UNITED STATES 

SECURITIES AND  EXCHANGE  COMMISSION 

WASHINGTON, D.C.      20549 

 

F O R 10 -Q 

 

x QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934 

 

For the  quarterly  period  ended  June 30, 2015 

¨   TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934  For  the  transition  period  from        to 

 

Commission File  No.  333-176684 

 

NUZEE, INC. 

(exact name  of  registrant  as  specified  in  its  charter) 

_________________________________________________

 

 

Nevada                                                       38-3849791 

_________________________________________________

(State or  other  jurisdiction  of  incorporation  or  organization) 

 

_________________________________________________ 

(I.R.S. Employer  Identification  Number) 

 

 

2865 Scott Street, Suite 101

Vista, CA 92081

 _________________________________________________

(Address of  principal  executive  offices)         (zip  code) 

 

(760)-295-2408 or toll  free  (844)  936-8933 

 _________________________________________________

(Registrant’s telephone  number,  including  area  code)  Securities  registered  pursuant  to  Section  12(b)  of  the  Act: 

Titles of  each class                                                    Name of  each exchange  on  which  registered  None                                                                             N/A 

 

 

Indicate by  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  ¨

 

Indicate by  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).                  Y e x N ¨

 


 
 

 

 

Indicate     by      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. 

 

Large accelerated  filer 

 

¨

 

 

Accelerated filer 

 

¨

Non-accelerated filer 

 

¨

(Do not  check  if  smaller  reporting  company) 

 

Smaller reporting  company 

 

x

 

Indicate by check mark whether the registrant is shell company (as defined in Rule 12b-2 of the Exchange  Act).         Yes  ¨                     No  x

 

APPLICABLE ONLY  TO  REGISTRANTS  INVOLVED  IN  BANKRUPTCY  PROCEEDINGS  DURING THE PRECEDING  FIVE  YEARS: 

 

Indicate by  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. 

 

      Y e ¨      N ¨

 

(APPLICABLE ONLY  TO  CORPORATE  REGISTRANTS) 

 

Indicate the  number  of  shares  outstanding  of  each  of  the  registrant’s  classes  of  common  stock, as  of  the  latest  practicable  date.  As  of  July 13 , 2015, NuZee,  Inc.  had 27,758,950 shares  of  common  stock  outstanding. 

 

Table of  Contents  PART  I. 

 

Item 1.         Financial  Statements. 

 

(a)       Balance  Sheets  as  at  June 30 2015  (Unaudited)  and  September 30, 2014  (Audited). 

(b)      Statement  of  Operations  for  the  three and nine months  ended  June 30 2015  and  2014      (Unaudited). 

(c)       Statement  of  Cash  Flows  for  the  nine  months  ended  June 30 2015  and  2014  (Unaudited). 

(d)      Notes  to Financial Statements  (Unaudited). 

 

Item 2.         Management’s  Discussion  and  Analysis  of  Financial  Condition  and  Results  of  Operations. 

Item  3.       Quantitative  and  Qualitative  Disclosures  about Market  Risk. 

Item 4.         Controls  and  Procedures 

 

 

Item 1.         Legal  Proceedings  Item  1A.         Risk  Factors 


PART II. 
     

Item 2.         Unregistered Sales  of  Equity  Securities  and  Use  of  Proceeds  Item  3.             Defaults  upon Senior  Securities 

Item 4.         Mine  Safety  Disclosures  Item  5.         Other Information 

Item 6.         Exhibits 

 

 

2


 
 

 

 

 

FORWARD-LOOKING INFORMATION 

 

This Quarterly  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  statement  of  historical  fact  is  forward-looking  statement,  and in  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  what is  expressed  in  our  forward-looking  statements  due  to  the  risk  factors  described  in  the  section  of  our  Form  10-K  filed  on  February 12, 2015  entitled  “Risk  Factors.” 

 

We undertake  no  obligation  to  update  publicly  any  forward-looking  statements,  whether  as  result  of  new  information,  future  events  or  otherwise. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 


 
 

PART I. 

 

Item 1.      Financial  Statements. 

  

Nuzee, Inc.

