |
Loan payable - long term, net of current portion | 10,729 | 12,696 |
Other noncurrent liabilities | 67,565 | 65,802 |
Total non current liabilities | 471,061 | 376,721 |
Total liabilities | 1,969,804 | 1,530,355 |
Stockholders’ equity: | ||
Common stock; 100,000,000 shares authorized, $0.00001 par value; 18,204,837 and 17,820,390 shares issued and outstanding as of December 31, 2021, and September 30, 2021, respectively | 182 | 178 |
Additional paid in capital | 67,684,455 | 64,839,254 |
Accumulated deficit | (55,629,011) | (52,824,808) |
Accumulated other comprehensive income | 230,511 | 197,823 |
Total stockholders’ equity | 12,286,137 | 12,212,447 |
Total liabilities and stockholders’ equity | $ 14,255,941 | $ 13,742,802 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2021 | Sep. 30, 2021 |
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 | 18,204,837 | 17,820,390 |
Common stock, shares outstanding | 18,204,837 | 17,820,390 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues, net | $ 1,019,253 | $ 517,987 |
Cost of sales | 1,003,882 | 516,284 |
Gross profit | 15,371 | 1,703 |
Operating expenses | 2,852,793 | 5,903,826 |
Loss from operations | (2,837,422) | (5,902,123) |
Loss from investment in unconsolidated affiliate | (1,157) | (2,056) |
Other income | 42,757 | 12,621 |
Interest income | 245 | 94 |
Other expense | (5,818) | (569) |
Interest expense | (2,808) | (4,039) |
Net loss | $ (2,804,203) | $ (5,896,072) |
Basic and diluted loss per common share | $ (0.16) | $ (0.40) |
Basic and diluted weighted average number of common stock outstanding | 18,011,292 | 14,741,974 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Net loss | $ (2,804,203) | $ (5,896,072) |
Foreign currency translation | 32,688 | 1,656 |
Total other comprehensive income, net of tax | 32,688 | 1,656 |
Comprehensive loss | $ (2,771,515) | $ (5,894,416) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Sep. 30, 2020 | $ 146 | $ 40,472,229 | $ (34,272,778) | $ 190,161 | $ 6,389,758 |
Beginning balance, shares at Sep. 30, 2020 | 14,570,105 | ||||
Equity securities issued for cash | $ 3 | 2,683,977 | 2,683,980 | ||
Equity securities issued for cash, shares | 324,959 | ||||
Stock option expense | 4,507,298 | 4,507,298 | |||
Exercise of stock options | 9,180 | 9,180 | |||
Exercise of stock options, shares | 6,000 | ||||
Other comprehensive gain | 1,656 | 1,656 | |||
Net loss | (5,896,072) | (5,896,072) | |||
Ending balance, value at Dec. 31, 2020 | $ 149 | 47,672,684 | (40,168,850) | 191,817 | 7,695,800 |
Ending balance, shares at Dec. 31, 2020 | 14,901,064 | ||||
Beginning balance, value at Sep. 30, 2021 | $ 178 | 64,839,254 | (52,824,808) | 197,823 | 12,212,447 |
Beginning balance, shares at Sep. 30, 2021 | 17,820,390 | ||||
Exercise of warrants | $ 4 | 1,721,014 | $ 1,721,018 | ||
Exercise of warrants, shares | 384,447 | 384,447 | |||
Stock option expense | 1,124,187 | $ 1,124,187 | |||
Exercise of stock options, shares | |||||
Other comprehensive gain | 32,688 | $ 32,688 | |||
Net loss | (2,804,203) | (2,804,203) | |||
Ending balance, value at Dec. 31, 2021 | $ 182 | $ 67,684,455 | $ (55,629,011) | $ 230,511 | $ 12,286,137 |
Ending balance, shares at Dec. 31, 2021 | 18,204,837 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | ||
Net loss | $ (2,804,203) | $ (5,896,072) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and Amortization | 36,711 | 121,824 |
Noncash lease expense | 36,822 | 70,933 |
Stock option expense | 1,124,187 | 4,507,298 |
Sales allowance | 2,018 | |
Loss from investment in unconsolidated affiliate | 1,157 | 2,056 |
Change in operating assets and liabilities: | ||
Accounts receivable | (240,063) | (27,012) |
Inventories | 189,266 | (10,928) |
Prepaid expenses and other current assets | 66,527 | (186,466) |
Other assets | 231 | (906) |
Accounts payable | 81,507 | (27,012) |
Deferred income | 151,397 | (23,125) |
Lease liability – operating lease | (36,949) | (63,507) |
Accrued expenses and other current liabilities | (188,084) | (169,784) |
Other non-current liabilities | 1,763 | 1,610 |
Net cash used in operating activities | (1,579,731) | (1,699,073) |
Investing activities: | ||
Purchase of equipment | (3,009) | (58,990) |
Net cash used in investing activities | (3,009) | (58,990) |
Financing activities: | ||
Proceeds from exercise of options | 9,180 | |
Repayment of loans | (13,975) | (8,594) |
Repayment of finance lease | (5,841) | (5,146) |
Proceeds from exercise of warrants, net of issuance costs | 1,721,018 | |
Proceeds from issuance of equity securities, net of issuance costs | 2,683,980 | |
Net cash provided by financing activities | 1,701,202 | 2,679,420 |
Effect of foreign exchange on cash | 32,688 | 1,656 |
Net change in cash | 151,150 | 923,013 |
Cash, beginning of period | 10,815,954 | 4,398,545 |
Cash, end of period | 10,967,104 | 5,321,558 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 2,808 | 4,039 |
Cash paid for taxes | 250 | |
Non-cash transactions: | ||
Deferred offering costs accrued | 257,234 | 213,857 |
ROU assets and liabilities added during the period | $ 192,397 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited interim consolidated financial statements of NuZee, Inc. (together with its subsidiaries, referred to herein as the “Company”, “we” or “NuZee”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021 as filed with the SEC on December 22, 2021. In the opinion of management, all adjustments, consisting of recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the Annual Report on Form 10-K for the year ended September 30, 2021 have been omitted. 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. 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 wholly owned subsidiaries. All significant intercompany accounts, balances and transactions have been eliminated upon consolidation. The Company has two wholly owned international subsidiaries in NuZee KOREA Ltd. (“NuZee KR”) and NuZee Investment Co., Ltd. (“NuZee INV”). 