Subject to Completion, Dated June18, 2014

PROSPECTUS

18,366,873 Shares of Common Stock

NUZEE, INC.

We are registeringoffering                   shares of the common stock, par value $0.00001 per share, of NuZee, Inc., a totalNevada corporation. The offering price is $        per share.

Prior to this offering, there has been no established public market for our common stock. We intend to apply to list our common stock on a national securities exchange under the symbol “NUZE.” While we believe that upon the completion of 18,366,873the offering contemplated by this prospectus, we will meet the standards for listing on a national securities exchange, we cannot guarantee that we will be successful in listing our common stock on a national securities exchange. However, we will not complete this offering unless we are so listed. Our common stock is currently listed on the OTCQB Marketplace (the “OTCQB”) under the symbol “NUZE.”

We have assumed a public offering price of $11.00 per share, the last reported sale price for our common stock as reported on the OTCQB on October 22, 2019 (which does not give effect to the reverse stock split described below due to the absence of sale price data following the effectiveness of the reverse stock split). The actual public offering price per share will be determined between us and the underwriters at the time of pricing and may be at a discount to the current market price. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final offering price.

We completed a l-for-3 reverse stock split on October 28, 2019, which became effective on November 12, 2019. All share and per share information in this prospectus (except the last reported sale price for our common stock) has been retroactively adjusted to give effect to the reverse stock split, including the financial statements and notes thereto.

Investing in our common stock involves a high degree of risk. See ‘‘Risk Factors’’ beginning on page 13 of this prospectus for information you should consider before buying shares of our common stock on behalf of the selling shareholders identified under the heading “Selling Shareholders” in this prospectus.  The Selling Shareholders may sell their shares from time to time in the over-the-counter market or any exchange on which our company may be listed in the future at the prevailing market price or in negotiated transactions.  Our shares are currently quoted on the e OTCQB tier of the marketplace maintained by OTC Markets Group, Inc. (“OTCQB”) under the symbol “NUZE”.

We are not selling any shares of our common stock in this offering and therefore will not receive any proceeds from the resale of our common stock pursuant to this offering.  

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD INVEST IN OUR COMMON STOCK ONLY IF YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. FOR A DISCUSSION OF SOME OF THE RISKS INVOLVED, SEE “RISK FACTORS” BEGINNING ON PAGE 6 OF THIS PROSPECTUS.stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined ifpassed upon the accuracy or adequacy of this prospectus is truthful or complete.prospectus. Any representation to the contrary is a criminal offense.

____________

(1)      Does not include a non-accountable expense allowance equal to 1% of the gross proceeds of this offering, payable to the underwriters, or the reimbursement of certain expenses of the underwriters. See “Underwriting” beginning on page 78 of this prospectus for additional information regarding total underwriter compensation.

We have granted a 45-day option to the underwriters to purchase up to an additional            shares of common stock solely to cover overallotments, if any, at the public offering price, less underwriting discounts and commissions.

Delivery of the shares offered hereby will be made on or about           , 2019.

Sole Book-Running Manager

THE DATE OF THIS PROSPECTUS IS JUNE18, 2014.The Benchmark Company

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TABLE OF CONTENTS

PROSPECTUS SUMMARY..5

RISK FACTORS.7

USE OF PROCEEDS.13

DETERMINATION OF OFFERING PRICE..13

DILUTION..13

SELLING SHAREHOLDERS.13

PLAN OF DISTRIBUTION..17

DESCRIPTION OF SECURITIES.18

INTERESTS OF NAMED EXPERTS AND COUNSEL..19

DESCRIPTION OF BUSINESS.20

DESCRIPTION OF PROPERTY..26

LEGAL PROCEEDINGS.26

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S.26

COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.26

FINANCIAL STATEMENTS.27

SELECTED FINANCIAL DATA..44

SUPPLEMENTARY FINANCIAL INFORMATION..44

MANAGEMENT’S DISCUSSION AND ANALYSIS OF.44

FINANCIAL CONDITION AND RESULTS OF OPERATIONS.44

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.47

ON ACCOUNTING AND FINANCIAL DISCLOSURE..47

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..48

DIRECTORS AND EXECUTIVE OFFICERS.48

EXECUTIVE COMPENSATION..51

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..54

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.55

DISCLOSURE OF COMMISSION POSITION OF.56

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.56

EXHIBITS.56

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.  It does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, including the section titled “Risk Factors” and our consolidated financial statementsWe and the related notes.  You should only rely on theunderwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus.prospectus or in any free writing prospectuses we have prepared. We have not, and the selling shareholders have not, authorizedunderwriters take no responsibility for, and can provide no assurance as to the reliability of, any other person toinformation that others may provide you with different information.  This prospectus is not an offeryou. We are offering to sell, nor is itand seeking an offeroffers to buy, these securitiesshares of common stock only in any statejurisdictions where the offer or sale is notoffers and sales are permitted. The information contained in this prospectus is accurate only as of the date onof this prospectus, regardless of the front cover, buttime of delivery of this prospectus or of any sale of the information may have changed since that date.common stock.

MARKET, INDUSTRY AND OTHER DATA

This prospectus includes industry and market data that we obtained from periodic industry publications, third-party studies and surveys, filings of public companies in our industry and internal company surveys. These sources may include government and industry sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the industry and market data to be reliable as of the date of this prospectus, this information could prove to be inaccurate. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein.

Until        , 2019 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

i

PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. Before you decide to invest in our common stock, you should read and carefully consider the following summary together with the entire prospectus, including our financial statements and the related notes thereto appearing elsewhere in this prospectus and the matters discussed in the sections in this prospectus entitled “Risk Factors,” “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the “Risk Factors” and other sections of this prospectus.

Unless the context otherwise requires, whenthe terms NuZee, the Company, our company, we, use the words “the Company,” “we,” “us” or “our Company”us, and our, refer to NuZee, Inc. We completed a l-for-3 reverse stock split on October 28, 2019,which became effective on November 12, 2019. All share and per share information in this prospectus we are referring(except the last reported sale price for our common stock) has been retroactively adjusted to Nuzee, Inc., a Nevada corporation.give effect to the reverse stock split, including the financial statements and notes thereto.

Overview

Our Company

We are a specialty coffee company and, we believe, the leading single serve pour over coffee co-packer in the United States. Our mission is leverage our position as a co-packer at the forefront of the North American single serve pour over coffee market to revolutionize the way single serve coffee is enjoyed in the United States. While the United States is our core market, we also have single serve pour over coffee sales operations in Japan as well as manufacturing and sales operations in Korea. In addition, we plan to opportunistically leverage our strengths and relationships to grow our proprietary NuZee and Coffee Blenders brands in the United States and select international markets.

We believe we are the only commercial-scale producer of single serve drip cup coffee and that we have contractual protections and certain other advantages in place within the North American market, as outlined by the factors described below. As we have with Kraft Heinz, and in particular their Gevalia Kaffe brand, and Royal Cup Coffee & Tea, we intend to leverage our position to be the commercial manufacturer of choice for major companies seeking to enter the single serve drip cup market in North America. We target existing large, high-margin companies and are paid per-package based on the number of single serve pour over drip cups produced by us. Accordingly, we consider our business model to be a form of tolling arrangement, as we receive a fee for every single serve drip cup our co-packing customers sell in the North American market. While we financially benefit from the success of our manufacturing customers through the sales of their respective single serve drip cup products, we are also able to avoid the risks associated with owning and managing the product and its related inventory.  As these companies gain market acceptance of single serve drip cup coffee in North America, we plan to leverage that market expansion to further grow our own brands.

