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 December 31,2015 

¨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) 

2865 Scott Street, Suite 101, Vista, CA, 92081

 ____________________________________________________________________

(Addressof principal executive offices) (zip code) 

(760)295-2408or toll free (844) 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 x No ¨

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 February 11, 2016, NuZee, Inc. had 30,464,951 shares of common stock outstanding. 

Tableof Contents 

PARTI. 
     

Item1.         Financial Statements. 

(a)Balance Sheets as at December 31, 2015 (Unaudited) and September 30, 2014 

(b)Statement of Operations for the three and ninemonths ended  December 31, 2015 and 2014 (Unaudited). 

(c)Statement of Cash Flows for the nine months ended December 31, 2015 and 2014 (Unaudited). 

(d)Notes to 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 13,2016 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

 

PARTI. 

Item1. Financial Statements. 

Nuzee, Inc. BALANCE SHEET (Unaudited)
						December 31, 2015	September 30, 2015
	ASSETS
		Current assets:
			Cash			$ 47,252	$ 107,678
			Accounts receivable			14,345	18,205
			Inventories			181,112	201,764
			Prepaid expenses and deposits			21,708	21,532
					Total current assets	264,417	349,179
			Equipment, net			184,145	192,103
		Total assets				$ 448,562	$ 541,282
	LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
		Current liabilities:
			Accounts payable			$ 77,620	$ 65,522
			Convertible notes payable-related party			600,000	600,000
			Other current liabilities			387	607
					Total current liabilities	678,007	666,129
		Stockholders' equity (deficit):
			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; 30,404,951 and 30,124,951 shares issued and outstanding			304	301
			Additional paid in capital			6,145,335	5,940,337
			Accumulated deficit			(6,297,718)	(5,988,119)
			Less: treasury stock, at cost (2,016,000 shares held in treasury as of December 31, 2015 and September 30, 2015 )			(77,366)	(77,366)
				Total stockholders' equity (deficit)		(229,445)	(124,847)
		Total liabilities and stockholders' equity (deficit)				$ 448,562	$ 541,282

The accompanying notes are an integral part of these unaudited financial statements.
F-1

 

Nuzee, Inc. STATEMENTS OF OPERATIONS (Unaudited)
			Three Months Ended December 31 ,2015	Three Months Ended December 31 ,2014
	Revenues		$ 44,460	$ 41,016
	Cost of sales		29,065	35,517
		Gross Profit	15,395	5,499
	Operating expenses		321,573	306,980
	Loss from operations		(306,178)	(301,481)
	Other income		228	-
	Other expense		(3,649)	(800)
	Net loss		$ (309,599)	$ (302,281)
	Basic and diluted loss per common share		$ (0.01)	$ (0.01)
	Basic and diluted weighted average number of common stock outstanding		30,330,494	28,099,371

The accompanying notes are an integral part of these unaudited financial statements.
F-2

 

Nuzee, Inc. STATEMENTS OF CASH FLOWS (Unaudited)
			Three Months Ended December 31, 2015	Three Months Ended December 31, 2014
	Operating activities:
		Net loss	$ (309,599)	$ (302,281)
	Adjustments to reconcile net loss to net cash
		used by operating activities:
		Depreciation	10,488	1,618
		Option expense	-	17,992
		Warrant expense	-	9,134
	Change in operating assets and liabilities:
		Accounts receivable	3,860	321
		Inventories	20,652	(33,082)
		Prepaid expenses and deposits	(176)	24,473
		Accounts payable	12,098	(5,004)
		Other current liabilities	(220)	672
		Net cash used by operating activities	(262,897)	(286,157)
	Investing activities:
		Purchase of equipment	(2,529)	-
		Net cash used by investing activities	(2,529)	-
	Financing activities:
		Proceeds from issuance of common stock	205,000	13,200
		Proceeds from issuance of treasury stock	-	174,000
		Net cash provided by financing activities	205,000	187,200
	Net change in cash		(60,426)	(98,957)
	Cash, beginning of period		107,678	238,160
	Cash, end of period		$ 47,252	$ 139,203
	Supplemental disclosure of cash flow information:
		Cash paid for interest	$ -	$ -
		Cash paid for taxes	$ 800	$ -

The accompanying notes are an integral part of these unaudited financial statements.
F-3

Nuzee,Inc. 

