10-Q

 

UNITEDSTATES 

SECURITIESAND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 

FORM 10-Q 

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

Forthe quarterly period ended June 30, 2014 

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 

CommissionFile No. 333-176684 

                                                                         NUZEE,INC.                                                                   

(exactname of registrant as specified in its charter)                                 

                              Nevada                                                                                 38-3849791                     

(Stateor other jurisdiction of incorporation or organization)             (I.R.S.Employer Identification Number) 

                                10815 Rancho Bernardo Road, Suite 250, San Diego, CA 92127                              

(Addressof principal executive offices) (zip code) 

                                            (858)549-6893 or toll free (855) 936-8933                                              

(Registrant’stelephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: 

                              Titlesof each class                                                    Nameof each exchange on which registered                 

None                                                                                             N/A                

Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90  days.Yes ¨No x

Indicateby check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such 

shorter

period

that

the

registrant

was

required

to

submit

and

post

such

files).

Yes x

No ¨

 

Indicateby check mark whether the registrant is a  large accelerated  filer, an accelerated  filer, a  non-accelerated filer or a  smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 

Largeaccelerated filer	¨		Acceleratedfiler	¨
Non-acceleratedfiler	¨	(Do not check if smaller reporting company)	Smallerreporting company	x

Indicate      by     check      mark     whether     the     registrant     is        a     shell     company     (as     defined     in        Rule     12b-2     of     the                  Exchange Act).                                                                                                                                               Yes ¨No x

APPLICABLEONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THEPRECEDING FIVE YEARS: 

Indicateby check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange         Act        of                    1934 subsequent                 to       the                distribution     of         securities        under a                      plan      confirmed       by                    a        court. 

Yes ¨No ¨

(APPLICABLEONLY TO CORPORATE REGISTRANTS) 

Indicatethe number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of August  18, 2014, NuZee, Inc. had 30,169,204 shares of common stock outstanding. 

Tableof Contents PART I. 

Item1.        Financial Statements. 

(a)Balance Sheets as at June 30, 2014 (Unaudited) and September 30, 2013 (Audited). 

(b)Statement of Operations for the three and ninemonths ended  June 30, 2014 and 2013 (Unaudited). 

(c)Statement of Cash Flows for the nine months ended June 30, 2014 and 2013 (Unaudited). 

(d)Notes to Consolidated Financial Statements (Unaudited). 

Item2.        Management’s Discussion and Analysis of Financial Condition and Results of Operations. Item 3.        Quantitative and Qualitative Disclosures About Market Risk. 

Item4.        Controls and Procedures 

PARTII. 

Item1.        Legal Proceedings 

Item 1A. Risk Factors 

2

 

Item2.         UnregisteredSales of Equity Securities and Use of Proceeds 

Item 3.         Defaults Upon Senior Securities 

Item4.         Mine Safety Disclosures 

Item 5.         OtherInformation 

Item6.         Exhibits 

FORWARD-LOOKINGINFORMATION 

ThisQuarterly Report on Form 10-Q of NuZee,  Inc.contains “forward-looking statements” that may state our management’s plans, future events, objectives, current expectations, estimates, forecasts, assumptions or projections about the company and its business. Any statement in this report that is not a statement of historical fact is a forward-looking statement,  andin some cases, words such as “believes,” “estimates,” “projects,” “expects,” “intends,” “may,” “anticipates,” “plans,” “seeks,” and similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or results. These statements are not guarantees of future performance, and undue reliance should not be placed on these statements. It is important to note that our actual results could differ materially from  whatis expressed in our forward-looking statements due to the risk factors described in the section of our Form 10-K filed on January 14, 2014 entitled “Risk Factors.” 

Weundertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. 

3

 

Item1. Financial Statements. 

PARTI. 

Nuzee, Inc. CONSOLIDATED BALANCE SHEET (Unaudited)
			June 30, 2014	September 30, 2013
ASSETS
	Current Assets
		Cash	$                                    467,749	$                                        1,110,661
		Accounts Receivable	23,528	13,195
		Related Party Receivables	-	139,661
		Inventories	53,735	-
		Prepaid expenses and deposits	92,734	16,896
		Total current assets	637,746	1,280,413
		Equipment, net	10,516	8,663
	Total Assets		$                                  648,262	$                                       1,289,076
LIABILITIES AND STOCKHOLDERS' EQUITY
	Current Liabilities
		Accounts payable	97,556	55,822
		Advances from Stockholders'	-	50,000
		Other Current Liabilities	16,961	9,563
		Total Current Liabilities	114,517	115,385
	Stockholders' Equity
		Preferred stock; 100,000,000 shares authorized, $0.00001 par value; 0 shares issued and outstanding	-	-
		Common stock; 100,000,000 shares authorized, $0.00001 par value; 30,055,357 and 37,957,790 shares issued and outstanding	301	380
		Additional paid in capital	4,592,947	2,556,349
		Accumulated deficit	(4,059,503)	(1,383,038)
		Total Stockholders' Equity	533,745	1,173,691
	Total Liabilities and Stockholders' Equity		$                                  648,262	$                                       1,289,076
The accompanying notes are an integral part of these unaudited consolidated financial statement.

