Company: JSDA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024179
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Company: JONES SODA CO.
Filing Date: 2025-08-14
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. 

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

On
June 19, 2025, the Company consummated a Share Purchase Agreement (the “SPA”), as amended, with MJ Reg Disrupters LLC (“MJ
Reg”) pursuant to which it sold all of the issued and outstanding equity interests in its wholly owned subsidiaries that operate
the cannabis (THC) beverage business (the “Cannabis Subsidiaries”) (Note 2).

Basis
of presentation, consolidation and use of estimates

The
unaudited interim condensed consolidated financial statements as of and for the period ending June 30, 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 consolidated
financial statements include our accounts and those of our subsidiaries, with all intercompany transactions eliminated in consolidation.

In
management’s opinion, the accompanying unaudited condensed consolidated financial statements