Cover
Cover - shares | 9 Months Ended | |
Jun. 30, 2022 | Aug. 11, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
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, $0.00001 par value | |
Trading Symbol | NUZE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,668,017 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash | $ 7,523,099 | $ 10,815,954 |
Accounts receivable, net | 573,990 | 555,238 |
Inventories, net | 682,580 | 573,464 |
Prepaid expenses and other current assets | 1,174,297 | 482,288 |
Total current assets | 9,953,966 | 12,426,944 |
Property and equipment, net | 612,296 | 674,024 |
Other assets: | ||
Right-of-use asset - operating lease | 731,419 | 386,587 |
Investment | 171,210 | 175,425 |
Goodwill | 531,412 | |
Intangible assets, net | 303,556 | |
Other assets | 86,748 | 79,822 |
Total other assets | 1,824,345 | 641,834 |
Total assets | 12,390,607 | 13,742,802 |
Current liabilities: | ||
Accounts payable | 456,470 | 342,790 |
Current portion of long-term loan payable | 7,890 | 43,618 |
Current portion of lease liability - operating lease | 180,939 | 150,931 |
Current portion of lease liability - finance lease | 30,610 | 27,833 |
Accrued expenses | 492,409 | 274,009 |
Deferred income | 338,317 | 175,822 |
Other current liabilities | 23,353 | 138,631 |
Total current liabilities | 1,529,988 | 1,153,634 |
Non-current liabilities: | ||
Lease liability - operating lease, net of current portion | 565,825 | 247,656 |
Lease liability - finance lease, net of current portion | 29,696 | 50,567 |
Loan payable - long term, net of current portion | 6,753 | 12,696 |
Other noncurrent liabilities | 80,817 | 65,802 |
Total non-current liabilities | 683,091 | 376,721 |
Total liabilities | 2,213,079 | 1,530,355 |
Stockholders’ equity: | ||
Common stock; 100,000,000 shares authorized, $0.00001 par value; 19,468,017 and 17,820,390 shares issued and outstanding as of June 30, 2022, and September 30, 2021, respectively | 194 | 178 |
Additional paid in capital | 71,485,715 | 64,839,254 |
Accumulated deficit | (61,486,600) | (52,824,808) |
Accumulated other comprehensive income | 178,219 | 197,823 |
Total stockholders’ equity | 10,177,528 | 12,212,447 |
Total liabilities and stockholders’ equity | $ 12,390,607 | $ 13,742,802 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2022 | 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 | 19,468,017 | 17,820,390 |
Common stock, shares outstanding | 19,468,017 | 17,820,390 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 774,019 | $ 510,032 | $ 2,508,345 | $ 1,442,083 |
Cost of sales | 857,672 | 413,446 | 2,575,646 | 1,352,843 |
Gross profit (loss) | (83,653) | 96,586 | (67,301) | 89,240 |
Operating expenses | 2,546,608 | 3,165,840 | 8,554,276 | 15,103,252 |
Loss from operations | (2,630,261) | (3,069,254) | (8,621,577) | (15,014,012) |
Loss from equity method investment | (1,919) | (102) | (4,215) | (4,077) |
Other income | 60,672 | 47,909 | 145,890 | 101,623 |
Other expense | (60,361) | (41,992) | (174,889) | (120,978) |
Interest expense, net | (2,023) | (3,603) | (7,001) | (11,278) |
Net loss | $ (2,633,892) | $ (3,067,042) | $ (8,661,792) | $ (15,048,722) |
Basic and diluted loss per common share | $ (0.14) | $ (0.17) | $ (0.47) | $ (0.94) |
Basic and diluted weighted average number of common stock outstanding | 19,332,753 | 17,820,390 | 18,475,396 | 15,938,931 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Net loss | $ (2,633,892) | $ (3,067,042) | $ (8,661,792) | $ (15,048,722) |
Foreign currency translation | (45,197) | (7,854) | (19,604) | (2,374) |
Total other comprehensive loss, net of tax | (45,197) | (7,854) | (19,604) | (2,374) |
Comprehensive loss | $ (2,679,089) | $ (3,074,896) | $ (8,681,396) | $ (15,051,096) |
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 | ||||
Stock option expense | 4,507,298 | 4,507,298 | |||
Other comprehensive loss | 1,656 | 1,656 | |||
Net loss | (5,896,072) | (5,896,072) | |||
Exercise of stock options | 9,180 | 9,180 | |||
Exercise of stock options, shares | 6,000 | ||||
Equity securities issued for cash, net of issuance costs | $ 3 | 2,683,977 | 2,683,980 | ||
Equity securities issued for cash, shares | 324,959 | ||||
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, 2020 | $ 146 | 40,472,229 | (34,272,778) | 190,161 | 6,389,758 |
Beginning balance, shares at Sep. 30, 2020 | 14,570,105 | ||||
Other comprehensive loss | (2,374) | ||||
Net loss | (15,048,722) | ||||
Ending balance, value at Jun. 30, 2021 | $ 178 | 63,147,614 | (49,321,500) | 187,787 | 14,014,079 |
Ending balance, shares at Jun. 30, 2021 | 17,820,390 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 149 | 47,672,684 | (40,168,850) | 191,817 | 7,695,800 |
Beginning balance, shares at Dec. 31, 2020 | 14,901,064 | ||||
Stock option expense | 1,989,006 | 1,989,006 | |||
Other comprehensive loss | 3,824 | 3,824 | |||
Net loss | (6,085,608) | (6,085,608) | |||
Restricted stock award issuance | $ 1 | 870,999 | 871,000 | ||
Restricted stock award issuance, shares | 137,215 | ||||
Equity securities issued for cash, net of issuance costs | $ 28 | 11,017,276 | 11,017,304 | ||
Equity securities issued for cash, shares | 2,782,111 | ||||
Ending balance, value at Mar. 31, 2021 | $ 178 | 61,549,965 | (46,254,458) | 195,641 | 15,491,326 |
Ending balance, shares at Mar. 31, 2021 | 17,820,390 | ||||
Stock option expense | 1,506,613 | 1,506,613 | |||
Other comprehensive loss | (7,854) | (7,854) | |||
Net loss | (3,067,042) | (3,067,042) | |||
Amortization of restricted stock award issued | 91,036 | 91,036 | |||
Ending balance, value at Jun. 30, 2021 | $ 178 | 63,147,614 | (49,321,500) | 187,787 | 14,014,079 |
Ending balance, shares at Jun. 30, 2021 | 17,820,390 | ||||
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, net of issuance costs | $ 4 | 1,721,014 | 1,721,018 | ||
Exercise of warrants, shares | 384,447 | ||||
Stock option expense | 1,124,187 | 1,124,187 | |||
Other comprehensive loss | 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 | ||||
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 | ||||
Other comprehensive loss | (19,604) | ||||
Net loss | $ (8,661,792) | ||||
Exercise of stock options, shares | 14,000 | ||||
Ending balance, value at Jun. 30, 2022 | $ 194 | 71,485,715 | (61,486,600) | 178,219 | $ 10,177,528 |
Ending balance, shares at Jun. 30, 2022 | 19,468,017 | ||||
Beginning balance, value at Dec. 31, 2021 | $ 182 | 67,684,455 | (55,629,011) | 230,511 | 12,286,137 |
Beginning balance, shares at Dec. 31, 2021 | 18,204,837 | ||||
Stock option expense | 935,447 | 935,447 | |||
Other comprehensive loss | (7,095) | (7,095) | |||
Net loss | (3,223,697) | (3,223,697) | |||
Warrant issuance costs | (18,422) | (18,422) | |||
Common stock issued for cash, ATM offering, net of issuance costs | 88,426 | 88,426 | |||
Common stock issued for cash, ATM offering, shares | 42,448 | ||||
Common stock issued to settle Dripkit Bulk Sales Holdback Amount | $ 2 | 386,842 | 386,844 | ||
Common stock issued for Dripkit acquisition, shares | 178,681 | ||||
Exercise of stock options | 12,600 | 12,600 | |||
Exercise of stock options, shares | 14,000 | ||||
Restricted stock award issuance | $ 1 | 9,589 | 9,590 | ||
Restricted stock award issuance, shares | 117,920 | ||||
Ending balance, value at Mar. 31, 2022 | $ 185 | 69,098,937 | (58,852,708) | 223,416 | 10,469,830 |
Ending balance, shares at Mar. 31, 2022 | 18,557,886 | ||||
Stock option expense | 627,895 | 627,895 | |||
Other comprehensive loss | (45,197) | (45,197) | |||
Net loss | (2,633,892) | (2,633,892) | |||
Common stock issued for cash, ATM offering, net of issuance costs | 6,830 | 6,830 | |||
