Company: JSDA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024179
Chunk: 3

Company: JONES SODA CO.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 3
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 months
subsequent to the issuance of the accompanying Condensed Consolidated Financial Statements . There is no assurance that management’s
current operating plan will be successful.

    10
    Table of Contents

Revenue
recognition

The
Company’s contracts have a single performance obligation, which is satisfied at the point in time when title and the significant
risks and rewards of ownership of the product transfer to the customer. This transfer is deemed to occur when products are either loaded
onto a truck for shipment or at the Free on Board (“FOB”) shipping point. The Company primarily receives fixed consideration
for product sales, subject to adjustments as outlined below.

Shipping
and handling costs paid by customers, primarily related to online orders, are included in revenue and totaled approximately $0.01 million
and $0.04 million for the three months ended  June 30, 2025, and 2024, respectively and approximately $0.04 million and $0.08 million
for the six months ended June 30, 2025, and 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 quarters ended June 30, 2025 and 2024, our revenue was reduced by $0.3 million and $1.2
million, respectively,