NOTESTO FINANCIAL STATEMENTS 

(Unaudited)

December 31, 2015 

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 (“GAAP”), 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 year ended December 31, 2015 as filed with the SEC. 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 have been omitted.

Going Concern

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

2. RELATED PARTY TRANSACTIONS

During February 2015, the Company issued a secured convertible promissory note in the sum of $600,000 to Masateru Higashida, the Company’s major shareholder.  Interest calculated at the annual rate of zero percent (0%) for the period until April 2016. If the outstanding principle and all accrued and unpaid interest on the debt hereof (the “Debt”) is not repaid by the Company in full by the Repayment Date, the Debt or any portion thereof may be converted at the option of the Holder, upon written notice to the Company at any time after the Repayment Date, into that number of shares of the Company’s Common Stock equal to the Debt or that portion thereof that the Holder elects to convert, divided by price per share of $0.51. This note shall by cancelled on the date of conversion of the entirety of the Debt

3. COMMON STOCK  

During October 2015, the Company sold 140,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $98,000.

During November 2015, the Company sold 50,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $35,000.

During December 2015, the Company sold 90,000 shares of common stock at $0.80 per share, for an aggregate purchase price of $72,000

4. STOCK OPTIONS

During three months ended 2015, the Company  committed to issue 242,500 options to employees and consultant for the services the next time the board approves for issuance.

The new method of determination of granted is simplified method and no more usage of the Black-Scholes model.

F-4

 

The following table summarizes common stock options issued and outstanding:

	Stock Options	Exercise price	Intrinsic value
Outstanding at September 30, 2015	2,833,333	$0.60	-
Granted	-	-	-
Excised	-	-	-
Forfeited	-	-	-
Expired	-	-	-
Outstanding at December 31, 2015	(2,833,333)	$0.60	-
Total	-	-	-

As of December 31, 2015, there were no options exercisable or outstanding.

5. SUBSEQUENT EVENTS

   During January 2016, the Company granted 50,000 shares of treasury stock to a consultant at $0.30 per share, for an aggregate purchase price of $15,000.

   During January 2016, the Company sold 60,000 shares of common stock at $0.80 per share for an aggregate purchase price of $48, 000

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. 

      Plan of Operations

Short Term Goals (12 Months)

Over the next 9 months, the Company’s growth plans include continuing efforts to:

▪ Build a targeted distribution network for our Coffee Blenders functional beverages by signing the retailers that serve the K-cup and Coffee    

   replenishment channels;

▪ Increase awareness for Coffee Blenders through communications and sampling programs;

▪ Establish the NuZee brands top 3 in their product categories consistent with our mission of providing natural products that work.

We have retained and plan to expend our sales and marketing team who can immediately contribute to our network of US and international channels as such seeding our product becomes a near term priority.  We have already started developing working relationships with key online and national distributors who serve the coffee and single-serve pod consumers.  We plan to accelerate our traction by using manufacturer representatives with food and beverage experience. 

In order to build distribution the Company is first determining the total distribution launch cost among the potential channels as each has their own upfront and recurring cost structure.  Under investigation are the following company directed channels:

▪ Direct – coffeeblenders.com shopping via search and digital marketing

▪ E-commerce affiliates (such as Amazon)

▪ Select health and wellness retailers

▪ Key mass/grocery retailers

▪ Club/Other

Each of the above is compared using a host of costing parameters not limited to the following: product slotting fees, overall margin requirements, market development 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, cross dock fees, shelf-life expiration swaps, and initial and recurring inventory loading levels. 