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, warrants 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. As of December 31, 2021 and December 31, 2020, the total number of common stock equivalents was 8,766,493 2,314,053 Capital Resources Since its inception, the Company has devoted substantially all its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets, raising capital, and the commercialization and manufacture of its single serve coffee products. The Company has generated limited revenues from its principal operations, and there is no assurance of future revenues. As of December 31, 2021, the Company had cash of $ 10,967,104 Major Customers In the three months ended December 31, 2021 and 2020, revenue was primarily derived from major customers disclosed below. Three months ended December 31, 2021: SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 310,551 30 % $ 279,273 35 % Customer CU $ 199,936 20 % $ 137,566 17 % Three months ended December 31, 2020: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 156,299 30 % $ 94,066 43 % Customer RSM $ 66,811 13 % $ - 0 % Customer GR $ 65,536 13 % $ 65,352 30 % 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 Company implemented ASU No. 2016-02 on October 1, 2019. The Company performs a quarterly analysis of leases to determine if there are any operating leases that require recognition under ASC 842. The Company has 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. During our analysis of leases in the three months ended December 31, 2021, we determined to renew the office and manufacturing space in Vista, California which was originally scheduled to expire on January 31, 2022 8,451 We extended our sub-leased property in Vista, California, through January 31, 2023, which has been calculated as a ROU Asset co-terminus with the direct-leased property. The Seoul, Korea office and manufacturing space lease was extended through June 2022 and there is an apartment leased through June 2022. Additionally, the Company leased a new larger office and manufacturing space in Seoul, Korea beginning November 15, 2021, through November 15, 2023 7,040 As of December 31, 2021, our operating leases had a weighted average remaining lease term of 1.7 5 SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE 1 ROU Asset – October 1, 2021 $ 386,587 ROU Asset added during the period 192,397 Amortization during the period (36,822 ) ROU Asset –December 31, 2021 $ 542,162 Lease Liability – October 1, 2021 $ 398,587 Lease Liability added during the period 192,397 Amortization during the period (36,949 ) Lease Liability – December 31, 2021 $ 554,035 Lease Liability – Short-Term $ 205,098 Lease Liability – Long-Term 348,937 Lease Liability – Total $ 554,035 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 December 31, 2021: Amounts due within 12 months of December 31, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2021 2022 $ 335,586 2023 220,913 2024 64,936 2025 - 2026 - Total Minimum Lease Payments 621,435 Less Effect of Discounting (67,400 ) Present Value of Future Minimum Lease Payments 554,035 Less Current Portion of Operating Lease Obligations 205,098 Long-Term Operating Lease Obligations $ 348,937 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 through July 2024. 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 December 31, 2021, our financing lease had a remaining lease term of 2.5 years and a discount rate of 12.75 %. The interest expense on finance lease liabilities for the three months ended December 31, 2021 was $ 2,437 . During the year ended September 30, 2021, we recorded an impairment to fully write off the related equipment as it was deemed no longer useful for our operations. The table below summarizes future minimum finance lease payments at December 31, 2021 for the 12 months ended December 31: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2021 2022 $ 33,113 2023 33,113 2024 19,316 2025 - 2026 - Total Minimum Lease Payments 85,542 Amount representing interest (12,983 ) Present Value of Minimum Lease Payments 72,559 Current Portion of Finance Lease Obligations 28,729 Finance Lease Obligations, Less Current Portion $ 43,830 Rent expense included in general and administrative expense for the three months ended December 31, 2021 and 2020 was $ 90,525 93,750 Cash and non-cash activities associated with the leases for the three months ended December 31, 2021 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 36,949 Operating cash outflows from finance lease: $ 2,437 Financing cash outflows from finance lease: $ 5,841 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. During the three months ended December 31, 2021, we recognized sublease income of $ 42,757 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2021 2022 $ 124,190 2023 127,926 2024 64,918 2025 - 2026 - Total $ 317,034 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 December 31, 2021 and September 30, 2021 amounted to $ 18,506 and $ 20,416 , respectively. On February 15, 2019, NuZee KR entered into equipment financing for production equipment with Shin Han Bank for $ 60,563 . In June 2019, NuZee KR purchased additional equipment and increased the loan with Shin Han 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 December 31, 2021 and September 30, 2021 amounted to $ 23,833 and $ 35,898 , respectively. The remaining loan payments are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit ShinHan Bank Total 2022 (Jan 2022 - Sep 2022) $ 5,812 $ 13,248 $ 19,060 2023 (Oct 2022 - Dec 2022) 1,965 10,585 12,550 Total Current Portion $ 7,777 $ 23,833 $ 31,610 2023 (Jan 2023 - Sep 2023) $ 8,005 - $ 8,005 2024 2,724 - 2,724 Total Long-Term Portion $ 10,729 $ - $ 10,729 Grand Total $ 18,506 $ 23,833 $ 42,339 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. Foreign Currency Translation The financial position and results of operations of each of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. Revenues and expenses of each such subsidiary have 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 adjustments recorded to other comprehensive gain amounted to $ 32,688 1,656 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. Inventories 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 December 31, 2021 and September 30, 2021, the carrying value of inventory was $ 384,198 573,464 SCHEDULE OF INVENTORY December 31, 2021 September 30, 2021 Raw materials $ 366,639 $ 552,621 Finished goods 17,559 20,843 Less – Inventory reserve - - Total $ 384,198 $ 573,464 Joint Venture On January 9, 2020, a joint venture agreement was signed between Industrial Marino, S.A. de C.V. ( 50 50 313,012 110,000 160,000 43,012 The Company accounts for NLA using the equity method of accounting since the management of day-to-day operations at NLA ultimately lies with the Company’s joint venture partner as the operations of NLA are based in its partners facilities and our partner appoints the Chairman of the joint board of directors of NLA. As of December 31, 2021, the only activity in NLA was the contribution of two machines as described above and other start up related activities. $ 1,157 2,056 |