F-1

 

Nuzee, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months Ended June 30, 2014	Three Months Ended June 30, 2013	Nine Months Ended June 30, 2014	Nine Months Ended June 30, 2013
Revenues		$                  59,159	$                   48,208	$                   59,471	$                     105,419
Cost of revenues		55,828	44,901	56,016	77,964
	Gross profit	3,331	3,307	3,455	27,455
Operating expenses		618,605	299,684	2,677,620	727,022
Loss from operations		(615,274)	(296,377)	(2,674,165)	(699,567)
Other Income (Expense)		(2,488)	(800)	(2,300)	(43,010)
Net loss		$             (617,762)	$               (297,177)	$           (2,676,465)	$                  (742,577)
Loss per share, Basic and diluted		$                   (0.02)	$                     (0.01)	$                    (0.09)	$                        (0.02)
Weighted average common shares outstanding, Basic and diluted		29,687,884	36,281,464	30,010,231	33,825,689
The accompanying notes are an integral part of these unaudited consolidated financial statement.

F-2

 

Nuzee, Inc STATEMENTS OF CASH FLOWS For the nine months ended June 30, 2014 and 2013 (Unaudited)
				2014	2013
Cash Flows from Operating Activities:
		Net loss		(2,676,465)	(742,577)
		Adjustments to reconcile net income to net cash used
			in operating activities:
			Depreciation expense	2,388	279
			Stock option expense	1,480,480	-
			Warrant expense	7,500
			Impairment of Intellectual Property	-	42,818
			(Increase) decrease in assets:
			Accounts receivable	(10,333)	(21,447)
			Inventory	(53,735)	7,896
			Prepayments and other current assets	(75,838)	(11,423)
			Related party receivable	-	(139,661)
			Increase (decrease) in liabilities:
			Accounts payable	41,734	(21,738)
			Other current liabilities	7,398	5,889
			Net Cash Provided by(Used in) Operating Activities	(1,276,871)	(879,964)
Cash Flows from Investing Activities:
	Purchase of property and equipment			(4,241)	-
			Net Cash Used in Investing Activities	(4,241)	-
Cash Flows from Financing Activities:
	Proceeds from sale of stock			638,200	249,390
	Advances from stockholders			-	540,000
			Net Cash Provided by Financing Activities	638,200	789,390
			Net change in Cash	(642,912)	(90,574)
Cash, beginning of period				1,110,661	165,484
Cash, end of period				467,749	74,910
	Supplemental Disclosure of cash flow information:
			Cash paid during the year for:
			Interest	-	-
			Income taxes	-	-
Non-cash Transaction
Cancellation of common stock				(139,661)	-
Common stock issued for settlement of advance from stockholder				-	640,610
The accompanying notes are an integral part of these unaudited financial statements

F-3

 

Nuzee,Inc. 

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS 

(Unaudited)

June 30, 2014 

1.BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Theaccompanying unaudited interim financial statements of Nuzee, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the initial period ended September 30, 2013 as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the annual report on Form 10-K have been omitted. 

In the quarter ended June 30, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

GoingConcern 

Theaccompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a  going concern. The  Companyhas had recurring losses, large  accumulateddeficits, is dependent on the shareholder to provide additional funding for operating expenses and has no recurring revenues. These items raise substantial doubt about the Company’s ability to continue as a going concern. 

Equitybased payments 

TheCompany accounts for equity instruments issued to employees in accordance with ASC 718 "Stock Compensation". Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. 

2.RELATED PARTY TRANSACTIONS 

DuringOctober 2013, the Company entered into a Compromise Agreement with the Company’s majority shareholder to settle the related party receivable. In consideration of the compromises contained in the agreement the Company’s majority shareholder agreed to forgive a note in the amount of $50,000, cancel  8,966,100shares,  andthe Company forgave the related party receivable of $139,661. 

3.COMMON STOCK 

DuringMarch 2014, the Company sold 613,667 shares at $0.60 per share, for an aggregate purchase price of $368,200. 

During April to June 2014, the Company  sold 450,000 shares at $0.60 per share, for an aggregate purchase price of $270,000.

4.STOCK OPTIONS 

DuringOctober 2013 the Company granted 3,471,665 options to employee. The right to exercise these options shall vest and become 25% exercisable on the first anniversary of when granted, with the exception that 100% of options issued to one employee vested immediately. The remaining options shall vest and become exercisable ratably over the next 36 months, with the exception that options issued to 2 employees shall vest and become exercisable over 18 months and option issued to one employee shall vest and become exercisable as of the effective date of the Option Agreement. The exercise price is $0.48 per share and will expire ten years from the grant date, unless terminated earlier as provided by the Option Agreements. 

Thefair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model using the assumptions noted as follows: expected volatility was based on historical trading in the company's stock. The expected term of options granted was determined using the simplified method under SAB 107 and represents one-half the exercise period. The risk-free rate is calculated using the U.S. Treasury yield curve, and is based on the expected term of the option. The Company has estimated there will be no forfeitures. 

TheBlack-Scholes option pricing model was used with the following weighted average assumptions for options granted during the nine months ended June 30, 2014: 

Risk-freeinterest rate 1% - 2% Expected option life 5 yearsExpected volatility 300% 

Expecteddividend yield 0.0% 

AtJune 30, 2014, 2,535,902 options are exercisable and the Company recognized $1,480,480 of stock options expenses during the nine months ended June 30, 2014. 