Common stock issued for cash, ATM offering, shares | 6,878 | ||||
Common stock issued to settle Dripkit Bulk Sales Holdback Amount | 40,000 | 40,000 | |||
Common stock issued for Dripkit acquisition, shares | 18,475 | ||||
Equity securities issued for cash, net of issuance costs | $ 9 | 1,649,727 | 1,649,736 | ||
Equity securities issued for cash, shares | 884,778 | ||||
Amortization of restricted stock award issued | 62,326 | 62,326 | |||
Ending balance, value at Jun. 30, 2022 | $ 194 | $ 71,485,715 | $ (61,486,600) | $ 178,219 | $ 10,177,528 |
Ending balance, shares at Jun. 30, 2022 | 19,468,017 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities: | ||
Net loss | $ (8,661,792) | $ (15,048,722) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 295,178 | 254,929 |
Noncash lease expense | 213,539 | 215,397 |
Stock option expense | 2,687,529 | 8,002,917 |
Restricted stock award issuance | 71,916 | 962,036 |
Property and equipment impairment | 840,391 | |
Sales allowance | (11,563) | |
Loss on disposition of asset | 12,618 | |
Write-off of deferred offering costs | 477,605 | |
Loss from equity method investment | 4,215 | 4,077 |
Change in operating assets and liabilities: | ||
Accounts receivable | (18,752) | (112,858) |
Inventories | (99,452) | (183,486) |
Prepaid expenses and other current assets | (49,464) | (141,018) |
Other assets | (6,926) | (1,362) |
Accounts payable | 112,917 | 31,540 |
Deferred income | 162,495 | 61,032 |
Lease liability – operating lease | (210,194) | (193,118) |
Accrued expenses and other current liabilities | (206,140) | (363,112) |
Other non-current liabilities | 15,015 | 728 |
Net cash used in operating activities | (5,677,298) | (5,204,587) |
Investing activities: | ||
Purchase of equipment | (214,524) | (141,445) |
Acquisition of Dripkit | (413,069) | |
Net cash used in investing activities | (627,593) | (141,445) |
Financing activities: | ||
Proceeds from issuance of common stock, exercise of options | 12,600 | 9,180 |
Repayment of loans | (41,671) | (40,407) |
Repayment of finance lease | (18,094) | (15,939) |
Proceeds from issuance of common stock, ATM offering, net of issuance costs | 95,256 | |
Proceeds from issuance of common stock, exercise of warrants, net of issuance costs | 1,702,596 | |
Proceeds from issuance of equity securities, exempt offering, net of issuance costs | 1,649,736 | |
Proceeds from issuance of equity securities, net of issuance costs | 13,701,284 | |
Cash paid for offering costs | (368,783) | |
Net cash provided by financing activities | 3,031,640 | 13,654,118 |
Effect of foreign exchange on cash | (19,604) | (2,374) |
Net change in cash | (3,292,855) | 8,305,712 |
Cash, beginning of period | 10,815,954 | 4,398,545 |
Cash, end of period | 7,523,099 | 12,704,257 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 7,077 | 11,278 |
Cash paid for taxes | 800 | 7,044 |
Non-cash transactions: | ||
ROU assets and liabilities added during the period | 558,371 | |
Common stock issued in acquisition of Dripkit | 426,844 | |
Stock issuance costs accrued | $ 273,762 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jun. 30, 2022 | |
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. We reclassified lease expenses associated with subleased property from Operating expenses to Other expenses totaling $ 118,885 40,712 18,000 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”). On February 25, 2022 (the “Closing Date”), the Company acquired substantially all the assets and certain specified liabilities (the “Acquisition”) of Dripkit, Inc., a Delaware corporation (“Dripkit”), pursuant to the Asset Purchase Agreement, dated as of February 21, 2022 (the “Asset Purchase Agreement”), by and among the Company, Dripkit, and Dripkit’s existing investors (the “Stock Recipients”) who executed joinders to the Asset Purchase Agreement as of the Closing Date. Pursuant to the terms of the Asset Purchase Agreement, the aggregate purchase price paid by the Company for the Acquisition was $ 860,000 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 June 30, 2022, and June 30, 2021, the total number of common stock equivalents was 9,706,438 8,289,864 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 June 30, 2022, the Company had cash of $ 7,523,099 Major Customers In the nine months ended June 30, 2022 and 2021, revenue was primarily derived from major customers disclosed below. SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Nine months ended June 30, 2022: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 660,997 26 % $ 239,579 42 % Customer CU $ 252,137 10 % $ 52,564 9 % Customer S $ 242,580 10 % $ 62,590 11 % Nine months ended June 30, 2021: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 456,247 32 % $ 124,814 39 % 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 a 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 nine months ended June 30, 2022, we determined to renew the office and manufacturing space in Vista, California which was scheduled to expire on January 31, 2023, through March 31, 2025 8,451 we leased an additional 1,796 2,514 January 31, 2023 2,111 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. The lease has a monthly expense of 7,040 As of June 30, 2022, our operating leases had a weighted average remaining lease term of 1.6 5.5% SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE ROU Asset – October 1, 2021 $ 386,587 ROU Asset added during the period 558,371 Amortization during the period (213,539 ) ROU Asset – June 30, 2022 $ 731,419 Lease Liability – October 1, 2021 $ 398,587 Lease Liability added during the period 558,371 Amortization during the period (210,194 ) Lease Liability – June 30, 2022 $ 746,764 Lease Liability – Short-Term $ 180,939 Lease Liability – Long-Term 565,825 Lease Liability – Total $ 746,764 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 June 30, 2022: Amounts due within twelve months of June 30, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2023 $ 292,775 2024 322,280 2025 186,759 Total Minimum Lease Payments 801,814 Less Effect of Discounting (55,050 ) Present Value of Future Minimum Lease Payments 746,764 Less Current Portion of Operating Lease Liabilities 180,939 Long-Term Operating Lease Liabilities $ 565,825 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 $ 2,987 124,500 1.9 12.75% 6,741 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 June 30, 2022 for the twelve months ended June 30: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2022 $ 33,113 2023 33,113 2024 2,759 Total Minimum Lease Payments 68,985 Amount representing interest (8,679 ) Present Value of Minimum Lease Payments 60,306 Current Portion of Finance Lease Obligations 30,610 Finance Lease Obligations, Less Current Portion $ 29,696 Rent expense included in Operating expense for the nine months ended June 30, 2022 and 2021 was $ 221,972 132,279 157,267 118,885 Cash and non-cash activities associated with the leases for the nine months ended June 30, 2022 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 216,334 Operating cash outflows from finance lease: $ 6,741 Financing cash outflows from finance lease: $ 18,094 In September 2020, we subleased the space at 1700 Capital Avenue in Plano, Texas, effective October 1, 2020, under terms that are co-terminus with the original lease ending June 30, 2024. During the nine months ended June 30, 2022, we recognized sublease income of $ 140,753 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2023 $ 126,017 2024 129,835 Total $ 255,852 Loans On April 1, 2019, we purchased a delivery van from Ford Motor Credit for $ 41,627 3,500 38,127 60 2.9% 