##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period From  to
 Commission File Number 000-28820
 
 Jones Soda Co.
  
 Washington
(State or other jurisdiction of 
incorporation or organization)
    
    91-1696175
(I.R.S. Employer
Identification Number)234 Ninth Avenue North 
Seattle, Washington
(Address of principal executive offices)
    
    98109
(Zip Code)
 (206) 624-3357(Registrants Telephone Number, Including Area Code)
 
 (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o(Do not check if a smaller reporting
company)
    
    Smaller reporting company þ
 o þ




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##### 



JONES SODA CO.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009
TABLE OF CONTENTS
 PageExplanatory Note
    
    
    3Cautionary Notice Regarding Forward Looking Statements
    
    
    3PART I. FINANCIAL INFORMATIONItem 1. Financial Statementsa) Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    5b) Condensed Consolidated Statements of Operations  three and six months ended June 30, 2009 and
2008
    
    
    6c) Condensed Consolidated Statements of Cash Flows  six months ended June 30, 2009 and 2008
    
    
    7d) Notes to Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 4. Controls and Procedures
    
    
    22PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    23Item 4. Submission of Matters to a Vote of Security Holders
    
    
    24Item 6. Exhibits
    
    
    25EX-10.3EX-10.4EX-31.1EX-31.2EX-32.1EX-32.2
  2




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EXPLANATORY NOTE
 ®
 Jones Soda Jones Pure Cane Soda Jones Soda Co
 
 CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
   
    
    Our ability to achieve levels of revenue and cost reductions that are adequate to support
our capital and operating requirements in order to continue as a going concern;
    
    Our inability to generate sufficient cash flow from operations, or to obtain funds
through additional financing, to support our business plan, which may force us to delay,
curtail or eliminate some or all of our product development, marketing or distribution
programs or to pursue various other strategies and strategic alternatives to secure
additional financing;
    
    Our ability to manage our resources and successfully execute our business plan;
    
    Our ability to implement our business plan in the current global economic crisis, which
could adversely affect demand for our products and make it more difficult for us to secure
additional financing, if necessary;
    
    Our inability to sustain compliance with the continued listing requirements of The Nasdaq
Capital Market, including the $1 minimum bid price requirement, which could result in
delisting of our common stock and adversely affect its market price and liquidity;
    
    Our ability to establish and maintain successful relationships with reliable
distributors, retailers and brokers;
    
    Our ability to establish long-term agreements with our distributors and our ability to
attract and maintain key distributors;
    
    Our ability to carefully manage our inventory levels and to predict the timing and amount
of our sales;
    
    Our ability to establish and maintain distribution arrangements directly with retailers
and national retail accounts, on which our business plan and future growth are dependent in
part;
    
    Our ability to successfully launch Jones GABAand develop points of distribution for this
product;
    
    The inability of our exclusive manufacturer and distributor (National Beverage Corp.) of
Jones Soda 8-ounce and 12-ounce cans and 1-liter PET bottles in the grocery and mass
merchant channel to perform adequately, which could impair our ability to meet demand in the
CSD industry;
 3




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
    
    Our ability to realize the benefits expected from our sponsorship agreements, to which we
have dedicated, and expect to continue to dedicate, significant resources;
    
    Our reliance on third-party packers of our products, which could make management of our
marketing and distribution efforts inefficient or unprofitable;
    
    Our ability to secure a continuous supply and availability of raw materials, as well as
other factors affecting our supply chain;
    
    Our ability to source our flavors on acceptable terms from our key flavor suppliers;
    
    Our ability to maintain brand image and product quality and the risk that we may suffer
other product issues such as product recalls;
    
    Our ability to attract and retain key personnel, which would directly affect our
efficiency and results of operations;
    
    Our inability to protect our trademarks, patents and trade secrets, which may prevent us
from successfully marketing our products and competing effectively;
    
    Litigation or legal proceedings (including pending securities class actions), which could
expose us to significant liabilities and damage our reputation;
    
    Our inability to build and sustain proper information technology infrastructure;
    
    Our inability to create and maintain brand name recognition and acceptance of our
products, which are critical to our success in our competitive, brand-conscious industry;
    
    Our ability to compete successfully against much larger, well-funded, established
companies currently operating in the beverage industry;
    
    Our inability to continue developing new products to satisfy our consumers changing
preferences; and
    
    Our ability to comply with the many regulations to which our business is subject.
  4