We may also consider co-packaging other products that are complementary to single serve pour over drip coffee and provides us with a deeper access to our customers, such as tea bag coffee.

What is single serve pour over coffee?

Single serve pour over coffee, or hand drip coffee, is a traditional and time-honored technique that pours hot water onto ground coffee with a filter. Proponents of drip coffee believe this method makes better coffee. Single serve pour over coffee uses the same technique without a machine, with the coffee flowing straight into a cup using only hot water and the prepacked coffee filter. The image below compares our single serve pour over coffee to other varieties of hot beverages.

Revolutionizing the single serve coffee market in North America

Prior to the success of coffee pods within the last two decades, coffee was primarily consumed at home and via traditional pot-based drip brewers and, to a lesser extent, instant coffee. Pot-based brewers are typically known for good quality coffee that produces multiple cups but not well-suited for single serve alternatives. In recent years with the advent of coffee pods and increased coffee consumption outside the home, the North American market has been focused on speed and convenience. Coffee pods addressed the need for a single serve coffee solution that was viewed as superior to instant coffee.  As coffee consumption has also moved outside the home in recent years, consumer preferences have also changed, leading to greater demand for higher quality coffee alternatives, particularly from younger consumers such as millennials.

Moreover, we believe the typical consumer is increasingly focused on the environmental impact of the product, as well as the taste and quality of the ingredients. We anticipate that pod-based, single serve coffee will face increasing pressure given their heavy reliance on the use of plastics. In our view, consumer preferences in North America have evolved over the last decade to substantially mirror those of Japanese consumers, who have traditionally focused on the taste, eco-footprint and quality of ingredients. Machine-based single serve coffee, which represents approximately 32% of the market in North America, we believe has an immaterial amount of market share in Japan. Single serve drip cups represent approximately 2.5 billion units annually in Japan.

The saturation of coffee pods in the North American market, coupled with changing tastes, provides our single serve drip cups with a substantial market opportunity in North America. Our single serve drip cup solution also has a number of advantages over other single serve coffee alternatives:

Our single serve drip coffee packaging is fully recyclable and does not use any plastics. The majority of the packaging is paper based and biodegradable, while the foil used to package the filter for freshness is recyclable. 

Our solution is portable and does not require a machine. Therefore, the consumer investment required to try our product is very minimal (as opposed to machine based solutions). Single serve drip cups can easily travel and have a number of consume-later applications not available to machine based solutions (camping, travel, office, etc.). 

We believe single serve drip coffee is more hygienic than other, machine-based single serve alternatives. For example, the use of a machine requires cleaning and maintenance. If not periodically cleaned or if spent pods are not removed timely, the pods can lead to poor taste and bacterial growth. 

Unlike machine-based drip systems, the single serve drip coffee is brandable to the cup level. 

Why NuZee?

We seek to establish ourselves as the leading single serve pour over co-packer of single serve pour over coffee for the North American market, and to expand our own brands as single serve pour over coffee gains market acceptance. We believe that top tier brands that want to compete in the North American single serve pour over coffee market will demand the highest levels of quality from their suppliers. We further believe that, as a result of our exclusivity agreement, Level 2 SQF Certification from the Safe Quality Food Institute, operational knowledge and recently announced co-packing arrangements with Kraft Heinz and Royal Cup Coffee & Tea, we are the leader in the single serve pour over coffee market in North America. As a result, we feel we are well positioned to be the co-packer of choice for companies offering single serve pour over coffee products in the North American market.

We own sophisticated packing equipment developed by East Asian companies for pour over coffee production. We believe these manufacturers are the world leaders for supplying pour over coffee production. We have entered into a written exclusivity agreement with the premier supplier of the type of high-quality packing equipment we use for our products, FUSO Industries Co. Ltd. (“FUSO”), which we believe significantly restricts our North American competitors’ access to this equipment. While our agreement with FUSO provides for a six month cancelation provision, due to the development of our co-packing business over the past several years, we are currently in active negotiations with FUSO as we aim to extend the period of exclusivity and amend our agreement to modify or eliminate the rights to termination. While lower-grade equipment alternatives do exist, availability is extremely limited for the top-grade equipment that generates co-packing products to the exacting specifications we believe large, established companies will demand. For example, the current wait time for the production and delivery of co-packing machinery of the type we use in our Vista, California plant is approximately two years. We understand that as the single serve drip cup gains momentum in the North American market we will face increasing competition. However, we believe we have a significant head start against any new potential commercial manufacturers in that (i) we have an exclusive arrangement with the premier equipment manufacturer, (ii) we have, and continue to develop, manufacturing expertise on increasingly complex and larger orders, (iii) we have experience dealing with companies of all sizes and their specific requirements (from small roasters to international companies) and (iv) we have SQF Level 2 certification.

We received Level 2 SQF Certification from the Safe Quality Food Institute, which is a customary requirement to produce for large multi-national and international companies. Obtaining Level 2 SQF Certification may take more than a year to achieve. We are also certified as fair trade, organic, kosher and halal.

Our primary focus is the development of single serve pour over coffee in the North American market targeting the individual consumer for use at home and office or other settings that would benefit from single serve pour over products, such as our recent expansion into the lodging market through our arrangement with Royal Cup Coffee & Tea, and positioning ourselves as the leading commercial-scale co-packer of single serve pour over coffee products. We may also look to co-package other products that are complementary to single serve pour over drip coffee and provides us with a deeper access to our customers, such as tea bag coffee. The competitive landscape for our services and products can be illustrated as follows:

OUR COMPANY

Since 2016, we have been primarily focused on single serve pour over coffee production. Over this time we have developed expertise in the operation of our sophisticated packing equipment and the related production of the single serve pour over product at both our Vista, California facility and at our production operations in Korea. We plan to carry over this expertise to our recently announced Plano, Texas manufacturing facility, which will serve as our new single serve pour over co-packing hub and corporate headquarters to capture the location’s logistical advantages and lower cost structure.

Our sources of revenue

Co-packing

We operate as a third-party contract packager for the finished goods of other major companies operating in the coffee beverage industry. Under these arrangements, we produce and package coffee products according to our customers’ formulations and specifications. We currently focus on fostering co-packing arrangements with larger companies developing pour over coffee products. For example, we recently entered into co-packing agreements with Kraft Heinz, under their Gevalia Kafee® brand, and Royal Cup Coffee & Tea.

In addition to larger companies, we package for smaller companies that have significant growth potential. For example, we started packaging for Copper Cow in July 2017 and continue to do so today. Copper Cow started with smaller batch, single product SKUs but over the years has meaningfully increased order sizes as well as the number of SKUs. We are continually looking for new exciting companies to work with and grow with like Copper Cow.

NuZee branded products

We have developed products and brands for the primary reason of providing completed finished products to showcase to potential co-packing customers. Our products effectively serve as a sort of “sample” to potential customers that include high quality packaging and coffee. We have received indications of interest from some potential customers in co-packing single serve coffee under the customer’s brand using coffee sourced by us as opposed to the customer providing the coffee, which is how we typically co-pack for customers.