14,643 20,146 The remaining loan payments are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit 2022 (Jul 2022 - Sep 2022) $ 1,951 2023 (Oct 2022 - Jun 2023) 5,939 Total Current Portion $ 7,890 2023 (Jul 2023 - Sep 2023) $ 6,753 Total Long-Term Portion $ 6,753 Grand Total $ 14,643 On February 15, 2019, NuZee KR entered into equipment financing for production equipment with Shin Han Bank for $ 60,563 86,518 36 4.33% 0 35,898 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 loss amounted to $( 19,604 2,374 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. Prepaid expenses and other current assets Prepaid expenses and other current assets at June 30, 2022 and September 30, 2021, were as follows: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, 2022 September 30, 2021 Prepaid expenses and other current assets $ 1,174,297 $ 482,288 The prepaid expenses and other current assets balance of $ 1,174,297 as of June 30, 2022 primarily consists of deferred financing costs related to our ATM offering of $ 368,783 and our underwritten public offering completed in August 2022 of $ 273,762 (see Note 8—Subsequent Events) , prepaid insurance and deposits, and the balance of $ 482,288 as of September 30, 2021 primarily consists of prepaid insurance and a customer deposit. 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 June 30, 2022 and September 30, 2021, the carrying value of inventory was $ 682,580 573,464 SCHEDULE OF INVENTORY June 30, 2022 September 30, 2021 Raw materials $ 638,444 $ 552,621 Finished goods 44,136 20,843 Less – Inventory reserve - - Total $ 682,580 $ 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 June 30, 2022, the only activities in NLA were the contribution of two machines, as described above, and start up and initial marketing and sales activities. $ 4,215 4,077 |
GEOGRAPHIC CONCENTRATION
GEOGRAPHIC CONCENTRATION | 9 Months Ended |
Jun. 30, 2022 | |
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 nine months ended June 30, 2022 and 2021 are as follows: Geographic Concentration SCHEDULE OF GEOGRAPHIC OPERATIONS Nine Months Ended Nine Months Ended June 30, 2022 June 30, 2021 Net Revenue: North America $ 2,031,781 $ 1,077,986 South Korea 476,564 364,097 Net Revenue $ 2,508,345 $ 1,442,083 Property and equipment, net: As of As of North America $ 400,842 $ 517,966 South Korea 209,254 154,562 Japan 2,200 1,496 Property and equipment, net $ 612,296 $ 674,024 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 3. RELATED PARTY TRANSACTIONS For the nine months ended June 30, 2022 and June 30, 2021, respectively, the Company had sales of $ 0 28,299 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | 4. BUSINESS COMBINATIONS As described in Note 1, on February 25, 2022, the Company acquired substantially all the assets and certain specified liabilities of Dripkit pursuant to the Asset Purchase Agreement, dated as of February 21, 2022, by and among the Company, Dripkit, and Dripkit’s existing investors who executed joinders to the Asset Purchase Agreement as of the Closing Date. Pursuant to the terms of the Asset Purchase Agreement, the aggregate purchase price paid by the Company for the Acquisition was $ 860,000 13,000 3,176 876,176 Pursuant to the terms of the Asset Purchase Agreement, on the Closing Date, the cash portion of the purchase price was reduced by the following amounts: (a) $ 22,000 35,500 40,000 40,000 On the Closing Date, after adjustments and holdbacks under the Asset Purchase Agreement, the Company paid the aggregate purchase price as follows: (i) cash paid by the Company to Dripkit was $ 257,000 178,681 78,656 115,500 80,000 35,500 In the quarter ended June 30, 2022, pursuant to the terms of the Asset Purchase Agreement, the Bulk Sales Holdback Amount was used to satisfy sales and use taxes owed by Dripkit to the State of New York as of the Closing Date. Pursuant to the terms of the Asset Purchase Agreement, the amounts remaining after offsetting the cost of these sales and use taxes were distributed as follows in the quarter ended June 30, 2022: (i) $ 39,237 18,475 Dripkit was acquired for purposes of supplementing our current product offerings. Dripkit operates as a new Dripkit Coffee business division that is wholly-owned by NuZee, Inc. The following table presents the allocation of the aggregate purchase price paid by the Company for the Acquisition of $ 860,000 13,000 3,176 876,176 SCHEDULE OF ALLOCATION OF AGGREGATE PURCHASE PRICE Total purchase price $ 876,176 Assets acquired: Inventory $ 9,664 Property and equipment 5,100 Identifiable intangible assets 330,000 Total assets acquired $ 344,764 Estimated fair value of net assets acquired $ 344,764 Goodwill $ 531,412 Identified Intangibles and Goodwill The Company identified tradename and customer relationships intangible assets. The tradename and customer relationships intangible assets will be amortized on a straight-line basis over their respective estimated useful lives. The goodwill recognized results from such factors as an assembled workforce and management’s industry know-how. See Note 5—Goodwill and Intangible Assets for additional information on identified intangible assets and goodwill. The nine months ended June 30, 2022 includes the operating results of Dripkit for the period from February 25, 2022, the date of acquisition, to June 30, 2022. The consolidated statement of operations for the three and nine months ended June 30, 2022 includes revenue of approximately $ 30,164 32,645 109,249 122,370 19,833 26,444 During the nine months ended June 30, 2022, the Company incurred $ 270,478 Unaudited Pro forma Financial Information The following unaudited proforma financial information presents the combined results of operations of the Company and gives effect to the Dripkit Acquisition for the three and nine months ended June 30, 2022 and 2021, as if the Acquisition had occurred as of the beginning of the first period presented instead of on February 25, 2022. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the Acquisition had been completed on October 1, 2021, nor does it purport to project the results of operations of the combined company in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the acquired company. The proforma financial information for the Company and Dripkit is as follows: SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION For the June 30, For the Description 2022 2021 2022 2021 Revenues $ 774,019 $ 631,744 $ 2,585,802 $ 1,787,270 Net loss $ 2,624,975 $ 3,101,583 $ 8,491,254 $ 15,234,435 For purposes of the pro forma disclosures above, the primary adjustments for the three months and nine months ended June 30, 2022 include the elimination of transaction costs of approximately $ 8,917 270,478 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 5. GOODWILL AND INTANGIBLE ASSETS Changes in goodwill for the nine months ended June 30, 2022, consists of the following: SCHEDULE OF CHANGES IN GOODWILL June 30, 2022 Balance at September 30, 2021 $ - Dripkit acquisition 531,412 Balance at June 30, 2022 $ 531,412 As of June 30, 2022, the Company’s intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS Amortization June 30, 2022 Period (Years) Gross Accumulated Net Tradenames 5 $ 230,000 $ 15,333 $ 214,667 Customer relationships 3 100,000 11,111 88,889 Balance at June 30, 2022 $ 330,000 $ 26,444 $ 303,556 Amortization expense was $ 26,444 |
ISSUANCE OF EQUITY SECURITIES
ISSUANCE OF EQUITY SECURITIES | 9 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