GEOGRAPHIC CONCENTRATION
GEOGRAPHIC CONCENTRATION | 3 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
GEOGRAPHIC CONCENTRATION | 2. GEOGRAPHIC CONCENTRATION The Company is organized based on fundamentally one business segment although it does sell its products on a world-wide basis. The Company is organized in three geographical segments. The Company co-packs product for customers and produces and sells its products directly in North America and Korea. The Company has a minimally staffed office in Japan that provides support for import and export of product and materials between the U.S. and Japan, as well as investor relations support to our shareholders based in Japan. Information about the Company’s geographic operations for the three months ended December 31, 2021 and 2020 are as follows: Geographic Concentrations SCHEDULE OF GEOGRAPHIC OPERATIONS Three Months Three Months December 31, 2021 December 30, 2020 Net Revenue: North America $ 817,341 $ 406,488 South Korea 201,912 111,499 Net Revenue $ 1,019,253 $ 517,987 Property and equipment, net: As of As of North America $ 462,389 $ 517,966 South Korea 176,810 154,562 Japan 1,123 1,496 Property and equipment, net $ 640,322 $ 674,024 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 3. RELATED PARTY TRANSACTIONS For the three months ended December 31, 2021 and December 31, 2020, respectively, the Company had sales of $ 0 15,998 |
ISSUANCE OF EQUITY SECURITIES
ISSUANCE OF EQUITY SECURITIES | 3 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
ISSUANCE OF EQUITY SECURITIES | 4. ISSUANCE OF EQUITY SECURITIES Exercise of Warrants In the three months ended December 31, 2021, we issued 384,447 380,447 380,447 4,000 8,000 1,721,018 ATM Offering On December 28, 2021, we entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Maxim Group LLC, as agent (the “Agent”), pursuant to which we may offer and sell, from time to time, shares of our common stock through the Agent in “at-the-market-offerings”, as defined in Rule 415 under the Securities Act, having an aggregate offering price of up to $ 20,000,000 3.0 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND WARRANTS | 5. STOCK OPTIONS AND WARRANTS Options During the three months ended December 31, 2021, the Company granted no new stock options, had 192,666 The following table summarizes stock option activity for three months ended December 31, 2021: SUMMARY OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2021 4,511,691 $ 4.73 8.4 $ 452,206 Granted - - Exercised - - Expired - - Forfeited (192,666 ) 14.11 Outstanding at December 31, 2021 4,319,025 $ 4.31 8.2 $ 4,320,497 Exercisable at December 31, 2021 1,704,638 $ 4.82 7.1 $ 1,953,581 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 $ 1,124,187 for the three months ended December 31, 2021. Unamortized option expense as of December 31, 2021 for all options outstanding amounted to $ 3,603,243 . These costs are expected to be recognized over a weighted average period of 1.3 years. The Company recognized stock option expense of $ 4,507,298 for the three months ended December 31, 2020. A summary of the status of the Company’s nonvested options as of December 31, 2021 is presented below: SUMMARY OF UNVESTED SHARES Nonvested options Number of Weighted Average Nonvested options at September 30, 2021 2,870,799 $ 5.02 Granted - - Forfeited (26,000 ) 2.60 Vested (230,412 ) 6.09 Nonvested options at December 31, 2021 2,614,387 $ 4.95 Warrants On June 23, 2020, as part of our agreement with Benchmark Company, LLC, the underwriter of the Company’s June 2020 registered public offering of common stock, we issued 40,250 9.00 December 23, 2020 June 18, 2025 On March 19, 2021, we entered into an underwriting agreement in connection with our registered public offering (the “Offering”) of (i) 2,777,777 4.50 Each Series A Warrant entitles the registered holder to purchase one share of our common stock at an exercise price of $ 4.50 5.85 5 The Series A and Series B Warrant holders are obligated to pay the exercise price in cash upon exercise of the Warrants unless we fail to maintain a current prospectus relating to the common stock issuable upon the exercise of the Warrants (in which case, the Warrants may only be exercised via a “cashless” exercise provision). The following table summarizes warrant activity for the three months ended December 31, 2021: SCHEDULE OF WARRANT ACTIVITY Number of Shares Issuable Upon Exercise of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2021 4,831,915 $ 4.98 4.5 $ - Issued - - Exercised (384,447 ) 4.51 Expired - - Outstanding at December 31, 2021 4,447,468 $ 5.02 4.2 - Exercisable at December 31, 2021 4,447,468 $ 5.02 4.2 $ - In the three months ended December 31, 2021, we issued 384,447 380,447 380,447 4,000 8,000 1,721,018 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 6. SUBSEQUENT EVENTS ATM Offering—Sales under Equity Distribution Agreement During the period from January 1, 2022 through February 4, 2022, we issued and sold 4,860 12,542 388 Agreement with Farmer Bros. Co. As previously disclosed in 2020, we entered into an Equipment Bailment and Contract Manufacturing Agreement (the “FBC Agreement”) with Farmer Bros. Co. (“FBC”), pursuant to which FBC agreed to provide us with access to manufacturing capacity and was obligated to manufacture finished products for us. On January 27, 2022, we and FBC mutually agreed to terminate the FBC Agreement, effective immediately. Prior to its termination, the Company had placed one machine with FBC under the FBC Agreement. Director Compensation Policy On January 11, 2022, the Company’s Board of Directors (the “Board”) adopted and approved a new director compensation policy pursuant to which the Company will provide the following compensation to its non-employee Board members: (i) annual cash compensation of $ 50,000 50,000 10,000 7,500 5,000 Amended Non-Binding Letter of Intent for Potential Asset Acquisition; Bridge Loan As previously disclosed in the Company’s Current Report on Form 8-K filed on December 29, 2021, the Company announced it entered into a non-binding letter of intent (the “Letter of Intent”) affording the Company an exclusivity period lasting until January 31, 2022, to negotiate a definitive agreement (the “Definitive Agreement”) to acquire substantially all the assets (the “Potential Transaction”) of an unaffiliated, privately held company in the coffee industry (the “Third Party”). On February 3, 2022, the Company and the Third Party amended the Letter of Intent to extend the exclusivity period to March 1, 2022 (the “Extension”). In consideration of the Extension, the Company agreed to loan the Third Party up to $ 35,000 13,000 22,000 Upon closing of the Potential Transaction (if any), the first tranche of $13,000 is expected to be designated as an assumed liability under the Definitive Agreement for the benefit of the Third Party and the second tranche of $22,000 is expected to be offset and reduce the purchase price to be paid by the Company 1% |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2021 | |