F-4

 

5.STOCK WARRANTS

During nine months ended June 30, 2014, the Company granted 100,000 warrants to advisors.  The right to exercise these warrants shall vest in equal eight quarterly installments over the twenty-four (24) months following the date their vesting begins, subject to their continued engagement as a service provider though each such date. The exercise price equal to the current fair market valueper share on the date of grantand will expire ten years from the grant date, unless terminated earlier as provided by the  WarrantAgreements. 

TheBlack-Scholes warrant pricing model was used with the following weighted average assumptions for options granted during the nine months ended June 30, 2014: 

Risk-freeinterest rate 2.53% 

Expected life 10 years

Expected volatility 300% 

Expecteddividend yield 0.0% 

AtJune 30, 2014, 12,500  warrantsare exercisable and the Company recognized $7,500 of warrant expenses during the nine months ended June 30, 2014. 

6.SUBSEQUENT EVENTS 

DuringJuly 2014, the Company sold 113,847 shares at $0.60 per share, for an aggregate purchase price of $68,308.

F-5

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 

Thefollowing plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial  condition.The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect,  estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward- looking statements. These forward-looking statements are subject to certain risk  sand uncertainties that could cause actual results to differ materially from our predictions. 

Planof Operations 

ShortTerm Goals (12 Months) Market Awareness, Growth Expansion 

Based on the initial commercial launch and availability of the product, the Company’s growth plans include continuing efforts to: 

·Launch distributors in Asia to introduce and distribute Coffee Blenders family of products as market awareness and interest in functional beverages is well understood. 

·Build a targeted distribution network  in the United States for our Coffee Blenders functional beverages by signing retailers that serve the  mass consumer K-cup and Coffee replenishment channels; 

·Increase awareness for Coffee Blenders through  direct communications and sampling programs; 

InApril 2014, we officially launched the Coffee Blenders products through international press announcement and began stocking product for resell on Coffee Blenders.com  andAmazon.com.  In the most recent quarter we augmented our direct efforts and started to supply product to regional and national coffee distributors. 

Furthermore, the Company plans to pursue direct and indirect distribution to select retailers nationwide. As a result, the Company invested in a new formula and product development effort in order to achieve retail channel price points.  In addition, the Company hired a new VP of Business Development and Sales with significant experience in the retail and beverage channels to accelerate our launch.  We are very encouraged by the initial interest and traction received from retailers and expect Coffee Blenders to be available for purchase in regional specialty chains by the end of the year that focus on premium quality coffee offerings for their customers.  Product availability is pending for national and regional chain with announcements to follow. 

Weembarked on researching and building brand and product awareness through editor/blogger outreach, digital advertising campaignsand  product sampling at local universities, functions,  events, etc.  The initial results are encouraging and the Company plans to continue to selectively participate in events.  In the current quarter we also explored co-marketing programs with Fitness and Health associations (e.g. health professionals and wellness organizations) and believe they also provide a solid opportunity to build brand and product awareness among their based of clients.  Joint sponsorship programs with companies are in development.  The Company hopes to announce sponsors in the coming months. 

We saw mixed results from our search engine marketing (SEM) and social outreach programs.  As a result, we will continue to invest in digital marketing only where it provides a return on investment that covers the shipping expenses associated with sampling the product. 

For each of the above initiatives, we continue to measure overall results using a host of costing parameters not limited to the following: product slotting fees, overall margin requirements,  retail activation costs, marketdevelopment fees, return allowances, broadcast advertising and promotional marketing plans, in-store and channel detailing, product sampling and customer demoing as well as transportation and logistics cost, crossdock fees, shelf-life expiration swaps,  andinitial and recurring inventory loading levels in order to

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TheCompany plans going forward include the following milestones: 

Milestone	Timing	Est.Cost/Funding Source
1.Refine Products & Pricing  ImproveProduct Functions and Create New Versions, preparing “regular” coffee Line for Japan, Explore brewer solutions (Home and QSRs)	2nd Half 2014	Saleof Equities
2.Refine Staff  and align operations based on funding	August - October	$50,000-$60,000/Mo.Recurring Sale of Equities
3.Focus on International and U.S. distribution	September– December	$150,000-300,000Sale of Equities
4.Establish and validate traction by channel	Ongoing
5.Explore OEM/Private Label Opportunities and secure additional funding from current investors.	Ongoing

Ifwe are unable to receive funding our plans will be dramatically and negatively impacted such that we will prioritize go to market strategies based on reduced operations and available capital. 

LongTerm Goals (Five Years) 

TheCompany believes that there will be significant expansion opportunities in existing markets through new products as well as in new regions outside of the United States in a combination of market development and product licensing. 

TheCompany believes that our limited resources may pose a challenge to our expansion goals and therefore anticipates that it may require additional capital  infuture years to fund expansion. There can be no  assurancethat our expansion strategy will be accretive to our earnings within a reasonable period of time. However, the Company believes that it can improve its operational efficiencies and reduce the need for new capital by carefully managing the business based on the following economic fundamentals within accretive margin and cost contribution modeling. 

Resultsof Operations 

Comparison of the three months ended June 30, 2014 and 2013

For the three months ended June 30, 2014 we have earned revenues of $59,159 from the launch of Coffee Blenders products through international press announcement and began stocking product for resell on coffeeblenders.com and amazon.com.  For the three months ended June 30, 2013 revenues of $48,208 were from the sale of discontinued operations of skin products, Torque energy drinks and New Zealand bottled water.