BALANCE SHEET

(Unaudited)

                     
                 

June 30, 2015

September 30, 2014

ASSETS

                 
 

Current assets:

       
   

Cash

         

$ 202,325

$ 238,160

   

Accounts receivable

   

29,844

5,205

   

Inventories

     

208,644

50,881

   

Prepaid expenses and deposits

 

166,620

69,099

       

Total current assets

   

607,433

363,345

                     
   

Equipment, net

   

114,220

33,368

                 

 

 

 

Total assets

     

$ 721,653

$ 396,713

                     
                     
                     

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

   
 

Current liabilities:

       
   

Accounts payable

   

149,556

43,384

   

Convertible notes payable - related party

600,000

-

   

Other current liabilities

   

389

8,180

       

Total current liabilities

 

749,945

51,564

                     
 

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;

     29,674,951 and 30,599,719 shares issued

297

306

   

Additional paid in capital

 

5,639,411

4,968,609

   

Accumulated deficit

   

(5,590,634)

(4,518,766)

   

Less: treasury stock, at cost

     (2,016,000 and 2,736,000 shares held in treasury, $0.03838 per share)

(77,366)

(105,000)

       

Total stockholders' equity (deficit)

(28,292)

345,149

                     
 

Total liabilities and stockholders' equity (deficit)

$ 721,653

$ 396,713

                     

The accompanying notes are an integral part of these financial statements

F-1

 


 
 

 

 

Nuzee, Inc.

STATEMENTS OF OPERATIONS

(Unaudited)

                     
                   
             

Three Months Ended
June 30,2015

Three Months Ended
June 30,2014

Nine Months Ended
June 30,2015

Nine Months Ended
June 30,2014

 

Revenues

     

$ 29,811

$ 59,159

$ 86,412

$ 59,471

 

Cost of sales

   

23,005

55,828

63,960

56,016

Gross Profit (loss)

6,806   3,331   22,452   3,455  
                     
 

Operating expenses

   

369,957

618,605

1,093,286

2,677,620

 

Loss from operations

 

(363,151)

(615,274)

(1,070,834)

(2,674,165)

                     
 

Other income

   

190

-

191

-

                     
 

Other expense

   

-

(2,488)

(1,225)

(2,300)

             

 

 

 

 

 

Net loss

     

$ (362,961)

$ (617,762)

$ (1,071,868)

$ (2,676,465)

                     
  Basic and diluted loss per common share

$ (0.01)

$ (0.0 2 )

$ (0.0 4 )

$ (0.0 9 )

  

Basic and diluted weighted average number of common

stock outstanding

27,770,018

29,687,894 27,876,954 30,010,231
  
                     
 

 

 

                     
                     

The accompanying notes are an integral part of these financial statements

F-2

                       

 

 

 

 

 

 

 

 



 
 

  

Nuzee, Inc.

STATEMENTS OF CASH FLOWS

                     
                 

Nine months Ended
June 30, 2015

Nine months Ended
June 30, 2014

                     

Operating activities:

             
 

Net loss

           

$ (1,071,868)

$ (2,676,465)

Adjustments to reconcile net loss to net cash

     
 

used by operating activities:

         
 

Depreciation

         

9,307

2,388

 

Option expense

         

32,038

1,480,480

 

Warrant expense

         

20,527

7,500

Change in operating assets and liabilities:

     
 

Accounts receivable

       

(24,639)

(10,333)

 

Inventories

         

(157,763)

(53,735)

 

Prepaid expenses and deposits

     

(97,521)

(75,838)

 

Accounts payable

         

106,172

41,734

 

Other current liabilities

     

(7,791)

7,398

                     
 

Net cash used by operating activities

 

(1,191,538)

(1,276,871)

                     

Investing activities:

             
 

Purchase of equipment

       

(90,159)

(4,241)

   

net cash used by investing activities

 

(90,159)

(4,241)

                     

Financing activities:

             
 

Proceeds from issuance of convertible note payable

600,000

-

 

Proceeds from issuance of common stock

 

429,862

638,200

 

Proceeds from issuance of treasury stock

 

216,000

-

 

Net cash provided by financing activities

 

1,245,862

638,200

                     

Net change in cash

         

(35,835)

(642,912)

Cash, beginning of period

       

238,160

1,110,661

Cash, end of period

         

$ 202,325

$ 467,749

                     

Non-cash investing and financing activities:

     
 

Cancellation of common stocks

     

$ 15

$ 139,661

                     
                     

No cash paid for interest and tax.

The accompanying notes are an integral part of these financial statements

F-3

 

 

 

 

 

 

 


 
 

Nuzee, Inc. 
NOTES TO  FINANCIAL  STATEMENTS 
(Unaudited)
June 30 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  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  initial  period  ended  September  30,  2014  as  filed  with  the  SEC.  In  the  opinion  of  management,  all  adjustments,  consisting  of  normal  recurring  adjustments,  necessary  for  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  consolidated  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  doubt  about  the  Company’s  ability  to  continue  as  going  concern. 

Stock based  payments 

The Company  accounts  for  equity  instruments  issued  to  employees  in  accordance  with  ASC  718  "Stock  Compensation".  Under  this  guidance,  stock  compensation  expense  is  measured  at  the  grant  date,  based  on  the  fair  value  of  the  award,  and  is  recognized  as  an  expense  over  the  estimated  service  period  (generally  the  vesting  period)  on  the  straight-line  attribute  method. 