Barista.Our Barista line of products is a high end product line that, in addition to showcasing our production expertise, also includes what we believe to be some of the best coffee available in a single serve application in the world. We plan to sell Barista via traditional retail channels that do not use “pay for placement” distributors. We also have a number of potential co-packing opportunities in which our customers would contract for us to replicate one or more of our Barista products with their foil and packing, providing further evidence of the high-quality nature of this line and coffee. We expect the Barista product line to be our flagship products that are both sold directly to consumers and used as a sales tool for co-packing customers. 

Twin Peaks.We currently sell our Twin Peaks single serve pour over coffee exclusively via Amazon, under Amazon’s accelerator program. This program commenced in April of 2019 and we expect that as Amazon and its customers become more familiar with single serve pour over coffee, we will increase our revenue for this product. 

Pine Ranch. Pine Ranch is a tea bag-style coffee that is available in two distinct roasts: a medium roast called “Smooth Blend” and a dark roast called “Bold Blend”. We introduced this product line in the third quarter of 2019.  The brand is initially being sold to retailers and at wholesale, and we plan to offer it direct to consumers in 2020. Pine Ranch is available in  dispense boxes that are suitable for offices and retail stores. Pine Ranch is also a zero-landfill product that we can showcase to potential co-packing customers as an alternative to the pour over format. We commenced production for our first tea bag style co-packing customer in October 2019. 

Recent momentum and current co-packing clients

We recently announced agreements to co-package coffee for Kraft Heinz, under their Gevalia Kafee® brand, and Royal Cup Coffee & Tea. In addition, we have recently entered into similar agreements with others, and we intend to continue to pursue such co-packing arrangements in the future. We believe this interest is due to (i) the saturation of machine based single serve coffee alternatives, (ii) increase in consumer requirements for eco-friendly packaging and (iii) our superior taste compared to other single serve coffee alternatives.

A select list of our current co-packing customers include: Gevalia Kafee (Kraft Heinz), Royal Cup Coffee & Tea, Copper Cow Coffee, Alumbre Coffee, C&C Hawaii Coffee, Lion Coffee, Idyllwild Coffee and Virgin Islands Coffee.

We recently entered into a five year lease for a new manufacturing hub and corporate headquarters in Plano, Texas (just outside of Dallas). We plan to have this hub operational during the fourth calendar quarter of 2019. Texas provides us with a variety of benefits versus our Vista, California facility, including reduced operating costs, lower freight costs to most states and better economies of scale. In Plano, we plan to have approximately 20 packing machines (compared with four, expanding to six in Vista, California) and approximately 30 employees. In the future, we plan to look for a more permanent location of appropriate scale in Texas.

Our competitive strengths

We believe that the following strengths contribute to our success:

•Favorable industry trends benefit us.With changing consumer preferences over the last decade that include a greater demand for higher quality coffee alternatives as well as greater flexibility and convenience, we believe we provide a unique alternative to non-single serve drip products currently on the market. For example, we believe our single serve drip cup provides a premium alternative to other single serve coffee alternatives. Recent consumer trends are moving towards premium alternatives to existing mainstream products (i.e. gourmet burgers, craft beers, specialty sodas, organic supermarkets, etc.). In addition to being a premium alternative, our product does not require a machine, which provides our product with a number of other benefits to existing single serve coffee that are machine based. 

•Exclusivity provides us protection in our core market.We have an exclusive agreement with the world’s leading manufacturer of equipment and filters used in packaging single serve pour over coffee. We believe that this agreement along with our operating expertise and SQF Level 2 certifications provide us with meaningful protections from the entry of potential competitors in our core North American market. 

•Significant production and operational experience in single serve pour over coffee.We have been producing single serve pour over coffee for almost four years in increasing scale and complexity. We believe the process and equipment for producing pour over single serve coffee is complex, and a potential new entrant into our market would encounter a significant learning curve to reach our level of operational experience and expertise. 

•Co-packing agreements with large international companies.We have recently announced a co-packing agreement with a large international company. We believe that as our potential co-packing customers continue to realize that we have the experience co-packing for a variety of customer sizes, we will become the co-packer of choice. The standards required to co- 

pack for large international companies almost always meet or exceed the standards required to co-pack for any other customer. We also believe that as our co-packing customers’ competitors realize they have a single serve pour over coffee solution, they will be more motivated to develop their own such solution and that will lead to increased co-packing opportunities for us.

•Food grade SQF Level 2 certification. SQF Level 2 certification can take up to a year and requires significant additional resources to obtain. Our existing SQF Level 2 certification allows us to co-pack for large, diversified companies. These companies usually have very strict certification standards and will not outsource production to companies that do not meet the highest level of industry certifications. SQF Level 2 requires us to meet very high quality and compliance standards for production and warehousing as well as chain of custody record keeping and supplier standards, which we believe gives us an advantage compared to potential competitors that do not have this certification. 

•Our Japanese and Korean subsidiaries support our U.S. operations. We have a sales office in Japan and a manufacturing and sales office in Korea. We source our manufacturing equipment and filters from East Asian companies, and have an exclusive agreement with FUSO, a Japanese manufacturer. We believe that having offices in Japan and Korea provides us with direct access to our key vendors that helps us to maintain such relationships as well as helps us operationally in our core U.S. market. 

Our business strategy

We intend to achieve our mission and further grow our business by pursuing the following strategies:

•Continually grow our base of large national or international co-packing customers.We have recently announced a co-packing agreement with a large international company. We are in active discussions with a number of similar sized companies. We believe that, as the U.S. market continues to gain awareness of single serve pour over coffee, we will continue to grow our base of large domestic or international co-packing customers. 

•Co-pack for smaller scale, rapidly growing, innovative coffee customers and capture their growth over time.In addition to co-packing for large domestic or international customers, we believe that select smaller scale, rapidly growing, innovative co-packing customers provide us with different opportunities versus larger customers. For example, smaller scale customers often possess better social media reach and their marketing campaigns have the ability to “go viral.” We believe by selectively choosing high quality smaller customers, we can benefit from growing market acceptable of single serve pour over coffee. 

•Increase our production capacity in response to growing demand for co-packing.We have entered into a lease for our planned manufacturing hub in Plano, Texas. We have started to order equipment, begin the SQF Level 2 certification process and begin other processes to have the facility operational by our second fiscal quarter of the upcoming fiscal year (on or before March 31, 2020). At peak potential capacity, we project the Plano, Texas facility would provide 5 – 6 times the current production capacity of our Vista, California facility. We have started this effort in anticipation of growing demand for co-packing. 

•Strategically grow and expand our international operations that are strategic to our vision.We plan to strategically grow our current international operations as well as potentially expand international if this growth or expansion is strategic to our vision. We believe the Korean market, albeit competitive, still has significant growth potential as well as strong market acceptance for coffee and single serve pour overs. As we look at other potential international manufacturing locations, we look for characteristics similar to the Korean and U.S. markets. 

•Strategically increase the sales of our proprietary brands.We plan to continue to increase the sales of our proprietary brands without utilizing “pay for placement” distributors. We anticipate our direct sales of our proprietary products will benefit as we increase our co-packing revenues because our co-packing customers will help educate consumers on the benefits of single serve pour coffee. We plan to increase our effort on direct sales methodically and concurrently as we increase co-packing revenues and volume. 

