Company: JSDA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024179
Chunk: 8

Company: JONES SODA CO.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 8
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 SPA, the Company entered into a trademark license agreement
(the “License Agreement”) with MJ Holdings pursuant to which the Company granted MJ Holdings an exclusive, freely-usable
and non-transferable, fully sublicensable license to use the Licensed IP (as defined in the License Agreement) during the term of such
agreement in connection with the manufacture, sale, distribution, advertising, and promotion of all current and future products (the
“Licensed Products”) each consisting of a mutually agreed upon composition, formula, recipe, flavor necessary for the Licensed
Products and labeling, container size, and packaging, as applicable, to be made available by MJ Holdings for sale on-site at MJ Holdings’
places of business and/or by means of other distributors of MJ Holdings globally, including in any country or jurisdiction where the
sale, marketing, and distribution of the Licensed Products is lawful. Pursuant to the License Agreement, MJ Holdings shall retain the
exclusive right to any consumable product containing an emulsion derived from the cannabis plant with a THC concentration greater than
0.3% by dry weight and any Licensed IP in connection therewith. Furthermore, MJ Holdings shall own all Licensee Modified Formulas (as
defined in the License Agreement) and such Licensee Modified Formulas may be incorporated and/or otherwise used in connection with a
Licensed Product during the term of such agreement and at any time thereafter; provided, however, the Company shall be entitled to license
the Licensee Modified Formulas on mutually agreeable terms and conditions. Notwithstanding the foregoing, the Company shall maintain
exclusive rights to products containing Hemp (as defined in the SPA). Pursuant to the License Agreement, MJ Holdings shall pay the Company
$0.15 million on the one year anniversary of the License Effective Date and $0.255 million on each subsequent anniversary of the License
Effective Date (the “Licensing Fee”). The Licensing Fee shall be fixed and non-adjustable during the term of the License.

Pursuant
to ASC 820, the Company utilized its weighted average cost of capital (WACC) of 11.6% to discount future cash flows and determined the
fair values as follows:

●Promissory
                                            Note: $2.59 million

●Licensing
                                            Agreement: $1.70 million

Transaction
costs incurred in connection with the disposition totaled $0.05 million. The gain on disposal of subsidiaries was calculated as follows:

 Schedule Of Assets And Liabilities Operations Of Discontinued Operations