2. Acquisitions

3 Months Ended

Dec. 31, 2016

2. ACQUISITIONS

NuZee JAPAN Co., Ltd

On August 16, 2016, the Company entered a Share Exchange Agreement with NuZee JAPAN Co., Ltd ("NuZee JP") and its shareholders whereby the Company will exchange 1,148,734 shares of its common stock, par value $0.00001 per share, for seventy percent (70%) of the issued and outstanding common stock of NuZee JP. The Company's issued shares had an acquisition date fair value of $258,465. The remaining thirty percent (30%) of NuZee JP's issued and outstanding common stock is, and will be at the closing, owned by NuZee JP's current President and Chairman of its Board of Directors. The reason for this acquisition is to extend our market shares as well as obtain more business opportunities in both USA and Japan market. This transaction closed on October 3rd, 2016.

The Company applied the acquisition method to the business combination and valued each of assets acquired and liabilities assumed at fair value as of the acquisition date.

The following table shows the estimated fair value of the assets acquired and liabilities assumes at the date of acquisition:

Acquisition of NuZee Japan Co., Ltd.

ASSETS ACQUIRED:
CASH	$	201,676
ACCOUNTS RECEIVABLE		60,770
INVENTORIES		233,845
OTHER CURRENT ASSETS		75,738
PROPERTY PLANT AND EQUIPMENT		16,677
GOODWILL		52,424
TOTAL ASSETS ACQUIRED		641,130
LESS LIABILITIES ASSUMED
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES		(153,440	)
LOAN PAYABLE		(140,922	)
TOTAL LIABILITIES ASSUMED		(294,362	)

LESS NONCONTROLLING INTEREST		(88,303	)

NET ASSETS ACQUIRED FROM NUZEE JP ACQUISITION		258,465

Since the date of acquisition, revenues of $317,228 were included in the Company's consolidated net loss for the three months ended December 31, 2016.

In accordance with ASC 805-10-50, the Company is providing the following unaudited pro-forma to present a summary of the combined results of the Company's consolidated operations with all acquisitions as if the acquisitions had been completed as of the beginning of the reporting period. Adjustments were made to eliminate any inter-company transactions in the periods presented. There is no pro forma information for 2016 as NuZee Japan Co., Ltd was acquired at the beginning of the period.

NuZee, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
	Three months ended December 31, 2015
	(Pro Forma)

Revenues		$	52,714
Cost of sales			45,780
Gross Profit			6,934

Operating expenses			386,315

Loss from operations			(379,381	)

Other income			243

Equity in loss of unconsolidated affiliate			-

Other expense			(22,986	)

Net loss			(402,124	)

Net loss attributable to noncontrolling interest			-

Net loss attributable to NuZee, Inc.		$	(402,124	)

Net loss per share, basic and fully diluted		$	(0.01	)

Weighted average of shares outstanding			31,479,228