In conjunction with the above channel assessment, the Company is also exploring custom and private labeling whereby the company licenses the product formulation, trademarks, and other assets in two ways:

Milestone	Timing	Est. Cost/Funding Source
Finalize Products & Pricing -           New Product	October (Phase 3) - Ongoing	$25,000 (Phase 3)
Staff (retain and expand)	January-June	$10,000-20,000/Mo. Recurring Previous Sale of Equities
Launch Market and Promotion Plan -           PR  -           Sampling  -           Advertising	Ongoing	$500,000-$750,000 Annual Previous and Future Sale of Equities + Product Contribution
Explore OEM/Private Label Opportunities	Ongoing	n/a

1.       Multi-Level Marketing (MLM) Firms – for example manufacturer on behalf of “Amway” for product extensions of their Great Value and Equate private brands. 

2.       Product Brands – for example license to “Maxwell House” the Coffee Blender product as a new product line extension to expand their single-serve business.

The Company plans going forward include the following milestones:

If we 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.    

Long Term Goals (Five Years)

The Company 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.

4

 

The Company believes that our limited resources may pose a challenge to our expansion goals and therefore anticipates that it may require additional capital in future years to fund expansion. There can be no assurance that 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.

Results of Operations

As of December 31, 2015, we generated net losses of $309,599. This loss was attributed to $321,573 of operating expenses. Compared with period end December 31, 2014, the overall net loss increased by $7,318 and operating expense increased by $14,593 .These operating expenses included costs associated with production, storage and delivery of our products as well as research and development of new products.

We are presently in the development phase of our new product platform for functional beverages and we can provide no assurance that we will be able to attain profitability.

From October 1^, 2015 to December 31, 2015, we earned gross profit of $15,395 from sales of our products. The gross profit earned during same period of 2014 was $5,499. There has been an almost three times increase in earned gross profit. This increase was caused by both the raise of revenue and decrease of the overall cost of goods sold.

We expect sales in 2016 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 retailers.

Liquidityand Capital Resources 

As of September 30, 2015 we had a cash balance of $107,678 and $47,252 at December 31, 2015. Total assets decreased by 17% from $541,282 at September 30, 2015 to $448,562 at December 31, 2014.

As of December 31, 2015 we had current liabilities of $678,007 and $666,129 at September 30, 2015. Accounts Payable increased by approximately 18 % to $77,620 as of December 31, 2015 from $65,522 at September 30, 2015.

Our current ratio decreased from 52% in September 30, 2015 to 39% as of December 31, 2015.

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.

Our current cash balance as of December 31, 2015 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. 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4.  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. 

5

 

PARTII. 

Item1. Legal Proceedings None. 

Item1A. Risk Factors 

Therehave been no changes to our risk factors from those disclosed in our Form 10-K filed on  January 13, 2016 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

Therewere no unregistered Sales of Equity Securities during the quarter ending December 31, 2015. 

Item3. Defaults Upon Senior Securities None. 

Item 4.Mine Safety Disclosures Not applicable.

Item 5. Other Information   None.

Item 6.Exhibits 

EXHIBITNO.	DESCRIPTION
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   XBRLInstance Document 

101.SCH   XBRLTaxonomy Extension Schema Document 

101.CAL   XBRLTaxonomy Extension Calculation Linkbase Document 

101.DEF   XBRL Taxonomy Extension Definition Linkbase  Document 

101.LAB   XBRL Taxonomy Extension Label Linkbase Document 

101.PRE   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. 

6

 

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:	February 12, 2016	NUZEE, INC.
		By:	/s/ Masateru Higashida
			Masateru Higashida, Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer)

7

EX-31

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Masateru Higashida, 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:	February 12, 2016	NUZEE, INC.
		By:	/s/ Masateru Higashida
			Masateru Higashida, President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer), Secretary, Treasurer and Director (Sole Officer and Director)

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 December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the Company’s Chief Executive Officer, Masateru Higashida, 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:	February 12, 2016	NUZEE, INC.
		By:	/s/ Masateru Higashida
			Masateru Higashida, President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer), Secretary, Treasurer and Director (Sole Officer and Director)

