In a large skillet, cook sausage, mushrooms, onion, peppers and garlic over medium heat until meat is no longer pink. Drain and set aside.
In a large skillet coated with cooking spray, sauté spinach until wilted.
Place bread on a baking sheet and broil 2-3 in. from heat for 1-2 minutes or until lightly browned. Transfer to a greased 13×9-in. baking dish.
In a large bowl, combine eggs, milk, Italian seasoning, salt, pepper and nutmeg. Layer sausage mixture and spinach over bread; pour egg mixture over top.
Sprinkle with cheese, then cover and refrigerate overnight.
Remove from refrigerator 30 minutes before baking. Preheat oven to 350°F.
Cover and bake for 50 minutes. Uncover and bake 5-10 minutes longer or until a knife inserted near the center comes out clean.
Let stand 10 minutes before cutting.