Company: JSDA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024179
Chunk: 29

Company: JONES SODA CO.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 29
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 administrative expenses as a percentage
of revenue decreased to 28.0% in the six months ending June 30, 2025, from 33% in the same period in 2024 or an approximately 5 percentage
points decrease. We continue to look for additional opportunities to reduce our G&A costs beyond the cost reductions achieved in
the six months ending June 30, 2025. For the six months ending June 30, 2025, and 2024, non-cash expenses included in general and administrative
expenses (stock compensation and depreciation) were approximately $235,000 and $582,000, respectively.

Income
Tax Expense

We
incurred approximately $7,000 and $21,000 of income tax expense during the six months ending June 30, 2025, and 2024, respectively. We
have not recorded any tax benefit for the loss in our U.S. operations as we have recorded a full valuation allowance on our U.S. net
deferred tax assets. We expect to continue to record a full valuation allowance on our U.S. net deferred tax assets until we sustain
an appropriate level of taxable income through improved U.S. operations. Our effective tax rate is based on recurring factors, including
the forecasted mix of income before taxes in various jurisdictions, estimated permanent differences and the recording of a full valuation
allowance on our U.S. net deferred tax assets.

Net
Income (loss)

Net
Income for the six months ending June 30, 2025, was approximately $1.8 million compared to net loss of approximately $2.7 million for
six months ending June 30, 2024, or an improvement of $4.6 million. The improvement in income was primarily due to the decreases in
selling and marketing expenses and general and administrative expenses in the six months of 2025 compared to the six months of 2024
and gain on sale of the Cannabis business which partially offset by reduced sales revenues and gross profit.

Seasonality
and other fluctuations

Our
sales are seasonal and we experience fluctuations in quarterly results as a result of many factors. We historically have generated a
greater percentage of our revenues during the warm weather months of April through September. Sales may fluctuate materially on a quarter
to quarter basis or an annual basis when we launch a new product or fill the “pipeline” of a new distribution partner or
a large retail partner. Sales results may also fluctuate based on the number