# EDGAR Filing Document

**Accession Number:** 0001083522
**File Stem:** 0001641172-25-024179
**Filing Date:** 2025-8
**Character Count:** 113302
**Document Hash:** 5a86d38aee5d09a680bb557a68f02a9b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-024179.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001641172-25-024179

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 73

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** JONES SODA CO
- **CENTRAL INDEX KEY:** 0001083522
- **STANDARD INDUSTRIAL CLASSIFICATION:** BEVERAGES [2080]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 911696175
- **STATE OF INCORPORATION:** WA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-28820
- **FILM NUMBER:** 251220978

**BUSINESS ADDRESS:**
- **STREET 1:** 4786 1ST AVENUE SOUTH
- **STREET 2:** SUITE D4
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98134
- **BUSINESS PHONE:** 206 624-3357

**MAIL ADDRESS:**
- **STREET 1:** 4786 1ST AVENUE SOUTH
- **STREET 2:** SUITE D4
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98134

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** URBAN JUICE & SODA CO LTD /WY/
- **DATE OF NAME CHANGE:** 19990407

?xml version='1.0' encoding='ASCII'?

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 10-Q**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

For the Quarterly Period Ended June 30, 2025

**OR**

☐ **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.**

*(Exact name of registrant as specified in its charter)*

---

| | |
|:---|:---|
| **Washington** | **52-2336602** |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
| **1522 Western Ave, Suite 24150** |  |
| **Seattle, Washington** | **98101** |
| (Address of principal executive offices) | (Zip Code) |

---

**(206) 624-3357**

**(Registrant**'**s telephone number, including area code)**

**Securities registered pursuant to Section 12(b) of the Act: None**

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company. or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐ Accelerated Filer ☐ <br> Non-accelerated Filer ☒ Smaller Reporting Company ☒ <br> Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 14, 2025, there were 117,671,604 shares of the registrant's common stock issued and outstanding.

**JONES SODA CO.**

**FORM 10-Q**

**FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Explanatory Note](#sd_001) | 3 |
| [Cautionary Notice Regarding Forward Looking Statements](#sd_002) | 3 |
| [PART I. FINANCIAL INFORMATION](#sd_003) | 5 |
| [Item 1. Financial Statements (Unaudited)](#sd_004) | 5 |
| &nbsp;&nbsp;&nbsp;[a) Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024](#sd_005) | 5 |
| &nbsp;&nbsp;&nbsp;[b) Condensed Consolidated Statements of Operations – three and six months ended June 30, 2025 and 2024](#sd_006) | 6 |
| &nbsp;&nbsp;&nbsp;[c) Condensed Consolidated Statements of Comprehensive Loss – six months ended June 30, 2025 and 2024](#sd_007) | 7 |
| &nbsp;&nbsp;&nbsp;[d) Condensed Consolidated Statements of Shareholders' Equity for the six months ended June 30, 2025 and 2024](#sd_008) | 8 |
| &nbsp;&nbsp;&nbsp;[e) Condensed Consolidated Statements of Cash Flows – six months ended June 30, 2025 and 2024](#sd_009) | 9 |
| &nbsp;&nbsp;&nbsp;[f) Notes to Condensed Consolidated Financial Statements](#sd_010) | 10 |
| [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#sd_011) | 19 |
| [Item 3. Quantitative and Qualitative Disclosures about Market Risk](#sd_012) | 24 |
| [Item 4. Controls and Procedures](#sd_013) | 24 |
| [PART II. OTHER INFORMATION](#sd_014) | 25 |
| [Item 1. Legal Proceedings](#sd_015) | 25 |
| [Item 1A. Risk Factors](#sd_016) | 25 |
| [Item 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, ISSUER PURCHASES OF EQUITY SECURITIES](#sd_017) | 25 |
| [Item 5. Other Information](#sd_020) | 25 |
| [Item 6. Exhibits](#sd_021) | 25 |

---

[**Table of Contents**](#Toc_001)

**EXPLANATORY NOTE**

Unless otherwise indicated or the context otherwise requires, all references in this Quarterly Report on Form 10-Q (this "Report") to "we," "us," "our," "Jones," and the "Company" are to Jones Soda Co., a Washington corporation, and our wholly-owned subsidiaries.

In addition, unless otherwise indicated or the context otherwise requires, all references in this Report to "Jones Soda" refer to our premium beverages, including Jones® Soda sold under the trademarked brand name "Jones Soda Co.®"

**CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS**

We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. This Report contains a number of forward-looking statements that reflect management's current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this Report other than statements of historical fact, including statements that address operating performance, the economy, events or developments that management expects or anticipates will or may occur in the future, including statements related to case sales, revenues, profitability, distributor channels, new products or markets, adequacy of funds from operations, cash flows and financing, potential strategic transactions, statements regarding future operating results and non-historical information, are forward-looking statements. In particular, the words such as "believe," "expect," "intend," "anticipate," "estimate," "may," "will," "can," "plan," "predict," "could," "future," "continue," variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements and their absence does not mean that the statement is not forward-looking.

Readers should not place undue reliance on these forward-looking statements, which are based on management's current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions and apply only as of the date of this Report. Our actual results, performance or achievements could differ materially from historical results as well as from the results expressed in, anticipated or implied by these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In particular, our business, including our financial condition and results of operations may be impacted by a number of factors, including, but not limited to, the following:

● Our
 ability to successfully execute on our growth strategy and operating plans;

● Our
 ability to continue to raise capital to finance our operations;

● Our
 ability to execute our plans to continue to license and market THC/CBD-infused and/or cannabis-infused beverages and edibles, and
 comply with the laws and regulations governing cannabis, hemp or related products, and the timing and costs of the development of
 this new product line;

● Our
 ability to manage our operating expenses and generate cash flow from operations, along with our ability to secure additional financing
 if our sales goals take longer to achieve than anticipated;

● Our
 ability to create and maintain brand name recognition and acceptance of our products, which is 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
 generally, including in the fountain business, particularly from other major beverage companies;

● Entrance
 into and increased focus on the craft beverage segment by other major beverage companies;

[**Table of Contents**](#Toc_001)

● Our
 ability to respond to changes in the consumer beverage marketplace, including potential reduced consumer demand due to health concerns
 (including obesity) and legislative initiatives against sweetened beverages (including the imposition of taxes);

● Our
 ability to successfully develop and launch new products that match consumer beverage trends, and to manage consumer response to such
 new products and new initiatives;

● Our
 ability to maintain brand image and product quality and avoid risks from product issues such as product recalls;

● Our
 ability to establish, maintain and expand distribution arrangements with independent distributors, retailers, brokers and national
 retail accounts, most of whom sell and distribute competing products, and upon whom we rely to employ sufficient efforts in managing
 and selling our products, including re-stocking the retail shelves with our products;

● Our
 ability to manage our inventory levels and to predict the timing and amount of our sales;

● Our
 reliance on third-party contract manufacturers of our products and the geographic locations of their facilities, which could make
 management of our distribution efforts inefficient or unprofitable;

● Our
 ability to secure a continuous supply and availability of raw materials, as well as other factors that may adversely affect our supply
 chain, including increases in raw material costs, and the potential shortages of glass in the supply chain;

● Our
 ability to source our flavors on acceptable terms from our key flavor suppliers;

● Our
 ability to attract and retain key personnel, the loss of whom would directly affect our efficiency and operations and could materially
 impair our ability to execute our growth strategy;

● Our
 ability to protect our trademarks and trade secrets, the failure of which may prevent us from successfully marketing our products
 and competing effectively;

● Litigation
 or legal proceedings, which could expose us to significant liabilities and damage our reputation;

● Our
 ability to comply with the many regulations to which our business is subject;

● Our
 ability to maintain an effective information technology infrastructure;

● Failures
 or security breaches of our information technology systems could disrupt our operations and negatively impact our business;

● Fluctuations
 in fuel and freight costs;

● Fluctuations
 in currency exchange rates, particularly between the United States and Canadian dollars;

● Tariffs
 affecting raw materials or finished goods transported between the United States and Canada;

● Regional,
 national or global economic, political, social and other conditions that may adversely impact our business and results of operations;

● Our
 ability to maintain effective disclosure controls and procedures and internal control over financial reporting;

● Dilutive
 and other adverse effects on our existing shareholders and our stock price arising from future securities issuances; and

● Our
 ability to access the capital markets for any future equity financing, and any actual or perceived limitations to our common stock
 by being traded on the OTCQB Marketplace and the Canadian Stock Exchange, including the level of trading activity, volatility or
 market liquidity.

For a discussion of some of the factors that may affect our business, results and prospects, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("SEC") on April 1, 2025 and in our other reports we file with the SEC, including our periodic reports on Form 10-Q and current reports on Form 8-K. Readers are also urged to carefully review and consider the various disclosures made by us in this Report and in our other reports we file with the SEC, including our periodic reports on Forms 10-Q and current reports on Form 8-K, and those described from time to time in our press releases and other communications, which attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations.