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 JONES SODA CO.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share data)
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    7,146
    
    
    $
    11,736Short-term investments
    
    
    
    
    
    
    890Accounts receivable, net of allowance of $167 and $330
    
    
    4,063
    
    
    
    2,428Inventory
    
    
    3,696
    
    
    
    5,654Prepaid expenses and other current assets
    
    
    1,037
    
    
    
    1,410Total current asset
    
    
    15,942
    
    
    
    22,118Deferred income tax asset
    
    
    100
    
    
    
    98Other assets
    
    
    1,572
    
    
    
    Fixed assets, net of accumulated depreciation of $3,778 and $3,364
    
    
    1,731
    
    
    
    2,099Total assets
    
    $
    19,345
    
    
    $
    24,315LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,394
    
    
    $
    1,469Accrued liabilities
    
    
    1,906
    
    
    
    2,788Taxes payable
    
    
    17
    
    
    
    34Capital lease obligations, current portion
    
    
    160
    
    
    
    153Total current liabilities
    
    
    3,477
    
    
    
    4,444Capital lease obligations
    
    
    240
    
    
    
    321Long term liabilities  other
    
    
    58
    
    
    
    75Commitments and contingenciesShareholders equity:Common stock, no par value:Authorized - 100,000,000 issued and outstanding shares  26,454,592 and
26,460,409 at June 30, 2009 and December 31, 2008, respectively
    
    
    43,925
    
    
    
    43,924Additional paid-in capital
    
    
    5,484
    
    
    
    5,044Accumulated other comprehensive income (loss)
    
    
    143
    
    
    
    (79
    )Accumulated deficit
    
    
    (33,982
    )
    
    
    (29,414
    )Total shareholders equity
    
    
    15,570
    
    
    
    19,475Total liabilities and shareholders equity
    
    $
    19,345
    
    
    $
    24,315
  5




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JONES SODA CO.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 (In thousands, except share data)
 Three Month Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue
    
    $
    7,482
    
    
    $
    11,699
    
    
    $
    14,554
    
    
    $
    21,103Cost of goods sold
    
    
    5,426
    
    
    
    8,718
    
    
    
    11,053
    
    
    
    16,200Gross profit
    
    
    2,056
    
    
    
    2,981
    
    
    
    3,501
    
    
    
    4,903Licensing revenue
    
    
    23
    
    
    
    58
    
    
    
    51
    
    
    
    109Operating expenses:Promotion and selling
    
    
    2,241
    
    
    
    3,482
    
    
    
    4,561
    
    
    
    6,484General and administrative
    
    
    1,759
    
    
    
    2,227
    
    
    
    3,560
    
    
    
    5,0874,000
    
    
    
    5,709
    
    
    
    8,121
    
    
    
    11,571Loss from operations
    
    
    (1,921
    )
    
    
    (2,670
    )
    
    
    (4,569
    )
    
    
    (6,559
    )Other (expense) income, net:
    
    
    (21
    )
    
    
    87
    
    
    
    
    
    
    
    235Loss before income tax
    
    
    (1,942
    )
    
    
    (2,583
    )
    
    
    (4,569
    )
    
    
    (6,324
    )Income tax benefit (expense)Current
    
    
    (3
    )
    
    
    (150
    )
    
    
    24
    
    
    
    (262
    )Deferred
    
    
    (22
    )
    
    
    
    
    
    
    (23
    )
    
    
    (25
    )
    
    
    (150
    )
    
    
    1
    
    
    
    (262
    )Net loss
    
    $
    (1,967
    )
    
    $
    (2,733
    )
    
    $
    (4,568
    )
    
    $
    (6,586
    )Net loss per share:Basic and diluted
    
    $
    (0.07
    )
    
    $
    (0.10
    )
    
    $
    (0.17
    )
    
    $
    (0.25
    )Weighted average basic
and diluted common shares
outstanding:
    
    
    26,454,592
    
    
    
    26,347,955
    
    
    
    26,455,582
    
    
    
    26,306,801
  6




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JONES SODA CO.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In thousands)
 Six months ended June 30,2009
    
    
    2008OPERATING ACTIVITIES:Net loss
    
    $
    (4,568
    )
    
    $
    (6,586
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    424
    
    
    
    324Stock-based compensation
    
    
    441
    
    
    
    330Change in allowance for doubtful accounts
    
    
    (163
    )
    