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. |
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 wholly owned subsidiaries. All significant intercompany accounts, balances and transactions have been eliminated upon consolidation. The Company has two wholly owned international subsidiaries in NuZee KOREA Ltd. (“NuZee KR”) and NuZee Investment Co., Ltd. (“NuZee INV”). |
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, warrants 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. As of December 31, 2021 and December 31, 2020, the total number of common stock equivalents was 8,766,493 2,314,053 |
Capital Resources | Capital Resources Since its inception, the Company has devoted substantially all its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets, raising capital, and the commercialization and manufacture of its single serve coffee products. The Company has generated limited revenues from its principal operations, and there is no assurance of future revenues. As of December 31, 2021, the Company had cash of $ 10,967,104 |
Major Customers | Major Customers In the three months ended December 31, 2021 and 2020, revenue was primarily derived from major customers disclosed below. Three months ended December 31, 2021: SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 310,551 30 % $ 279,273 35 % Customer CU $ 199,936 20 % $ 137,566 17 % Three months ended December 31, 2020: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 156,299 30 % $ 94,066 43 % Customer RSM $ 66,811 13 % $ - 0 % Customer GR $ 65,536 13 % $ 65,352 30 % |
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 Company implemented ASU No. 2016-02 on October 1, 2019. The Company performs a quarterly analysis of leases to determine if there are any operating leases that require recognition under ASC 842. The Company has 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. During our analysis of leases in the three months ended December 31, 2021, we determined to renew the office and manufacturing space in Vista, California which was originally scheduled to expire on January 31, 2022 8,451 We extended our sub-leased property in Vista, California, through January 31, 2023, which has been calculated as a ROU Asset co-terminus with the direct-leased property. The Seoul, Korea office and manufacturing space lease was extended through June 2022 and there is an apartment leased through June 2022. Additionally, the Company leased a new larger office and manufacturing space in Seoul, Korea beginning November 15, 2021, through November 15, 2023 7,040 As of December 31, 2021, our operating leases had a weighted average remaining lease term of 1.7 5 SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE 1 ROU Asset – October 1, 2021 $ 386,587 ROU Asset added during the period 192,397 Amortization during the period (36,822 ) ROU Asset –December 31, 2021 $ 542,162 Lease Liability – October 1, 2021 $ 398,587 Lease Liability added during the period 192,397 Amortization during the period (36,949 ) Lease Liability – December 31, 2021 $ 554,035 Lease Liability – Short-Term $ 205,098 Lease Liability – Long-Term 348,937 Lease Liability – Total $ 554,035 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 December 31, 2021: Amounts due within 12 months of December 31, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2021 2022 $ 335,586 2023 220,913 2024 64,936 2025 - 2026 - Total Minimum Lease Payments 621,435 Less Effect of Discounting (67,400 ) Present Value of Future Minimum Lease Payments 554,035 Less Current Portion of Operating Lease Obligations 205,098 Long-Term Operating Lease Obligations $ 348,937 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 through July 2024. 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 December 31, 2021, our financing lease had a remaining lease term of 2.5 years and a discount rate of 12.75 %. The interest expense on finance lease liabilities for the three months ended December 31, 2021 was $ 2,437 . During the year ended September 30, 2021, we recorded an impairment to fully write off the related equipment as it was deemed no longer useful for our operations. The table below summarizes future minimum finance lease payments at December 31, 2021 for the 12 months ended December 31: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2021 2022 $ 33,113 2023 33,113 2024 19,316 2025 - 2026 - Total Minimum Lease Payments 85,542 Amount representing interest (12,983 ) Present Value of Minimum Lease Payments 72,559 Current Portion of Finance Lease Obligations 28,729 Finance Lease Obligations, Less Current Portion $ 43,830 Rent expense included in general and administrative expense for the three months ended December 31, 2021 and 2020 was $ 90,525 93,750 Cash and non-cash activities associated with the leases for the three months ended December 31, 2021 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 36,949 Operating cash outflows from finance lease: $ 2,437 Financing cash outflows from finance lease: $ 5,841 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. During the three months ended December 31, 2021, we recognized sublease income of $ 42,757 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2021 2022 $ 124,190 2023 127,926 2024 64,918 2025 - 2026 - Total $ 317,034 |