[**Table of Contents**](#Toc_001)

**PART 1** – **FINANCIAL INFORMATION**

---

| | |
|:---|:---|
| **ITEM 1.** | **FINANCIAL STATEMENTS** |

---

**JONES SODA CO.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

(In thousands, except per share data)

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $650 | $1275 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance of $31 and $77, respectively | 2782 | 1858 |
| &nbsp;&nbsp;&nbsp;Current note receivable | 886 |  |
| &nbsp;&nbsp;&nbsp;Current licensing fees receivable | 150 |  |
| &nbsp;&nbsp;&nbsp;Inventories, net | 3271 | 3364 |
| &nbsp;&nbsp;&nbsp;Prefunded insurance premiums from financing | 111 | 199 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 1370 | 614 |
| &nbsp;&nbsp;&nbsp;Current assets of discontinued operations | - | 1070 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | **9220** | **8380** |
| Long-term note receivable | 1096 |  |
| Long-term licensing fees receivable | 1551 |  |
| Fixed assets, net of accumulated depreciation of $452 and $422, respectively | 74 | 108 |
| Non-current assets of discontinued operations | - | 35 |
| **Total assets** | $**11941** | $**8523** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $4686 | $3279 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 1629 | 2464 |
| &nbsp;&nbsp;&nbsp;Revolving credit facility | 916 | 291 |
| &nbsp;&nbsp;&nbsp;Insurance premium financing | 58 | 199 |
| &nbsp;&nbsp;&nbsp;Promissory notes | 313 |  |
| &nbsp;&nbsp;&nbsp;Current liabilities of discontinued operations | - | 134 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **7602** | **6367** |
| **Total liabilities** | **7602** | **6367** |
| **Commitments and contingencies (Note 11)** |  |  |
| **Shareholders' equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, no par value: |  |  |
| &nbsp;&nbsp;&nbsp;Authorized — 800,000,000 issued and outstanding shares — 116,567,152 shares and 115,867,659 shares, respectively | 95221 | 94883 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 308 | 222 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (91190) | (92949) |
| **Total shareholders' equity** | **4339** | **2156** |
| **Total liabilities and shareholders' equity** | $**11941** | $**8523** |

---

See accompanying notes to condensed consolidated financial statements.

[**Table of Contents**](#Toc_001)

**JONES SODA CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

**(In thousands, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Net Revenue** | $**4894** | $**6659** | $**9124** | $**11240** |
| Cost of goods sold | (3266) | (4396) | (6101) | (7363) |
| **Gross profit** | **1628** | **2263** | **3023** | **3877** |
| **Operating expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing | 1060 | 1685 | 2173 | 3109 |
| &nbsp;&nbsp;&nbsp;General and administrative | 1328 | 2289 | 2531 | 3757 |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | **(2388)** | **(3974)** | **(4704)** | **(6866)** |
| **Loss from operations** | **(760)** | **(1711)** | **(1681)** | **(2989)** |
| **Other income (expenses):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 5 |  | 6 | 6 |
| &nbsp;&nbsp;&nbsp;Interest expense | (70) | 1 | (148) | (7) |
| &nbsp;&nbsp;&nbsp;Other (expense) income, net | (179) | 24 | (273) | 18 |
| &nbsp;&nbsp;&nbsp;Gain on disposition of subsidiaries | 3663 | - | 3663 | - |
| **Total other income** | **3419** | **25** | **3248** | **17** |
| **Income (loss) before income taxes** | **2659** | **(1686)** | **1567** | **(2972)** |
| Income tax expense, net | (7) | (11) | (7) | (21) |
| **Net income (loss) from continuing operations** | **2652** | **(1697)** | **1560** | **(2993)** |
| Loss (income) from discontinued operations | (41) | 129 | 199 | 273 |
| **Net income (loss)** | $**2611** | $**(1568)** | $**1759** | $**(2720)** |
| **Earning (loss) per share – basic and diluted** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Income (loss) from continuing operations | $0.02 | $(0.02) | $0.01 | $(0.03) |
| &nbsp;&nbsp;&nbsp;Income from discontinued operations | $0.00 | $0.00 | $0.01 | $0.00 |
| &nbsp;&nbsp;&nbsp;Total | $0.02 | $(0.02) | $0.02 | $(0.03) |
| &nbsp;&nbsp;&nbsp;**Weighted average common shares outstanding - basic and diluted** | 116180383 | 102256899 | 116023676 | 101867317 |

---

See accompanying notes to condensed consolidated financial statements.

[**Table of Contents**](#Toc_001)

**JONES SODA CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS**

**(Unaudited)**

**(In thousands, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Net loss** | $**2611** | $**(1568)** | $**1759** | $**(2720)** |
| **Other comprehensive income (loss)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 74 | (22) | 75 | (67) |
| &nbsp;&nbsp;&nbsp;Reclassification of foreign currency translation differences upon disposal of the foreign operation | 11 | - | 11 | - |
| &nbsp;&nbsp;&nbsp;**Total comprehensive income (loss)** | $**2696** | $**(1590)** | $**1845** | $**(2787)** |

---

See accompanying notes to condensed consolidated financial statements.

[**Table of Contents**](#Toc_001)

**JONES SODA CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS**' **EQUITY**

**(Unaudited)**

**(In thousands, except per share data)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Number** | **Amount** | **Accumulated**<br> **Other**<br> **Comprehensive**<br>**Income** | **Accumulated**<br>**Deficit** | **Total**<br> **Shareholders'**<br>**Equity** |
| **Balance as of December 31, 2024** | **115867659** | $**94883** | $**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 222** | $**(92949)** | $**2156** |
| Shares issued for restricted share units | 699493 |  |  |  |  |
| Fair value of warrants issued |  | 51 |  |  | 51 |
| Stock-based compensation |  | 287 |  |  | 287 |
| Net Income |  |  |  | 1759 | 1759 |
| Other comprehensive income |  |  | 86 |  | 86 |
| **Balance as of June 30, 2025** | **116567152** | **95221** | **308** | **(91190)** | **4339** |
| **Balance as of December 31, 2023** | **101258135** | $**90273** | $**331** | $**(83054)** | $**7550** |
| Stock-based compensation | 1398980 | 619 |  |  | 619 |
| Exercise of Pinestar Warrants | 974808 | 44 |  |  | 44 |
| Exercise of Stock Options | 136250 | 37 |  |  | 37 |
| Net Loss | *-* |  |  | (2720) | (2720) |
| Other comprehensive loss | *-* | - | (67) | - | (67) |
| **Balance as of June 30, 2024** | **103768173** | $**90973** | $**264** | $**(85774)** | $**5463** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Number** | **Amount** | **Accumulated**<br> **Other**<br> **Comprehensive**<br>**Income** | **Accumulated**<br>**Deficit** | **Total**<br> **Shareholders'**<br>**Equity** |
| **Balance as of March 31, 2025** | **115867659** | $**94974** | $**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 223** | $**(93801)** | $**1396** |
| Shares issued for restricted share units | 699493 |  |  |  |  |
| Fair value of warrants issued |  | 51 |  |  | 51 |
| Stock-based compensation |  | 196 |  |  | 196 |
| Net Income |  |  |  | 2611 | 2611 |
| Other comprehensive income |  |  | 85 |  | 85 |
| **Balance as of June 30, 2025** | **116567152** | **95221** | **308** | **(91190)** | **4339** |
| **Balance as of March 31, 2024** | **101258135** | $**90475** | $**286** | $**(84206)** | $**6555** |
| Stock-based compensation | 1398980 | 461 |  |  | 461 |
| Exercise of Stock Options | 136250 | 37 |  |  | 37 |
| Net loss | *-* |  |  | (1568) | (1568) |
| Other comprehensive loss | *-* | - | (22) | - | (22) |
| **Balance as of June 30, 2024** | **103768173** | $**90973** | $**264** | $**(85774)** | $**5463** |

---

See accompanying notes to condensed consolidated financial statements.