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.

             

           During the third quarter of current year, there were no transactions with a related party.

 

3.          C O MM O S T O C

      

           During November 2014, the Company resold 130,000 shares of treasury stock at $0.30 per share, for an aggregate purchase price of $39,000.

           During December 2014, the Company resold 450,000 shares of treasury stock at $0.30 per share, for an aggregate purchase price of $135,000.

           During December 2014, the Company sold 20,000 shares of common stock at $0.66 per share, for an aggregate purchase price of $13,200.

 

           During January 2015, the Company cancelled 1,160,000 shares of common stock.

           During January 2015, the Company resold 140,000 shares of treasury stock at $0.30 per share, for an aggregate purchase price of $42,000.

           During March 2015, the Company sold 20,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $14,000.

 

           During April 2015, the Company sold 473,803 shares of common stock at $0.30 per share, for an aggregate purchase price of $331,662.

           During May 2015, the Company sold 20,000 shares of common stock at $0.70 per share, for an aggregate purchase price of $14,000.

           During June 2015, the Company sold 81,429 shares of common stock at $0.70 per share, for an aggregate purchase price of $57,000.

           During June 2015, the Company cancelled 380,000 shares of common stock.

 

4.     STOCK  OPTIONS 

During October 2013 the Company granted 3,471,665 options to employee. The right to exercise these options shall vest and become 25% exercisable on      the first anniversary of when granted, with the exception that 100% of options issued to one employee vested immediately. The remaining options shall vest and become exercisable ratably over the next 36 months, with the exception that options issued to 2 employees shall vest and become exercisable over 18 months and option issued to one employee shall vest and become exercisable as of the effective date of the Option Agreement. The exercise price is $0.48 per share and will expire ten years from the grant date, unless terminated earlier as provided by the Option Agreements.

During February 2015 the Company granted 45,000 options to employee. The right to exercise these options shall vest and become exercisable on the last day of business of December 31, 2015. The exercise price is $0.30 per share.

 

F-4


 
 

During February 2015 the Company granted 100,000 options to consultants for services. The right to exercise these options shall vest and become exercisable following September 30, 2015. The exercise price is $0.30 per share.

The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model using the assumptions noted as follows: expected volatility was based on historical trading in the company's stock. The expected term of options granted was determined using the simplified method under SAB 107 and represents one-half the exercise period. The risk-free rate is calculated using the U.S. Treasury yield curve, and is based on the expected term of the option. The Company has estimated there will be no forfeitures.

The Black-Scholes option pricing model was used with the following weighted average assumptions for options granted during the nine months ended June 30, 2015:

Risk-free interest rate 1% - 2%

Expected option life 5 – 6 years

Expected volatility 300%

Expected dividend yield 0.0%

During the nine months ended June 30, 2015, 151,041 options are exercisable and the Company recognized $32,038 of stock options expenses. Unamortized option expense as of June 30, 2015 for all options outstanding amounted to approximately $24,620.

5.      STOCK WARRANTS

During April 2014, the Company granted 100,000 warrants to advisors for services. The right to exercise these warrants shall vest in equal eight quarterly installments over the twenty-four (24) months following the date their vesting begins, subject to their continued engagement as a service provider though each such date. The exercise price equal to the current fair market value per share on the date of grant and will expire ten years from the grant date, unless terminated earlier as provided by the Warrant Agreements.

The Black-Scholes warrant pricing model was used with the following weighted average assumptions for options granted during the nine months ended June 30th, 2015:

Risk-free interest rate 2.53%

Expected life 10 years

Expected volatility 300%

Expected dividend yield 0.0%

During nine months ended June 30, 2015, the company had $20,527 warrant expenses.

During nine months ended June 30, 2015, the company cancelled all warrants.

6.     S U B S E Q U E N E V E N T

          

            During July 2015, the Company sold 100,000 new shares of common stock at $0.70 per share, for an aggregate purchase price of $70,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-5


 
 

Item 2.      Management’s  Discussion  and  Analysis  of  Financial  Condition  and  Results  of  Operations. 

 

The following  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  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  s and  uncertainties  that  could  cause  actual  results  to  differ  materially  from  our  predictions. 

 

Plan of  Operations          

 

Short Term  Goals  (12  Months)   

            Over the next 3 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:

 

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: 

              

            

Milestone

Timing

Est. Cost/Funding Source

1.         Finalize Products & Pricing

-           New Product Functions and Versions

December – February (Phase I)

March-May (Phase II)

$25,000 (Phase I)

$20,000 (Phase II)

Previous Sale of Equities

2.         Staff (retain and expand)

February - June

$20,000-30,000/Mo. Recurring

Previous Sale of Equities

3.         Launch Market and Promotion Plan

-           PR 

-           Sampling 

-           Advertising 

January – Ongoing

$500,000-$750,000 Annual

Previous and Future Sale of Equities + Product Contribution

4.         Explore OEM/Private Label Opportunities

March – Ongoing

n/a

4


 
 

 

 

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  combination  of  market  development  and  product  licensing. 