    
    (92
    )Loss on disposal of fixed assets
    
    
    21
    
    
    
    Deferred income tax
    
    
    22
    
    
    
    22Other
    
    
    39
    
    
    
    278Changes in operating assets & liabilities:Accounts receivable
    
    
    (1,264
    )
    
    
    (2,541
    )Inventory
    
    
    1,828
    
    
    
    (2,390
    )Prepaid expenses and other current assets
    
    
    364
    
    
    
    (676
    )Other assets
    
    
    (1,424
    )
    
    
    Accounts payable
    
    
    (128
    )
    
    
    1,941Accrued liabilities
    
    
    (903
    )
    
    
    1,873Taxes payable
    
    
    (16
    )
    
    
    (203
    )Net cash used in operating activities
    
    
    (5,327
    )
    
    
    (7,720
    )INVESTING ACTIVITIES:Purchase of fixed assets
    
    
    (82
    )
    
    
    (283
    )Sales of short-term investments  net
    
    
    890
    
    
    
    2,436Sales of fixed assets
    
    
    5
    
    
    
    Net cash provided by investing activities
    
    
    813
    
    
    
    2,153FINANCING ACTIVITIES:Proceeds from exercise of options
    
    
    1
    
    
    
    69Repayment of capital lease obligations
    
    
    (75
    )
    
    
    (85
    )Net cash used in financing activities
    
    
    (74
    )
    
    
    (16
    )Net decrease in cash and cash equivalents
    
    
    (4,588
    )
    
    
    (5,583
    )Effect of exchange rate changes on cash
    
    
    (2
    )
    
    
    Cash and cash equivalents, beginning of period
    
    
    11,736
    
    
    
    17,858Cash and cash equivalents, end of period
    
    $
    7,146
    
    
    $
    12,275Supplemental disclosure:Cash paid (received) during period for:Interest
    
    $
    (11
    )
    
    $
    (294
    )Income taxes
    
    $
    1
    
    
    $
    327
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JONES SODA CO.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Nature and Operations and Summary of Significant Accounting Policies
 ® Jones Pure
Cane Soda ; Jones 24C, Jones
GABA ® Jones Organics Jones Naturals ® , WhoopAss Energy Drink ®
 Basis of presentation and consolidation
   Use of estimates
  Seasonality
  Recently issued accounting pronouncements
 Interim Disclosures about Fair Value of Financial Instruments Disclosures about Fair Value of Financial
Instruments Interim Financial Reporting
 Recognition and Presentation of
Other-Than-Temporary Impairments,
 Subsequent Events,
 8




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The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles
 Liquidity
   Jones GABA Jones GABA Jones GABA
 Jones Pure Cane Soda Jones GABA
  9




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Reclassifications
  2. Inventory
  June 30,
    
    
    December 31,2009
    
    
    2008Finished goods
    
    $
    2,093
    
    
    $
    3,709Raw materials
    
    
    1,603
    
    
    
    1,945$
    3,696
    
    
    $
    5,654
 10




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3. Other Assets
  4. Stock-Based Compensation
  (a) Stock options:
  Weighted-Weighted-
    
    
    averageAverage
    
    
    remainingNumber of
    
    
    exercise
    
    
    contractualshares
    
    
    price
    
    
    life (years)Outstanding balance at December 31, 2008
    
    
    1,459,358
    
    
    $
    4.90Options granted
    
    
    744,250
    
    
    
    0.80Options exercised
    
    
    (1,429
    )
    
    
    (0.37
    )Options cancelled/expired
    
    
    (398,104
    )
    
    
    (4.46
    )Outstanding balance at June 30, 2009
    
    
    1,804,075
    
    
    
    3.44
    
    
    
    7.16Exercisable, June 30, 2009
    
    
    768,123
    
    
    
    5.49
    
    
    
    4.42Vested and expected to vest
    
    
    1,671,983
    
    
    $
    3.56
  (b) Restricted stock awards:
  Weighted-
    
    
    Weighted-Average
    
    
    AverageRestricted
    
    
    Grant Date
    
    
    ContractualShares
    
    
    Fair Value
    
    
    LifeNon-vested restricted stock at December 31, 2008
    
    
    80,978
    
    
    $
    6.48
    
    
    8.97 yrsGranted
    
    
    
    
    
    
    Vested
    
    
    (12,475
    )
    