Loans | 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 December 31, 2021 and September 30, 2021 amounted to $ 18,506 and $ 20,416 , respectively. On February 15, 2019, NuZee KR entered into equipment financing for production equipment with Shin Han Bank for $ 60,563 . In June 2019, NuZee KR purchased additional equipment and increased the loan with Shin Han 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 December 31, 2021 and September 30, 2021 amounted to $ 23,833 and $ 35,898 , respectively. The remaining loan payments are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit ShinHan Bank Total 2022 (Jan 2022 - Sep 2022) $ 5,812 $ 13,248 $ 19,060 2023 (Oct 2022 - Dec 2022) 1,965 10,585 12,550 Total Current Portion $ 7,777 $ 23,833 $ 31,610 2023 (Jan 2023 - Sep 2023) $ 8,005 - $ 8,005 2024 2,724 - 2,724 Total Long-Term Portion $ 10,729 $ - $ 10,729 Grand Total $ 18,506 $ 23,833 $ 42,339 |
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. |
Foreign Currency Translation | Foreign Currency Translation The financial position and results of operations of each of the Company’s foreign subsidiaries are measured using the foreign subsidiary’s local currency as the functional currency. Revenues and expenses of each such subsidiary have 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 adjustments recorded to other comprehensive gain amounted to $ 32,688 1,656 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. |
Inventories | Inventories 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 December 31, 2021 and September 30, 2021, the carrying value of inventory was $ 384,198 573,464 SCHEDULE OF INVENTORY December 31, 2021 September 30, 2021 Raw materials $ 366,639 $ 552,621 Finished goods 17,559 20,843 Less – Inventory reserve - - Total $ 384,198 $ 573,464 |
Joint Venture | Joint Venture On January 9, 2020, a joint venture agreement was signed between Industrial Marino, S.A. de C.V. ( 50 50 313,012 110,000 160,000 43,012 The Company accounts for NLA using the equity method of accounting since the management of day-to-day operations at NLA ultimately lies with the Company’s joint venture partner as the operations of NLA are based in its partners facilities and our partner appoints the Chairman of the joint board of directors of NLA. As of December 31, 2021, the only activity in NLA was the contribution of two machines as described above and other start up related activities. $ 1,157 2,056 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF REVENUE BY MAJOR CUSTOMERS | In the three months ended December 31, 2021 and 2020, revenue was primarily derived from major customers disclosed below. Three months ended December 31, 2021: SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 310,551 30 % $ 279,273 35 % Customer CU $ 199,936 20 % $ 137,566 17 % Three months ended December 31, 2020: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 156,299 30 % $ 94,066 43 % Customer RSM $ 66,811 13 % $ - 0 % Customer GR $ 65,536 13 % $ 65,352 30 % |
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE | SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE 1 ROU Asset – October 1, 2021 $ 386,587 ROU Asset added during the period 192,397 Amortization during the period (36,822 ) ROU Asset –December 31, 2021 $ 542,162 Lease Liability – October 1, 2021 $ 398,587 Lease Liability added during the period 192,397 Amortization during the period (36,949 ) Lease Liability – December 31, 2021 $ 554,035 Lease Liability – Short-Term $ 205,098 Lease Liability – Long-Term 348,937 Lease Liability – Total $ 554,035 |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES | Amounts due within 12 months of December 31, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2021 2022 $ 335,586 2023 220,913 2024 64,936 2025 - 2026 - Total Minimum Lease Payments 621,435 Less Effect of Discounting (67,400 ) Present Value of Future Minimum Lease Payments 554,035 Less Current Portion of Operating Lease Obligations 205,098 Long-Term Operating Lease Obligations $ 348,937 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES | The table below summarizes future minimum finance lease payments at December 31, 2021 for the 12 months ended December 31: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2021 2022 $ 33,113 2023 33,113 2024 19,316 2025 - 2026 - Total Minimum Lease Payments 85,542 Amount representing interest (12,983 ) Present Value of Minimum Lease Payments 72,559 Current Portion of Finance Lease Obligations 28,729 Finance Lease Obligations, Less Current Portion $ 43,830 Rent expense included in general and administrative expense for the three months ended December 31, 2021 and 2020 was $ 90,525 93,750 |
SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES | Cash and non-cash activities associated with the leases for the three months ended December 31, 2021 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 36,949 Operating cash outflows from finance lease: $ 2,437 Financing cash outflows from finance lease: $ 5,841 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE | SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2021 2022 $ 124,190 2023 127,926 2024 64,918 2025 - 2026 - Total $ 317,034 |
SCHEDULE OF LOAN PAYMENTS | The remaining loan payments are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit ShinHan Bank Total 2022 (Jan 2022 - Sep 2022) $ 5,812 $ 13,248 $ 19,060 2023 (Oct 2022 - Dec 2022) 1,965 10,585 12,550 Total Current Portion $ 7,777 $ 23,833 $ 31,610 2023 (Jan 2023 - Sep 2023) $ 8,005 - $ 8,005 2024 2,724 - 2,724 Total Long-Term Portion $ 10,729 $ - $ 10,729 Grand Total $ 18,506 $ 23,833 $ 42,339 |
SCHEDULE OF INVENTORY | SCHEDULE OF INVENTORY December 31, 2021 September 30, 2021 Raw materials $ 366,639 $ 552,621 Finished goods 17,559 20,843 Less – Inventory reserve - - Total $ 384,198 $ 573,464 |
GEOGRAPHIC CONCENTRATION (Table
GEOGRAPHIC CONCENTRATION (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
SCHEDULE OF GEOGRAPHIC OPERATIONS | SCHEDULE OF GEOGRAPHIC OPERATIONS Three Months Three Months December 31, 2021 December 30, 2020 Net Revenue: North America $ 817,341 $ 406,488 South Korea 201,912 111,499 Net Revenue $ 1,019,253 $ 517,987 Property and equipment, net: As of As of North America $ 462,389 $ 517,966 South Korea 176,810 154,562 Japan 1,123 1,496 Property and equipment, net $ 640,322 $ 674,024 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SUMMARY OF STOCK OPTION ACTIVITY | The following table summarizes stock option activity for three months ended December 31, 2021: SUMMARY OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2021 4,511,691 $ 4.73 8.4 $ 452,206 Granted - - Exercised - - Expired - - Forfeited (192,666 ) 14.11 Outstanding at December 31, 2021 4,319,025 $ 4.31 8.2 $ 4,320,497 Exercisable at December 31, 2021 1,704,638 $ 4.82 7.1 $ 1,953,581 |