[**Table of Contents**](#Toc_001)

**JONES SODA CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

**(In thousands, except per share data)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| **OPERATING ACTIVITIES:** |  |  |
| **Net income (loss)** | $**1759**  | $**(2720)** |
| Less: Income from discontinued operations | (199) | (273) |
| **Net Income (loss) from continuing operations** | **1560** | **(2993)** |
| Adjustments to reconcile net income (loss) to net cash flows used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Accretion of interest of note receivable | (5) |  |
| &nbsp;&nbsp;&nbsp;Finance costs | 117 |  |
| &nbsp;&nbsp;&nbsp;Gain on disposition of subsidiaries | (3663) |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 30 | 27 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 287 | 619 |
| &nbsp;&nbsp;&nbsp;Change in allowance for credit losses | (46) | (218) |
| &nbsp;&nbsp;&nbsp;Write-off of obsolete inventory | (38) |  |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (805) | (2538) |
| &nbsp;&nbsp;&nbsp;Inventories | 145 | (2001) |
| &nbsp;&nbsp;&nbsp;Prefunded insurance premiums from financing | 141 | 238 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (855) | (959) |
| &nbsp;&nbsp;&nbsp;Other assets |  | 126 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1403 | 3465 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | (862) | 1189 |
| &nbsp;&nbsp;&nbsp;Taxes payable | - | 20 |
| **Net cash used in continuing operations** | **(2591)** | **(3025)** |
| **INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Disposal of a subsidiary, net of cash disposed of | 617 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from disposal of property, plant and equipment | 4 | - |
| **Net cash provided by investing activities** | **621** | **-** |
| **FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net cash from revolving credit facility | 587 | 254 |
| &nbsp;&nbsp;&nbsp;Proceeds on issuance of promissory notes | 450 |  |
| &nbsp;&nbsp;&nbsp;Repayment of promissory notes | (165) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from the exercise of Pinestar Warrants |  | 44 |
| &nbsp;&nbsp;&nbsp;Proceeds from the exercise of stock options |  | 37 |
| &nbsp;&nbsp;&nbsp;Repayments on insurance financing | (141) | (238) |
| **Net cash provided by financing activities** | **731** | **97** |
| **DISCONTINUED OPERATIONS:** |  |  |
| Net cash provided by operating activities of discontinued operations | 288 | 570 |
| **Net cash Provided by discontinued operations** | **288** | **570** |
| **Net change in cash** | **(951)** | **(2358)** |
| &nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash | 68 | (53) |
| Cash from continuing operations, beginning of period | 1275 | 1748 |
| Cash from discontinued operations, beginning of period | 258 | 2119 |
| Less: Cash from discontinued operations, end of period | - | (162) |
| **Cash, end of period** | $**650** | $**1294** |
| **Supplemental disclosure:** |  |  |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;Interest | $97 | $- |
| &nbsp;&nbsp;&nbsp;Income taxes | $- | $14 |

---

See accompanying notes to condensed consolidated financial statements.

[**Table of Contents**](#Toc_001)

**JONES SODA CO.**

**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 reflect all material adjustments necessary for a fair presentation of our financial position, results of operations, and cash flows as of the dates and for the periods presented. These adjustments consist solely of normal and recurring items. The preparation of financial statements requires estimates and assumptions that impact the reported amounts of assets, liabilities, revenues, and expenses. Key areas subject to such estimates and assumptions include, but are not limited to, inventory valuation, depreciation and valuation of capital assets, accounts receivable credit loss reserve, trade promotion liabilities, stock-based compensation expense, valuation allowance for deferred income tax assets, contingencies, and forecasts supporting the going concern assumption and related disclosures. Actual results may differ from these estimates.

The operating results for interim periods are not necessarily indicative of expected results for the full fiscal year. These financial statements should be reviewed in conjunction with the audited financial statements and accompanying notes included in our Annual Report on *Form 10-K* for the fiscal year ended *December 31, 2024*.

In accordance with ASC 205-20, the Company has classified the Cannabis Subsidiaries as discontinued operations. The results of discontinued operations are presented separately in the condensed consolidated statements of operations for all periods presented and the assets and liabilities of Cannabis Subsidiaries have been reflected as assets and liabilities of discontinued operations in the accompanying unaudited condensed consolidated balance sheets for all periods presented. (Note 2).

***Reclassifications***

Certain amounts from prior periods have been reclassified to conform with the current period presentation.

***Liquidity***

As of June 30, 2025, and December 31, 2024, the Company had cash of approximately $0.7 million and $1.5 million, respectively, and working capital of approximately $1.6 million and $2.0 million, respectively. Net cash used in operating activities for the six months ended June 30, 2025 and 2024, was approximately $2.6 million and $3.0 million, respectively. The Company reported a net income of approximately $1.8 million for the six months ended June 30, 2025, compared to a net loss of approximately $2.7 million for the six months ended June 30, 2024. As of June 30, 2025, the Company's accumulated deficit decreased to approximately $91.2 million, compared to approximately $92.9 million as of December 31, 2024.

For the six months ended June 30, 2025, net cash provided by investing activities was approximately $0.6 million. This amount was primarily attributable to cash proceeds of $0.6 million received in connection with the disposition of the Cannabis Subsidiaries.

For the six months ended June 30, 2025, net cash provided by financing activities was approximately $0.7 million. This amount was primarily attributable to net proceeds of $0.6 million from a new credit facility and repayments of approximately $0.1 million under the Company's insurance financing agreement. In addition, the Company issued a $0.5 million promissory note to its Chairman of the Board, of which $0.2 million was repaid during the period.

We have experienced recurring losses from operations and negative cash flows from operating activities. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. To address this issue, in the first quarter of fiscal year 2025, the Company changed its senior leadership and is focusing on reducing its operating expenses while bringing products to market with higher margins and potentially higher customer demand. Additionally, on February 5, 2025, the Company, through a wholly-owned subsidiary (the "Subsidiary"), entered into loan agreement (the "Loan Agreement") with Two Shores Capital Corp, pursuant to which the Subsidiary may borrow a maximum aggregate amount of up to $5 million, subject to satisfaction of certain conditions. All advances drawn under the Loan Agreement will bear interest at a rate of 13.75% per annum and all present and future obligations of the Subsidiary arising under the Loan Agreement are secured by a first priority security interest in all of the assets of the Company, the Subsidiary and the Company's other United States subsidiaries. The Loan Agreement replaces the $2 million revolving credit facility entered into by the Company in March 2024 (the "2024 Credit Facility"). The borrowing base under the Loan Agreement expands the assets that can be financed against from only accounts receivable under the 2024 Credit Facility to accounts receivable, inventory and customer purchase orders.

Based on management's current operating plan, the Company believes its cash on hand, projected cash generated from product sales and funds received from under the Loan Agreement are sufficient to fund the Company's operations for a period of at least 12 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.

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***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, and for the six months ended June 30, 2025 and 2024, our revenue was reduced by $0.9 million and $1.6 million, respectively, in each case for slotting fees and promotion allowances.

Sales to distributors and customers are generally final. However, in limited instances, the Company may accept product returns due to quality issues or distributor terminations, resulting in variable consideration. Customers typically remit payment within 30 days of receiving a valid invoice. The Company offers prompt payment discounts of up to 2% to certain customers, generally for payments made within 15 days. These discounts are recorded as a deduction to revenue in the condensed consolidated statements of operations. As of June 30, 2025 and December 31, 2024, prompt payment discounts extended to these customers were considered immaterial to the related accounts receivable balances presented on the condensed consolidated balance sheets.

***Accounts Receivable***

The accounts receivable balance primarily consists of trade receivables from distributors and retail customers. The Company's allowance for credit losses represents management's best estimate of probable credit losses in existing accounts receivable, determined primarily based on current trends and historical collection data. To account for potential credit losses, the Company reserves a percentage of trade receivable balances based on collection history and prevailing economic conditions expected to impact credit risk over the life of the receivables. These reserves are regularly re-evaluated and adjusted as necessary. Account balances deemed uncollectible are written off against the allowance after all collection efforts have been exhausted and the likelihood of recovery is considered remote. As of June 30, 2025 and December 31, 2024, allowances for credit losses were approximately $0.1 million and $0.1 million, respectively, and were netted against accounts receivable. Changes in accounts receivable are primarily driven by fluctuations in order volume, the timing of product transfers to distributors, and the timing of cash collections.

As of June 30, 2025, two of the Company's independent customers accounted for approximately 24% of outstanding accounts receivable. As of December 31, 2024, a single customer represented approximately 10.2% of the Company's accounts receivable balance.

***Earnings (loss) per share***

Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the respective reporting periods. Diluted earnings (loss) per share is computed by adjusting the weighted average number of common shares to reflect the potential impact of dilutive securities, including stock options, warrants, and restricted stock units.

During the three and six months ended June 30, 2025 and 2024, the following potentially dilutive securities were considered anti-dilutive and were therefore excluded from the computation of diluted earnings (loss) per share:

● **Stock options:** approximately 12,528,244 and 13,037,772 shares for the three and six months ended June 30, 2025 and 2024, respectively

● **Warrants:** approximately 6,695,400 and nil shares for the three and six months ended June 30, 2025 and 2024, respectively

● **Restricted stock units:** nil and approximately 1,998,979 shares for the three and six months ended June 30, 2025 and 2024, respectively

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***Recently Adopted Accounting Pronouncements***

 ****

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09: Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance requires entities to provide more detailed disclosures about income tax expenses (or benefits), including components of the expense (or benefit) and the nature of significant reconciling items. Entities must also disclose information about unrecognized tax benefits, including a tabular reconciliation of beginning and ending balances of unrecognized tax benefits, and details about valuation allowances, including the nature and amount of valuation allowances recorded and released during the period. The guidance is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The adoption of ASU 2023-09 did not have a material impact on the Company's condensed consolidated financial statements.

