Company: JSDA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011093
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Company: JONES SODA CO.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
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NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

    1.
    Nature
    of Operations and Summary of Significant Accounting Policies

Jones
Soda Co. develops, produces, markets and distributes   premium beverages that we sell and distribute primarily in the United
States and Canada through our network of independent distributors and directly to our national and regional retail accounts. We also
sell products in select international markets. Our products are sold in grocery stores, convenience and gas stores, on fountain in restaurants,
“up and down the street” in independent accounts such as delicatessens, sandwich shops and burger restaurants, as well as
through our national accounts with several large retailers. We refer to our network of independent distributors as our direct store delivery
(“DSD”) channel, and we refer to our national and regional accounts who receive shipments directly from us as our direct
to retail (“DTR”) channel. We do not directly manufacture our products, but instead outsource the manufacturing process to
third-party contract manufacturers. We also sell various products online, including soda with customized labels, wearables, candy and
other items, and we license our trademarks for use on products sold by other manufacturers. In addition, during 2022, we developed and
began to license THC infused cannabis products under the “Mary Jones” brand name in various U.S. states that permitted the
sale of THC infused products. We also have a royalty-free license in perpetuity to intellectual property related to Mary Jones for us
to license Mary Jones products for use only in Canada.

We
are a Washington corporation and have the following subsidiaries: Jones Soda Co. (USA) Inc., Jones Soda (Canada) Inc., Mary Jones Holdings
Inc., Mary Jones California, LLC, Mary Jones Michigan LLC, Pinestar Gold Inc., Mary Jones Washington LLC, Mary Jones Beverage
LLC, Mary Jones Beverage (Michigan), LLC, Mary Jones Beverage (Canada) Inc. and Mary Jones Holdco 2, Inc. (collectively,
the “Subsidiaries”).

Basis
of presentation, consolidation and use of estimates

The
unaudited interim condensed consolidated financial statements as of and for the period ending   March 31, 2025, have been prepared
in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations
of the Securities and Exchange Commission (“SEC”) applicable to interim financial reporting. These condensed