Company: JSDA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024179
Chunk: 2

Company: JONES SODA CO.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 2
---
 2024.

For
the six months ended June 30, 2025, net cash provided by investing activities was approximately $0.6 million. This amount was primarily
attributable to cash proceeds of $0.6 million received in connection with the disposition of the Cannabis Subsidiaries.

For
the six months ended June 30, 2025, net cash provided by financing activities was approximately $0.7 million. This amount
was primarily attributable to net proceeds of $0.6 million from a new credit facility and repayments of approximately $0.1
million under the Company’s insurance financing agreement. In addition, the Company issued a $0.5 million promissory note to its
Chairman of the Board, of which $0.2 million was repaid during the period.

We
have experienced recurring losses from operations and negative cash flows from operating activities. These factors raise substantial
doubt regarding the Company’s ability to continue as a going concern. To address this issue, in the first quarter of fiscal year
2025, the Company changed its senior leadership and is focusing on reducing its operating expenses while bringing products to market
with higher margins and potentially higher customer demand. Additionally, on February 5, 2025, the Company, through a wholly-owned subsidiary
(the “Subsidiary”), entered into loan agreement (the “Loan Agreement”) with Two Shores Capital Corp,
pursuant to which the Subsidiary may borrow a maximum aggregate amount of up to $5 million, subject to satisfaction of certain conditions.
All advances drawn under the Loan Agreement will bear interest at a rate of 13.75% per annum and all present and future obligations of
the Subsidiary arising under the Loan Agreement are secured by a first priority security interest in all of the assets of the Company,
the Subsidiary and the Company’s other United States subsidiaries. The Loan Agreement replaces the $2 million revolving credit
facility entered into by the Company in March 2024 (the “2024 Credit Facility”). The borrowing base under the Loan Agreement
expands the assets that can be financed against from only accounts receivable under the 2024 Credit Facility to accounts receivable,
inventory and customer purchase orders.

Based
on management’s current operating plan, the Company believes its cash on hand, projected cash generated from product sales and
funds received from under the Loan Agreement are sufficient to fund the Company’s operations for a period of at least 12