Operating expenses increased $311,421 or 104% from approximately $299,684 in the third quarter of 2013 to approximately $618,605 in the third quarter of 2014 due to stock compensation expenses, marketing expenses and personnel costs.

Comparison of the nine month ended June 30, 2014 and 2013

For the nine month ended June 30, 2014 we have earned revenues of $59,471 from the launch of Coffee Blenders products through international press announcement and began stocking product for resell on coffeeblenders.com and amazon.com.  For the nine month ended June 30, 2013 revenues of $105,419 were from the sale of discontinued operations of skin products, Torque energy drinks and New Zealand bottled water.  Some of the products were sold at a significant discount in order to eliminate inventory.

Operating expenses increased $1,950,598 or 268% from approximately $727,022 in the nine month ended 2013 to approximately $2,677,620 in the nine month ended 2014 due to research and preparation of coffee blenders products, stock compensation expenses, marketing expenses, and personnel costs.

We are presently in the initial commercial launch of the Coffee Blenders products and we can provide no assurance that we will be able to attain profitability.

We expect sales growth in 2014 from our new products through a combination of direct to consumer through our website portal, product awareness as well as through affiliate online stores and distribution to select retailers nationwide.

5

 

Liquidityand Capital Resources 

Asof June 30, 2014  wehad  a cash balance of $467,749 and $1,110,661 at September 30, 2013.  Inventory increased to $53,735 as of June 30, 2014 from no inventory at September 30, 2013.  The increase was mainly due to discontinued operations of skin products, Torque energy drinks and New Zealand bottled water.  Related Party Receivables decreased from $139,661 at September 2013 to no related party receivable at June 30,2014.  See note 3 for more information on related party receivable.  Prepaid expenses and deposits increased by approximately 549% to $92,734 as of June 30, 2014 from $16,896 at September 30, 2013.  Total assets decreased by 50% from $1,289,076 at September 2013 to $648,262 at June 30, 2014.

As of June 30, 2014 we had current liabilities of $114,517 and $115,385 at September 30, 2013. Accounts Payable increased by approximately 75% to $97,556 as of June 30, 2014 from $55,822 at September 30, 2013.  The increase was mainly due to product costs, Directors & Officers insurance, and legal costs.  Advances from stockholders decreased from $50,000 at September 30, 2013 to $nil balance as of June 30, 2014.  Other Current Liabilities increased by approximately 77% to $16,961 as of June 30, 2014 from $9,563 at September 30, 2013 mainly due to legal fees accrual and deferred product costs.

Our current ratio decreased from 1110% in September 30, 2013 to 557% as of June 30, 2014.

Our auditor has indicated that there is substantial doubt about our ability to continue as a going concern as a result of our lack of significant revenues, and if we are unable to generate significant revenue or secure financing, we may be required to cease or curtail our operations.  Our financial statements do not include adjustments that might result from the outcome of this uncertainty.

Ourcurrent cash balance as of June 30, 2014 is not sufficient to fund our operations for the next twelve months. Therefore, the Company intends to engage in additional financing through the sale of equity securities. 

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 

Weare a smaller reporting company and therefore are not required to provide the information for this item for Form 10-Q. 

Item4. Controls and Procedures 

Asof the end of the period covered by this Report, the Company’s President, and principal financial officer (the “Certifying Officer”),  evaluatedthe effectiveness of the Company’s “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on that evaluation, the officer concluded that, as of the date of the evaluation, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed in the Company’s periodic filings under the Securities Exchange Act of 1934 is accumulated and communicated to management to allow timely decisions regarding required disclosure. 

TheCertifying Officer has also indicated that there were no changes in internal controls over financial reporting during the Company’s last fiscal quarter, and no significant changes in our internal controls or other factors that could significantly  affectsuch controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses. 

Ourmanagement, including the Certifying Officer, does not expect that our disclosure controls or our internal controls will prevent all errors and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be 

consideredrelative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making  can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements 

dueto error or fraud may occur and not be detected. 

PARTII. 

Item1. Legal Proceedings 

None. 

Item1A. Risk Factors 

6

 

Therehave been no changes to our risk factors from those disclosed in our Form 10-K filed on January 14, 2014. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

Therewere no unregistered Sales of Equity Securities during the quarter ending June 30, 2014. 

Item3. Defaults Upon Senior Securities None. 

Item 4.Mine Safety Disclosures Not applicable. 

Item 5. Other Information 

On March 17, 2014, the Company held the Annual Meeting of the Shareholders of the Corporation at 16955 Via Del Campo, San Diego, California, 92127. The shareholders unanimously approved the directors nominated  asdirectors of the Corporation, reappointment of Malone & Bailey  asexternal audit firm of the Corporation for the fiscal year ended September 30, 2014, and the Nuzee, Inc. 2013 Stock Incentive Plan. 

DEPARTURE OF OFFICERS AND DIRECTORS

On August 4, 2014, Fernando Corona tendered his resignation as one of the Company’s Directors.  Mr. Corona’s resignation, which was effective immediately, was not due to any disagreements with the Company’s operations, policies or practices.  A copy of Mr. Corona’s Letter of Resignation dated August 4, 2014  is filed herewith as Exhibit 17.1.

On August 11, 2014, Arata Matsushima tendered his resignation as one of the Company’s Directors.  Mr. Matsushima’s resignation was effective immediately.  A copy of Mr. Matsushima’s Letter of Resignation dated August 11, 2014 , which does not state any disagreements with the Company’s operations, policies or practices, is filed herewith as Exhibit 17.2.