ISSUANCE OF EQUITY SECURITIES | 6. ISSUANCE OF EQUITY SECURITIES Exercise of Warrants In the nine months ended June 30, 2022, we issued 384,447 380,447 380,447 4,000 8,000 1,702,596 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 could 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% In the nine months ended June 30, 2022, we issued and sold 49,326 95,256 3,003 Grant of Restricted Stock Awards to the Company’s Independent Board Members On March 17, 2022, pursuant to the Company’s non-employee director compensation policy, the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) granted 23,584 117,920 71,916 April 2022 Exempt Offering On April 13, 2022, pursuant to Securities Act registration exemptions under Regulation S and/or Section 4(a)(2) of the Securities Act, the Company sold 884,778 2.00 1,649,736 2.00 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND WARRANTS | 7. STOCK OPTIONS AND WARRANTS Options During the nine months ended June 30, 2022, the Company granted 100,000 14,000 223,500 The fair value of each option award granted in the nine months ended June 30, 2022 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 the historical volatility of a peer group of companies. The expected term of options granted was determined using the simplified method under SAB 107 which represents the mid-point between the vesting term and the contractual 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 nine months ended June 30, 2022: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR FAIR VALUE MEASUREMENT OF OPTIONS GRANTED June 30, 2022 Risk-free interest rate 2.38 % Expected option life 6 years Expected volatility 70.53 % Expected dividend yield 0.00 % Exercise price $ 2.16 The following table summarizes stock option activity for the nine months ended June 30, 2022: SUMMARY OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2021 4,511,691 $ 4.73 8.4 $ 452,206 Granted 100,000 2.16 Exercised (14,000 ) 0.90 Expired - - Forfeited (223,500 ) 13.16 Outstanding at June 30, 2022 4,374,191 $ 4.25 7.8 $ - Exercisable at June 30, 2022 1,932,379 $ 4.92 6.8 $ - 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 $ 2,687,529 8,002,917 1,808,520 1.4 A summary of the status of the Company’s nonvested options as of June 30, 2022, 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 100,000 2.16 Forfeited (54,333 ) 4.43 Vested (474,653 ) 5.90 Nonvested options at June 30, 2022 2,441,813 $ 4.74 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 On March 19, 2021, we entered into an underwriting agreement in connection with our registered public 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 2021 Warrants unless we fail to maintain a current prospectus relating to the common stock issuable upon the exercise of the 2021 Warrants (in which case, the 2021 Warrants may only be exercised via a “cashless” exercise provision). On April 13, 2022, pursuant to Securities Act registration exemptions under Regulation S and/or Section 4(a)(2) of the Securities Act, the Company sold 884,778 2.00 5 The following table summarizes warrant activity for the nine months ended June 30, 2022: 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 884,778 2.00 Exercised (384,447 ) 4.51 Expired - - Outstanding at June 30, 2022 5,332,246 $ 4.52 3.9 - Exercisable at June 30, 2022 5,332,246 $ 4.52 3.9 $ - In the nine months ended June 30, 2022, we issued 384,447 380,447 380,447 4,000 8,000 1,702,596 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 8. SUBSEQUENT EVENTS Termination of Equity Distribution Agreement On August 5, 2022, we terminated our Equity Distribution Agreement with the Agent. See Note 6—Issuance of Equity Securities for additional information regarding the Equity Distribution Agreement. Prior to termination, we issued and sold 49,326 95,256 August 2022 Underwritten Public Offering On August 10, 2022, we completed an underwritten public offering (the “Offering”) of 4,200,000 3.4 3.2 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
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. We reclassified lease expenses associated with subleased property from Operating expenses to Other expenses totaling $ 118,885 40,712 18,000 |
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”). On February 25, 2022 (the “Closing Date”), the Company acquired substantially all the assets and certain specified liabilities (the “Acquisition”) of Dripkit, Inc., a Delaware corporation (“Dripkit”), pursuant to the Asset Purchase Agreement, dated as of February 21, 2022 (the “Asset Purchase Agreement”), by and among the Company, Dripkit, and Dripkit’s existing investors (the “Stock Recipients”) who executed joinders to the Asset Purchase Agreement as of the Closing Date. Pursuant to the terms of the Asset Purchase Agreement, the aggregate purchase price paid by the Company for the Acquisition was $ 860,000 |
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 June 30, 2022, and June 30, 2021, the total number of common stock equivalents was 9,706,438 8,289,864 |
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 June 30, 2022, the Company had cash of $ 7,523,099 |
Major Customers | Major Customers In the nine months ended June 30, 2022 and 2021, revenue was primarily derived from major customers disclosed below. SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Nine months ended June 30, 2022: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 660,997 26 % $ 239,579 42 % Customer CU $ 252,137 10 % $ 52,564 9 % Customer S $ 242,580 10 % $ 62,590 11 % Nine months ended June 30, 2021: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 456,247 32 % $ 124,814 39 % |
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 a 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 nine months ended June 30, 2022, we determined to renew the office and manufacturing space in Vista, California which was scheduled to expire on January 31, 2023, through March 31, 2025 8,451 we leased an additional 1,796 2,514 January 31, 2023 2,111 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. The lease has a monthly expense of 7,040 As of June 30, 2022, our operating leases had a weighted average remaining lease term of 1.6 5.5% SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE ROU Asset – October 1, 2021 $ 386,587 ROU Asset added during the period 558,371 Amortization during the period (213,539 ) ROU Asset – June 30, 2022 $ 731,419 Lease Liability – October 1, 2021 $ 398,587 Lease Liability added during the period 558,371 Amortization during the period (210,194 ) Lease Liability – June 30, 2022 $ 746,764 Lease Liability – Short-Term $ 180,939 Lease Liability – Long-Term 565,825 Lease Liability – Total $ 746,764 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 June 30, 2022: Amounts due within twelve months of June 30, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2023 $ 292,775 2024 322,280 2025 186,759 Total Minimum Lease Payments 801,814 Less Effect of Discounting (55,050 ) Present Value of Future Minimum Lease Payments 746,764 Less Current Portion of Operating Lease Liabilities 180,939 Long-Term Operating Lease Liabilities $ 565,825 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 $ 2,987 124,500 1.9 12.75% 6,741 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 June 30, 2022 for the twelve months ended June 30: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2022 $ 33,113 2023 33,113 2024 2,759 Total Minimum Lease Payments 68,985 Amount representing interest (8,679 ) Present Value of Minimum Lease Payments 60,306 Current Portion of Finance Lease Obligations 30,610 Finance Lease Obligations, Less Current Portion $ 29,696 Rent expense included in Operating expense for the nine months ended June 30, 2022 and 2021 was $ 221,972 132,279 157,267 118,885 Cash and non-cash activities associated with the leases for the nine months ended June 30, 2022 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 216,334 Operating cash outflows from finance lease: $ 6,741 Financing cash outflows from finance lease: $ 18,094 In September 2020, we subleased the space at 1700 Capital Avenue in Plano, Texas, effective October 1, 2020, under terms that are co-terminus with the original lease ending June 30, 2024. During the nine months ended June 30, 2022, we recognized sublease income of $ 140,753 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2023 $ 126,017 2024 129,835 Total $ 255,852 |