Industry

Coffee consumption is at an all-time high. According to the United States Department of Agriculture (USDA), global coffee consumption is forecast to reach a record 167.9 million bags in 2019/20 (a bag is equivalent to 60 kilograms). The United States is the

country with the highest consumption with 26.8 million bags forecast for 2019/20, up from 23.6 million in 2014/15 (a 2.6 percent compound annual growth rate, or CAGR)¹.

Nuzee Inc. 

In dollar terms, the global coffee market amounts to US$429.5 billion in 2019, and the market is expected to grow annually by 5.8 percent (CAGR 2019-2023). The United States is the largest market with US$80.9 billion generated in 2019.²

An estimated 63 percent of American adults drink coffee on a daily basis³, and an increasing number of consumers seem to be seeking bolder and more unique coffee experiences. This is evidenced by more Americans’ gourmet coffee consumption reaching a 60/40 advantage over traditional non-gourmet coffee for the first time in the 69-year history of the National Coffee Association’s annual report on coffee consumption.⁴

The “at home” segment continues to dominate coffee consumption, with 81 percent of volume consumption attributable to the at home market in 2019, representing a 20 percent revenue share. The market share of the at home segment has been relatively constant over the last few years and is expected to maintain a similar share of coffee consumption in 2019-2023.⁵

¹ “Coffee: World Markets and Trade”, United States Department of Agriculture, Foreign Agricultural Service, June 2019 – https://downloads.usda.library.cornell.edu/usda-esmis/files/m900nt40f/xk81jw68v/kp78gs60d/coffee.pdf

² Statista, August 2019 – https://www.statista.com/outlook/30010000/100/coffee/worldwide#market-revenue

³ National Coffee Association blog, March 2019 – https://nationalcoffee.blog/2019/03/09/national-coffee-drinking-trends-2019/

⁴ Roast Magazine, March 2019 – https://dailycoffeenews.com/2019/03/11/2019-coffee-and-beverage-trends-inside-the-ncas-annual-report/

⁵ Statista, August 2019 – https://www.statista.com/outlook/30010000/100/coffee/worldwide#market-revenue

Single-serve coffee brewing has grown in popularity in recent years, and single-serve brewing machines were the second most popular brewing system after standard drip coffee makers, with 26 percent of American coffee drinkers using them in 2018.⁶ Additionally, and according to an online survey by the National Coffee Association, 42 percent of US households owned a single-cup coffee brewing machine in 2019, up from 1 percent in 2005 and 15 percent in 2014.⁷

While consumers have been purchasing single-serve coffee machines to recreate the café style experience at home, there has been an increased focus on environmental sustainability and demand for eco-friendly products. The2019 Retail and Sustainability Survey by CGS showed that more than two-thirds of respondents consider sustainability when making a purchase and are willing to pay more for sustainable products.⁸  In another recent survey of US and UK consumers by Globalwebindex, 42 percent of consumers said that products that have packaging made from recycled products and/or sustainable materials are important in their day-to-day shopping, and more than half said they have reduced the amount of disposable plastic they use in the past 12 months.⁹  Greenpeace USA considered coffee pods as “one of the best examples of unnecessary single-use plastics that are polluting our planet” and the big producers of pods having been seeking eco-friendly alternatives.¹⁰ Sustainability is expected to continue to be a big trend in the coffee pod market, especially as some cities and local governments consider bans on the use of single-use plastic pods (akin to bans on plastic straws and plastic bags) and as consumers become increasingly concerned about throwing used plastic pods in landfills.¹¹

We believe that many of the prevalent industry trends – the continued consumption and market growth, the prevalence of “at home” consumption, the popularity of single-serve coffee brewing, the increased focus on unique coffee experiences, and consumers’ shift to eco-friendly and sustainable alternatives – will be favorable to our business.

Our Risks and History of Losses

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties summarized below, the risks described under the “Risk Factors” section beginning on page 13 of, and the other information contained in, this prospectus before you decide to invest. Our ability to achieve our mission and execute our strategies is subject to certain challenges, risks and uncertainties, including:

•Our ability to sustain our recent growth rates and manage our rapid growth; 

⁶Statista, March 2019 – https://www.statista.com/topics/2219/single-serve-coffee-market/

⁷Statista, August 2019 – https://www.statista.com/statistics/316217/us-ownership-of-single-cup-brewing-systems/

⁸CGS, January 2019 – https://www.globenewswire.com/news-release/2019/01/10/1686144/0/en/CGS-Survey-Reveals-Sustainability-Is-Driving-Demand-and-Customer-Loyalty.html

⁹GLobalwebindex, April 2019 – https://blog.globalwebindex.com/chart-of-the-week/lifting-the-lid-on-sustainable-packaging/

¹⁰USA Today, March 2019 – https://www.usatoday.com/story/tech/2019/03/13/heres-why-your-used-k-cups-coffee-pods-arent-usually-recycled/3067283002/

¹¹Food Dive, September 2018 – https://www.fooddive.com/news/coffee-pods-lose-ground-as-consumers-look-for-sustainable-premium-java-exp/531816/

•Our ability to obtain sufficient funding to expand our business and respond to business opportunities; 

•Our ability to acquire new customers or retain existing customers in a cost-effective manner; 

•Our ability to successfully improve our production efficiencies and economies of scale; 

•Our ability to manage our supply chain to continue to satisfy our future operation needs; and 

•Our ability to retain our leadership position in co-packing single serve pour over coffee. 

We have incurred net losses since our inception in 2011, including net losses of $3.6 million and $1.8 million for the years ended September 30, 2018 and 2017, respectively, and $13.4 million for the nine months ended June 30, 2019. As of June 30, 2019, our accumulated deficit was approximately $26.0 million. We expect to incur significant sales and marketing expenses prior to recording sufficient revenue from our operations to offset these expenses. In the United States, we expect to incur additional losses as a result of the costs associated with operating as an exchange-listed public company that managesfollowing this offering.

Recent Developments

Reverse Stock Split

On October 28, 2019, we completed a portfoliol-for-3 reverse stock split, which became effective on November 12, 2019 (the “Reverse Split”). The accompanying financial statements and notes to the financial statements give retroactive effect to the Reverse Split for all periods presented. The shares of branded consumer packaged goods.  The Company wascommon stock retained a par value of $0.00001 per share. Accordingly, the stockholders’ deficit reflects the Reverse Split by reclassifying from “common stock” to “additional paid-in capital” in an amount equal to the par value of the decreased shares resulting from the Reverse Split.

Private Placement Transaction

On November 7, 2019, we completed a private placement financing transaction pursuant to which we issued approximately 111,738 shares of common stock to a small number of investors for an aggregate purchase price of approximately $2.0 million.

Corporate information

We were incorporated in July 2011 in Nevada as Havana Furnishings, Inc.  (“Havana”) under the laws of the State of Nevada.  From the date of Incorporation through April 2013, the CompanyNuZee Co. Ltd. was a development stage company engagedincorporated in the business of selling public restaurant and bar furnishings and accessories from Asia to retailer customers at wholesale prices on the internet.  In April 2013, the Company's sole officer decided that it was not economically feasible to continue with the Company’s business plan and began to seek other companies for potential merger.