On August 11, 2014, Craig Hagopian tendered his resignation as the Company’s President and CEO and  Director, to be effective on August 19, 2014.  Mr. Hagopian’s resignation resulted from a disagreement with the Company on a matter relating to the Company’s operations, policies or practices.  A copy of Mr. Hagopian’s Letter of Resignation dated August 4, 2014, which contains his reason for resigning, is filed herewith as Exhibit 17.3.

On August 11, 2014, Satoru Yukie tendered his resignation as the Company’s CFO, COO, Secretary, Treasurer and  Director, to be effective on August 19, 2014.  Mr. Yukie’s resignation resulted from a disagreement with the Company on a matter relating to the Company’s operations, policies or practices.  A copy of Mr. Yukie’s Letter of Resignation dated August 4, 2014, which contains his reason for resigning, is filed herewith as Exhibit 17.4. 

The Registrant believes that the following circumstances may have represented the disagreements that might, in whole or in part, caused or contributed to the resignation of Mssrs. Hagopian and Yukie, and most likely affected the resignation decision of Mr. Matsushima.

At a Special Meeting of the Company’s Board of Directors which took place on August 4, 2014, the Chairman of the Board recommended several changes to the Company’s executive team.  Specifically, Mr. Higashida desired to take on the role as the Company’s CFO.  Mr. Yukie would retain his position as the Company’s COO, Secretary and Treasurer.  Additionally, to reduce the Company’s expenses, the Chairman recommended that Mr. Yukie’s salary be reduced.  These recommendations were not due to any disagreements that the Board had with Mr. Yukie, or dissatisfaction with Mr. Yukie’s performance. 

At the August 4, 2014 meeting, the Chairman also recommended that Mr. Hagopian’s role be modified to include a portion of Mr. Yukie’s responsibilities.  In order to control the Company’s expenses, the Chairman recommended that Mr. Hagopian’s salary would be changed whereby  he would receive 50% of his normal salary and 50% would be paid in the form of Company stock.

The above-mentioned recommendations were only discussed at the August 4th meeting.  No motions were made or resolutions approved.  Rather, the Board decided to continue the meeting until August 11, 2014.  On August 11, 2014, the Board approved the changes recommended by the Chairman at the August 4, 2014 Board Meeting.  The resignations of Mssrs. Hagopian and Yukie followed, then the resignation of Mr. Matsushima.   

Mssrs. Hagopian and Yukie both offered to remain  with the Company, keeping their positions as Directors and as President/CEO and CFO/COO/Secretary/Treasurer respectively until the Company’s upcoming 10-Q for the period ending June 30, 2014 is filed with the Securities and Exchange Commission.  The latest date to file the 10-Q will be August 19, 2014.

ELECTION OF OFFICERS AND DIRECTORS

On August 12, 2014, the Company’s Board of Directors (which consisted of Mssrs. Higashida, Hagopian and Yukie) appointed Mr. Higashida as the Company’s President, CEO, CFO, COO, Secretary and Treasurer to be effective on August 19, 2014.

A copy of this Form 10-Q has been furnished to the Directors whose resignation is addressed in this filing, as required by item 5.02(a)(3)(i) of Form 8-K and has requested that each Director furnish a letter addressed to the Company stating whether he agrees with the statements made by the Company herein and, if not, stating the respects in which he or she does not agree.  The Company will file a Form 8-K to disclose the receipt of such correspondence from any departing Director.

7

Item 6.Exhibits 

EXHIBITNO.	DESCRIPTION
17.1*	Resignation Letter of Fernando Corona dated August 4, 2014
17.2*	Resignation Letter of Arata Matsushima dated August 11, 2014
17.3*	Resignation Letter of Craig Hagopian dated August 11, 2014
17.4*	Resignation Letter of Satoru Yukie dated August 11, 2014
31.1*	Certificationof Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
	adoptedpursuant to Section 302 of the Sarbanes-Oxley  Actof 2002
31.2*	Certificationof Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
	adoptedpursuant to Section 302 of the Sarbanes-Oxley  Actof 2002
32.1*	Certificationof Chief Executive Officer and Chief Financial Officer pursuant to 18
	U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	of2002
32.2*	Certificationof Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
	adoptedpursuant to Section 906 of the Sarbanes-Oxley  Actof 2002

101**      Interactive Data Files 

101.INS

101.SCH

101.CAL

101.DEF

101.LAB

101.PRE

XBRLInstance Document 

XBRLTaxonomy Extension Schema Document 

XBRLTaxonomy Extension Calculation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document XBRL Taxonomy Extension Label Linkbase Document 

XBRLTaxonomy Extension Presentation Linkbase Document 

*       Filed herewith 

**Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections. 

8

 

SIGNATURES

Pursuantto the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 

Date:         August 19,2014                                                                                                                                                       NUZEE, INC.

By:     /s/ Craig Hagopian 
           Craig Hagopian, President, Chief Executive 
          Officer (Principal Executive Officer) 

Date:         August 19, 2014                                                         . 