Loans | Loans On April 1, 2019, we purchased a delivery van from Ford Motor Credit for $ 41,627 3,500 38,127 60 2.9% 14,643 20,146 The remaining loan payments are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit 2022 (Jul 2022 - Sep 2022) $ 1,951 2023 (Oct 2022 - Jun 2023) 5,939 Total Current Portion $ 7,890 2023 (Jul 2023 - Sep 2023) $ 6,753 Total Long-Term Portion $ 6,753 Grand Total $ 14,643 On February 15, 2019, NuZee KR entered into equipment financing for production equipment with Shin Han Bank for $ 60,563 86,518 36 4.33% 0 35,898 |
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 loss amounted to $( 19,604 2,374 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. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets Prepaid expenses and other current assets at June 30, 2022 and September 30, 2021, were as follows: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, 2022 September 30, 2021 Prepaid expenses and other current assets $ 1,174,297 $ 482,288 The prepaid expenses and other current assets balance of $ 1,174,297 as of June 30, 2022 primarily consists of deferred financing costs related to our ATM offering of $ 368,783 and our underwritten public offering completed in August 2022 of $ 273,762 (see Note 8—Subsequent Events) , prepaid insurance and deposits, and the balance of $ 482,288 as of September 30, 2021 primarily consists of prepaid insurance and a customer deposit. |
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 June 30, 2022 and September 30, 2021, the carrying value of inventory was $ 682,580 573,464 SCHEDULE OF INVENTORY June 30, 2022 September 30, 2021 Raw materials $ 638,444 $ 552,621 Finished goods 44,136 20,843 Less – Inventory reserve - - Total $ 682,580 $ 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 June 30, 2022, the only activities in NLA were the contribution of two machines, as described above, and start up and initial marketing and sales activities. $ 4,215 4,077 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF REVENUE BY MAJOR CUSTOMERS | In the nine months ended June 30, 2022 and 2021, revenue was primarily derived from major customers disclosed below. SCHEDULE OF REVENUE BY MAJOR CUSTOMERS Nine months ended June 30, 2022: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 660,997 26 % $ 239,579 42 % Customer CU $ 252,137 10 % $ 52,564 9 % Customer S $ 242,580 10 % $ 62,590 11 % Nine months ended June 30, 2021: Customer Name Sales Amount % of Total Revenue Accounts Receivable Amount % of Total Accounts Receivable Customer WP $ 456,247 32 % $ 124,814 39 % |
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE | SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE ROU Asset – October 1, 2021 $ 386,587 ROU Asset added during the period 558,371 Amortization during the period (213,539 ) ROU Asset – June 30, 2022 $ 731,419 Lease Liability – October 1, 2021 $ 398,587 Lease Liability added during the period 558,371 Amortization during the period (210,194 ) Lease Liability – June 30, 2022 $ 746,764 Lease Liability – Short-Term $ 180,939 Lease Liability – Long-Term 565,825 Lease Liability – Total $ 746,764 |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES | Amounts due within twelve months of June 30, SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES 2023 $ 292,775 2024 322,280 2025 186,759 Total Minimum Lease Payments 801,814 Less Effect of Discounting (55,050 ) Present Value of Future Minimum Lease Payments 746,764 Less Current Portion of Operating Lease Liabilities 180,939 Long-Term Operating Lease Liabilities $ 565,825 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES | The table below summarizes future minimum finance lease payments at June 30, 2022 for the twelve months ended June 30: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES 2022 $ 33,113 2023 33,113 2024 2,759 Total Minimum Lease Payments 68,985 Amount representing interest (8,679 ) Present Value of Minimum Lease Payments 60,306 Current Portion of Finance Lease Obligations 30,610 Finance Lease Obligations, Less Current Portion $ 29,696 |
SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES | Cash and non-cash activities associated with the leases for the nine months ended June 30, 2022 are as follows: SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES Operating cash outflows from operating leases: $ 216,334 Operating cash outflows from finance lease: $ 6,741 Financing cash outflows from finance lease: $ 18,094 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE | SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE 2023 $ 126,017 2024 129,835 Total $ 255,852 |
SCHEDULE OF LOAN PAYMENTS | The remaining loan payments are as follows: SCHEDULE OF LOAN PAYMENTS Ford Motor Credit 2022 (Jul 2022 - Sep 2022) $ 1,951 2023 (Oct 2022 - Jun 2023) 5,939 Total Current Portion $ 7,890 2023 (Jul 2023 - Sep 2023) $ 6,753 Total Long-Term Portion $ 6,753 Grand Total $ 14,643 |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets at June 30, 2022 and September 30, 2021, were as follows: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, 2022 September 30, 2021 Prepaid expenses and other current assets $ 1,174,297 $ 482,288 |
SCHEDULE OF INVENTORY | SCHEDULE OF INVENTORY June 30, 2022 September 30, 2021 Raw materials $ 638,444 $ 552,621 Finished goods 44,136 20,843 Less – Inventory reserve - - Total $ 682,580 $ 573,464 |
GEOGRAPHIC CONCENTRATION (Table
GEOGRAPHIC CONCENTRATION (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
SCHEDULE OF GEOGRAPHIC OPERATIONS | SCHEDULE OF GEOGRAPHIC OPERATIONS Nine Months Ended Nine Months Ended June 30, 2022 June 30, 2021 Net Revenue: North America $ 2,031,781 $ 1,077,986 South Korea 476,564 364,097 Net Revenue $ 2,508,345 $ 1,442,083 Property and equipment, net: As of As of North America $ 400,842 $ 517,966 South Korea 209,254 154,562 Japan 2,200 1,496 Property and equipment, net $ 612,296 $ 674,024 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF ALLOCATION OF AGGREGATE PURCHASE PRICE | SCHEDULE OF ALLOCATION OF AGGREGATE PURCHASE PRICE Total purchase price $ 876,176 Assets acquired: Inventory $ 9,664 Property and equipment 5,100 Identifiable intangible assets 330,000 Total assets acquired $ 344,764 Estimated fair value of net assets acquired $ 344,764 Goodwill $ 531,412 |
SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION | The proforma financial information for the Company and Dripkit is as follows: SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION For the June 30, For the Description 2022 2021 2022 2021 Revenues $ 774,019 $ 631,744 $ 2,585,802 $ 1,787,270 Net loss $ 2,624,975 $ 3,101,583 $ 8,491,254 $ 15,234,435 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN GOODWILL | Changes in goodwill for the nine months ended June 30, 2022, consists of the following: SCHEDULE OF CHANGES IN GOODWILL June 30, 2022 Balance at September 30, 2021 $ - Dripkit acquisition 531,412 Balance at June 30, 2022 $ 531,412 |