On April 19, 2013, the Company completed a merger with Nuzee2011.  NuZee Co., Ltd. a California corporation “Nuzee-CA”) wherein Nuzee Co., Ltd. became a wholly owned subsidiary of Havana.  Pursuant to the Share Exchange Agreement, each of the 33,733,333 outstanding shares of Nuzee-CA common stock was convertedmerged into one share of the Company’s common stock.   In addition, upon the closing of the Merger, the Company amended its Articles of Incorporation to change its name from Havana Furnishings, Inc. in 2013, and we changed our name to Nuzee,NuZee, Inc. Nuzee-CA was establishedOur principal executive offices are located at 1700 Capital Avenue, Suite 100, Plano, Texas 77055, and our telephone number is (760) 295-2408. We also maintain a California office located at 2865 Scott Street, Suite 107, Vista, California 92081. We lease modest office space in 2011Japan.

Our corporate website is www.mynuzee.com. Information contained on, or that can be accessed through, our website is not a part of this prospectus or incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

THE OFFERING SUMMARY

All share and per share information in this prospectus (except the last reported sale price for our common stock) has been retroactively adjusted to give effect to the Reverse Split, including the financial statements and notes thereto. The number of shares of common stock to be outstanding immediately after this offering is based upon 13,587,580 shares outstanding as an importerof June 30, 2019, and distributor of natural spring water and skincare products as well as energy drinks.excludes the following:

In December,•1,787,334 shares of our common stock issuable upon the exercise of options outstanding as of June 30, 2019, with a weighted-average exercise price of $6.90 per share; 

•1,544,333 shares of our common stock reserved for future grant or issuance under the NuZee, Inc. 2013 Stock Incentive Plan (the “2013 Plan”); 

•3,333,334 shares of our common stock reserved for future grant or issuance under the NuZee, Inc. 2019 Stock Incentive Plan (the “2019 Plan”); and 

•300,000 shares of our common stock issuable upon the exercise of options that we completedexpect to grant upon the pricing of this offering to our directors, executive officers and certain other employees at an exercise price equal to the public offering price of this offering. 

Unless otherwise indicated, this prospectus reflects and assumes the following:

•no exercise of outstanding options; and 

•no exercise by the underwriters of their over-allotment option. 

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize our consolidated financial data for the periods ended and as of the dates indicated. We have derived the statements of operations data for the years ended September 30, 2018 and 2017 and the balance sheet data as of September 30, 2018 from our audited financial statements included elsewhere in this prospectus. We have derived the statements of operations data for the nine months ended June 30, 2019 and 2018 and the balance sheet data as of June 30, 2019 from our unaudited interim financial statements included elsewhere in this prospectus. We have prepared the unaudited interim financial statements on the same basis as the audited financial statements and have included, in our opinion, all adjustments, consisting only of normal recurring adjustments that we consider necessary for a mergerfair statement of the financial information set forth in those statements. Our historical results are not necessarily indicative of results to be expected for any period in the future and the results for the nine months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year or any other period. You should read this information together with our wholly owned subsidiary, Nuzee Co., Ltd. wherein Nuzee Co., Ltd. merged withfinancial statements and into Nuzee, Inc.  Nuzee, Inc. wasrelated notes appearing elsewhere in this prospectus and the surviving companyinformation in the section titled “Management’s Discussion and Analysis of the merger,Financial Condition and at the closingResults of the merger, Nuzee Co., Ltd. ceased to exist.Operations.”

RISK FACTORS

Our global corporate headquarters is locatedBefore you invest in San Diego, California.  When we refer to our companycommon stock, you should understand the high degree of risk involved. You should carefully consider the following risks and its businessother information in this report, we are referringprospectus, including our consolidated financial statements and related notes included elsewhere in this prospectus, before you decide to thepurchase shares of our common stock. The following risks may adversely impact our business and activities of our consolidated operations.

To date, we mainly distributed natural and organic products produced by 3rd parties.  These legacy product lines which included New Zealand bottled spring water, natural and organic skincare from New Zealand as well as the TorqueTM energy drinks are being phased out and/or discontinued as the Company believes its best near and long term success is to focus resources on our own product line of functional beverages which will enable the Company to control, develop, manufacture and promote its brands from the United States.

During the 2013 fiscal year we began researching and investigating the viability of a new product platform for functional beverages.  We plan to start producing our first family of functional beverages in early 2014.  These products are considered healthy alternatives, with all natural ingredients and provide an added wellness benefit when compared to the traditional non-fortified version of the same beverage.financial condition. As a result, Nuzee’s mission isthe trading price of our common stock could decline and you could lose part or all of your investment.

Risks Related to be a good-for-you company focused on building beverage brands that offer functionalOur Financial Condition and nutritional benefits.Capital Requirements

EMERGING GROWTH COMPANY

We have limited operating history, which may make it difficult to evaluate our current business and to forecast our future performance.

We have little operating history and are addressing an Emerging Growth Companyemerging market. As a result, our current and future business prospects are difficult to evaluate. All potential investors must consider our business prospects in light of the risks and difficulties we have encountered and will continue to encounter as defineda company operating in a rapidly evolving market. Some of these risks relate to our potential inability to:

effectively manage our business and proprietary information; 

recruit and retain sales and marketing, technical and managerial personnel; 

recruit and retain sales personnel and appropriate distributor relationships; 

successfully develop and protect our intellectual property portfolio; 

successfully provide high levels of service as our business expands; and 

successfully address other risks, as described in this prospectus or otherwise. 

If we do not address these risks successfully, it could have a material adverse effect on our business and financial condition.

We have a history of net losses. We expect to continue to incur net losses in the Jumpstart Our Business Startups Act.

future and we may never generate sufficient revenue from the commercialization of our single serve pour over coffee products or co-packing services to achieve or sustain profitability.

We shallhave incurred net losses since our inception in 2013, including net losses of $3.6 million and $1.8 million for the years ended September 30, 2018 and 2017, respectively, and $13.4 million for the nine months ended June 30, 2019. As of June 30, 2019, our accumulated deficit was approximately $26.0 million. We expect to incur significant sales and marketing expenses prior to recording sufficient revenue from our operations to offset these expenses. In the United States, we expect to incur additional losses as a result of the costs associated with operating as an exchange-listed public company following this offering.

These losses have had, and will continue to have, an adverse effect on our working capital, total assets and stockholders’ equity (deficit). Our ability to become and remain profitable will depend on our ability to generate significantly higher revenues from the sales of our pour over coffee products and co-packing services, which depends upon a number of factors, including but not limited to successful sales, manufacturing, marketing and distribution of our products and services.

Because of the numerous risks and uncertainties associated with our commercialization efforts, we are unable to predict when we will become profitable, and we may never become profitable. Even if we do achieve profitability, we may not be deemed an emerging growth company until the earliest of:able to sustain or increase profitability on a quarterly or annual basis. Our inability to achieve and then sustain profitability would have a material adverse effect on our business and financial condition.

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(A)the last day ofOur independent auditor’s report for the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commissionended September 30, 2018 includes an explanatory paragraph regarding substantial doubt about our ability to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the thresholdcontinue as a going concern.

Due to the nearest 1,000,000) or more;

(B)uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited annual financial statements as of and for the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuantended September 30, 2018, our independent auditors included an explanatory paragraph regarding concerns about our ability to an effective registration statement under this title;

(C)the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or

(D)the date on which such issuer is deemedcontinue as a going concern. Recurring losses from operations raise substantial doubt about our ability to becontinue as a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.

