GOURMET, SPECIALTY-GRADE COFFEES FORTIFIED WITH
CLINICALLY-SUPPORTED NUTRACEUTICALS
OTCQB: NUZE
December 2017
Any statements that are not historical facts contained in this release are "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statementswith respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates,intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, whichmay be beyond our control, and which may cause our actual results, performance or achievements to bematerially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. We have based these forward-looking statements upon information available to managementas of the date of this release and management's expectations and projections about certain future events. It ispossible that the assumptions made by management for purposes of such statements may not materialize. Suchstatements may involve risks and uncertainties, including but not limited to those relating to product demand,pricing, market acceptance, the effect of economic conditions, intellectual property rights, the outcome ofcompetitive products, risks in product development, and other factors discussed from time to time in theCompany's Securities and Exchange Commission filings. The Company undertakes no obligation to update orrevise any forward-looking statement for events or circumstances after the date on which such statement is made.
FORWARD LOOKING STATEMENTS
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First-ever line of clinically supported, all-natural coffees with health benefits
Compatible with most single-serve brewing systems
100% Arabica beans, directly and fairly sourced from Central and South America
Slow roasted
Experienced sommeliers
IT’S COFFEE REIMAGINED ™
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U.S. Single Serve Coffee Retail Sales (1) U.S. Functional Beverages (2)
[1] National Coffee Association, https://www.statista.com/topics/2219/single-serve-coffee-market/ 2016[2] Functional Beverage Segment Review; http://trifectaresearch.com/wp content/uploads/2015/09/Functioal-Beverages-PE-Sample-FINAL.pptx.pdf
100% Arabica CoffeeTop Quality Beans Harvested
Hand Roasted in Small Batches
Quality IngredientsBacked by Clinical Studies
Each Cup Provides “Therapeutic dose”
MARKET OPPORTUNITY
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$0.5 M
FY 2015
FY 2016
9 Mo. 6/30/17
$0.1 M
$1.2 M
Revenue
9 Mo. 2017 Sales
9 Mo. 2017 Sales
61%
39%
Product Sales Breakdown9 Mo. 2017
K Cup Drip Cup Whole Bean
COMPANY OVERVIEW
49% 49%
1%
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• Manufactures and markets all-natural, specialty-grade functional coffees and Matcha tea
• Sold at 2000+ retail locations via B2B multi-store retail chains, wholesale distributors, office & home delivery, and B2C via www.coffeeblenders.com and www.amazon.com.
• Available in 48 states, the District of Columbia, South Korea, and Japan
• Manufactures and markets Drip Cup coffee system
• Accelerating revenues; capitalizing on multiple industry trends to support continuing growth in 2018
• Highly scalable business model, supported by multiple co-packing relationships.
• Focused on new products, expanded marketing, and partnership agreements
Commences production of
functional beverages
Launch Cold Brew
line of functional
coffee
Introduces Drip Cup line of functional
coffees under exclusive U.S. license
Introduces ACTIVE Cup ®NUDE Cup ®Matcha Tea
Launches whole bean coffee line
2016
PRODUCT TIMELINE
2014Nov.2017
2015
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Coffee Blenders® products are sold at
RETAILERS DISTRIBUTORS
2,000+retail locations and online
PRODUCT AVAILABILITY
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Coffee demand is growing.
According to a 2017 report from the National Coffee
Association (NCA), 62% of Americans drink coffee daily,
up from 57% in 2016.
NCA data shows that 33% of US households now own a single-cup brewer, up from 29%
in 2016.Keurig Green
Mountain sold 13.2 BN single-serve cups in 2015, with an
average growth rate of 17.6% (2012-15) (2)
Mintel estimates cold brew alone grew by 339% (2010 – 2015). When combined with RTD coffee, the entire
business is worth close to $2 billion in the U.S.,
and should continue to grow.
