Company: JSDA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011093
Chunk: 3

Company: JONES SODA CO.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 3
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 to adjustments as outlined below.

Shipping
and handling costs paid by customers, primarily related to online orders, are included in revenue and totaled approximately $30 thousand
and $40 thousand  for the three months ended March 31, 2025 and March 31, 2024, respectively. Sales tax and other similar taxes
are excluded from revenue.

For
further details on the Company’s revenue recognition policy, refer to Note 1 of the most recently filed Form 10-K, filed on April
1, 2025.

Revenue
is recorded net of provisions for discounts, slotting fees payable by us to retailers to stock our products and promotional allowances.
Discounts, slotting fees and promotional allowances vary the consideration we are entitled to in exchange for the sale of products to
distributors. We estimate these discounts, slotting fees and promotional allowances in the same period that the revenue is recognized
for product sales to customers. These estimates are based on contract terms and our historical experience with similar programs and require
management judgement with respect to estimating customer participation and performance levels. Differences between estimated expense
and actual costs are normally insignificant and are recognized in earnings in the period such differences are determined. The amount
of revenue recognized represents the amount that will not   be subject to a significant future reversal of revenue.
The liability for promotional allowances is included in accrued expenses on the condensed consolidated   balance sheets. Amounts
paid for slotting fees are recorded as prepaid expenses on the condensed consolidated balance sheets and amortized over the corresponding
term. For the three months ended March 31, 2025 and 2024,   our revenue was reduced by $0.6 million and $0.4 million, respectively,
for slotting fees and promotional allowances.

Sales
to distributors and customers are generally final. However, in limited instances, the Company may accept product returns due to quality
issues or distributor terminations, resulting in variable consideration. Customers typically remit payment within 30 days of receiving
a valid invoice. The Company offers prompt payment discounts of up to 2% to certain customers, generally for payments made within 15
days. These discounts are recorded as a deduction to revenue in the condensed consolidated statements of operations. As of March 31,
2025, and December 31, 2024, prompt payment discounts extended to these customers were considered immaterial to the related accounts
receivable balances presented on the condensed consolidated balance sheets.

Accounts
Receivable

The