In March 2024, the FASB issued ASU 2024-01: Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. This update provides guidance on the scope application of profits interest and similar awards under Topic 718. The amendments improve clarity and understanding of paragraph 718-10-15-3, aiding entities in determining whether a profits interest award should be accounted for as a share-based payment arrangement 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 in Note 1, on June 19, 2025 (the "Date of Disposition"), the Company entered into the SPA with its cannabis beverage subsidiaries (the "Cannabis Subsidiaries") and the MJ Reg pursuant to which, on the Date of Disposition, the MJ Reg purchased all of the issued and outstanding shares of the Cannabis Subsidiaries from the Company for the Share Purchase Price of $3.0 million promissory notes and inventory for approximately $0.06 million as set forth in the SPA (the "Sale Transaction"). The Share Purchase Price was paid as follows:

● A $3.0 million promissory note, payable as follows:

○ $0.5 million at the Date of Disposition (paid);

○ $0.5 million due on June 27, 2025 (of which $0.1 million) was paid prior to June 30, 2025 and $0.4 million was received subsequent to June 30, 2025);

○ $0.5 million due on June 19, 2026;

○ $0.75 million due on June 19, 2027; and

○ $0.75 million due on June 19, 2028.

The promissory note accrues interest at the lower of 3% per annum and the lowest amount permitted by law; provided, however, if MJ Reg satisfies its obligations under the promissory note, in full, pursuant to the terms thereof, any interest accrued pursuant to the promissory note shall be waived. Notwithstanding the foregoing, upon the occurrence of an Event of Default (as defined in the promissory note), the outstanding principal amount of the promissory note together with any accrued and unpaid interest thereon shall accrue interest at a rate of 10% per annum. The promissory note shall mature upon the earlier of (i) June 19, 2028 and (ii) in the event of prepayment of the promissory note, the date that the principal amount of the promissory note together with the interest accrued thereon is paid in full by MJ Reg.

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On June 19, 2025 (the "License Effective Date"), in connection with the SPA, the Company entered into a trademark license agreement (the "License Agreement") with MJ Holdings pursuant to which the Company granted MJ Holdings an exclusive, freely-usable and non-transferable, fully sublicensable license to use the Licensed IP (as defined in the License Agreement) during the term of such agreement in connection with the manufacture, sale, distribution, advertising, and promotion of all current and future products (the "Licensed Products") each consisting of a mutually agreed upon composition, formula, recipe, flavor necessary for the Licensed Products and labeling, container size, and packaging, as applicable, to be made available by MJ Holdings for sale on-site at MJ Holdings' places of business and/or by means of other distributors of MJ Holdings globally, including in any country or jurisdiction where the sale, marketing, and distribution of the Licensed Products is lawful. Pursuant to the License Agreement, MJ Holdings shall retain the exclusive right to any consumable product containing an emulsion derived from the cannabis plant with a THC concentration greater than 0.3% by dry weight and any Licensed IP in connection therewith. Furthermore, MJ Holdings shall own all Licensee Modified Formulas (as defined in the License Agreement) and such Licensee Modified Formulas may be incorporated and/or otherwise used in connection with a Licensed Product during the term of such agreement and at any time thereafter; provided, however, the Company shall be entitled to license the Licensee Modified Formulas on mutually agreeable terms and conditions. Notwithstanding the foregoing, the Company shall maintain exclusive rights to products containing Hemp (as defined in the SPA). Pursuant to the License Agreement, MJ Holdings shall pay the Company $0.15 million on the one year anniversary of the License Effective Date and $0.255 million on each subsequent anniversary of the License Effective Date (the "Licensing Fee"). The Licensing Fee shall be fixed and non-adjustable during the term of the License.

Pursuant to ASC 820, the Company utilized its weighted average cost of capital (WACC) of 11.6% to discount future cash flows and determined the fair values as follows:

● Promissory Note: $2.59 million

● Licensing Agreement: $1.70 million

Transaction costs incurred in connection with the disposition totaled $0.05 million. The gain on disposal of subsidiaries was calculated as follows:

---

| | |
|:---|:---|
| **Carrying value (in thousands) of net assets of the Cannabis Subsidiaries** |  |
| Cash | $3 |
| Accounts receivable | 233 |
| Inventories | 157 |
| Prepaid expenses and other current assets | 332 |
| Other assets | 22 |
| Accounts payable | (117) |
|  | **630** |
| **Total consideration received, net of transaction costs** |  |
| Cash | 61 |
| Fair value of Promissory Note | 2591 |
| Fair value of Licensing Agreement | 1696 |
| Less: Transaction costs | (55) |
|  | **4293** |
| **Gain on disposition** | $**3663** |

---

Following is the breakdown of the gain (loss) from discontinued operations:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Net Revenue** | $**120** | $**504** | $**498** | $**916** |
| Cost of goods sold | (22) | (205) | (78) | (340) |
| **Gross profit** | **98** | **299** | **420** | **576** |
| **Operating expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing | 58 | 304 | 134 | 311 |
| &nbsp;&nbsp;&nbsp;General and administrative | 21 | 12 | 27 | 12 |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | **(79)** | **(316)** | **(161)** | **(323)** |
| **Gain (Loss) from discontinued operations** | **19** | **(17)** | **259** | **253** |
| **Other income (expenses):** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income |  | 5 |  | 5 |
| &nbsp;&nbsp;&nbsp;Other income (expense), net | - | 15 | - | 15 |
| &nbsp;&nbsp;&nbsp;**Total other income (expense)** | **-** | **20** |  | **20** |
| **Tax expenses** | **(60)** | **-** | **(60)** | **-** |
| **Net income (loss) from discontinued operations** | $**(41)** | $**3** | $**199** | $**273** |

---

***3.*** **Inventory**

Inventory consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025**<br> **(in thousands)** | **December 31, 2024** <br> **(in thousands)** |
| Finished goods | $1818 | $2198 |
| Raw materials | 1453 | 1166 |
|  | $**3271** | $**3364** |

---

Finished goods primarily consist of products ready for shipment and promotional merchandise held for sale. Raw materials include ingredients, concentrate, and packaging materials. For the three months ended June 30, 2025 and 2024, the Company recorded obsolete inventory expenses (recovery) of approximately $0.01 million and $0.01 million, respectively. For the six months ended June 30, 2025 and 2024, the Company recorded obsolete inventory expenses of approximately $0.04 million and $0.05 million, respectively.

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***4.*** **Fixed Assets, net**

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| | | |
|:---|:---|:---|
|  | **June 30, 2025**<br> **(in thousands)** | **December 31, 2024**<br> **(in thousands)** |
| Vehicles | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 65 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 65 |
| Equipment | 199 | 203 |
| Office and computer equipment | 262 | 262 |
|  | **526** | **530** |
| Accumulated depreciation | (452) | (422) |
|  | $**74** | $**108** |

---

***5.*** **Accrued Expenses**

Accrued expenses consisted of the following as of June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025**<br> **(in thousands)** | **December 31, 2024**<br> **(in thousands)** |
| Employee benefits | $242 | $220 |
| Goods and services tax | 274 | 155 |
| Legal settlement |  | 135 |
| Sales and marketing | 516 | 1309 |
| Other accruals | 597 | 645 |
|  | $**1629** | $**2464** |

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***6.*** **Revolving Credit Facility**

During the year ended December 31, 2024, the Company entered into a Revolving Financing and Assignment Agreement ("RFAA"), which provided a revolving credit facility of up to $2.0 million (the "Total Credit Facility") at an interest rate equal to the prime rate plus 3.50% per annum, with a minimum floor rate of 6.00%. This facility was intended to support the Company's working capital needs and general corporate purposes. On February 24, 2025, the Company made a payment of approximately $0.1 million to fully repay the Total Credit Facility and formally terminated the RFAA. Following this payment, the Company was released from any further obligations under the terms of the agreement.

On February 5, 2025, the Company, through its Subsidiary, entered into a Loan Agreement with Two Shores Capital Corp., pursuant to which the Subsidiary may borrow up to an aggregate maximum amount of $5.0 million, subject to the satisfaction of certain conditions. Advances under the Loan Agreement bear interest at a rate of 13.75% per annum. All present and future obligations of the Subsidiary under the Loan Agreement are secured by a first-priority security interest in all assets of the Company, the Subsidiary, and the Company's other U.S. subsidiaries. As of June 30, 2025, the outstanding balance under the Loan Agreement, including accrued interest, was approximately $0.9 million. The Company is obligated to provide periodic financial reporting, reporting of its inventory and accounts receivable listings, maintenance of its subsidiaries in good legal standing, maintenance of its insurance policies and payments of its tax obligations.

In connection with the Loan Agreement with Two Shores Capital Corp., the Company issued 750,000 warrants to Two Shores Capital Corp., exercisable at a price of $0.45 per share for a period of three years from the date of issuance. For accounting purposes, the Company estimated the fair value of the warrants at $50,711 on the issuance date. This amount was recognized as finance costs in the condensed consolidated statements of operations. The valuation of the warrants was performed using the Black-Scholes option pricing model, applying the following weighted-average assumptions:

Schedule of Weighted Average Assumptions Using the Black Scholes Valuation of Warrants

&nbsp;&nbsp;&nbsp;&nbsp;● Stock
 price $0.20

● Risk
free interest rate 4.00 %

● Expected
 volatility 79 %

● Expected
life (in years) 3

● Expected
dividend nil

Subsequent to June 30, 2025, the Company issued 250,000 warrants to Two Shores Capital Corp., exercisable at a price of $0.45 per share for a period of three years from the date of issuance.