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Document And Entity Information - shares	3 Months Ended
	Dec. 31, 2015	Feb. 11, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	NuZee, Inc.
Trading Symbol	NUZE
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		30,464,951
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	Dec. 31, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1

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NuZee, Inc. - Balance Sheets - USD ($)	Dec. 31, 2015	Sep. 30, 2015
Current assets:
Cash	$ 47,252	$ 107,678
Accounts receivable	14,345	18,205
Inventories	181,112	201,764
Prepaid expenses and deposits	21,708	21,532
Total current assets	264,417	349,179
Equipment, net	184,145	192,103
Total assets	448,562	541,282
Current liabilities:
Accounts payable	77,620	65,522
Convertible notes payable-related party	600,000	600,000
Other current liabilities	387	607
Total current liabilities	678,007	666,129
Stockholders' equity (deficit):
Preferred stock; 100,000,000 shares authorized, $0.00001 par value; 0 shares issued and outstanding	0	0
Common stock; 100,000,000 shares authorized, $0.00001 par value; 30,404,951 and 30,124,951 shares issued and outstanding	304	301
Additional paid in capital	6,145,335	5,940,337
Accumulated deficit	(6,297,718)	(5,988,119)
Less: treasury stock, at cost (2,016,000 shares held in treasury as of December 31, 2015 and September 30, 2015 )	(77,366)	(77,366)
Total stockholders' equity (deficit)	(229,445)	(124,847)
Total liabilities and stockholders' equity (deficit)	$ 448,562	$ 541,282

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NuZee, Inc. - Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2015	Sep. 30, 2015
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	30,404,951	30,124,951
Common stock; outstanding	30,404,951	30,124,951
Less: treasury stock, held	2,016,000	2,016,000

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NuZee Inc. - Statements of Operations - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Revenues	$ 44,460	$ 41,016
Cost of sales	29,065	35,517
Gross Profit	15,395	5,499
Operating expenses	321,573	306,980
Loss from operations	(306,178)	(301,481)
Other income	228
Other expense	(3,649)	(800)
Net loss	$ (309,599)	$ (302,281)
Basic and diluted loss per common share (in Dollars per share)	$ (0.01)	$ (0.01)
Basic and diluted weighted average number of common stock outstanding (in Shares)	30,330,494	28,099,371

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NuZee, Inc. - Statements of Cash Flows - USD ($)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Operating activities:
Net loss	$ (309,599)	$ (302,281)
used by operating activities:
Depreciation	10,488	1,618
Option expense		17,992
Warrant expense		9,134
Change in operating assets and liabilities:
Accounts receivable	3,860	321
Inventories	20,652	(33,082)
Prepaid expenses and deposits	(176)	24,473
Accounts payable	12,098	(5,004)
Other current liabilities	(220)	672
Net cash used by operating activities	(262,897)	(286,157)
Investing activities:
Purchase of equipment	(2,529)
Net cash used by investing activities	(2,529)
Financing activities:
Proceeds from issuance of common stock	205,000	13,200
Proceeds from issuance of treasury stock		174,000
Net cash provided by financing activities	205,000	187,200
Net change in cash	(60,426)	(98,957)
Cash, beginning of period	107,678	238,160
Cash, end of period	47,252	139,203
Supplemental disclosure of cash flow information:
Cash paid for interest	0	$ 0
Cash paid for taxes	$ 800

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1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited interim financial statements of Nuzee, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), 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 year ended December 31, 2015 as filed with the SEC. 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 have been omitted.

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 doubts about the Company’s ability to continue as a going concern.

The Company 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.

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2. RELATED PARTY TRANSACTIONS

3 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

2. RELATED PARTY TRANSACTIONS

During February 2015, the Company issued a secured convertible promissory note in the sum of $600,000 to Masateru Higashida, the Company’s major shareholder.  Interest calculated at the annual rate of zero percent (0%) for the period until April 2016. If the outstanding principle and all accrued and unpaid interest on the debt hereof (the “Debt”) is not repaid by the Company in full by the Repayment Date, the Debt or any portion thereof may be converted at the option of the Holder, upon written notice to the Company at any time after the Repayment Date, into that number of shares of the Company’s Common Stock equal to the Debt or that portion thereof that the Holder elects to convert, divided by price per share of $0.51. This note shall by cancelled on the date of conversion of the entirety of the Debt

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3. COMMON STOCK

3 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

3. COMMON STOCK  

During October 2015, the Company sold 140,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $98,000.