As an emerging growth companygoing concern. If we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuersunable to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting.  This statement shall also assess the effectiveness of such internal controls and procedures.

Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

As an emerging growth company we are exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act.

For so long as we are an emerging growth company, we will be permitted to provide the scaled executive compensation disclosure applicable to smaller reporting companies even if we no longer qualifycontinue as a smaller reporting company.going concern, we might have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements. In addition, asthe inclusion of an emerging growth company, we are exempt from PCAOB rulesexplanatory paragraph regarding mandatory firm rotation or the auditor reporting model.

GOING CONCERN

MaloneBailey, LLP, our independent auditor, has expressed substantial doubt about our ability to continue as a going concern given and

our recurring losses, large accumulated deficits, dependence on the shareholder to provide additional funding for operating expenses, and no recurring revenues.  Potential investors should be aware that there are difficulties associated with being a new venture, and the high ratelack of failure associated with this fact.

THE OFFERING

The following is a brief summary of this offering:

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RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition or results of operations in future periods. The risks described below are not the only risks facing our company. Additional risks not currently known to us or that we currently deem to be immaterial alsocash resources may materially adversely affect our business, financial conditionshare price and our ability to raise new capital or results of operations in future periods.

RISKS RELATED TO OUR COMPANY

to enter into critical contractual relations with third parties.

If we cannot sustain profitable operations, we willWe may need to raise additional capital to continuefund our existing operations, which may not be available on commercially reasonable terms, or at all,market our products and which may dilute your investment.expand our operations.

We generated abelieve that the net lossproceeds of $1,097,980 for the year ended September 30, 2013 and therefore we cannot guarantee that wethis offering, together with our existing cash balances, will be successfulsufficient to cover our cash needs for at least the next 12-24 months. If our available cash balances, net proceeds from this offering and anticipated cash flow from operations are lower than we anticipate, including due to changes in buildingour business plan, a functional beverage businesslower demand for our products or other risks described in future periods.

Ifthis prospectus, we are unable to generate sufficient revenues to pay our expenses and our existing sources of cash and cash flows are otherwise insufficient to fund our activities, we will needmay seek to raise additional capital sooner than currently expected.

We may also consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons, including to:

fund development of our products; 

acquire, license or invest in technologies or intellectual property relating to our existing products; 

acquire or invest in complementary businesses or assets; and 

finance capital expenditures and general and administrative expenses. 

Our present and future funding requirements will depend on many factors, including:

success of our current marketing efforts; 

our revenue growth rate and ability to generate cash flows from product sales; 

effects of competing technological and market developments; and 

changes in regulatory oversight applicable to our products. 

The various alternatives for raising additional capital include short-term or long-term debt financings, equity offerings, collaborations or licensing arrangements and each one carries potential risks. If we raise funds by issuing equity securities, our stockholders will be further diluted. Any equity securities issued also could provide for rights, preferences or privileges senior to continuethose of holders of our operations. We do not have any arrangements in place to provide additional funds.common stock. If needed, thosewe raise funds may not be available on favorable terms, or at all. Furthermore, if we issue equity orby issuing debt securities, to raise additional funds, our existing stockholders may experience dilution, and the new equity orthose debt securities maywould have rights, preferences and privileges senior to those of holders of our existing stockholders.common stock. The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations or our ability to issue additional equity securities or issue additional indebtedness. We may also be required under additional debt financing to grant security interests on our assets, including our intellectual property. If we are unsuccessful in sustaining profitabilityraise funds through collaborations and reducing our accumulated deficit, andlicensing arrangements, we cannot obtain additional funds on commercially reasonable terms or at all, we maymight be required to curtail significantlyrelinquish significant rights to our intellectual property, or ceasegrant licenses on terms that are not favorable to us which could lower the economic value of those items to us. The credit markets and the financial services industry have in the past experienced turmoil and upheaval characterized by the bankruptcy, failure, collapse, or sale of various financial institutions and intervention from the U.S. federal government. These events typically make equity and debt financing more difficult to obtain. Accordingly, additional equity or debt financing might not be available on reasonable terms, if at all. If we cannot secure additional funding when needed, including due to changes in our operations.business plan, a lower demand for our products or other risks described in this prospectus, we may have to delay, reduce the scope of or eliminate one or more sales and marketing initiatives and development programs, which would have a materially adverse effect on our business.

Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to annual limitations on its ability to use its pre-change net operating loss carryforwards, or NOLs, or other tax attributes to offset future taxable income or reduce taxes. Our past issuances of stock and other changes in our stock ownership may have resulted in ownership changes within the meaning of Section 382 of the Code; accordingly, our pre-change NOLs may be subject to limitation under Section 382. State NOL carryforwards may be similarly limited. Furthermore, the closing of this offering, alone or together with transactions in our stock that have occurred in the past and may occur in the future, may trigger an ownership change pursuant to Section 382. Because of the cost and complexity involved in the analysis of a Section 382 ownership change and the fact that we do not have any taxable income to offset, we have not undertaken a limited operating history,study to assess whether an “ownership change” has occurred or whether there have been multiple ownership changes since we became a “loss corporation” as defined in Section 382. Shares issued in this offering or future changes in our stock ownership (either in combination with this offering or separately) could result in ownership changes under Section 382 of the Code further limiting our ability to fully and successfully developutilize our business is unknown.

Nuzee Co, Ltd. was incorporated in California in 2011 prior to the merger with Havana Furnishings as a result we have only recently begun developing and producingNOLs. Furthermore, our functional products, and do not have a significant operating history with which investors can evaluate our business. Our ability to successfully develop our products anduse NOLs of companies that we may acquire in the future may be subject to realize consistent, meaningful revenues and profit has not been established and cannot be assured.limitations. For us to achieve success, our products must receive broad market acceptance by consumers.  Without this market acceptance,these reasons,

even if we willattain profitability, we may not be able to generate sufficient revenueuse a material portion of our NOLs, and this would reduce our earnings potentially affect and the valuation of our stock.

Risks Related to continue our business operation. If our products are not widely accepted by the market, our business may fail.Our Business

Our independent auditor has indicated substantial doubt aboutContinued innovation and the successful development and timely launch of new products and product extensions are critical to our financial results and achievement of our growth strategy.

Achievement of our growth strategy is dependent, among other things, on our ability to continue as a going concern.extend the product offerings of our existing brands and introduce innovative new products. Although we devote significant focus to the development of new products, we may not be successful in developing innovative new products or our new products may not be commercially successful. Additionally, our new product introductions are often time sensitive, and thus failure to deliver innovations on schedule could be detrimental to our ability to successfully launch such new products and retain partners, in addition to potentially harming our reputation and customer loyalty. Our financial results and our ability to maintain or improve our competitive position will depend on our ability to effectively gauge the direction of our key marketplaces and successfully identify, develop, manufacture, market and sell new or improved products in these changing marketplaces.

Our future financial results are difficult to predict, and failure to meet market expectations for our financial performance or our publicly announced guidance may cause the price of our stock to decline.