By:    /s/ Satoru Yukie 
         SatoruYukie, Secretary, Treasurer, COO, 
          Chief Financial Officer (Principal Financial Officer) 

9

EX-17

 

Exhibit 17.1

   

EX-17

 

Exhibit 17.2

 

 

EX-17

 

Exhibit 17.3

 

EX-17

 

Exhibit 17.4

 

EX-31

 

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Craig Hagopian, certify that:

1.      I have reviewed this report on Form 10-Q of NuZee, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.     I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 19, 2014	NUZEE, INC.
		By:	/s/ Craig Hagopian
			Craig Hagopian, President, Chief Executive Officer (Principal Executive Officer)

2

EX-31

 

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Satoru Yukie, certify that:

1.      I have reviewed this report on Form 10-Q of NuZee, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.     I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 19, 2014	NUZEE, INC.
		By:	/s/ Satoru Yukie
			Satoru Yukie, Chief Financial Officer (Principal Financial Officer)

2

EX-32

 

Exhibit 32.1

WRITTEN STATEMENT

PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of NuZee, Inc. and its subsidiaries (the “Company”) on Form 10-Q for the period ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the Company’s Chief Executive Officer, Craig Hagopian, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of Section 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 19, 2014	NUZEE, INC.
		By:	/s/ Craig Hagopian
			Craig Hagopian, Chief Executive Officer (Principal Executive Officer)

EX-32

 

Exhibit 32.2

WRITTEN STATEMENT

PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of NuZee, Inc. and its subsidiaries (the “Company”) on Form 10-Q for the period ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the Company’s Chief Financial Officer, Satoru Yukie, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of Section 13a-14(b) or 15d-14(b) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 19, 2014	NUZEE, INC.
		By:	/s/ Satoru Yukie
			Satoru Yukie, Chief Financial Officer (Principal Financial Officer)

XML

4. STOCK OPTIONS

9 Months Ended

Jun. 30, 2014

Table Text Block Supplement [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

4. STOCK OPTIONS 

During October  2013  the  Company  granted  3,471,665  options  to  employee.  The  right  to  exercise  these  options  shall  vest  and  become  25%  exercisable  on  the  first  anniversary  of  when  granted,  with  the  exception  that  100%  of  options  issued  to  one  employee  vested  immediately.  The  remaining  options  shall  vest  and  become  exercisable  ratably  over  the  next  36  months,  with  the  exception  that  options  issued  to  2  employees  shall  vest  and  become  exercisable  over  18  months  and  option  issued  to  one  employee  shall vest  and  become  exercisable  as  of  the  effective  date  of  the  Option  Agreement.  The  exercise  price  is  $0.48  per  share  and  will  expire  ten  years  from  the  grant  date,  unless  terminated  earlier  as  provided  by  the  Option  Agreements. 

The fair  value  of  each  option  award  was  estimated  on  the  date  of  grant  using  the  Black-Scholes  option  valuation  model  using  the  assumptions  noted  as  follows: expected  volatility  was  based  on  historical  trading  in  the  company's  stock.  The  expected  term  of  options  granted  was  determined  using  the  simplified  method  under  SAB  107  and  represents  one-half  the  exercise  period.  The  risk-free  rate  is  calculated  using  the  U.S.  Treasury  yield  curve,  and  is  based on  the  expected  term  of  the  option.  The  Company  has  estimated  there  will  be  no  forfeitures. 

The Black-Scholes  option  pricing  model  was  used  with  the  following  weighted  average  assumptions  for  options  granted  during  the  nine  months  ended  June 30,  2014: 

Risk-free interest  rate  1%  -  2%  Expected  option  life  5 years Expected  volatility  300% 

Expected dividend  yield  0.0% 

At June 30,  2014,  2,535,902  options  are  exercisable  and  the  Company  recognized  $1,480,480  of  stock  options  expenses  during  the  nine  months  ended  June 30,  2014. 

XML

3. COMMON STOCK

9 Months Ended

Jun. 30, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

3. COMMON STOCK 

During March  2014,  the  Company  sold  613,667  shares  at  $0.60  per  share,  for  an aggregate  purchase  price  of  $368,200. 

During April to June 2014,  the  Company  sold 450,000 shares at $0.60 per share, for an aggregate purchase price of $270,000.

XML

NuZee, Inc. - Consolidated Balance Sheet (USD $)	Jun. 30, 2014	Sep. 30, 2013
Current Assets
Cash	$ 467,749	$ 1,110,661
Accounts Receivable	23,528	13,195
Related Party Receivables		139,661
Inventories	53,735
Prepaid expenses and deposits	92,734	16,896
Total current assets	637,746	1,280,413
Equipment, net	10,516	8,663
Total Assets	648,262	1,289,076
Current Liabilities
Accounts payable	97,556	55,822
Advances from Stockholders'		50,000
Other Current Liabilities	16,961	9,563
Total Current Liabilities	114,517	115,385
Stockholders' Equity
Common stock; 100,000,000 shares authorized, $0.00001 par value; 30,055,357 and 37,957,790 shares issued and outstanding	301	380
Additional paid in capital	4,592,947	2,556,349
Accumulated deficit	(4,059,503)	(1,383,038)
Total Stockholders' Equity	533,745	1,173,691
Total Liabilities and Stockholders' Equity	$ 648,262	$ 1,289,076

XML

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

The accompanying  unaudited  interim  financial  statements  of  Nuzee,  Inc.  have  been  prepared  in  accordance  with  accounting  principles  generally  accepted  in  the  United  States  of  America  and  rules  of  the  Securities  and  Exchange  Commission,  and  should  be  read  in  conjunction  with  the  audited  financial  statements  and  notes  thereto  contained  in  the  Company’s  annual  report  on  Form  10-K  for  the  initial  period  ended  September  30,  2013  as  filed  with  the  SEC.  In  the  opinion  of  management,  all  adjustments,  consisting  of  normal  recurring  adjustments,  necessary  for  a  fair  presentation  of  financial  position  and  the  results  of  operations  for  the  interim  periods  presented  have  been  reflected  herein.  The  results  of  operations  for  interim  periods  are  not  necessarily  indicative  of  the  results  to  be  expected  for  the  full  year.  Notes  to  the  consolidated  financial  statements  which  would  substantially  duplicate  the  disclosure  contained  in  the  audited  financial  statements  as  reported  in  the  annual  report  on  Form  10-K  have  been  omitted. 