***7.*** **Promissory Notes**

On May 2, 2025, the Company entered into a Promissory Note (the "Note") with the Chairman of the Board of the Company (the "Lender") for a principal amount of $0.45 million. The Note carries a fixed interest rate of 12% per annum and is payable monthly in arrears. The principal, together with accrued interest, is due and payable in full by October 10, 2025.

In addition to the principal and interest payments, the Company is required to pay a loan origination fee of $22,000, which is due on the date of maturity. The Note permits the Company to make prepayments without penalty, provided there is no default in payment obligations.

During the three and six months ended June 30, 2025, the Company repaid $0.17 million on the Notes. Subsequent to June 30, 2025, the Company made an additional repayment of $0.14 million.

***8.*** **Insurance Premium Financing**

Effective November 15, 2024, the Company entered into a **1** one-year financing agreement with IPFS Corporation to fund a portion of its insurance premiums in the amount of $0.2 million. Repayments are made quarterly on January 15, 2025, April 15, 2025, and by July 15, 2025, the entirety of the financing was paid off in full. The interest rate is 8.99% and there are no covenants associated with this agreement.

***9.*** **Membership Agreement Obligation**

On September 1, 2022, the Company entered into a revocable membership and licensing agreement with Saltbox Inc. for shared office and warehouse access in Seattle, WA. This agreement establishes a licensor-licensee relationship rather than a lease, and no lease liability or right-of-use asset is recorded. Initially, the agreement had a **1** one-year term with monthly payments of $8,000. Upon renewal, the Company opted for a month-to-month arrangement at $9,000 per month. On February 28, 2025, the Company provided notice of its intent to exit the agreement after securing lower-cost facilities.

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***10.*** **Shareholders' Equity**

On March 15, 2022, our Board adopted the 2022 Plan, which became effective upon approval by our shareholders on May 16, 2022. Under the 2022 Plan, the sum of (i) 10,000,000 shares of the Company's common stock, plus (ii) the number of shares of common stock reserved, but unissued under the 2011 Plan, plus (iii) the number of shares of common stock underlying forfeited awards under the 2011 Plan are initially available for issuance of awards under the 2022 Plan. Additionally, the number of shares of the Company's common stock available reserved under the 2022 Plan is subject to an annual increase on the first day of each calendar year beginning with the first January 1 following the effective date of the 2022 Plan and ending with the last January 1 during the initial ten-year term of the 2022 Plan, equal to the lesser of (A) 4% of the shares of the Company's common stock outstanding (which shall include shares issuable upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable for shares, including without limitation, preferred stock, warrants and employee options to purchase any shares) on the final day of the immediately preceding calendar year and (B) such lesser number of shares of common stock as determined by our Board. The Company may grant incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units and other stock-based awards to participants to acquire shares of Company common stock under the 2022 Plan. The 2022 Plan will be administered by the plan administrator (as defined in the 2022 Plan.

The Board may grant awards to employees, officers, directors, consultants, agents, advisors, and independent contractors. Stock options are issued at the closing price on the grant date and generally have a ten-year term. As of June 30, 2025, 4,351,158 shares remained available for future awards under the Plan.

***(a)***  ***Stock options:*** 

A summary of our stock option activity is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Outstanding Options** | **Outstanding Options** | **Outstanding Options** | **Outstanding Options** |
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** |
|  | **Number of<br> Shares** | **Weighted<br> Average<br> Exercise<br> Price ($)<br> (Per Share)** | **Number of<br> Shares** | **Weighted<br> Average<br> Exercise<br> Price ($)<br> (Per Share))** |
| Opening | 8647984 | 0.26 | 11407772 | 0.26 |
| Granted | 6425000 | 0.26 | 2200000 | 0.24 |
| Exercised | - | - | (136500) | 0.27 |
| Forfeited / Expired | (2269741) | 0.24 | (433750) | 0.42 |
| **Closing** | **12803243** | **0.26** | **13037772** | **0.25** |
| **Exercisable** | **4954014** | **0.27** | **5676126** | **0.27** |

---

The following table summarizes information about stock options outstanding and exercisable under our stock incentive plans as of June 30, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Exercise Price** | **Number<br> Outstanding** | **Weighted<br> Average<br> Remaining<br> Contractual<br> Life<br> (Years)** | **Weighted<br> Average<br> Exercise<br> Price Per<br> Share** | **Number<br> Exercisable** | **Weighted<br> Average<br> Remaining<br> Contractual<br> Life<br> (Years)** | **Weighted<br> Average<br> Exercise<br> Price Per<br> Share** |
| $0.165 to $0.25 | 5690379 | 8.41 | 0.20 | 2282504 | 7.24 | 0.20 |
| $0.251 to $0.40 | 6486290 | 8.82 | 0.29 | 2086290 | 7.34 | 0.27 |
| $0.401 to $0.55 | 437500 | 5.79 | 0.49 | 398958 | 5.70 | 0.49 |
| $0.551 to $0.70 | 189075 | 6.20 | 0.62 | 186262 | 6.19 | 0.62 |
|  | **12528243** | **8.46** | **0.27** | **4954014** | **7.12** | **0.26** |

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***(b)***  ***Restricted stock awards:*** 

Beginning May 13, 2022, the Company's Board of Directors determined that restricted stock units (RSUs) would be awarded as equity compensation for non-employee directors, replacing stock options, based on the recommendation of the Compensation and Governance Committee. RSUs vest incrementally per the award agreement, with certain awards vesting immediately upon a "Change in Control" as defined in the 2022 Plan.

Previously, from January 1, 2020, through February 15, 2022, non-employee directors received annual non-qualified stock option grants, which vested on the first anniversary of the grant date, subject to continued service. Grants were determined by dividing $25,000 by the closing share price on the grant date. New directors joining the Board before February 15, 2022, received prorated stock option awards under similar terms. Stock option and RSU awards were governed by the 2011 Plan (prior to the 2022 Plan) and respective grant agreements.

On December 30, 2022, the Company entered into rescission agreements with certain non-employee directors and its Chief Executive Officer and President, rescinding and canceling all RSUs granted during 2022, including shares issued upon RSU vesting in August 2022, without consideration.

During the three and six months ended June 30, 2025, the Company issued 699,493 common shares to settle the vested RSUs.

During the three and six months ended June 30, 2025 and 2024, no RSUs were issued, vested, or canceled.

As of June 30, 2025, and December 31, 2024, the Company had no RSUs outstanding.

***(c)***  ***Stock-based compensation expense:*** 

Stock-based compensation expense is recognized using the straight-line attribution method over the employees' requisite service period. We recognize compensation expense for only the portion of stock options or restricted stock expected to vest. Therefore, we apply estimated forfeiture rates that are derived from historical employee termination behavior. If the actual number of forfeitures differs from those estimated by management, additional adjustments to stock-based compensation expense may be required in future periods.

As of June 30, 2025, we had unrecognized compensation expense related to stock options of $1.0 million to be recognized over a weighted-average period of 5 years.

The following table summarizes the stock-based compensation expense (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Stock options | $196 | $198 | $287 | $348 |
| Restricted stock | - | 263 | - | 271 |
|  | $**196** | $**461** | $**287** | $**619** |
| **Consolidated Statements of Operations account:** |  |  |  |  |
| Selling and marketing | 61 | 32 | 73 | 52 |
| General and administrative | 136 | 429 | 214 | 567 |
|  | $**196** | $**461** | $**287** | $**619** |

---

[**Table of Contents**](#Toc_001)

We employ the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model and the simplified method to estimate the expected term of "plain vanilla" options:

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2024** |
| Expected dividend yield |  |  |
| Expected stock price volatility | 76.0% | 89.3% |
| Risk-free interest rate | 4.46% | 4.20% |
| Expected term (in years) | 10.0 | 5.90 |
| Weighted-average grant date fair-value | $0.21 | $0.18 |

---

As of June 30, 2025, the aggregate intrinsic value of outstanding stock options was approximately $11,500, while the intrinsic value of exercisable options was approximately $4,000. Intrinsic value is calculated as the quoted market price of the stock at the balance sheet date less the exercise price of the option.

***(d)***  ***Warrants*** 

During the year ended December 31, 2024, the Company issued 5,505,000 warrants, each with an exercise price of $0.50 per warrant, exercisable for a period of 24 months from the issuance date. Additionally, 440,400 broker's warrants were issued in connection with private placements completed during the year ended December 31, 2024. As of June 30, 2025 and December 31, 2024, these warrants remained outstanding.

As discussed in Note 6, in connection with the Loan Agreement with Two Shores Capital Corp., the Company issued 750,000 warrants to Two Shores Capital Corp., exercisable at a price of $0.45 per share for a period of three years from the date of issuance.