    
    6.88Cancelled/forfeited
    
    
    (21,307
    )
    
    
    6.43Non-vested restricted stock at June 30, 2009
    
    
    47,196
    
    
    $
    6.35
    
    
    8.49 yrs
  11




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(c) Stock-based compensation expense:
 Share-Based
Payment,
  Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Type of awards:Stock options
    
    $
    138
    
    
    $
    34
    
    
    $
    364
    
    
    $
    364Restricted stock
    
    
    7
    
    
    
    (119
    )
    
    
    77
    
    
    
    (34
    )$
    145
    
    
    $
    (85
    )
    
    $
    441
    
    
    $
    330Income statement account:Promotion and selling
    
    $
    (13
    )
    
    $
    (30
    )
    
    $
    98
    
    
    $
    117General and administrative
    
    
    158
    
    
    
    (55
    )
    
    
    343
    
    
    
    213$
    145
    
    
    $
    (85
    )
    
    $
    441
    
    
    $
    330
  Six months ended June 30,2009
    
    2008Expected stock price volatility
    
    
    87.
    36%
    
    
    71.
    1%Risk free interest rate
    
    
    2.
    2%
    
    
    2.
    7%Expected term (in years)
    
    
    5.
    9
    
    
    4.
    5Expected dividend yield
    
    
    0.
    0%
    
    
    0.
    0%Weighted-average grant date fair value
    
    $
    0.
    59
    
    $
    1.
    97
   5. Commitments and contingencies
 Legal proceedings
  12




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13




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6. Segment Information
  Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008United States
    
    $
    5,488
    
    
    $
    9,807
    
    
    $
    11,359
    
    
    $
    17,761Canada
    
    
    1,727
    
    
    
    1,717
    
    
    
    2,816
    
    
    
    3,097Other countries
    
    
    267
    
    
    
    175
    
    
    
    379
    
    
    
    245Total revenue
    
    $
    7,482
    
    
    $
    11,699
    
    
    $
    14,554
    
    
    $
    21,103
  
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 You should read the following discussion and analysis in conjunction with our unaudited
condensed consolidated financial statements and related notes included elsewhere in this Report and
the 2008 audited consolidated financial statements and notes thereto included in our Annual Report
on Form 10-K , which was filed with the Securities and Exchange Commission (SEC) on March 16, 2009.
 This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain
forward-looking statements. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by terminology such as
believe, expect, intend, anticipate, estimate, may, will, can, plan, predict,
could, future, variations of such words, and similar expressions. These statements are only
predictions. Actual events or results may differ materially. In evaluating these statements, you
should specifically consider various factors, including the risks outlined at the beginning of this
report under Cautionary Notice Regarding Forward-Looking Statements and in Item 1A of our most
recent Annual Report on Form 10-K filed with the SEC. These factors may cause our actual results to
differ materially from any forward-looking statements. Except as required by law, we undertake no
obligation to publicly release any revisions to these forward-looking statements that may be made
to reflect events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
 Overview
 Jones GABA ®
 
    
    Jones Pure Cane Soda, a premium carbonated soft drink;
    
    Jones 24C, an enhanced water beverage;
    
    Jones GABA®,a functional tea juice blend;
    
    Jones Organics, a ready-to-drink organic tea;
    
    Jones Naturals®, a non-carbonated juice & tea; and
    
    WhoopAss Energy Drink® a citrus energy drink.
  Jones Soda
 14




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Jones Pure Cane Soda Jones Soda Jones Pure Cane
Soda
    
    
    expanding points of distribution for our products;
    
    creating strong alignment with our key distributors;
    
    developing innovative beverage brands and products;
    
    stimulating strong consumer demand for our existing brands and products, with primary
emphasis in the U.S. and Canada;
    
    inviting consumers to participate in our brand through submission of photographs to be
placed on labels through our interactive application of myJones.com;
    
    licensing our brand equity for the creation of other beverage or non-beverage products;
and
    
    exploring opportunities to license our patented custom-label process to non-competitive
products.
 Jones Pure Cane Soda Jones GABA, Jones GABA Jones GABA Jones GABA Jones GABA Jones GABA
  15




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Results of Operations
  Three Months Ended June 30,
    
    Six Months Ended June 30,% of
    
    
    
    
    
    % of
    
    
    
    
    
    % of
    
    
    
    
    
