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ISSUANCE OF EQUITY SECURITIES | 9 Months Ended
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Jun. 30, 2023
Equity [Abstract] |
ISSUANCE OF EQUITY SECURITIES | 5. ISSUANCE OF EQUITY SECURITIES Restricted Stock Awards On March 17, 2022, pursuant to the Company’s non-employee director compensation policy, the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) granted 674 restricted shares (the “Restricted Shares”) of the Company’s common stock to each of the Company’s five independent directors pursuant to the NuZee, Inc. 2013 Stock Incentive Plan, totaling 3,370 Restricted Shares. These awards are now fully vested. On March 22, 2023, pursuant to the Company’s non-employee director compensation policy, the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”) granted 4,398 restricted shares (the “Restricted Shares”) of the Company’s common stock to each of the Company’s five independent directors pursuant to the NuZee, Inc. 2023 Stock Incentive Plan, totaling 21,990 Restricted Shares. The Restricted Shares are scheduled to vest in full on the one-year anniversary of the grant date, subject to each independent director’s continued service as a director of the Company. The Company recognized common stock compensation expense of $176,775 and $71,916, respectively, for the nine months ended June 30, 2023 and 2022, related to these Restricted Shares. The Restricted Shares are valued using the closing stock price on the grant date and the Company is expensing these restricted share awards on a straight-line basis over the requisite service period. On March 15, 2023, the Company granted 58,619 performance-based restricted shares to executive officers, employees and consultants as part of the 2013 Stock Incentive Plan and the 2019 Stock Incentive Plan. The initial performance period for the Performance-Based Restricted Shares commenced October 1, 2022 and ends September 30, 2023. 50% of the Performance-Based Restricted Shares will vest, if at all, in Fiscal Year 2023, based on the Company’s achievement of a specified amount of cash on hand, sales growth, increased gross margin, and reduced operating losses in Fiscal Year 2023, and the other 50% of the Performance-Based Restricted Shares will vest, if at all, in Fiscal Year 2024, based on performance metrics to be set by the Board in its sole and absolute discretion on or before December 31, 2023. Based on management’s estimate as of June 30, 2023, the performance goals for Fiscal Year 2023 won’t be achieved and the Company recognized common stock compensation expense of $0 for the nine months ended June 30, 2023, related to these Restricted Shares. The following table summarizes the restricted common shares activities for the nine months ended June 30, 2023 and June 30, 2022: SCHEDULE OF RESTRICTED COMMON SHARES
|  | 2023 |  |  | 2022 |
Number of shares outstanding at September 30, 2022 and 2021 |  |  | 3,370 |  |  |  | - |
Restricted shares granted |  |  | 80,609 |  |  |  | 3,370 |
Restricted shares forfeited |  |  | (2,458 | ) |  |  | - |
Restricted shares vested |  |  | (3,370 | ) |  |  | - |
Number of shares outstanding at June 30, 2023 and 2022 |  |  | 78,151 |  |  |  | 3,370 |
During the nine months ended June 30, 2023, 2,458 restricted shares were forfeited because of the termination of employment. Common stock issued for services On January 6, 2023, the Company issued 6,000 shares of common stock to a third-party unaffiliated professional services provider in exchange for certain consulting advice to be provided to the Company. The shares are valued using the closing stock price on the grant date and the Company recognized common stock compensation expense of $57,120 for the nine months ended June 30, 2023, related to these common stock shares. On June 20, 2023, the Company issued 7,500 shares of common stock to a third-party unaffiliated professional services provider in exchange for certain consulting advice to be provided to the Company. The shares are valued using the closing stock price on the grant date and the Company recognized common stock compensation expense of $78,750 for the nine months ended June 30, 2023, related to these common stock shares.

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