The following table presents a summary of the Company's outstanding warrants as of June 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Expiry Date** | **Number<br> Outstanding** | **Remaining<br> Contractual<br> Life (Years)** | **Exercise<br> Price Per<br> Share<br> (in dollar)** | **Number<br> Exercisable** |
| July 26, 2026 | 3767500 | 1.07 | $0.50 | 3767500 |
| July 31, 2026 | 800000 | 1.08 | 0.50 | 800000 |
| August 21, 2026 | 937500 | 1.14 | 0.50 | 937500 |
| May 30, 2028 | 750000 | 2.91 | 0.45 | 750000 |
|  | **6695400** |  |  | **6695400** |

---

[**Table of Contents**](#Toc_001)

***11.*** **Segment Information**

Subsequent to the disposition of the Cannabis-Derived (THC) Beverages segment, the Company's only operating and reportable segment is beverages. This segment includes both Jones Soda's traditional craft sodas, known for their unique flavors, pure cane sugar formulation, and consumer-driven branding as well as our modern soda's such as Pop Jones, Fiesta Jones and hemp derived products such as HD9. The products are distributed through various channels, including retail stores, foodservice outlets, and direct-to-consumer platforms.

The Chief Operating Decision Maker ("CODM") of the Company, who is also the Chief Executive Officer ("CEO"), is responsible for evaluating the performance of the Company's operations. The evaluation focuses primarily on key financial metrics such as net operating revenues and operating income (loss). Based on this consolidated approach to assessing performance and allocating resources, the Company does not present additional segment information in its financial disclosures.

Furthermore, in accordance with ASC 280, the Company provides the following entity-wide disclosures for the three months and six months ended June 30, 2025 and 2024:

**Net Sales by Geographic Location**: The breakdown of the Company's net sales by geographic location are as follows:

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| | | |
|:---|:---|:---|
| | **For the three months ended** | **For the three months ended** |
| <br>(in thousands) | **June 30, 2025** | **June 30, 2024** |
| **Segment Results – Net sales** |  |  |
| &nbsp;&nbsp;&nbsp;United States | $4018 | $5247 |
| &nbsp;&nbsp;&nbsp;Canada | 876 | 1412 |
| &nbsp;&nbsp;&nbsp;**Total** | $**4894** | $**6659** |

---

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| | | |
|:---|:---|:---|
| | **For the six months ended** | **For the six months ended** |
| <br>(in thousands) | **June 30, 2025** | **June 30, 2024** |
| **Segment Results – Net sales** |  |  |
| &nbsp;&nbsp;&nbsp;United States | $7660 | $8876 |
| &nbsp;&nbsp;&nbsp;Canada | 1464 | 2364 |
| &nbsp;&nbsp;&nbsp;**Total** | $**9124** | $**11240** |

---

Net sales generated in the United States accounted for 82% and 79% of total revenue during the three months ended June 30, 2025, and 2024, respectively.

Net sales generated in the United States accounted for 84% and 83% of total revenue during the six months ended June 30, 2025, and 2024, respectively.

**Income (loss) from Operations by Geographic Location**: The breakdown of the Company's income (loss) from operations by geographic location is as follows:

---

| | | |
|:---|:---|:---|
| | **For the three months ended** | **For the three months ended** |
| <br>(in thousands) | **June 30, 2025** | **June 30, 2024** |
| **Segment Results – Income (loss) from continuing operations** |  |  |
| &nbsp;&nbsp;&nbsp;United States | $2467 | $(1731) |
| &nbsp;&nbsp;&nbsp;Canada | 5 | 34 |
| &nbsp;&nbsp;&nbsp;**Total** | $**2652** | $**(1697)** |

---

---

| | | |
|:---|:---|:---|
| | **For the six months ended** | **For the six months ended** |
| <br>(in thousands) | **June 30, 2025** | **June 30, 2024** |
| **Segment Results – Income (loss) from continuing operations** |  |  |
| &nbsp;&nbsp;&nbsp;United States | $1553 | $(3660) |
| &nbsp;&nbsp;&nbsp;Canada | 7 | 667 |
| &nbsp;&nbsp;&nbsp;**Total** | $**1560** | $**(2993)** |

---

**Long-Lived Assets:** All of the Company's long-lived assets are located in the United States.

***12.*** **Commitments and Contingencies**

***Commitments***

As of June 30, 2025, we continue to have commitments to various suppliers of raw materials. Purchase obligations under these commitments are expected to total $2.3 million.

***Legal proceedings***

The California Department of Public Health ("CDPH") issued a cease-and-desist letter to the sale and distribution of Mary Jones hemp infused sodas in California through Jones Soda's wholly owned subsidiary Mary Jones Michigan, LLC. The state alleged that the Company's products violated California law by failing to properly label the products and that the products contained hemp-derived THC isolate, which they did not. The Company disputed the CDPH position, however, it voluntarily agreed to cease distribution of its hemp infused soda in California. While CDPH requested additional information from the Company regarding the status of the recall for distributed products, the action appeared to be resolved by September 2024. In April 2025, shortly before the statute of limitations expired for any further action by CDPH relating to Mary Jones sodas, CDPH filed a Complaint, and on June 27, 2025, the CDPH filed an amended compliant, in Los Angeles Superior Court naming Jones Soda and other businesses who were involved in the sale of infused soda in California in the spring of 2024, which the Company intends to dispute.

The Company has been served with a lawsuit by a supplier on August 11 , 2025 concerning an alleged breach of contract and unjust enrichment in the amount of $342,373. The Company intends to file a counterclaim against the plaintiff for an amount in excess of the damages alleged in the complaint.

We are or may be involved from time to time in various claims and legal actions arising in the ordinary course of business, including proceedings involving employee claims, contract disputes, product liability, other general liability claims and government and regulatory actions, as well as trademark, copyright, and related claims and legal actions. In the opinion of our management, the ultimate disposition of these matters will not have a material adverse effect on our condensed consolidated financial position, results of operations or liquidity.

***13.*** **Subsequent Events**

As disclosed in Note 6, the Company issued 250,000 warrants to Two Shores Capital Corp., exercisable at a price of $0.45 per share for a period of three years from the date of issuance.

As disclosed in Note 8, subsequent to June 30, 2025, the Company made an additional principal repayment of $135,000 with respect to the Notes previously issued to the Chair of the Company's Board of Directors.

The Company granted an aggregate of 2,213,765 RSUs to members of its Board of Directors. Pursuant to the grant terms, 50% of the RSUs vested on July 31, 2025, and the remaining RSUs are scheduled to vest in equal installments on September 30, 2025, and December 31, 2025. In connection with the vesting of the RSUs, the Company issued 1,106,884 shares of its common stock to settle the vested awards.

[**Table of Contents**](#Toc_001)

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| | |
|:---|:---|
| **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 our audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (*"*SEC*"*) on April 1, 2025.*

*This Report contains 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,*" "*continue,*" *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, and in our other reports we file with the SEC, including our periodic reports on Form 10-Q and current reports on Form 8-K. 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**

We develop, produce, market and distribute 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.

Our company is a Washington corporation formed in 2000 as a successor to Urban Juice and Soda Company Ltd., a Canadian company formed in 1986. Our principal place of business is located at 1522 Western Ave, STE 24150, Seattle, WA 98101. Our telephone number is (206) 624-3357.

**Products**

Our strategy is to evolve from a craft soda company (Jones Soda) to a diverse beverage company covering additional growing market segments including modern soda (Pop Jones and Fiesta Jones) and the alternative adult beverages (Hemp-derived Mary Jones and Spiked Jones). Our product line-up currently consists of the following:

***Jones Soda***

Jones Soda is our premium carbonated soft drink. We sell Jones Soda in premium glass bottles and cans, with labels featuring photos sent to us by our consumers. Over one million photos have been submitted to us. We believe this unique interaction with our consumers distinguishes our brand and offers a strong competitive advantage for Jones Soda. Additionally, we release various label campaigns that celebrate our consumers and the positive impact such consumers have on the world. Our products are made from high quality ingredients, including cane sugar and natural colors and flavors when possible. We also sell Jones Soda in more traditional flavors such as Cream Soda, Cola, Root Beer and Orange & Cream.

***Pop Jones and Fiesta Jones (Modern Soda market segment)***

We continue to see a growing market in our health focused soda brands, which we consider to be the "modern soda" market. Recent growth by industry competitors such as Poppi and Olipop have proven out the growing consumer demand for this market segment. In 2024, Jones launched its Pop Jones and Fiesta Jones product lines to capitalize on this growing market opportunity.