    % of2009
    
    Revenue
    
    2008
    
    Revenue
    
    2009
    
    Revenue
    
    2008
    
    Revenue(Dollars in thousands, except per share data)Consolidated statements of operation data:Revenue
    
    $
    7,482
    
    
    
    100.0
    
    
    $
    11,699
    
    
    
    100.0
    
    
    $
    14,554
    
    
    
    100.0
    
    
    $
    21,103
    
    
    
    100.0Cost of goods sold
    
    
    (5,426
    )
    
    
    (72.5
    )
    
    
    (8,718
    )
    
    
    (74.5
    )
    
    
    (11,053
    )
    
    
    (75.9
    )
    
    
    (16,200
    )
    
    
    (76.8
    )Gross profit
    
    
    2,056
    
    
    
    27.5
    
    
    
    2,981
    
    
    
    25.5
    
    
    
    3,501
    
    
    
    24.1
    
    
    
    4,903
    
    
    
    23.2Licensing revenue
    
    
    23
    
    
    
    0.3
    
    
    
    58
    
    
    
    0.5
    
    
    
    51
    
    
    
    0.4
    
    
    
    109
    
    
    
    0.5Promotion and selling expenses
    
    
    (2,241
    )
    
    
    (30.0
    )
    
    
    (3,482
    )
    
    
    (29.8
    )
    
    
    (4,561
    )
    
    
    (31.3
    )
    
    
    (6,484
    )
    
    
    (30.7
    )General and administrative expenses
    
    
    (1,759
    )
    
    
    (23.5
    )
    
    
    (2,227
    )
    
    
    (19.0
    )
    
    
    (3,560
    )
    
    
    (24.5
    )
    
    
    (5,087
    )
    
    
    (24.1
    )Operating loss
    
    
    (1,921
    )
    
    
    (25.7
    )
    
    
    (2,670
    )
    
    
    (22.8
    )
    
    
    (4,569
    )
    
    
    (31.3
    )
    
    
    (6,559
    )
    
    
    (31.1
    )Other (expense) income, net
    
    
    (21
    )
    
    
    (0.3
    )
    
    
    87
    
    
    
    0.7
    
    
    
    
    
    
    
    (0.0
    )
    
    
    235
    
    
    
    1.1Loss before income taxes
    
    
    (1,942
    )
    
    
    (26.0
    )
    
    
    (2,583
    )
    
    
    (22.1
    )
    
    
    (4,569
    )
    
    
    (31.3
    )
    
    
    (6,324
    )
    
    
    (30.0
    )Income tax (expense) benefit
    
    
    (25
    )
    
    
    (0.3
    )
    
    
    (150
    )
    
    
    (1.3
    )
    
    
    1
    
    
    
    (0.1
    )
    
    
    (262
    )
    
    
    (1.2
    )Net loss
    
    $
    (1,967
    )
    
    
    (26.3
    )
    
    $
    (2,733
    )
    
    
    (23.4
    )
    
    $
    (4,568
    )
    
    
    (31.4
    )
    
    $
    (6,586
    )
    
    
    (31.2
    )Basic and diluted net loss per share
    
    $
    (0.07
    )
    
    
    
    
    
    $
    (0.10
    )
    
    
    
    
    
    $
    (0.17
    )
    
    
    
    
    
    $
    (0.25
    )
 16




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##### Table of Contents



As of
    

    As ofJune 30, 2009
    
    December 31, 2008(Audited)(Dollars in thousands)Balance sheet data:Cash and cash equivalents, short term investments
and accounts receivable
    
    $
    11,209
    
    
    $
    15,054Fixed assets, net
    
    
    1,731
    
    
    
    2,099Total assets
    
    
    19,345
    
    
    
    24,315Long-term liabilities
    
    
    298
    
    
    
    396Working capital
    
    
    12,465
    
    
    
    17,674
 Three Months Ended June 30,
    
    Six Months Ended June 30,2009
    
    2008
    
    2008
    
    2008288-ounce equivalent case sales:Finished products case sales
    
    
    611,600
    
    
    
    939,700
    
    
    
    1,153,400
    
    
    
    1,703,200Concentrate case sales
    
    
    204,800
    
    
    
    1,036,600
    
    
    
    368,100
    
    
    
    1,071,800Total case sales
    
    
    816,400
    
    
    
    1,976,300
    
    
    
    1,521,500
    
    
    