MaloneBailey, LLP,As we and our independent auditor, has expressed substantial doubt aboutindustry evolve, we expect to face new challenges with respect to our introduction of innovative products and the changing competitive landscape within the single serve category and the beverage industry. These challenges can occur at various stages, including design, supply chain and sales cycle. Our public forecasts regarding the expected performance of our business and future operating results are forward-looking statements subject to risks and uncertainties, including the risks and uncertainties described in our filings with the SEC and in our other public statements, and necessarily reflect current assumptions and judgments that may prove incorrect. As a result, there can be no assurance that our performance will be consistent with any public forecasts or that any variation from such forecasts will not be material and adverse. Failure to meet expectations, particularly with respect to operating margins, earnings per share, operating cash flows and net revenues may result in a decline and/or increased volatility in the price of our stock. In addition, price and volume fluctuations in the stock market as a whole may affect the price of our stock in ways that may be unrelated to our financial performance.

Increased competition, including as a result of industry consolidation, could hurt our businesses.

The beverage industry is intensely competitive and we compete with respect to product, quality, convenience and price. We face significant competition in each of our channels and marketplaces. We compete with major international beverage companies that operate in multiple geographic areas, as well as numerous companies that are primarily local in operation. Our beverages also compete against local or regional brands as well as against private label brands developed by retailers. Our ability to continuegain or maintain share of sales in the global marketplace or in various local marketplaces or maintain or enhance our relationships with our partners and customers may be limited as a going concern given our recurring losses, large accumulated deficits, dependence onresult of actions by competitors, including as a result of increased consolidation in the shareholder to provide additional funding for operating expenses,food and no recurring revenues.  Potential investors should be aware that there are difficulties associated with being a new venture, and the high rate of failure associated with this fact.beverage industry.

Our financial statements includedsuccess depends, in part, on our relationships with the manufacturers of our packing equipment, including our exclusivity arrangement.

We source our sophisticated packing equipment from companies located in East Asia. Furthermore, we have entered into an exclusivity agreement with the primary manufacturer of the co-packing equipment we use in our operations, which we believe significantly restricts our North American competitors’ access to this prospectus have been prepared assumingequipment. Our exclusivity agreement does not apply to two companies that had previously purchased packing equipment from this manufacturer, and that may compete with our products and services. However, availability is in general extremely limited for equipment of the top quality offered by this manufacturer, though other manufacturers do offer lower-grade alternatives. Our exclusivity agreement may be terminated with limited notice, and we will continue asmay not be able to replace the terminating manufacturer in a going concern.timely manner or on terms agreeable to us, if at all. If we are not able to achievemaintain our exclusivity arrangement, or if our manufacturer elects to violate our exclusivity arrangement, our competitive position may suffer and our revenues then we may not be able to continue ascould decline significantly, which would have a going concern andmaterial adverse effect on our business, financial condition, and business prospects will be adversely affected.

Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to generate revenues, manage development costs and expenses, and compete successfully with our direct and indirect competitors.results of operations.

Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the development, production, marketing, and sales of our product. As a result, we may not generate significant revenues in the future. Failure to generate significant revenues in near future may cause us to suspend or cease activities.

We will need additional funds to produce, market, and distribute our product.

We will have to spend additional funds to produce, market and distribute our product. If we cannot raise sufficient capital, we may have to cease operations and you could lose your investment.

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There is no guarantee that sufficient sale levels will be achieved.

There is no guarantee that the expenditure of money on distribution and marketing efforts will translate into sales or sufficient sales to cover our expenses and result in profits. Consequently, there is a risk that you may lose all of your investment.

Our development, marketing, and sales activities are limited by our size.

Because we are small and do not have significant capital reserves, we must limit our product development, marketing, and sales activities.  As such we may not be able to scale our production and business development activities to the level required. If this becomes a reality, we may not ever generate revenues and you will lose your investment.

Changes in the nutritional beverage business environment and retail landscape could adversely impact our financial results.

The nutritional and functional beverage business environment is rapidly evolving as a result of, among other things, changes in consumer preferences, including changes based on health and nutrition considerations and obesity concerns;preferences; shifting consumer tastes and needs; changes in consumer lifestyles; and competitive product and pricing pressures. In addition, the nutritional beverage retail landscape is very dynamic and constantly evolving, not only in emerging and developing markets,marketplaces, where modern trade is growing at a faster pace than traditional trade outlets, but also in developed markets,marketplaces, where discounters and value stores, as well as the volume of transactions through e-commerce, are growing at a rapid pace. If we are unable to successfully adapt to the rapidly changing environment and retail landscape, our share of sales, volume growth and overall financial results could be negatively affected.

Intense competition and increasing competitionSales to a limited number of customers represent a significant portion of our net sales. The loss of a key customer, including by consolidation in the commercial beverage marketretail channel, and efforts by our customers to improve their profitability could hurtreduce sales of NuZee branded products and adversely affect our business.financial performance.

The commercial retail beverage industry,Sales to relatively few customers account for a significant percentage of our net sales, and our success depends in particular the functional beverage segment is still nascent and viewed as highly competitive. Market participants are of various sizes, with various market shares and geographical reach, some of whom have access to substantially more sources of capital.

We will compete generally with many liquid refreshments, including numerous specialty beverages, such as hot and cold coffee and teas.

We will compete indirectly with major international beverage companies including but not limited to: Green Mountain Coffee Roasters, the Coca-Cola Company; PepsiCo, Inc.; Nestlé; Kraft Foods Group, Inc.; and Starbucks. These companies have established market presence in the United States, and offer a variety of beverages that are substitutes to our product. We face potential direct competition from such companies, because they have the financial resources, and access to manufacturing and distribution channels to rapidly enter the health food and beverage market.

We will compete directly with other consumer products participants in the emerging functional beverage sector including BulletProof Coffee, Green Mountain Wellness Coffee, Organo Gold Herbal Coffee, Nuvia Trim Coffee, South Beach Java, Javita, and NatureGift Instant Coffee. These companies could bolster their position in the sector through additional expenditure and promotion.

As a result of both direct and indirect competition,part on our ability to successfully distribute, marketmaintain good relationships with these and sellother key retail and grocery customers. Currently, Amazon and our product,www.coffeeblenders.com website are our only established domestic retail channels for direct sales to consumers of NuZee branded products. However, we can provide no assurance that any of these customers or any of our other customers will continue to utilize our products or our services at current levels, or at all. Although we generally enter into master agreements with our key customers, these agreements govern the terms and to gain sufficient market shareconditions of the relationship and typically do not contain minimum purchase requirements. The loss of one or more of our key customers, or cancellation of or reduction in the United Statesamount of purchase by our key customers, could have an adverse effect on our results of operations and internationallyfinancial condition.

In addition, because of the competitive environment facing retailers, many of our customers have increasingly sought to realize profitsimprove their profitability through increased promotional programs, pricing concessions, more favorable trade terms and increased emphasis on private label products. To the extent we provide concessions or trade terms that are favorable to customers, our margins would be reduced. Further, if we are unable to continue to offer terms that are acceptable to our significant customers or our customers determine that they need fewer inventories to service consumers, these customers could reduce purchases of our products or may increase purchases of products from our competitors, which would harm our sales and profitability.

Our industry is also being affected by the trend toward consolidation in the retail channel. Retailers have and will likely continue to seek lower prices from us and demand increased marketing or promotional expenditures. Large retailers also may be limited, greatly diminished, or totally diminished, whichmore likely to use their distribution networks to introduce and develop private label brands. Strategic partners may leadalso choose to partial or total lossvertically integrate their brands’ manufacturing and distribution. Any of your investments inthe foregoing could negatively affect our company.sales of NuZee branded products and our profitability.