***Mary Jones (Hemp Derived Products) & Spiked Jones (Alternative Adult market segment)***

Jones started offering its hemp-derived Delta-9 THC products in 2024 through the Mary Jones brand, including with a line of four flavors of Mary Jones hemp-derived sodas. Since that time, Mary Jones has expanded its portfolio to include four flavors of 10mg Mary Jones shooters, four flavors of Mary Jones gummies, and a line of Mary Jones zero sugar sodas (which we anticipate launching in September 2025). The Mary Jones line is one of Jones' fastest growing business segments with new DSD distributors picking up the line every month. We believe there is a growing market for these products as consumers continue to migrate away from traditional beer and wine products. We further believe Mary Jones is uniquely positioned to lead in this emerging category. Backed by over two decades of brand equity from Jones Soda, we believe we offer an instantly recognizable name, a loyal consumer base, and a proven reputation for flavor innovation and quality. This brand trust allows us to enter the HD9 market with a built-in advantage, one that we believe most new and existing competitors cannot replicate. Additionally, we plan to launch our line of hard craft sodas "spiked" with alcohol under the brand name Spiked Jones in 2025.

***Fountain (food services market segment)***

Drawing inspiration from our traditional bottles, our fountain equipment and cups are branded with an engaging collage of consumer-submitted photos that are inspired by the business themes of our retail partners and the regions in which they are located. Our fountain offerings include traditional flavors such as Cane Sugar Cola, Sugar Free Cola, as well as cane sugar sweetened Ginger Ale, Orange & Cream, Root Beer and Lemon Lime. Rounding out the lineup are two of our most popular cane sugar flavors, Berry Lemonade and Green Apple. We have developed other products in select markets that include teas, lemonade, vitamin enhanced waters, hydration beverages, as well as naturally flavored sparkling waters.

We continue to see growing interest from larger quick service restaurants, corporate accounts, retailers, celebrity chefs and a variety of other outlets looking for differentiated offerings in their fountain soda. We feel that Jones on fountain enhances the consumer experience, while appealing to a broad demographic. We believe our national brand awareness and customer-centric approach make us unique compared to other craft soda competitors within this category.

**Our Focus: Sales Growth**

Our focus is sales growth through execution of the following key initiatives:

● Expand the Jones Soda glass bottle business in existing and new sales channels;

● Expand our business in the modern soda category through our Pop Jones and Fiesta Jones brands;

● Expand our fountain program in the United States and Canada;

● Grow our Spiked Jones alcohol infused brand throughout the US; and,

● Grow the new Mary Jones brand cannabidiol (CBD)-infused beverages.

[**Table of Contents**](#Toc_001)

**Results of Operations**

The following selected financial and operating data are derived from our condensed consolidated financial statements and should be read in conjunction with our condensed consolidated financial statements.

***Three months ended June 30, 2025 and 2024***

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| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>(Dollars in thousands) | **2024**<br>(Dollars in thousands) |<br>**% Change** |
| Revenue | $4894 | $6653 | (26.4)% |
| Cost of Goods Sold | (3266) | (4391) | (25.6)% |
| Gross Profit | 1628 | 2262 | (28.0)% |
| % of Revenue | 33% | 34% |  |

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***Quarter Ending June 30, 2025 Compared to Quarter Ended June 30, 2024***

*Revenue*

For the quarter ending June 30, 2025, revenue decreased by approximately $1.8 million, or 26.4%, to approximately $4.9 million compared to approximately $6.7 million for the quarter ending June 30, 2024. The decrease in sales revenue was driven by lower sales in its core soda business ($2.1 million decrease year over year) and direct to consumer business ($0.3 million), which was partially offset by growth in mini cans, food service, convenience stores and HD9 products ($0.7 million increase year over year). HD9 grew to $0.2 million during the second quarter from $0.6 million in the prior year to $0.8 million for the second quarter ending June 30, 2025. Core soda sales were front end loaded in 2024 with one customer taking a large pipeline fill order in the second quarter of 2024 which did not repeat in 2025. Management expects to see growth in the third and fourth quarters driven by Core Soda, HD9, Spiked Jones, Modern Soda formats (Pop Jones and Fiesta Jones), direct to consumer, as well as growth in club, food service and convenience store channels.

*Gross Profit*

For the quarter ending June 30, 2025, gross profit decreased by approximately $0.6 million, or 28%, to approximately $1.6 million compared to approximately $2.3 million for the quarter ending June 30, 2024 as a result of lower sales revenue in the current quarter. For the quarter ending June 30, 2025, gross margin decreased slightly to 33.3% from 33.4% in the quarter ending June 30, 2024. The Company continues to look for opportunities to decrease the cost of goods sold with its co-manufacturers and our warehouse and freight providers.

*Selling and Marketing Expenses*

Selling and marketing expenses for the second quarter ending June 30, 2025 were approximately $1 million, a decrease of approximately $0.6 million, or 39%, from approximately $1.6 million for the second quarter ending June 30, 2024. This decrease was primarily a result of decreased online marketing spend and tradeshows and sponsorships for both the Jones Soda and Mary Jones brands in the second quarter of 2025 compared to the same quarter of 2024. Selling and marketing expenses as a percentage of revenue decreased to 21% in the second quarter ending June 30, 2025 from 25% in the same period in 2024. We intend to continue to look for clear return on investment from our selling and marketing expenses to drive profitable sales. For the three months ending June 30, 2025, and 2024, non-cash expenses included in selling and marketing expenses (stock compensation and depreciation) were approximately $65,000 and $38,000, respectively.

*General and Administrative Expenses*

General and administrative expenses for the second quarter ending June 30, 2025 were approximately $1.3 million compared to $2.2 million in the second quarter ending June 30, 2024 or a reduction of $0.9 million. General and administrative expenses as a percentage of revenue decreased to 27% in the second quarter ending June 30, 2025 from 33% in the same quarter in 2024 or an approximately 6 percentage points decrease. We intend to continue to look for additional opportunities to reduce our G&A costs beyond the cost reductions achieved in 2025. For the three months ending June 30, 2025, and 2024, non-cash expenses included in general and administrative expenses (stock compensation and depreciation) were approximately $148,000 and $435,000, respectively.

[**Table of Contents**](#Toc_001)

*Income Tax Expense*

We incurred approximately $7,000 and $11,000 of income tax expense during the quarter ended 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 quarter ended June 30, 2025 was approximately $2.6 million compared to net loss of approximately $1.6 million for the quarter ended June 30, 2024 or an improvement of $4.2 million. This decrease in net loss was primarily due to the decreases in selling and marketing expenses and general and administrative expenses in the second quarter of 2025 compared to the first quarter of 2024, and the gain on sale of its Cannabis businesses being partially offset by reduced sales revenues and gross profit in the current quarter compared to the same quarter last year.

***Six months ending June 30, 2025 and 2024***

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| | | | |
|:---|:---|:---|:---|
|  | **2025**<br>(Dollars in thousands) | **2024**<br>(Dollars in thousands) |<br>**% Change** |
| Revenue | $9124 | $11240 | (18.8)% |
| Cost of Goods Sold | (6101) | (7363) | (17.1)% |
| Gross Profit | 3023 | 3877 | (22.0)% |
| % of Revenue | 33.1% | 34.5% |  |

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***Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024***

*Revenue*

For the six months ending June 30, 2025, revenue decreased by approximately $2.1 million, or 18.8%, to approximately $9.1 million compared to approximately $11.2 million for the six months ending June 30, 2024. The decrease in sales revenue was driven by lower sales in its core soda business ($3.5 million decrease year over year) and direct to consumer business ($0.4 million), which was partially offset by growth in mini cans, food service, convenience store and HD9 products ($1.8 million increase year over year). HD9 grew $0.9 million over the six months from $0.9 million in the prior year to $1.8 million for the six months ending June 30, 2025. Core soda sales were front end loaded in 2024 with one customer taking a large pipeline fill order in the second quarter of 2024 which did not repeat in 2025. Management expects to see growth in the third and fourth quarters driven by Core Soda, HD9, Spiked Jones, Modern Soda formats (Pop Jones and Fiesta Jones), direct to consumer, as well as growth in club, food service and convenience store channels. Core Soda sales for 2025 is expected to end the year down slightly over the prior year's total core soda sales.

*Gross Profit*

For the six months ending June 30, 2025, gross profit decreased by approximately $0.8 million, or 22%, to approximately $3.0 million compared to approximately $3.8 million for the six months ending June 30, 2024 because of lower sales revenue. For the six months ending June 30, 2025, gross margin decreased to 33.3% from 34.5% in the comparable period driven by higher initial product costs for new Jones products. The Company expects that with higher sales volumes of these new products, product costs are expected to be lower as we negotiate lower co-manufacturing fees and lower raw material and packaging.

*Selling and Marketing Expenses*

Selling and marketing expenses for the six months ending June 30, 2025, were approximately $2.2 million, a decrease of approximately $0.9 million, or 29%, from approximately $3.1 million in the comparable period. This decrease was primarily a result of decreased online marketing spend and tradeshows and sponsorships for both the Jones Soda and Mary Jones brands in the six months ending June 30, 2025, compared to the same period in 2024. Selling and marketing expenses as a percentage of revenue decreased to 24% in the six months ending June 30, 2025, from 28% in the same period in 2024. We intend to continue to look for clear return on investment from our selling and marketing expenses to drive profitable sales. For the six months ending June 30, 2025, and 2024, non-cash expenses included in selling and marketing expenses (stock compensation and depreciation) were approximately $82,000 and $65,000, respectively.

