NuZee, Inc. (NASDAQ:NUZE), a Nevada-based company, has finalized the sale of common stock shares, raising a total of $2 million. On Monday, the company issued 701,754 shares at $0.57 per share to one non-U.S. investor, concluding its previously announced securities purchase agreement.
The transaction, part of a larger agreement detailed in September, involved the sale of 3,508,769 shares to various investors. Earlier this month, NuZee had already issued 2,807,015 shares to four non-U.S. investors, receiving $1.6 million. This final issuance completes the aggregate sale of $2 million worth of shares.
NuZee’s decision to sell these shares at the Nasdaq Minimum Price was in accordance with Nasdaq Rule 5635(d). The company had disclosed the terms of the Purchase Agreement and Registration Rights Agreement in a September 30 SEC filing, which is incorporated by reference into this recent report.
The shares were sold to non-U.S. investors and, as such, were not registered under the Securities Act of 1933. NuZee relied on the exemption from registration provided by Rule 903 of Regulation S under the Act, which pertains to sales of securities outside the United States.
This equity sale provides NuZee with additional capital, although the specific use of the funds was not detailed in the filing. The completion of this transaction was officially reported in an 8-K filing with the SEC on Wednesday, based on events occurring on October 22, 2024.
In other recent news, NuZee, Inc. has seen significant developments in its financial and operational activities. The company has reported that warrant holders exercised a cashless option to acquire 55,973 shares of common stock, which increased the total number of NuZee's common stock shares outstanding to 8,542,987.
Additionally, NuZee has secured $1.6 million from the sale of 2,807,015 shares to non-U.S. investors, with a further $400,000 expected from the sale of remaining shares. The company has also raised $3 million through the sale of equity securities and an additional $2.05 million through convertible notes, including a recent issuance of notes totaling $750,000.
In terms of product promotion, NuZee has entered into an endorsement agreement with five sports champions to promote its Macanuoli beverage, marking the product's first marketing campaign. The company expects this move to enhance the product's market presence and promote a healthy lifestyle.
Finally, there have been changes in NuZee's executive ranks. The company has appointed Zhanzhan Shi as its new Acting Chief Financial Officer, following the departure of the previous CFO, Randell Weaver. Jianshuang Wang has been welcomed as the Chairman of the Board of Directors and Co-Chief Executive Officer.
InvestingPro Insights
NuZee's recent $2 million capital raise through stock issuance comes at a critical time for the company, as revealed by InvestingPro data. The company's market capitalization stands at a modest $5.96 million, highlighting the significance of this fundraising effort.
InvestingPro Tips indicate that NuZee is "quickly burning through cash" and that "short term obligations exceed liquid assets," which contextualizes the importance of this capital injection. The company's revenue for the last twelve months as of Q3 2024 was $3.79 million, with a substantial revenue growth of 109.62% over the same period. However, this growth comes with challenges, as NuZee is "not profitable over the last twelve months" and "analysts do not anticipate the company will be profitable this year."
The stock has shown significant volatility, with InvestingPro reporting a "strong return over the last month" of 119.49% and an impressive "1 Week Price Total Return" of 245.51%. This recent surge in stock price may have provided a favorable environment for the company to issue new shares.
Investors considering NuZee should note that the company "holds more cash than debt on its balance sheet," which could be seen as a positive factor. However, it's crucial to consider that NuZee "suffers from weak gross profit margins," with the gross profit margin at -3.62% for the last twelve months as of Q3 2024.
For a more comprehensive analysis, InvestingPro offers 16 additional tips for NuZee, providing deeper insights into the company's financial health and market position.
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