SCHEDULE OF INTANGIBLE ASSETS | As of June 30, 2022, the Company’s intangible assets consisted of the following: SCHEDULE OF INTANGIBLE ASSETS Amortization June 30, 2022 Period (Years) Gross Accumulated Net Tradenames 5 $ 230,000 $ 15,333 $ 214,667 Customer relationships 3 100,000 11,111 88,889 Balance at June 30, 2022 $ 330,000 $ 26,444 $ 303,556 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
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 nine months ended June 30, 2022: SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR FAIR VALUE MEASUREMENT OF OPTIONS GRANTED June 30, 2022 Risk-free interest rate 2.38 % Expected option life 6 years Expected volatility 70.53 % Expected dividend yield 0.00 % Exercise price $ 2.16 |
SUMMARY OF STOCK OPTION ACTIVITY | The following table summarizes stock option activity for the nine months ended June 30, 2022: SUMMARY OF STOCK OPTION ACTIVITY Number of Shares Weighted Average Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at September 30, 2021 4,511,691 $ 4.73 8.4 $ 452,206 Granted 100,000 2.16 Exercised (14,000 ) 0.90 Expired - - Forfeited (223,500 ) 13.16 Outstanding at June 30, 2022 4,374,191 $ 4.25 7.8 $ - Exercisable at June 30, 2022 1,932,379 $ 4.92 6.8 $ - |
SUMMARY OF UNVESTED SHARES | A summary of the status of the Company’s nonvested options as of June 30, 2022, 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 100,000 2.16 Forfeited (54,333 ) 4.43 Vested (474,653 ) 5.90 Nonvested options at June 30, 2022 2,441,813 $ 4.74 |
SCHEDULE OF WARRANT ACTIVITY | The following table summarizes warrant activity for the nine months ended June 30, 2022: 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 884,778 2.00 Exercised (384,447 ) 4.51 Expired - - Outstanding at June 30, 2022 5,332,246 $ 4.52 3.9 - Exercisable at June 30, 2022 5,332,246 $ 4.52 3.9 $ - |
SCHEDULE OF REVENUE BY MAJOR CU
SCHEDULE OF REVENUE BY MAJOR CUSTOMERS (Details) - Customer Concentration Risk [Member] - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue Benchmark [Member] | Customer WP [Member] | ||
Product Information [Line Items] | ||
Sales Amount | $ 660,997 | $ 456,247 |
Concentration risk percentage | 26% | 32% |
Revenue Benchmark [Member] | Customer CU [Member] | ||
Product Information [Line Items] | ||
Sales Amount | $ 252,137 | |
Concentration risk percentage | 10% | |
Revenue Benchmark [Member] | Customer S [Member] | ||
Product Information [Line Items] | ||
Sales Amount | $ 242,580 | |
Concentration risk percentage | 10% | |
Accounts Receivable [Member] | Customer WP [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 42% | 39% |
Accounts receivable amount | $ 239,579 | $ 124,814 |
Accounts Receivable [Member] | Customer CU [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 9% | |
Accounts receivable amount | $ 52,564 | |
Accounts Receivable [Member] | Customer S [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 11% | |
Accounts receivable amount | $ 62,590 |
SCHEDULE OF OTHER INFORMATION R
SCHEDULE OF OTHER INFORMATION RELATED TO OPERATING LEASE (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||
ROU Asset – October 1, 2021 | $ 386,587 | |
ROU Asset added during the period | 558,371 | |
Amortization during the period | (213,539) | |
ROU Asset – June 30, 2022 | 731,419 | |
Lease Liability – October 1, 2021 | 398,587 | |
Lease Liability added during the period | 558,371 | |
Amortization during the period | (210,194) | |
Lease Liability – June 30, 2022 | 746,764 | |
Lease Liability - Short-Term | 180,939 | $ 150,931 |
Lease Liability - Long-Term | 565,825 | 247,656 |
Lease Liability - Total | $ 746,764 | $ 398,587 |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
2023 | $ 292,775 | |
2024 | 322,280 | |
2025 | 186,759 | |
Total Minimum Lease Payments | 801,814 | |
Less Effect of Discounting | (55,050) | |
Present Value of Future Minimum Lease Payments | 746,764 | $ 398,587 |
Less Current Portion of Operating Lease Liabilities | 180,939 | 150,931 |
Long-Term Operating Lease Liabilities | $ 565,825 | $ 247,656 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS FOR FINANCE LEASES (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
2022 | $ 33,113 | |
2023 | 33,113 | |
2024 | 2,759 | |
Total Minimum Lease Payments | 68,985 | |
Amount representing interest | (8,679) | |
Present Value of Minimum Lease Payments | 60,306 | |
Current Portion of Finance Lease Obligations | 30,610 | $ 27,833 |
Finance Lease Obligations, Less Current Portion | $ 29,696 | $ 50,567 |
SCHEDULE OF CASH AND NON-CASH A
SCHEDULE OF CASH AND NON-CASH ACTIVITIES OF LEASES (Details) | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Accounting Policies [Abstract] | |
Operating cash outflows from operating leases: | $ 216,334 |
Operating cash outflows from finance lease: | 6,741 |
Financing cash outflows from finance lease: | $ 18,094 |
SCHEDULE OF FUTURE MINIMUM LE_2
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF SUBLEASE (Details) | Jun. 30, 2022 USD ($) |
Accounting Policies [Abstract] | |
2023 | $ 126,017 |
2024 | 129,835 |
Total | $ 255,852 |
SCHEDULE OF LOAN PAYMENTS (Deta
SCHEDULE OF LOAN PAYMENTS (Details) - Ford Motor Credit [Member] - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Line of Credit Facility [Line Items] | ||
2022 (Jul 2022 - Sep 2022) | $ 1,951 | |
2023 (Oct 2022 - Jun 2023) | 5,939 | |
Total Current Portion | 7,890 | |
2023 (Jul 2023 - Sep 2023) | 6,753 | |
Total Long-Term Portion | 6,753 | |
Grand Total | $ 14,643 | $ 20,146 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Prepaid expenses and other current assets | $ 1,174,297 | $ 482,288 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Accounting Policies [Abstract] | ||
Raw materials | $ 638,444 | $ 552,621 |
Finished goods | 44,136 | 20,843 |
Less – Inventory reserve | ||
Total | $ 682,580 | $ 573,464 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Feb. 25, 2022 USD ($) | Jan. 09, 2020 USD ($) | Oct. 09, 2019 USD ($) | Apr. 01, 2019 USD ($) | Feb. 15, 2019 USD ($) | Jun. 30, 2019 USD ($) | Jun. 30, 2022 USD ($) ft² | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) ft² shares | Jun. 30, 2021 USD ($) shares | Sep. 30, 2021 USD ($) | |
Recalssification from operating expenses to other expenses | $ 40,712 | $ 118,885 | |||||||||
Recalssification from capitalized software costs to other assets | $ 18,000 | ||||||||||
Common stock equivalents | shares | 9,706,438 | 8,289,864 | |||||||||
Cash | $ 7,523,099 | $ 7,523,099 | 10,815,954 | ||||||||
Operating Lease, Expense | $ 213,539 | $ 215,397 | |||||||||
Operating leases weighted average remaining lease term | 1 year 7 months 6 days | 1 year 7 months 6 days | |||||||||
Operating lease weighted average discount rate percent | 5.50% | 5.50% | |||||||||
Finance Lease, Weighted Average Remaining Lease Term | 1 year 10 months 24 days | 1 year 10 months 24 days | |||||||||
Finance lease discount rate | 12.75% | 12.75% | |||||||||
Interest expense on finance lease liabilities | $ 6,741 | ||||||||||
Sub-lease income | 140,753 | ||||||||||
Purchase price of delivery van | 214,524 | 141,445 | |||||||||
Foreign currency translation adjustment | 19,604 | 2,374 | |||||||||
Deferred Costs, Noncurrent | $ 1,174,297 | 1,174,297 | 482,288 | ||||||||
[custom:ProceedsFromCashPaidForOfferingCosts] | 368,783 | ||||||||||
[custom:PublicOffering] | 273,762 | ||||||||||
Inventories, net | 682,580 | 682,580 | 573,464 | ||||||||
Loss from investment | 1,919 | $ 102 | 4,215 | 4,077 | |||||||
Joint Venture Agreement [Member] | |||||||||||
Machine carrying cost | $ 313,012 | ||||||||||
Ford Motor Credit [Member] | |||||||||||
Long-term Debt | 14,643 | 14,643 | 20,146 | ||||||||
