Company: JSDA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024179
Chunk: 6

Company: JONES SODA CO.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 6
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 or similar to a cash bonus or profit-sharing arrangement. For public business
entities, the amendments are effective for annual periods beginning after December 15, 2024, and interim periods within those annual
periods. The adoption of ASU 2024-01 did not have a material impact on the Company’s condensed consolidated financial
statements.

Recent
Accounting Guidance Not Yet Adopted

In
November 2024, the FASB issued ASU 2024-03: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures
(Subtopic 220-40). This update requires entities to disaggregate income statement expenses. The guidance is effective for fiscal years
beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. We are currently
evaluating the impact of the updated standard on our consolidated financial statements and disclosures.

In
December 2024, the FASB issued Accounting Standards Update (ASU) 2024-04, Debt—Debt with Conversion and Other Options (Subtopic
470-20): Induced Conversions of Convertible Debt Instruments. This update provides guidance on accounting for induced conversions of
convertible debt instruments, clarifying the criteria for determining whether settlements should be accounted for as an induced conversion.
The amendments specify that an inducement offer must provide the debt holder with consideration meeting or exceeding the conversion privileges
outlined in the instrument’s original terms. Additionally, the update addresses convertible debt instruments that are not currently
convertible but included substantive conversion features at issuance and at the time of the inducement. The guidance is effective for
fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted for
entities that have adopted ASU 2020-06. We are currently evaluating the impact of adopting this guidance on our consolidated financial
statements and disclosures.

2. Discontinued Operations

As
disclosed in Note 1, on June 19, 2025 (the “Date of Disposition”), the Company entered into the SPA to sell of
all issued and outstanding equity interests in its cannabis beverage subsidiaries (the “Cannabis Subsidiaries”) pursuant
to a share purchase agreement, as amended, with MJ Reg and discontinued the Cannabis-Derived (THC) Beverage. Subsequent to the transaction, the Company’s former VP of Operations was appointed as the CEO of MJ Reg.

As
disclosed