Executive Summary

Q3 2024 revenue increased 37% year over year to $366,888, but sequentially declined versus Q2; gross margin fell to -40% due to higher costs and inventory reserves .
Net loss from continuing operations improved to $1,192,434 from $1,886,290 in Q3 2023; diluted loss per share was $(0.92) versus $(2.63) last year .
Strategic pivot underway: management changes and a shift toward digital marketing/distribution, including exclusive rights to sell maca-infused products in Asia; execution risk remains and is early stage .
Liquidity bolstered post-quarter via equity and convertible note transactions ($3.0M and ~$0.3M), enabling NASDAQ compliance; dilution and going-concern risks remain noted in filings .

What Went Well and What Went Wrong

Revenue growth: Q3 revenue rose 37% year over year to $366,888, reflecting increased U.S. single-serve volumes with major customers .
Operating discipline: Operating expenses decreased 29% year over year to $1,335,371, helping narrow net losses .
Management reorientation: “NUZEE plans to transform to a leading digital marketing, sales and distribution company for consumer products,” said Co-CEO Jianshuang Wang .

Profitability pressure: Gross margin deteriorated to -40% (from 2% last year), driven by higher overall costs and inventory reserves; gross profit was negative $(146,213) .
Sequential slowdown: Q3 revenue of $366,888 was below Q2's $605,761 amid declines in bagged coffee shipments called out in MD&A .
Customer concentration and litigation costs: 70% of nine-month revenue tied to a single customer; a $500,000 Steeped litigation settlement was accrued, weighing on liquidity .

Metric	Q3 2023	Q2 2024	Q3 2024
Revenue ($USD)	$268,023	$605,761	$366,888
Gross Profit ($USD)	$5,549	$(146,229)	$(146,213)
Gross Margin (%)	2%	(24)%	(40)%
Operating Expenses ($USD)	$1,882,269	$1,464,523	$1,335,371
Loss from Operations ($USD)	$(1,876,720)	$(1,610,752)	$(1,481,584)
Net Loss ($USD)	$(2,025,337)	$(1,653,931)	$(1,440,197)
Net Loss from Continuing Ops ($USD)	$(1,886,290)	N/A	$(1,192,434)
Diluted EPS ($)	$(2.63)	$(1.28)	$(0.92)

KPIs and other disclosures:

Major customer concentration: Customer CL accounted for 70% of nine-month revenue ($1,142,865) .
Cash and working capital: Cash $374,458; working capital $(801,812) as of June 30, 2024 .
Discontinued operations (Korea/Japan) Q3 2024: revenue $157,440; loss from discontinued operations $(98,086) .
Post-sale geography: Following the June 7, 2024 subsidiary sale, all revenues and property/equipment are in North America .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q3 2024	None provided	None provided	Maintained (no guidance)
Margins	FY/Q3 2024	None provided	None provided	Maintained (no guidance)
OpEx	FY/Q3 2024	None provided	None provided	Maintained (no guidance)
Tax rate	FY/Q3 2024	None provided	None provided	Maintained (no guidance)

No quantitative guidance was issued in the Q3 press release or 10‑Q .

No Q3 2024 earnings call transcript was available in the document catalog.

Topic	Previous Mentions (Q2/Q1)	Current Period (Q3 2024)	Trend
Digital marketing/AI initiatives	Focus on co-packing; no AI emphasis in Q2 10‑Q overview	Pivot to digital marketing/distribution with natural-language search AI; management changes	Emerging/expanding
Product performance (bagged coffee)	Bagged coffee introduced; Q2 MD&A noted decline later in quarter	MD&A: decline in bagged coffee revenues in June quarter	Softening sequentially
Regional trends	Q2 revenue included Asia; operations in Korea/Japan	Sale of KR/JP entities; all revenues now North America	Consolidation to NA
Regulatory/legal	NASDAQ equity deficiency noted; settlement talks with Steeped	NASDAQ compliance regained; Steeped settlement executed	Improving compliance; legal costs realized

“NUZEE is in the early stages of transforming itself into a leading digital marketing, sales and distribution company for consumer products.” — Co‑CEO Jianshuang Wang, Q3 press release .
“NUZEE plans to transform to a leading digital marketing, sales and distribution company for consumer products. We have a professional team to help our business partners achieve greater value.” — Co‑CEO Jianshuang Wang, August 7 press release .

No earnings call transcript was available; therefore, Q&A highlights and guidance clarifications were not accessible in the source documents.

S&P Global Wall Street consensus for Q3 2024 EPS and revenue was unavailable due to missing Capital IQ mapping for NUZE. As a result, estimate comparison could not be performed [SpgiEstimatesError].

Where estimates may need to adjust: None assessed given the absence of consensus data.

Revenue mix and volume: Year-over-year growth was solid, but sequential revenue fell; management flagged weaker bagged coffee revenues in the quarter, suggesting near-term variability in volumes .
Profitability challenge: Gross margin at -40% and recurring net losses highlight the need for cost controls and pricing/mix improvements; watch for margin stabilization in subsequent quarters .
Strategic pivot risk/reward: The move into AI-enabled digital distribution and maca products offers optionality but is unproven; monitor tangible revenue contributions from new channels/products .
Balance sheet/life-line: Post-quarter financings ($3.0M common stock sale; ~$0.3M converts) eased compliance pressure but increase dilution; going-concern language persists—track cash burn and further raises .
Customer concentration: 70% nine-month revenue from a single customer is a key risk; diversification progress should be a focal KPI .
Corporate actions: Subsequent compliance with NASDAQ and broader corporate changes (including leadership updates) may be catalysts; monitor execution milestones and any further corporate identity changes .