In the quarter ended June 30, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

GoingConcern 

The accompanying  financial  statements  have  been  prepared  in  accordance  with  accounting  principles  generally  accepted  in  the  United  States  of  America,  which  contemplates  continuation  of  the  Company  as  a  going  concern.  The  Company has  had  recurring  losses,  large  accumulated deficits,  is  dependent  on  the  shareholder  to  provide  additional  funding  for  operating  expenses  and  has  no  recurring  revenues.  These  items  raise  substantial  doubt  about  the  Company’s  ability  to  continue  as  a  going  concern. 

Equitybased payments 

The Company  accounts  for  equity  instruments  issued  to  employees  in  accordance  with  ASC  718  "Stock  Compensation".  Under  this  guidance,  stock  compensation  expense  is  measured  at  the  grant  date,  based  on  the  fair  value  of  the  award,  and  is  recognized  as  an  expense  over  the  estimated  service  period  (generally  the  vesting  period)  on  the  straight-line  attribute  method. 

XML

2. RELATED PARTY TRANSACTIONS

9 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

2. RELATED PARTY TRANSACTIONS 

During October  2013,  the  Company  entered  into  a  Compromise  Agreement  with  the  Company’s  majority  shareholder  to  settle  the  related  party  receivable.  In  consideration  of  the  compromises  contained  in  the  agreement  the  Company’s  majority  shareholder  agreed  to  forgive  a  note  in  the  amount  of  $50,000,  cancel  8,966,100 shares,  and the  Company  forgave  the  related  party  receivable  of  $139,661. 

XML

NuZee, Inc. - Consolidated Balance Sheet (Parentheticals) (USD $)	Jun. 30, 2014	Sep. 30, 2013
Preferred stock; shares authorized	100,000,000	100,000,000
Preferred stock; par value (in Dollars per share)	$ 0.00001	$ 0.00001
Preferred stock; shares issued	0	0
Preferred stock; shares outstanding	0	0
Common stock; shares authorized	100,000,000	100,000,000
Common stock; par value (in Dollars per share)	$ 0.00001	$ 0.00001
Common stock; shares issued	30,055,357	37,957,790
Common stock; shares outstanding	30,055,357	37,957,790

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6. SUBSEQUENT EVENTS (Details) (USD $)	Jul. 15, 2014	Jun. 30, 2014	Mar. 15, 2014	Sep. 30, 2013
Subsequent Events [Abstract]
Common Stock, Shares, Issued	113,847	30,055,357		37,957,790
Shares Issued, Price Per Share	$ 0.60		$ 0.60
Common Stock, Value, Issued	$ 68,308	$ 301		$ 380

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Document And Entity Information	9 Months Ended
	Jun. 30, 2014	Aug. 18, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	NuZee, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		30,169,204
Amendment Flag	false
Entity Central Index Key	0001527613
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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NeZee, Inc. - Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues	$ 59,159	$ 48,208	$ 59,471	$ 105,419
Cost of revenues	55,828	44,901	56,016	77,964
Gross profit	3,331	3,307	3,455	27,455
Operating expenses	618,605	299,684	2,677,620	727,022
Loss from operations	(615,274)	(296,377)	(2,674,165)	(699,567)
Other Income (Expense)	(2,488)	(800)	(2,300)	(43,010)
Net loss	$ (617,762)	$ (297,177)	$ (2,676,465)	$ (742,577)
Loss per share, Basic and diluted (in Dollars per share)	$ (0.02)	$ (0.01)	$ (0.09)	$ (0.02)
Weighted average common shares outstanding, Basic and diluted (in Shares)	29,687,884	36,281,464	30,010,231	33,825,689

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Accounting Policies, by Policy (Policies)

9 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

The accompanying  unaudited  interim  financial  statements  of  Nuzee,  Inc.  have  been  prepared  in  accordance  with  accounting  principles  generally  accepted  in  the  United  States  of  America  and  rules  of  the  Securities  and  Exchange  Commission,  and  should  be  read  in  conjunction  with  the  audited  financial  statements  and  notes  thereto  contained  in  the  Company’s  annual  report  on  Form  10-K  for  the  initial  period  ended  September  30,  2013  as  filed  with  the  SEC.  In  the  opinion  of  management,  all  adjustments,  consisting  of  normal  recurring  adjustments,  necessary  for  a  fair  presentation  of  financial  position  and  the  results  of  operations  for  the  interim  periods  presented  have  been  reflected  herein.  The  results  of  operations  for  interim  periods  are  not  necessarily  indicative  of  the  results  to  be  expected  for  the  full  year.  Notes  to  the  consolidated  financial  statements  which  would  substantially  duplicate  the  disclosure  contained  in  the  audited  financial  statements  as  reported  in  the  annual  report  on  Form  10-K  have  been  omitted. 