GLOBAL MARKET DRIVERS
(1) www.naturalproductsinsider.com/blogs/food-beverage-perspectives/2015/09/functional-coffee-piques-consumer-interest.aspx(2) 13.2 BN included branded and co-packing; www.statista.com/statistics/259236/leading-single-cup-coffee-vendors-in-the-united-states/
Research firm Mintel estimates that 42% of U.S. consumers would
like to see added nutritional benefits in
coffee at retail.
Asia/Pacific retail sales
of fortified/functional
coffee were US $271 M
in 2015, with a CAGR
of 12% (2010-15). (1)
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• Drip Cup is the first single serve pour over coffee on U.S. market
• Common and popular brewing method in Asia
• Portable technology allows you to conveniently craft quality gourmet coffee anywhere; ideal for campers, college students, outdoor enthusiasts
• NUZE estimates a total U.S. market of 30 billion Drip Cups per year
• Target production of 100 million Drip Cups by 2020
Coffee Blenders Drip Cup ProductionUnits / in MMs
Japan Korea United States
3.23.3
0.1
0.7 0.6
4.0
0.6
FY 2015
FY 2016
9 mo. FY 2017
FY 2015
FY 2016
9 mo. FY 2017
FY 2015
FY 2016
9 mo. FY 2017
n/a
DRIP CUP COFFEE POUCH
n/a
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• 100% Arabica Coffee• 400mg – All Natural Green Coffee Bean Extract• Improves your lean body mass index by 4%* • Proven to help lose up to 11 pounds in 60 days*• Claims backed by multiple clinical studies
LOSE WEIGHT NATURALLY
* Results May Vary see website for details
COFFEE BLENDERS® - LEAN Cup ®
CONFIDENTIAL / PRIVILEGED 12
• 100% Arabica Coffee • 200mg – All Natural American Ginseng• Improves cognitive functions and mental clarity • Increases concentration, memory and productivity • Claims backed by multiple clinical studies• Available in Single Serve & Drip Cup
STAY SHARP NATURALLY
COFFEE BLENDERS® - THINK Cup ®
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Coffee Blenders® - RELAX Cup™
• 100% Arabica Coffee • 200mg – All Natural L-Theanine 98%• Reduces stress and anxiety • Induces relaxation without drowsiness • Claims backed by multiple clinical studies• GRAS Approved
REDUCE STRESS NATURALLY
COFFEE BLENDERS® - RELAX Cup ®
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• 100% Arabica Coffee • 100% All-Natural Organic Coffee• Available in Single Serve and Drip Cup
ORGANIC DARK ROAST COFFEE
COFFEE BLENDERS® - NUDE Cup ®
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• 100% Arabica Coffee • 300mg – All Natural Alpha GPC• Improves muscle power output during physical activity• Sharpens agility and delays mental fatigue• Claims backed by multiple clinical studies
NATURAL WORKOUT BOOST
COFFEE BLENDERS® - ACTIVE Cup ®
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• 100% Natural Green Tea, Matcha Powder• Improves mental focus & provides natural energy• One cup of Matcha has 10x as many anti-oxidants
as a normal cup of brewed green tea.
NATURAL PURE LEAF GREEN TEA
COFFEE BLENDERS® - MATCHA Cup ™
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COFFEE BLENDERS WHOLE BEAN & GROUND COFFEE
• Coffee Blenders Nude Whole Bean features 100% Organic Honduran Blend Coffee
• Coffee Blenders Functional Ground Coffee Is Available in Lean, Think, Relax, & Active
COFFEE BLENDERS® - WHOLE BEAN AND GROUND COFFEE
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(1) StudyLogic; (2) Among those drinking coffee daily, National Coffee Association; (3) Mintel
• Launched November 2017
• 100% Arabica Dark Roast Coffee
• Steeped, not brewed, for 12 hours
• Sweeter, less acidic than hot coffee
• 10 oz. glass bottles
• DSD in branded-fleet of refrigerated trucks
• Available at independent retailers and convenience stores throughout So. Cal.
• National roll-out contemplated to commence in 2018
U.S. cold brew sales increase TTM 2/2017 (1)
80% 21%U.S. cold brew
market penetration
in 2017 (2)
0.4%Estimated U.S.