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Our growth and profitability dependsdepend on the performance of third-parties and our relationship with them.

A significant portion of our distribution network, and itscorrespondingly our success dependin distributing our pour over coffee products, depends on the performance of third parties.third-parties.  Any non-performance or deficient performance by such parties may undermine our operations and profitability, and may result in total loss to your investment.  To distribute our product, we will use a broker-distributor-retailer network whereby brokers represent our products to distributors and retailers who, will in turn, sell our product to consumers.  The success of this network will dependdepends on the performance of thethis network of brokers, distributors and retailers of this network.retailers.  There is a risk that a broker, distributor or retailer may refuse to or cease to market or carry our product. There is a riskproduct, or that the mentioned entitiesany such entity may not adequately perform theirits functions within the network by, without limitation, failing to distribute to sufficient retailers or positioning our product in localities that may not be receptive to our product.

Furthermore, such third-parties’ financial position or market share may deteriorate, which could adversely affect our distribution, marketing and sale activities.  We must also need to maintain good commercial relationships with third-party brokers, distributors and retailsretailers so that they will promote and carry our product.  Any adverse consequences resulting from the performance of third-parties or our relationship with them could undermine our operations and profitability, and may result in total loss of your investment.

We depend on third party manufacturers and ingredients providers to produce allThe loss of any member of our products.

Our reliance on third party manufacturers and providers exposes us to a number of risks that are beyond our control, including:

·Unexpected increases in production costs;

·Unexpected scheduling delays;

·Unexpected shortage of ingredients;

·Loss of priority assignment of any and all supplies and materials;

·The failure from any of our partners to deliver components or finished goods.

Health benefits of the functional ingredients are not guaranteed.

Although we use ingredient backed by clinical studies that support our claims such health benefits to individuals are not guaranteed. Consequently, negative studies and publicity surrounding any of our ingredients may result in loss of market share or potential market share and hence loss of your investment.

Significant additional labeling or warning requirements or limitations on the availability of our product may inhibit sales of affected products.

Various jurisdictions may seek to adopt significant additional product labeling or warning requirements or limitations on the availability of our product relating to the content or perceived adverse health consequences of our product. If these types of requirements become applicable to our product under current or future environmental or health laws or regulations, they may inhibit sales of our product.

Unfavorable general economic conditions in the United States or elsewhere could negatively impact our financial performance.

Unfavorable general economic conditions, such as a recession or economic slowdown, in the United States could negatively affect the affordability of, and consumer demand for, our product in the United States. Under difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of our products or by shifting away from our beverages to lower-priced products offered by other companies. Lower consumer demand for our product in the United States could reduce our profitability.

We will rely primarily on the United States and Keurig brewer households to generate adoption and use in our products.

The consumer acceptance for Keurig brewers could decline and negatively impact the market size and growth potential. We are attempting to develop other geographic markets and single-serve brewer platforms for our products, in Asia and other markets.  We are looking for opportunities to generate additional significant customers to reduce our risk associated with customer concentration. We can make no assurance, however, that we will succeed in diversifying our customer base, developing other geographic markets or in becoming less reliant on a small number of significant customers.

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If we do not compete effectively in the functional beverage market, our revenues and market share will decline.

The markets for Coffee Blenders are highly competitive. We face competition from larger and better capitalized competitors such as Green Mountain Coffee Roasters, Inc. and many nutraceutical beverage firms which have significantly greater penetration in key markets than we do. Economies of scale allow these competitors to offer product pricing and related incentives that we may be unable to match. We also face competition from a number of smaller competitors. These competitors may be able to:

• develop better and more variety of products
• develop less expensive products
• develop broader channels
• as well as the ability to respond more rapidly to changing market conditions

If we are not successful in enhancing our products, maintaining customer relationships and managing our cost structure so that we can provide competitive prices, we may experience reduced sales and our potential market share may decline.

Our competitive position could be seriously damaged and we may incur substantial expenses if we become party to lawsuits alleging that our products infringe the intellectual property rights of others.

The technology around K-CUP®, K-Cup Brewers and related Keurig know-how and processes may impact our ability and/senior management team or our partner’s abilityinability to deliver finished goods.

If we are forced to take any of the foregoing legal actions to defend our products, we could face substantial costsattract and shipment delays and our business could be seriously harmed. Although we carry general liability insurance, our insurance may not cover potential claims of this type or be adequate to indemnify us for all liability that may be imposed.

In addition, it is possible that our distribution partners or manufacturing partners may seek indemnity from us in the event that our products are found or alleged to infringe upon the intellectual property rights of others. Any such claim for indemnity could result in substantial expenses to us that could harm our operating results.

Our international sales and operations subject us to various risks associated with, among other things, foreign laws, policies, economies, and exchange rate fluctuations.

All of our international sales and operations are subject to inherent risks, whichretain highly skilled personnel could have a material adverse effect on our financial condition or results of operations. Each country has their own regulations regarding food safety and ingredient panel disclosures. Our ability to meet those requirements may prevent us from launching products or force us to reverse orders and business.

Adverse weather conditions could reduce the supply or demand for our products.

The salesOur success depends on the skills, experience and performance of key members of our products are influenced to some extent by weather conditions in the markets in which we operate.  Also the supplysenior management team, including Masateru Higashida, our Chief Executive Officer, Secretary and Treasurer, Travis Gorney, our President and Chief Operating Officer, and Shanoop Kothari, our Chief Financial Officer. The individual and collective efforts of our raw ingredients couldsenior management team will be impacted by adverse weather that increase costimportant as we continue to expand our commercial activities and develop additional products. The loss or reduce availability.

Because the majorityincapacity of existing members of our salessenior management team could have a material adverse effect on our business and financial condition if we experience difficulties in hiring qualified successors. Our employment agreements with our executive officers are denominated in United States dollars, changes in foreign currency exchange rates affect“at will”, and the market price for our products in countries in which they are sold. If the currency of a particular country weakens against the United States dollar, the costretention of our products in that country may increase.executive officers for any period of time cannot be guaranteed. We do not maintain “key person” insurance on any of our employees.

IfDue to the specialized nature of the business and our small size, we are unablehighly dependent upon our ability to attract and retain qualified sales and marketing, technical and managerial personnel. The loss of the services of existing personnel, as well as the failure to recruit key sales, marketing, technical and managerial personnel necessaryin a timely manner would be detrimental to operateour development and could have a material adverse effect on our business and financial condition. Our anticipated growth and expansion into areas and activities requiring additional expertise, such as sales and marketing, may require the addition of new management personnel, both domestic and international. All of our employees may terminate their employment at any time with short or no advance notice. We may have difficulties locating, recruiting or retaining qualified sales people. Recruiting and retention difficulties will limit our ability to developsupport our development and market our products successfully could be harmed.sales programs and to build a commercially viable business.

We have a small employee base and depend substantially on our current executive officers and key sales, and operational employees. The loss of key employees or the inability to attract or retain qualified personnel, could delay product development and harm our ability to sell our products. Our success depends on our ability to identify, attract and retain qualified management, sales, and marketing personnel.

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