SUMMARY OF UNVESTED SHARES | A summary of the status of the Company’s nonvested options as of December 31, 2021 is presented below: SUMMARY OF UNVESTED SHARES Nonvested options Number of Weighted Average Nonvested options at September 30, 2021 2,870,799 $ 5.02 Granted - - Forfeited (26,000 ) 2.60 Vested (230,412 ) 6.09 Nonvested options at December 31, 2021 2,614,387 $ 4.95 |
SCHEDULE OF WARRANT ACTIVITY | The following table summarizes warrant activity for the three months ended December 31, 2021: SCHEDULE OF WARRANT ACTIVITY Number of Shares Issuable Upon Exercise of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2021 4,831,915 $ 4.98 4.5 $ - Issued - - Exercised (384,447 ) 4.51 Expired - - Outstanding at December 31, 2021 4,447,468 $ 5.02 4.2 - Exercisable at December 31, 2021 4,447,468 $ 5.02 4.2 $ - In the three months ended December 31, 2021, we issued 384,447 380,447 380,447 4,000 8,000 1,721,018 |
SCHEDULE OF REVENUE BY MAJOR CU
SCHEDULE OF REVENUE BY MAJOR CUSTOMERS (Details) - Customer Concentration Risk [Member] - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Benchmark [Member] | Customer WP [Member] | ||
Product Information [Line Items] | ||
Sales Amount | $ 310,551 | $ 156,299 |
Concentration risk percentage | 30.00% | 30.00% |
Revenue Benchmark [Member] | Customer CU [Member] | ||
Product Information [Line Items] | ||
Sales Amount | $ 199,936 | |
Concentration risk percentage | 20.00% | |
Revenue Benchmark [Member] | Customer RSM [Member] | ||
Product Information [Line Items] | ||
Sales Amount | $ 66,811 | |
Concentration risk percentage | 13.00% | |
Revenue Benchmark [Member] | Customer GR [Member] | ||
Product Information [Line Items] | ||
Sales Amount | $ 65,536 | |
Concentration risk percentage | 13.00% | |
Accounts Receivable [Member] | Customer WP [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 35.00% | 43.00% |
Accounts receivable amount | $ 279,273 | $ 94,066 |
Accounts Receivable [Member] | Customer CU [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 17.00% | |
Accounts receivable amount | $ 137,566 | |
Accounts Receivable [Member] | Customer RSM [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 0.00% | |
Accounts receivable amount | ||
Accounts Receivable [Member] | Customer GR [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 30.00% | |
Accounts receivable amount | $ 65,352 |
SCHEDULE OF OTHER INFORMATION R
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||
ROU Asset | $ 386,587 | |
ROU Asset added during the period | 192,397 | |
Amortization during the period | (36,822) | |
ROU Asset | 542,162 | |
Lease Liability | 398,587 | |
Lease Liability added during the period | 192,397 | |
Amortization during the period | (36,949) | |
Lease Liability | 554,035 | |
Lease Liability - Short-Term | 205,098 | $ 150,931 |
Lease Liability - Long-Term | 348,937 | 247,656 |
Lease Liability - Total | $ 554,035 | $ 398,587 |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
2022 | $ 335,586 | |
2023 | 220,913 | |
2024 | 64,936 | |
2025 | ||
2026 | ||
Total Minimum Lease Payments | 621,435 | |
Less Effect of Discounting | (67,400) | |
Present Value of Future Minimum Lease Payments | 554,035 | $ 398,587 |
Less Current Portion of Operating Lease Obligations | 205,098 | 150,931 |
Long-Term Operating Lease Obligations | $ 348,937 | $ 247,656 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
2022 | $ 33,113 | |
2023 | 33,113 | |
2024 | 19,316 | |
2025 | ||
2026 | ||
Total Minimum Lease Payments | 85,542 | |
Amount representing interest | (12,983) | |
Present Value of Minimum Lease Payments | 72,559 | |
Current Portion of Finance Lease Obligations | 28,729 | $ 27,833 |
Finance Lease Obligations, Less Current Portion | $ 43,830 | $ 50,567 |
SCHEDULE OF CASH AND NON-CASH A
SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES (Details) | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Accounting Policies [Abstract] | |
Operating cash outflows from operating leases: | $ 36,949 |
Operating cash outflows from finance lease: | 2,437 |
Financing cash outflows from finance lease: | $ 5,841 |
SCHEDULE OF FUTURE MINIMUM LE_2
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE (Details) | Dec. 31, 2021USD ($) |
Accounting Policies [Abstract] | |
2022 | $ 124,190 |
2023 | 127,926 |
2024 | 64,918 |
2025 | |
2026 | |
Total | $ 317,034 |
SCHEDULE OF LOAN PAYMENTS (Deta
SCHEDULE OF LOAN PAYMENTS (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Line of Credit Facility [Line Items] | ||
2022 (Jan 2022 - Sep 2022) | $ 19,060 | |
2023 (Oct 2022 - Dec 2022) | 12,550 | |
Total Current Portion | 31,610 | |
2023 (Jan 2023 - Sep 2023) | 8,005 | |
2024 | 2,724 | |
Total Long-Term Portion | 10,729 | |
Grand Total | 42,339 | |
Ford Motor Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 (Jan 2022 - Sep 2022) | 5,812 | |
2023 (Oct 2022 - Dec 2022) | 1,965 | |
Total Current Portion | 7,777 | |
2023 (Jan 2023 - Sep 2023) | 8,005 | |
2024 | 2,724 | |
Total Long-Term Portion | 10,729 | |
Grand Total | 18,506 | $ 20,416 |
Shin Han Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
2022 (Jan 2022 - Sep 2022) | 13,248 | |
2023 (Oct 2022 - Dec 2022) | 10,585 | |
Total Current Portion | 23,833 | |
2023 (Jan 2023 - Sep 2023) | ||
2024 | ||
Total Long-Term Portion | ||
Grand Total | $ 23,833 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Raw materials | $ 366,639 | $ 552,621 |
Finished goods | 17,559 | 20,843 |
Less – Inventory reserve | ||
Total | $ 384,198 | $ 573,464 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Oct. 09, 2019 | Jun. 28, 2019 | Apr. 02, 2019 | Feb. 15, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Jan. 09, 2020 |
Property, Plant and Equipment [Line Items] | ||||||||
Common stock equivalents | 8,766,493 | 2,314,053 | ||||||
Cash | $ 10,967,104 | $ 10,815,954 | ||||||
Operating leases weighted average remaining lease term | 1 year 8 months 12 days | |||||||
Operating lease weighted average discount rate percent | 5.00% | |||||||
Finance Lease, Weighted Average Remaining Lease Term | 2 years 6 months | |||||||
Lessee, Finance Lease, Discount Rate | 12.75% | |||||||
Finance Lease, Interest Expense | $ 2,437 | |||||||
Sub-lease income | 42,757 | |||||||
Payments to Acquire Property, Plant, and Equipment | 3,009 | $ 58,990 | ||||||
Long-term Debt | 42,339 | |||||||
Foreign currency translation adjustment | 32,688 | 1,656 | ||||||
Inventories, net | 384,198 | 573,464 | ||||||
