Company: JSDA
Filing Date: 2025-07-03
Form Type: S-1
Source: 0001641172-25-017818
Chunk: 38

Company: JONES SODA CO.
Filing Date: 2025-07-03
Form: S-1
Chunk 38
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 can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

| 20 |

Our management has concluded that our internal controls over financial reporting were as of the year ended December 31, 2024, and continue to be, ineffective, as a result of the following material weaknesses:

| ● | We                                                                                             
 had key senior accounting personnel transitioned over the course of the year-end process       
 from the end of 2024 through the beginning of 2025. As a result, adjustments to the year       
 end balances were required to be made; and                                                     |
|:--|:-----------------------------------------------------------------------------------------------|
| ● | During                                                                                         
 the transition period noted above, we lacked sufficient resources with respect to the number   
 of people employed in our accounting department and the adequacy of their training in relation 
 to our financial reporting requirements.                                                       |

While we appointed a new Chief Financial Officer in February 2025 and hired additional CPA consultants for our year-end audit, there is no assurance that the foregoing will remediate the identified material weaknesses or that the controls will prevent or detect future material weaknesses. If we are not able to remediate the material weaknesses or maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

There can be no assurance that our acquisitions, investments or expansions of scope of existing relationships will have a beneficial impact on our business, financial condition and results of operations.

We have entered into and may in the future enter into additional acquisitions or investments with third parties that we believe will complement our existing business. Our ability to complete acquisitions or investments is dependent upon, and may be limited by, the availability of suitable candidates and capital. In addition, acquisitions or investments could present unforeseen integration or operational obstacles or costs, may not enhance our business, and/or may involve risks that could adversely affect us, including by diverting significant amounts of management time from operations in order to pursue and complete such transactions or maintain such relationships. Future acquisitions or investments could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that future acquisitions or investments will achieve, the expected benefits to our business or that we will be able to consummate future acquisitions or investments on satisfactory terms, or at all. Any of the foregoing could have a material adverse effect on our business,