RTD sales in 2015 (3)
Favorable Industry Market Trends
COFFEE BLENDERS® - FUNCTIONAL COLD BREW
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ADDING EXPERIENCE
• William Lampe joins NUZE as “Operations Consultant”
• 30 years of global food and beverage industry experience, including 27 years with various divisions and JVs of The Coca-Cola Company:
• managed Coca-Cola North America Packaging Group • managed Minute Maid Capital Project Group • executive with Corporate Packaging Development, Corporate Engineering,
Coca-Cola Foods, and Coca-Cola North America Contract Manufacturing.
• Involved in all three joint ventures between The Coca-Cola Company and Nestlé, SA, including Coca-Cola Nestlé Refreshments and both iterations of Beverage Partners Worldwide.
• Experience in ready-to-drink (RTD) coffee and tea products globally, as well as clinical claim functional beverage developments via Nestlé Research.
“Bill has been associated with some of the most successful beverage launches in our industry. He brings to NuZee extensive experience in package ideation, design and development, contract
manufacturing, capital project management.”
- Masa Higashida, CEO of NuZee
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OPERATIONS EXPANSION
VISTA, CA
• Adding ~600 square feet, or 14%, of new capacity at existing HQ
• Adding two new Drip Cup co-packing machines and upgrading process automation, which is expected to, on an annual basis:
• increase production by ~250%• reduce COGS by ~10-15%
• Build-out will accommodate rising demand for Drip Cup; FY 2017 unit production expected to rise by ~30% from FY 2016
• Scheduled to be completed by EOY 2017.
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GROWTH STRATEGY
12 MONTH OBJECTIVES LONGER-TERM OBJECTIVES
• Secure additional working capital
• Complete exclusive U.S. license agreements with NASA/Fuso and Ohki for Drip Cup
• Drive sales growth by leveraging current and potential customer base
o implement sales & marketing road maps with distribution partners, work closely with chosen brokers, broaden SKUs
• Expand distribution channels
o direct; e-commerce; mass/grocery; club; outdooro DSD distribution in southern California
• Enter into new co-packing agreements for Drip Cup
• Innovate and introduce new products
• Scale business to achieve higher efficiencies, expand profit margins, and generate cash
• Expand co-packing relationships for Drip Cup
• Retain talented professionals and expand base to support and drive our future growth
• Expand U.S. presence by opening new facilities
• Once proven, establish international, vertically-integrated operations: Japan, Korea, China
• Up list to national exchange
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Q3 FY 2017
Q2 FY 2017
Q1 FY 2017
9 Mos.FY 2017
FY 2016
Total Revenues $268,262 $376,327 $577,507 $1,222,096 $455,491
Gross Profit $65,186 $50,735 $160,639 $276,560 $47,341
Gross Margin % 24% 13.5% 27.8% 22.6% 10.4%
Operating Loss $(371,990) $(363,139) $(347,695) $(1,082,824) $(1,287,190)
Net Loss $(367,009) $(385,292) $(346,374) $(1,098,675) $(1,275,293)
Net (Loss) Per Diluted Share $(0.01) $(0.01) $(0.01) $(0.03) $(0.04)
Diluted Avg. Shares O/S 32,744,196 32,925,132 32,553,835 31,539,132 30,752,267
FINANCIAL OVERVIEW (FYE 9/30)
For the 9 months ended 6/30, revenues were nearly 3x higher when compared to FY 2016, with gross margin of 22.6% as compared to 10.4% in FY 2016.
Losses reflect NUZE’s continuing investments in facilities, products, and sales & marketing as it continues to expand SKUs and geographic presence
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CONTACT
Corporate Offices2865 Scott Street, Suite 101Vista, CA760.295.2408www.coffeeblenders.com
Masa Higashida, [email protected]
Travis Gorney, President and [email protected]
https://www.facebook.com/coffeeblenders/
https://twitter.com/coffeeblenders?lang=en
Investor Relations The Equity Group Inc.Devin Sullivan, [email protected]
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