Gain on investments | 110,000 | |||||||
Cash contribution | (1,157) | (2,056) | ||||||
Joint Venture Agreement [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Machine carrying cost | $ 313,012 | |||||||
Ford Motor Credit [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Long-term Debt | 18,506 | 20,416 | ||||||
Shin Han Bank [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Long-term Debt | 23,833 | |||||||
Vehicles [Member] | Ford Motor Credit [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Payments to Acquire Property, Plant, and Equipment | $ 41,627 | |||||||
Line of Credit Facility, Periodic Payment | 3,500 | |||||||
Line of Credit Facility, Capacity Available for Trade Purchases | $ 38,127 | |||||||
Debt Instrument, Term | 60 months | |||||||
Line of Credit Facility, Interest Rate at Period End | 2.90% | |||||||
General and Administrative Expense [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Payments for Rent | 90,525 | 93,750 | ||||||
NuZee Korea Ltd [Member] | Shin Han Bank [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Long-term Debt | 23,833 | $ 35,898 | ||||||
NuZee Korea Ltd [Member] | Equipment [Member] | Shin Han Bank [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Line of Credit Facility, Capacity Available for Trade Purchases | $ 60,563 | |||||||
Debt Instrument, Term | 36 months | |||||||
Line of Credit Facility, Interest Rate at Period End | 4.33% | |||||||
Line of Credit Facility, Increase (Decrease), Net | $ 86,518 | |||||||
Industrial Marino, S.A. de C.V. and NuZee Latin America, S.A. de C.V. [Member] | Joint Venture Agreement [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Equity percentage | 50.00% | |||||||
NLA [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Gain on investments | 160,000 | |||||||
Cash contribution | 1,157 | $ 2,056 | ||||||
NLA [Member] | Machines [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Cash contribution | $ 43,012 | |||||||
Lease Agreement [Member] | Alliance Funding Group [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Sale Leaseback Transaction, Net Book Value | $ 2,987 | |||||||
Payments to Acquire Equipment on Lease | $ 124,500 | |||||||
CANADA | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Lease term expiration | Jan. 31, 2022 | |||||||
Monthly lease expenses | $ 8,451 | |||||||
Sub-leased, option to extend description | We extended our sub-leased property in Vista, California, through January 31, 2023, which has been calculated as a ROU Asset co-terminus with the direct-leased property. The Seoul, Korea office and manufacturing space lease was extended through June 2022 and there is an apartment leased through June 2022. Additionally, the Company leased a new larger office and manufacturing space in Seoul, Korea beginning November 15, 2021, through November 15, 2023. | |||||||
KOREA, REPUBLIC OF | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Lease term expiration | Nov. 15, 2023 | |||||||
Monthly lease expenses | $ 7,040 |
SCHEDULE OF GEOGRAPHIC OPERATIO
SCHEDULE OF GEOGRAPHIC OPERATIONS (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Net Revenue | $ 1,019,253 | $ 517,987 | |
Property and equipment, net | 640,322 | $ 674,024 | |
North America [Member] | |||
Net Revenue | 817,341 | 406,488 | |
Property and equipment, net | 462,389 | 517,966 | |
KOREA, REPUBLIC OF | |||
Net Revenue | 201,912 | $ 111,499 | |
Property and equipment, net | 176,810 | 154,562 | |
JAPAN | |||
Property and equipment, net | $ 1,123 | $ 1,496 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
NuZee Latin America [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues from related parties | $ 0 | $ 15,998 |
ISSUANCE OF EQUITY SECURITIES (
ISSUANCE OF EQUITY SECURITIES (Details Narrative) | Dec. 28, 2021USD ($) | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($) | Sep. 30, 2021shares |
Class of Warrant or Right [Line Items] | ||||
Exercise of warrants, shares | 384,447 | |||
Common Stock, Shares, Issued | 18,204,837 | 17,820,390 | ||
Proceeds from exercise of warrants, net of issuance costs | $ | $ 1,721,018 | |||
Aggregate offering price | $ | $ 2,683,980 | |||
Equity Distribution Agreement [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Percentage of commission to agent | 3 | |||
Equity Distribution Agreement [Member] | At-The-Market Offering [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Aggregate offering price | $ | $ 20,000,000 | |||
Series A Warrant [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Common Stock, Shares, Issued | 380,447 | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 380,447 | |||
Series B Warrant [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Common Stock, Shares, Issued | 4,000 | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,000 |
SUMMARY OF STOCK OPTION ACTIVIT
SUMMARY OF STOCK OPTION ACTIVITY (Details) | 3 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Options Outstanding, Beginning | shares | 4,511,691 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 4.73 |
Weighted Average Remaining Contractual Life (years) Stock Options Outstanding, Beginning | 8 years 4 months 24 days |
Aggregate Intrinsic Value Options Outstanding, Beginning | $ | $ 452,206 |
Number of Options Outstanding, Beginning | shares | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | |
Number of Options Outstanding, Beginning | shares | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | |
Number of Options Outstanding, Beginning | shares | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | |
Number of Options Outstanding, Beginning | shares | (192,666) |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 14.11 |
Number of Options Outstanding, Beginning | shares | 4,319,025 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 4.31 |
Weighted Average Remaining Contractual Life (years) Stock Options Outstanding, Ending Balance | 8 years 2 months 12 days |
Aggregate Intrinsic Value Options Outstanding, Beginning | $ | $ 4,320,497 |
Number of Options Outstanding, Beginning | shares | 1,704,638 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 4.82 |
Weighted Average Remaining Contractual Life (years) Stock Options, Exercisable | 7 years 1 month 6 days |
Aggregate Intrinsic Value Options Outstanding, Beginning | $ | $ 1,953,581 |
SUMMARY OF UNVESTED SHARES (Det
SUMMARY OF UNVESTED SHARES (Details) | 3 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Nonvested Shares, Beginning | shares | 2,870,799 |