General and Administrative Expense [Member] | |||||||||||
Payments for rent | 221,972 | 132,279 | |||||||||
Other rent expense | 157,267 | $ 118,885 | |||||||||
NuZee Korea Ltd [Member] | ShinHan Bank [Member] | |||||||||||
Long-term Debt | $ 0 | $ 0 | $ 35,898 | ||||||||
Industrial Marino, S.A. de C.V. and NuZee Latin America, S.A. de C.V. [Member] | Joint Venture Agreement [Member] | NuZee Latin America [Member] | |||||||||||
Equity percentage | 50% | ||||||||||
NLA [Member] | |||||||||||
Gain on investments | $ 110,000 | ||||||||||
Investment | 160,000 | ||||||||||
Lease Agreement [Member] | Alliance Funding Group [Member] | |||||||||||
Sale leaseback value | $ 2,987 | ||||||||||
Purchase price of equipment | $ 124,500 | ||||||||||
Vehicles [Member] | Ford Motor Credit [Member] | |||||||||||
Purchase price of delivery van | $ 41,627 | ||||||||||
Down payment | 3,500 | ||||||||||
Financed amount | $ 38,127 | ||||||||||
Debt instrument term | 60 months | ||||||||||
Interest rate | 2.90% | ||||||||||
Equipment [Member] | NuZee Korea Ltd [Member] | ShinHan Bank [Member] | |||||||||||
Financed amount | $ 60,563 | ||||||||||
Debt instrument term | 36 months | ||||||||||
Interest rate | 4.33% | ||||||||||
Increased load amount | $ 86,518 | ||||||||||
Machines [Member] | NLA [Member] | |||||||||||
Loss on contribution on machines | $ 43,012 | ||||||||||
CALIFORNIA | |||||||||||
Lease Expiration Date | Mar. 31, 2025 | ||||||||||
Payments for rent | $ 8,451 | ||||||||||
Sub-leased, option to extend description | we leased an additional 1,796 square feet that has a monthly base rent of $2,514 through | ||||||||||
CALIFORNIA | Additional Lease Area [Member] | |||||||||||
Area of Land | ft² | 1,796 | 1,796 | |||||||||
Operating lease, lease income | $ 2,514 | ||||||||||
CALIFORNIA | Sub-Leased Property [Member] | |||||||||||
Lease Expiration Date | Jan. 31, 2023 | ||||||||||
Operating lease, lease income | $ 2,111 | ||||||||||
KOREA, REPUBLIC OF | |||||||||||
Sub-leased, option to extend description | 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. The lease has a monthly expense of | ||||||||||
Operating Lease, Expense | $ 7,040 | ||||||||||
Dripkit Inc. [Member] | |||||||||||
Payments to acquire assets | $ 860,000 |
SCHEDULE OF GEOGRAPHIC OPERATIO
SCHEDULE OF GEOGRAPHIC OPERATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Net Revenue | $ 774,019 | $ 510,032 | $ 2,508,345 | $ 1,442,083 | |
Property and equipment, net | 612,296 | 612,296 | $ 674,024 | ||
North America [Member] | |||||
Net Revenue | 2,031,781 | 1,077,986 | |||
Property and equipment, net | 400,842 | 400,842 | 517,966 | ||
KOREA, REPUBLIC OF | |||||
Net Revenue | 476,564 | $ 364,097 | |||
Property and equipment, net | 209,254 | 209,254 | 154,562 | ||
JAPAN | |||||
Property and equipment, net | $ 2,200 | $ 2,200 | $ 1,496 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
NuZee Latin America [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues from related parties | $ 0 | $ 28,299 |
SCHEDULE OF ALLOCATION OF AGGRE
SCHEDULE OF ALLOCATION OF AGGREGATE PURCHASE PRICE (Details) - USD ($) | 9 Months Ended | ||
Feb. 25, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | |
Assets acquired: | |||
Goodwill | $ 531,412 | ||
Dripkit Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 876,176 | 876,176 | |
Assets acquired: | |||
Inventory | 9,664 | ||
Property and equipment | 5,100 | ||
Identifiable intangible assets | 330,000 | ||
Total assets acquired | 344,764 | ||
Estimated fair value of net assets acquired | 344,764 | ||
Goodwill | $ 531,412 |
SCHEDULE OF UNAUDITED PRO FORMA
SCHEDULE OF UNAUDITED PRO FORMA FINANCIAL INFORMATION (Details) - Dripkit Inc. [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 774,019 | $ 631,744 | $ 2,585,802 | $ 1,787,270 |
Net loss | $ 2,624,975 | $ 3,101,583 | $ 8,491,254 | $ 15,234,435 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Feb. 25, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||||||||
Accounts Payable, Current | $ 456,470 | $ 456,470 | $ 342,790 | |||||||
Revenue | 774,019 | $ 510,032 | 2,508,345 | $ 1,442,083 | ||||||
Net loss | (2,633,892) | $ (3,223,697) | $ (2,804,203) | $ (3,067,042) | $ (6,085,608) | $ (5,896,072) | (8,661,792) | $ (15,048,722) | ||
Depreciation and amortization | 19,833 | 26,444 | ||||||||
Dripkit Inc. [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase price paid for acquisition | $ 860,000 | |||||||||
Bridge loan | 13,000 | |||||||||
Accounts Payable, Current | 3,176 | |||||||||
Business Combination, Consideration Transferred | $ 876,176 | 876,176 | ||||||||
Purchase price description | the cash portion of the purchase price was reduced by the following amounts: (a) $22,000, in satisfaction of a bridge loan made from the Company to Dripkit in February 2022 to provide Dripkit with operational financing prior to the Closing Date, (b) $35,500, as an indemnity holdback for the purpose of satisfying any indemnification claims made by the Company pursuant to the Asset Purchase Agreement, and (c) $40,000, as a cash bulk sales holdback (the “Cash Bulk Sales Holdback Amount”) | |||||||||
Purchase price reduction on payment of Bridge loan | $ 22,000 | |||||||||
Indemnity holdback | 35,500 | |||||||||
Cash bulk sales holdback amount | 40,000 | |||||||||
Stock bulk sales holdback amount | 40,000 | |||||||||
Cash paid for acquisition | $ 257,000 | |||||||||
Shares issued in acquisition | 178,681 | |||||||||
Economic injury disaster loan paid | $ 78,656 | |||||||||
Liability related to potential future amounts | 115,500 | |||||||||
Bulk sales holdback | $ 80,000 | |||||||||
Amount distributed | $ 39,237 | |||||||||
Shares of common stock issued to stock recipients | 18,475 | |||||||||
Revenue | 30,164 | $ 32,645 | ||||||||
Net loss | 109,249 | 122,370 | ||||||||
Business acquisition, transaction costs | 270,478 | 270,478 | ||||||||
Transaction costs eliminated | $ 8,917 | $ 270,478 |
SCHEDULE OF CHANGES IN GOODWILL
SCHEDULE OF CHANGES IN GOODWILL (Details) | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance at September 30, 2021 | |
Dripkit acquisition | 531,412 |
Balance at June 30, 2022 | $ 531,412 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, Gross | $ 330,000 |
Intangible assets, Accumulated Amortization | 26,444 |
Intangible assets, Net | $ 303,556 |
Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (Years) | 5 years |
Intangible assets, Gross | $ 230,000 |
Intangible assets, Accumulated Amortization | 15,333 |
Intangible assets, Net | $ 214,667 |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period (Years) | 3 years |
Intangible assets, Gross | $ 100,000 |
Intangible assets, Accumulated Amortization | 11,111 |
Intangible assets, Net | $ 88,889 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 19,833 | $ 26,444 |
ISSUANCE OF EQUITY SECURITIES (
ISSUANCE OF EQUITY SECURITIES (Details Narrative) | 3 Months Ended | 9 Months Ended | |||||
Apr. 13, 2022 USD ($) $ / shares shares | Mar. 17, 2022 shares | Dec. 28, 2021 USD ($) | Jun. 30, 2022 USD ($) shares | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jun. 30, 2022 USD ($) shares | |
Class of Warrant or Right [Line Items] | |||||||
Proceeds from exercise of warrants, net of issuance costs | $ | $ 1,702,596 | ||||||
Aggregate offering price | $ | $ 1,649,736 | $ 11,017,304 | $ 2,683,980 | ||||
Shares sold during period | 884,778 | ||||||
Sale of Stock, Price Per Share | $ / shares | $ 2 | ||||||
Aggregate purchase price of shares sold | $ | $ 1,649,736 | 95,256 | |||||
price per share | $ / shares | $ 2 | ||||||
Independent Director Five [Member] | 2013 Stock Incentive Plan [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 23,584 | ||||||