    2,775,000
 Quarter Ended June 30, 2009 Compared to Quarter Ended June 30, 2008
 Revenue
 Jones Soda Jones Soda 24C 24C Jones Pure Cane Soda
 24C Jones GABA
 Gross Profit
 Jones Soda
 17




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##### Table of Contents



Licensing Revenue
 Jones Soda
 Promotion and Selling Expenses
  General and Administrative Expenses
  Other (Expense) Income, Net
  Income Tax (Expense) Benefit
  Net Loss
 Jones Soda
 Six Month Period Ended June 30, 2009 and 2008
 Revenue
  18




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##### Table of Contents



Jones Soda Jones Soda 24C 24C Jones Pure Cane Soda
 24C Jones GABA
 Gross Profit
 Jones Soda Jones GABA
 Licensing Revenue
 Jones Soda
 Promotion and Selling Expenses
  General and Administrative Expenses
  19




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##### Table of Contents



Other (Expense) Income, Net
  Income
Tax (Expense) Benefit
  Net Loss
 Jones Soda
 Liquidity and Capital Resources
   Jones GABA Jones GABA Jones GABA
 Jones Pure Cane Soda
 20




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##### Table of Contents



Jones GABA
     21




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##### Table of Contents



Off-Balance Sheet Arrangements
  Seasonality
  Critical Accounting Policies
  
 ITEM 4. CONTROLS AND PROCEDURES
 Procedures
 (a) Evaluation of disclosure controls and procedures
  (b) Changes in internal controls
  
 PART II OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 Saltzman v. Jones Soda Company, et al. In re Jones Soda Company Securities Litigation
 22




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##### Table of Contents



Cramer v. van Stolk, et al.
      
 ITEM 1A. RISK FACTORS
  23




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##### Table of Contents



2008 10-K
 If we are not able to successfully execute on our revised operating plan, and without the ability
to further implement meaningful cost containment measures beyond those we intend to implement in
the third quarter of 2009, our financial condition and results of operation could be materially
adversely affected, and we may not be able to continue as a going concern.
   
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Director
    
    Votes For
    
    Votes WithheldMills A. Brown
    
    
    19,796,042
    
    
    
    974,524Richard S. Eiswirth, Jr
    
    
    19,552,579
    
    
    
    1,217,987Michael M. Fleming
    
    
    19,328,219
    
    
    
    1,442,347Matthew K. Kellogg
    
    
    19,545,191
    
    
    
    1,225,375Jonathan J. Ricci
    
    
    19,726,822
    
    
    
    1,043,744Susan A. Schreter
    
    
    19,809,306
    
    
    
    961,260
   24




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##### Table of Contents



ITEM 6. EXHIBITS
 10.1*
    
    Settlement Agreement and Release, dated April 3, 2009, by and between the Company and Peter M.
van Stolk. (Previously filed with, and incorporated herein by reference to, Exhibit 10.1 to our
quarterly report on Form 10-Q, filed on May 11, 2009; File No. 000-28820.)10.2*
    
    Summary of Jones Soda Co. 2009 Bonus Plan For Executive Officers (Previously filed with, and
incorporated herein by reference to, Exhibit 10.1 to our current report on Form 8-K, filed on
April 10, 2009; File No. 000-28820.)10.3*
    
    Separation Agreement and General Release, dated May 8, 2009, by and between the Company and
Stephen C. Jones. (Filed herewith.)10.4*
    
    Second Amendment to Employment Offer Letter, dated May 4, 2009, by and between the Company and Jonathan J. Ricci (Filed herewith.)31.1
    
    Section 302 Certification of CEO  Jonathan J. Ricci, Chief Executive Officer (Filed herewith.)31.2
    
    Section 302 Certification of CFO  Michael R. OBrien, Chief Financial Officer (Filed herewith.)32.1
    
    Section 906 Certification of CEO  Jonathan J. Ricci, Chief Executive Officer of Jones Soda
Co., pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (Filed herewith.)32.2
    
    Section 906 Certification of CFO  Michael R. OBrien, Chief Financial Officer of Jones Soda
Co., pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 (Filed herewith.)
 
 *
    
    Management contract or compensatory plan or arrangement 25




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##### Table of Contents



SIGNATURES
   JONES SODA CO.By:
    /s/ JONATHAN J. RICCIJonathan J. RicciPresident and Chief Executive OfficerBy:
    /s/ MICHAEL R. OBRIENMichael R. OBrienChief Financial Officer 26