In the quarter ended June 30, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage

Going Concern Note

Going ConcernThe accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has had recurring losses, large accumulated deficits, is dependent on the shareholder to provide additional funding for operating expenses and has no recurring revenues. These items raise substantial doubt about the Company's ability to continue as a going concern

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Equitybased payments 

The Company  accounts  for  equity  instruments  issued  to  employees  in  accordance  with  ASC  718  "Stock  Compensation".  Under  this  guidance,  stock  compensation  expense  is  measured  at  the  grant  date,  based  on  the  fair  value  of  the  award,  and  is  recognized  as  an  expense  over  the  estimated  service  period  (generally  the  vesting  period)  on  the  straight-line  attribute  method

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6. SUBSEQUENT EVENTS

9 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

6. SUBSEQUENT EVENTS 

During July  2014,  the  Company  sold  113,847  shares  at  $0.60  per  share,  for  an aggregate  purchase  price  of  $68,308.

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4. STOCK OPTIONS (Details) (USD $)	1 Months Ended	9 Months Ended
	Oct. 31, 2013	Jun. 30, 2014
Table Text Block Supplement [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	3,471,665
Investment Options, Exercise Price (in Dollars per share)	$ 0.48
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures		2,535,902
Allocated Share-based Compensation Expense (in Dollars)		$ 1,480,480

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2. RELATED PARTY TRANSACTIONS (Details) (USD $)	1 Months Ended
	Oct. 31, 2013
Related Party Transactions [Abstract]
Debt Instrument, Decrease, Forgiveness	$ 50,000
RelatedPartyDebtForgivenessinShares (in Shares)	8,966,100
RelatedPartyDebtForgiveness	$ 139,661

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3. COMMON STOCK (Details) (USD $)	0 Months Ended	3 Months Ended
	Mar. 15, 2014	Jun. 30, 2014	Jul. 15, 2014
3. COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, New Issues	613,667
Shares Issued, Price Per Share	$ 0.60		$ 0.60
Proceeds from Issuance or Sale of Equity	$ 368,200	$ 270,000
IssuedAt0.22PerShare
3. COMMON STOCK (Details) [Line Items]
Stock Issued During Period, Shares, New Issues		450,000
IssuedAt0.48PerShare
3. COMMON STOCK (Details) [Line Items]
Shares Issued, Price Per Share		$ 0.60

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5. STOCK WARRANTS (Details)	9 Months Ended	129 Months Ended
	Jun. 30, 2014	Jun. 30, 2024	Jun. 29, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Class of Warrant or Right, Outstanding (in Shares)		12,500	100,000
Fair Value Assumptions, Risk Free Interest Rate	2.53%
Fair Value Assumptions, Expected Term		10 years
Fair Value Assumptions, Expected Volatility Rate		300.00%
Fair Value Assumptions, Expected Dividend Rate		0.00%
Class of Warrant or Right, Expense or Revenue Recognized		$7,500

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NuZee, Inc. - Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash Flows from Operating Activities:
Net loss	$ (2,676,465)	$ (742,577)
Adjustments to reconcile net income to net cash used
Depreciation expense	2,388	279
Stock option expense	1,480,480
Warrant expense	7,500
Impairment of Intellectual Property		42,818
(Increase) decrease in assets:
Accounts receivable	(10,333)	(21,447)
Inventory	(53,735)	7,896
Prepayments and other current assets	(75,838)	(11,423)
Related party receivable		(139,661)
Increase (decrease) in liabilities:
Accounts payable	41,734	(21,738)
Other current liabilities	7,398	5,889
Net Cash Provided by(Used in) Operating Activities	(1,276,871)	(879,964)
Cash Flows from Investing Activities:
Purchase of property and equipment	(4,241)
Net Cash Used in Investing Activities	(4,241)
Cash Flows from Financing Activities:
Proceeds from sale of stock	638,200	249,390
Advances from stockholders		540,000
Net Cash Provided by Financing Activities	638,200	789,390
Net change in Cash	(642,912)	(90,574)
Cash, beginning of period	1,110,661	165,484
Cash, end of period	467,749	74,910
Cancellation of common stock	(139,661)
Common stock issued for settlement of advance from stockholder		$ 640,610

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5. STOCK WARRANTS

9 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

5. STOCK WARRANTS

During nine months ended June 30, 2014, the Company granted 100,000 warrants to advisors.  The right to exercise these warrants shall vest in equal eight quarterly installments over the twenty-four (24) months following the date their vesting begins, subject to their continued engagement as a service provider though each such date. The  exercise  price  equal to the current fair market value per  share on the date of grant and  will  expire  ten  years  from  the  grant  date,  unless  terminated  earlier  as  provided  by  the  Warrant Agreements. 

The Black-Scholes  warrant  pricing  model  was  used  with  the  following  weighted  average  assumptions  for  options  granted  during  the  nine  months  ended  June 30,  2014: 

Risk-free interest  rate  2.53% 

Expected  life  10 years

Expected  volatility  300% 

Expected dividend  yield  0.0% 

At June 30,  2014,  12,500  warrants are  exercisable  and  the  Company  recognized  $7,500  of  warrant  expenses  during  the  nine  months  ended  June 30,  2014.