The Company  believes  that  our  limited  resources  may  pose  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  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 

 

From inception on November 9, 2011 through June 30, 2015, we have accumulated losses of $ 5,590,634 . This loss was attributed to $4,903,649 of operating expenses.

 

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.

 

For the three Month ended June 30th, 2015, we earned revenues of $29,811 from sales of our products and incurred operating expenses in the amount of $369,957. For the nine months ended June 30, 2015, we earned revenues of $86,412 from sales of our products and incurred operating expenses in the amount of 1,093,286.These operating expenses included the research and the preparation of our business plan in addition to general and administrative expenses. We anticipate our operating expenses will increase as we further undertake our plan of operations. The increase will be attributed to costs associated with production, storage and delivery of our products as well as research and development of new products.

 

We expect sales in 2015 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.

 

Liquidity and  Capital  Resources 

 

As of June 30th 2015  we had  a cash balance of $202,325 and $238,160 at September 30th, 2014.  Total assets increased by 82% from $396,713 at September 2014 to $721,653 at June 30, 2015.

 

As of June 30th, 2015 we had current liabilities of $749,945 and $51,564 at September 30, 2014, mainly due to the $600,000 convertible promissory note. Accounts Payable increased by approximately 245 % to $149,556 as of June 30, 2014 from $43,384 at September 30, 2014. Other Current Liabilities decreased by approximately 95% to $389 as of June 30, 2015 from $8,180 at September 30, 2014.

 

Our current ratio decreased from 705% in September 30, 2014 to 81% as of June 30, 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  June 30th 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 

 

As of  the  end  of  the  period  covered  by  this  Report, the  Company’s  President, and  principal  financial  officer  (the  “Certifying  Officer”),  evaluated the  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. 

 

The Certifying  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  affect such  controls  subsequent  to  the  date  of  their  evaluation  and  there  were  no  corrective  actions  with  regard  to  significant  deficiencies  and  material  weaknesses. 

 

5


 
 

Our management,  including  the  Certifying  Officer,  does  not  expect  that  our  disclosure  controls  or  our  internal  controls  will  prevent  all  errors  and  fraud.  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  control  system must  reflect  the  fact  that  there  are  resource  constraints, and  the  benefits  of  controls  must  be  considered relative  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  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  cost-effective  control  system, misstatements  Due to  error  or  fraud  may  occur  and  not  be  detected. 

 

 

 

 

Item 1.      Legal  Proceedings  None. 

Item 1A.      Risk  Factors 


PART II. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6


 
 

There have  been no  changes  to  our  risk  factors  from  those  disclosed  in  our  Form  10-K  filed  on  February 12 2015. 

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

There were  no  unregistered  Sales  of  Equity  Securities  during  the  quarter  ending  March 31 2015. 

 

Item 3.      Defaults  Upon  Senior  Securities 

None. 

Item 4.       Mine  Safety  Disclosures 

Not applicable.

Item 5.      Other  Information 


None.

 

Item 6.     Exhibits 

 

EXHIBIT NO. 

DESCRIPTION

31.1*

Certification of  Chief  Executive  Officer  pursuant  to  18  U.S.C.  Section  1350,  as 

 

adopted pursuant  to  Section  302  of  the  Sarbanes-Oxley  Act of  2002 

31.2*

Certification of  Chief  Financial  Officer  pursuant  to  18  U.S.C.  Section  1350,  as 

 

adopted pursuant  to  Section  302  of  the  Sarbanes-Oxley  Act of  2002 

32.1*

Certification of  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 

 

of 2002 

32.2*

Certification of  Chief  Financial  Officer  pursuant  to  18  U.S.C.  Section  1350,  as 

 

adopted pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act of  2002 

101**      Interactive  Data  Files 

101.INS     XBRL Instance  Document 

101.SCH     XBRL Taxonomy  Extension  Schema  Document 

101.CAL     XBRL Taxonomy  Extension  Calculation  Linkbase  Document 

101.DEF    XBRL  Taxonomy  Extension  Definition  Linkbase  Document 

101.LAB    XBRL  Taxonomy  Extension  Label  Linkbase  Document

101.PRE     XBRL Taxonomy  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. 

 

 

 

7


 

 

 

SIGNATURES

 

Pursuant to  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:

August 14 , 2015

 

NUZEE, INC.

 

 

 

 

 

By:

/s/ Masateru Higashida

 

 

 

Masateru Higashida, Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


 

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:

August 14 , 2015

 

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


 

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 June 30, 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:

August 14 , 2015

 

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)