Weighted Average Grant Date Fair Value Nonvested Shares Beginning | $ / shares | $ 5.02 |
Number of Nonvested Shares, Granted | shares | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | |
Number of Nonvested Shares, Forfeited | shares | (26,000) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 2.60 |
Number of Nonvested Shares, Vested | shares | (230,412) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 6.09 |
Number of Nonvested Shares, Ending | shares | 2,614,387 |
Weighted Average Grant Date Fair Value Nonvested Shares Ending | $ / shares | $ 4.95 |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) | 3 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Warrants Outstanding, Beginning | shares | 4,831,915 |
Weighted Average Exercise Price, Beginning | $ / shares | $ 4.98 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Beginning Balance | 4 years 6 months |
Aggregate Intrinsic Value Warrants Outstanding, Beginning | $ | |
Number of Warrants Outstanding, Beginning | shares | |
Weighted Average Exercise Price, Beginning | $ / shares | |
Number of Warrants Outstanding, Beginning | shares | (384,447) |
Weighted Average Exercise Price, Beginning | $ / shares | $ 4.51 |
Number of Warrants Outstanding, Beginning | shares | |
Weighted Average Exercise Price, Beginning | $ / shares | |
Number of Warrants Outstanding, Beginning | shares | 4,447,468 |
Weighted Average Exercise Price, Beginning | $ / shares | $ 5.02 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Ending Balance | 4 years 2 months 12 days |
Aggregate Intrinsic Value Warrants Outstanding, Beginning | $ | |
Number of Warrants Outstanding, Beginning | shares | 4,447,468 |
Weighted Average Exercise Price, Beginning | $ / shares | $ 5.02 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Exercisable | 4 years 2 months 12 days |
Aggregate Intrinsic Value Warrants Outstanding, Beginning | $ |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | Mar. 19, 2021 | Jun. 23, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option forfeited during period | 192,666 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 7 years 1 month 6 days | ||||
Warrant to purchase common stock | 40,250 | ||||
Warrant exercise price | $ 9 | ||||
Warrants exercisable date | Dec. 23, 2020 | ||||
Warrant expiration date | Jun. 18, 2025 | ||||
Stock issued during period stock warrants shares exercised | 384,447 | ||||
Common Stock, Shares, Issued | 18,204,837 | 17,820,390 | |||
Proceeds from Warrant Exercises | $ 1,721,018 | ||||
Series A Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock, Shares, Issued | 380,447 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 380,447 | ||||
Series B Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock, Shares, Issued | 4,000 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,000 | ||||
Series A Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrant exercise price | $ 4.50 | ||||
Warrants term | 5 years | ||||
Series B Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrant exercise price | $ 5.85 | ||||
Warrants term | 5 years | ||||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock or Unit Option Plan Expense | $ 1,124,187 | $ 4,507,298 | |||
Unamortized option expense | $ 3,603,243 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 1 year 3 months 18 days | ||||
Termination of Employment [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option forfeited during period | 192,666 | ||||
Underwritten, Over Allotment Option [Member] | Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of warrants, description | (i) 2,777,777 units (the “Units”), at a price to the public of $4.50 per Unit, with each Unit consisting of (a) one share of our common stock, (b) one Series A Warrant, and (c) one Series B Warrant (together with the Series A Warrants, the “Warrants”), and (ii) 416,666 Series A Warrants and 416,666 Series B Warrants, each pursuant to the underwriter’s full exercise of their overallotment option with respect to such warrants. | ||||
Shares sold during period | 2,777,777 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Feb. 11, 2022 | Jan. 11, 2022 | Feb. 04, 2022 | Mar. 31, 2022 | Feb. 03, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Subsequent Event [Line Items] | |||||||
Aggregate grant date fair value | $ 4,320,497 | $ 452,206 | |||||
Bridge Loan [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Second payment | $ 35,000 | ||||||
Bridge Loan [Member] | Letter Of Intent [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt description | Upon closing of the Potential Transaction (if any), the first tranche of $13,000 is expected to be designated as an assumed liability under the Definitive Agreement for the benefit of the Third Party and the second tranche of $22,000 is expected to be offset and reduce the purchase price to be paid by the Company | ||||||
Interest rate percent | 1.00% | ||||||
Bridge Loan [Member] | Share-based Payment Arrangement, Tranche One [Member] | Letter Of Intent [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Second payment | 13,000 | ||||||
Bridge Loan [Member] | Share-based Payment Arrangement, Tranche Two [Member] | Letter Of Intent [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Second payment | $ 22,000 | ||||||
Subsequent Event [Member] | Director [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Share based payment arrangement, expense | $ 50,000 | ||||||
Aggregate grant date fair value | 50,000 | ||||||
Subsequent Event [Member] | ATM Offering and Equity Distribution Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Number of new shares issued | 4,860 | ||||||
Proceeds from issuance sale of equity | $ 12,542 | ||||||
Subsequent Event [Member] | ATM Offering and Equity Distribution Agreement [Member] | Agent [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Share based payment arrangement, expense | $ 388 | ||||||
Subsequent Event [Member] | Audit Committee Chair [Member] | Director [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Annual payments, amount | 10,000 | ||||||
Subsequent Event [Member] | Compensation Committee Chair [Member] | Director [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Annual payments, amount | 7,500 | ||||||
Subsequent Event [Member] | Nominating and Corporate Governance Committee Chair [Member] | Director [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Annual payments, amount | $ 5,000 |