During November 2015, the Company sold 50,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $35,000.

During December 2015, the Company sold 90,000 shares of common stock at $0.80 per share, for an aggregate purchase price of $72,000

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4. STOCK OPTIONS

3 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

4. STOCK OPTIONS

During three months ended 2015, the Company  committed to issue 242,500 options to employees and consultant for the services the next time the board approves for issuance.

The new method of determination of granted is simplified method and no more usage of the Black-Scholes model.

The following table summarizes common stock options issued and outstanding:

	Stock Options	Exercise price	Intrinsic value
Outstanding at September 30, 2015	2,833,333	$0.60	-
Granted	-	-	-
Excised	-	-	-
Forfeited	-	-	-
Expired	-	-	-
Outstanding at December 31, 2015	(2,833,333)	$0.60	-
Total	-	-	-

As of December 31, 2015, there were no options exercisable or outstanding.

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5. SUBSEQUENT EVENTS

3 Months Ended

Dec. 31, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

5. SUBSEQUENT EVENTS

   During January 2016, the Company granted 50,000 shares of treasury stock to a consultant at $0.30 per share, for an aggregate purchase price of $15,000.

   During January 2016, the Company sold 60,000 shares of common stock at $0.80 per share for an aggregate purchase price of $48, 000

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4. STOCK OPTIONS (Tables)

3 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity [Table Text Block]

	Stock Options	Exercise price	Intrinsic value
Outstanding at September 30, 2015	2,833,333	$0.60	-
Granted	-	-	-
Excised	-	-	-
Forfeited	-	-	-
Expired	-	-	-
Outstanding at December 31, 2015	(2,833,333)	$0.60	-
Total	-	-	-

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2. RELATED PARTY TRANSACTIONS (Details)	Feb. 02, 2015 USD ($) $ / shares
Related Party Transactions [Abstract]
Related Party Transaction, Amounts of Transaction	$ 600,000
Interest Expense, Related Party	$ 0.00
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ / shares	$ 0.51

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3. COMMON STOCK (Details) - USD ($)		1 Months Ended
	Jan. 02, 2016	Dec. 31, 2015	Nov. 30, 2015	Oct. 31, 2015	Jan. 05, 2016
Stockholders' Equity Note [Abstract]
Stock Issued During Period, Shares, New Issues	60,000	90,000	50,000	140,000
Shares Issued, Price Per Share	$ 0.80	$ 0.80	$ 0.70	$ 0.70	$ 0.30
Stock Issued During Period, Value, New Issues		$ 72,000	$ 35,000	$ 98,000

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4. STOCK OPTIONS (Details)	Dec. 31, 2015 USD ($)
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 242,500

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4. STOCK OPTIONS (Details) - The following table summarizes common stock options issued and outstanding: - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015
The following table summarizes common stock options issued and outstanding: [Abstract]
	(2,833,333)	2,833,333
	$ 0.60	$ 0.60

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5. SUBSEQUENT EVENTS (Details) - USD ($)			1 Months Ended
	Jan. 05, 2016	Jan. 02, 2016	Dec. 31, 2015	Nov. 30, 2015	Oct. 31, 2015	Sep. 30, 2015
Subsequent Events [Abstract]
Stock Issued During Period, Shares, Treasury Stock Reissued	50,000
Shares Issued, Price Per Share	$ 0.30	$ 0.80	$ 0.80	$ 0.70	$ 0.70
Stock Issued During Period, Value, Treasury Stock Reissued	$ 15,000
Stock Issued During Period, Shares, New Issues		60,000	90,000	50,000	140,000
Common Stock, Value, Issued		$ 48,000	$ 304			$ 301