Five Independent Directors [Member] | 2013 Stock Incentive Plan [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Compensation paid to agent | $ | $ 71,916 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period | 117,920 | ||||||
Equity Distribution Agreement [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Percentage of commission to agent | 0.030 | ||||||
Equity Distribution Agreement [Member] | At-The-Market Offering [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Aggregate offering price | $ | $ 20,000,000 | ||||||
Shares sold during period | 49,326 | ||||||
Proceeds from issuance and sale of common stock | $ | $ 95,256 | ||||||
Compensation paid to agent | $ | $ 3,003 | ||||||
2021 Warrants [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Shares issued for exercise of warrants | 384,447 | ||||||
Series A Warrant [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Shares issued for exercise of warrants | 380,447 | ||||||
Number of warrants exercised | 380,447 | 380,447 | |||||
Series B Warrant [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Shares issued for exercise of warrants | 4,000 | ||||||
Number of warrants exercised | 8,000 | 8,000 |
SCHEDULE OF WEIGHTED AVERAGE AS
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS FOR FAIR VALUE MEASUREMENT OF OPTIONS GRANTED (Details) | 9 Months Ended |
Jun. 30, 2022 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Risk-free interest rate | 2.38% |
Expected option life | 6 years |
Expected volatility | 70.53% |
Expected dividend yield | 0% |
Fair value assumptions, exercise price | $ 2.16 |
SUMMARY OF STOCK OPTION ACTIVIT
SUMMARY OF STOCK OPTION ACTIVITY (Details) | 9 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of Shares 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 Shares, Granted | shares | 100,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 2.16 |
Number of Shares, Exercised | shares | (14,000) |
Weighted Average Exercise Price, Exercised | $ / shares | $ 0.90 |
Number of Shares, Expired | shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Number of Shares, Forfeited | shares | (223,500) |
Weighted Average Exercise Price, Forfeited | $ / shares | $ 13.16 |
Number of Shares Outstanding, Ending | shares | 4,374,191 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 4.25 |
Weighted Average Remaining Contractual Life (years) Stock Options Outstanding, Ending Balance | 7 years 9 months 18 days |
Aggregate Intrinsic Value Options Outstanding, Ending | $ | |
Number of Shares, Exercisable | shares | 1,932,379 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.92 |
Weighted Average Remaining Contractual Life (years) Stock Options, Exercisable | 6 years 9 months 18 days |
Aggregate Intrinsic Value Options, Exercisable | $ |
SUMMARY OF UNVESTED SHARES (Det
SUMMARY OF UNVESTED SHARES (Details) | 9 Months Ended |
Jun. 30, 2022 $ / shares shares | |
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 | 100,000 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 2.16 |
Number of Nonvested Shares, Forfeited | shares | (54,333) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 4.43 |
Number of Nonvested Shares, Vested | shares | (474,653) |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 5.90 |
Number of Nonvested Shares, Ending | shares | 2,441,813 |
Weighted Average Grant Date Fair Value Nonvested Shares Ending | $ / shares | $ 4.74 |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) | 9 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
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 |
Number of Warrants, Issued | shares | 884,778 |
Weighted Average Exercise Price, Issued | $ / shares | $ 2 |
Number of Warrants, Exercised | shares | (384,447) |
Weighted Average Exercise Price, Exercised | $ / shares | $ 4.51 |
Number of Warrants, Expired | shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Number of Warrants Outstanding, Ending | shares | 5,332,246 |
Weighted Average Exercise Price, Ending | $ / shares | $ 4.52 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Ending Balance | 3 years 10 months 24 days |
Aggregate Intrinsic Value Warrants Outstanding, Ending | $ | |
Number of Warrants Exercisable | shares | 5,332,246 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.52 |
Weighted Average Remaining Contractual Life (years) Stock Warrants, Exercisable | 3 years 10 months 24 days |
Aggregate Intrinsic Value Warrants, Exercisable | $ |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 9 Months Ended | ||||
Apr. 13, 2022 | Mar. 19, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 23, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock option forfeited during period | 223,500 | ||||
Exercise of stock options, shares | 14,000 | ||||
Employee Stock Ownership Plan | $ 223,500 | ||||
Stock option expense | $ 2,687,529 | $ 8,002,917 | |||
Weighted average period for recognition | 6 years 9 months 18 days | ||||
Warrant to purchase common stock | 40,250 | ||||
Warrant exercise price | $ 9 | ||||
Shares sold during period | 884,778 | ||||
Units sold price per share | $ 2 | ||||
Proceeds from exercise of warrants, net of issuance costs | $ 1,702,596 | ||||
2021 Warrants [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares issued for exercise of warrants | 384,447 | ||||
Series A Warrant [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares issued for exercise of warrants | 380,447 | ||||
Number of warrants exercised | 380,447 | ||||
Series B Warrant [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares issued for exercise of warrants | 4,000 | ||||
Number of warrants exercised | 8,000 | ||||
2022 Units [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares sold during period | 884,778 | ||||
Units sold price per share | $ 2 | ||||
Series A Warrant [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Warrant exercise price | $ 4.50 | ||||
Series B Warrant [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Warrant exercise price | $ 5.85 | ||||
2021 Warrant [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Warrants term | 5 years | ||||
2022 Warrant [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Warrants term | 5 years | ||||
Stock Options [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock option expense | $ 2,687,529 | $ 8,002,917 | |||
Unamortized option expense | $ 1,808,520 | ||||
Weighted average period for recognition | 1 year 4 months 24 days | ||||
Termination of Employment [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock option forfeited during period | 100,000 | ||||
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 “2021 Units”), at a price to the public of $4.50 per 2021 Unit, with each 2021 Unit consisting of (a) one share of our common stock, (b) one Series A Warrant, and (c) one Series B Warrant (together with the Series A Warrants, the “2021 Warrants”), and (ii) 416,666 Series A Warrants and 416,666 Series B Warrants, each pursuant to the underwriter’s full exercise of their overallotment option with respect to such warrants. | ||||
Shares sold during period | 2,777,777 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Aug. 10, 2022 | Aug. 05, 2022 |
Subsequent Event [Line Items] | ||
Number of shares of common stock | 49,326 | |
Equity Distribution Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Number of shares issued during period, value | $ 95,256 | |
Underwriting Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Number of shares of common stock | 4,200,000 | |
Proceeds from offering | $ 3,400,000 | |
Proceeds from offering after deducting underwriting discounts | $ 3,200,000 |