[**Table of Contents**](#Toc_001)

 

*General and Administrative Expenses*

General and administrative expenses for the six months ending June 30, 2025, were approximately $2.6 million compared to $3.8 million in the first six months ending June 30, 2024, or a reduction of $1.2 million (31% reduction). General and 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 of stock keeping units ("SKU") selected or removed by our distributors and retail partners through the normal course of serving consumers in the dynamic, trend-oriented beverage industry. As a result, management believes that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the fiscal year.

**Liquidity and Capital Resources**

As of June 30, 2025, and December 31, 2024, the Company had cash of approximately $0.7 million and $1.5 million, respectively, and working capital of approximately $1.6 million and $2.0 million, respectively. Net cash used in operating activities for the six months ending June 30, 2025 and 2024, was approximately $2.6 million and $3.0 million, respectively. The Company reported a net income of approximately $1.8 million for the six months ending June 30, 2025, compared to a net loss of approximately $2.7 million for the six months ending June 30, 2024. As of June 30, 2025, the Company's accumulated deficit decreased to approximately $91.2 million, compared to approximately $92.9 million as of December 31, 2024.

[**Table of Contents**](#Toc_001)

For the six months ending June 30, 2025, net cash provided by investing activities was approximately $0.6 million. This amount was primarily attributable to cash proceeds of $0.6 million received in connection with the disposition of the Cannabis Subsidiaries.

For the six months ended June 30, 2025, net cash provided by financing activities was approximately $0.7 million. This amount was primarily attributable to net proceeds of $0.6 million from a new credit facility and repayments of approximately $0.1 million under the Company's insurance financing agreement. In addition, the Company issued a $0.5 million promissory note to its Chairman of the Board, of which $0.2 million was repaid during the period. In contrast, for the six months ended June 30, 2024, net cash used in financing activities amounted to approximately $0.1 million, reflecting repayments under the Company's insurance financing agreement, partially offset by proceeds from the exercise of Pinestar warrants.

We have experienced recurring losses from operations and negative cash flows from operating activities. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. To address this issue, in the first quarter of fiscal year of 2025, the Company changed its senior leadership and is focusing on reducing its operating expenses while bringing new products to market with higher margins and potentially higher customer demand. Additionally, on February 5, 2025, the Company, through a wholly-owned subsidiary (the "Subsidiary"), entered into loan agreement (the "Loan Agreement") with Two Shores Capital Corp, pursuant to which the Subsidiary may borrow a maximum aggregate amount of up to $5 million, subject to satisfaction of certain conditions. All advances drawn under the Loan Agreement will bear interest at a rate of 13.75% per annum and all present and future obligations of the Subsidiary arising under the Loan Agreement are secured by a first priority security interest in all of the assets of the Company, the Subsidiary and the Company's other United States subsidiaries. The Loan Agreement replaces the $2 million revolving credit facility entered into by the Company in March 2024 (the "2024 Credit Facility"). The borrowing base under the Loan Agreement expands the assets that can be financed against from only accounts receivable under the 2024 Credit Facility to accounts receivable, inventory and customer purchase orders.

Additionally, on May 7, 2025, the Company entered into a loan agreement with the Chairman of the Company's Board of Directors in the amount of $450,000. The interest rate on this loan is 12% per annum. The principal, together with accrued interest and a loan fee of $22,000, is due and payable in full by October 10, 2025. A $22,000 loan fee is also due upon repayment. The proceeds from this loan are expected to be used for general working capital purposes.

Based on management's current operating plan, the Company believes its cash on hand, projected cash generated from product sales and funds received from under the Loan Agreement are sufficient to fund the Company's operations for a period of at least 12 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.

**Critical Accounting Policies and Estimates**

See the information concerning our critical accounting policies and estimates included under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation – Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 1, 2025. There have been no material changes in our critical accounting policies during the three months ended June 30, 2025.

[**Table of Contents**](#Toc_001)

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| | |
|:---|:---|
| **ITEM 3.** | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** |

---

Not applicable.

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| | |
|:---|:---|
| **ITEM 4.** | **CONTROLS AND PROCEDURES.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a) Evaluation of disclosure controls and procedures***

We maintain disclosure controls and procedures (as such terms are defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(b) Changes in internal controls over financial reporting***

There were no other changes in our internal controls over financial reporting during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. Based on our evaluation under the COSO framework, management concluded that, as of such date, our internal controls over financial reporting were not effective as of the end of the period covered by this interim report on Form 10-Q due to material weaknesses as described herein. A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (United States) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following material weaknesses:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● The Company had key senior accounting personnel transitioned over the course of the year-end process from the end of 2024 through the beginning of 2025. As a result, adjustments to the year end balances were required to be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● During the transition period noted above the Company lacked sufficient resources with respect to the number of people employed in its accounting department and the adequacy of their training in relation to its financial reporting requirements.

Planned Remediation

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● The Company announced a new experienced CFO in February, 2025. The Company hired additional CPA consultants to complete the year end audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● The Company hired an experienced CPA in public company reporting in June,2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● The Company is now through that transition and the new leadership team will ensure previously effective controls are followed by the time we report the third quarter interim results and reinforced adherence to the set of internal controls that Company has previously successfully abided by over the past years.

[**Table of Contents**](#Toc_001)

**PART II** – **OTHER INFORMATION**

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| | |
|:---|:---|
| **ITEM 1.** | **LEGAL PROCEEDINGS** |

---

We are not currently involved in any material legal proceedings. We may be involved from time to time in various claims and legal actions arising in the ordinary course of business, including proceedings involving employee claims, contract disputes, product liability and other general liability claims, as well as trademark, copyright, and related claims and legal actions. In the opinion of our management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity.

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| | |
|:---|:---|
| **ITEM 1A.** | **RISK FACTORS** |

---

There have been no material changes in the risk factors set forth in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024.

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| | |
|:---|:---|
| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, ISSUER PURCHASES OF EQUITY SECURITIES.** |

---

None.

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| | |
|:---|:---|
| **ITEM 3.** | **DEFAULTS UPON SENIOR SECURITIES** |

---

None.

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| | |
|:---|:---|
| **ITEM 4.** | **MINE SAFETY DISCLOSURES** |

---

None.

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| | |
|:---|:---|
| **ITEM 5.** | **OTHER INFORMATION** |

---

None.

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| | |
|:---|:---|
| **ITEM 6.** | **EXHIBITS** |

---

---

| | |
|:---|:---|
| 3.1 | [Articles of Incorporation of Jones Soda Co. (Previously filed as, and incorporated herein by reference to, Exhibit 3.1 to our annual report on Form 10-KSB for the fiscal year ended December 31, 2000, filed on March 30, 2001; File No. 333-75913).](https://www.sec.gov/Archives/edgar/data/1083522/000091205701505910/a2043223zex-3_1.htm) |
| 3.2 | [Amended and Restated Bylaws of Jones Soda Co. (Previously filed with, and incorporated herein by reference to, Exhibit 3.1 to our quarterly report on Form 10-Q, filed on November 8, 2013; File No. 000-28820).](https://www.sec.gov/Archives/edgar/data/1083522/000108352213000053/jsda9302013ex31.htm) |
| 3.3 | [Articles of Amendment to Articles of Incorporation of Jones Soda Co. dated May 16, 2022. (Previously filed with, and incorporated herein by reference to, Exhibit 3.3 to our registration statement on Form S-1, filed on June 14, 2022; File No. 333-265598).](https://www.sec.gov/Archives/edgar/data/1083522/000143774922014988/ex_386995.htm) |
| 31.1 | [Certification of Chief Executive Officer, pursuant to Rules 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).](ex31-1.htm) |
| 31.2 | [Certification of Chief Financial Officer, pursuant to Rules 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).](ex31-2.htm) |
| 32.1 | [Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).](ex32-1.htm) |
| 32.2 | [Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).](ex32-2.htm) |
| 101.INS\* | Inline XBRL Instance Document. |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

[**Table of Contents**](#Toc_001)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | JONES SODA CO. | JONES SODA CO. |
|  | (Registrant) | (Registrant) |
| August 14, 2025 |  |  |
|  | By: | */s/ Brian Meadows* |
|  |  | Brian Meadows<br>|
|  |  | Chief Financial Officer |

---

## Exhibit 10.1

**Exhibit 10.1**

![](ex10-1_001.jpg)

![](ex10-1_002.jpg)

![](ex10-1_003.jpg)

![](ex10-1_004.jpg)

![](ex10-1_005.jpg)

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO RULES 13(a)-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934**

I, Scott Harvey, certify that:

1. I
 have reviewed this report on Form 10-Q of Jones Soda Co.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d) Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| Date: August 14, 2025 |  |
|  | */s/ Scott Harvey* |
|  | **Scott Harvey** |
|  | Chief Executive Officer |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO RULES 13(a)-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934**

I, Brian Meadows, certify that:

1. I
 have reviewed this report on Form 10-Q of Jones Soda Co.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d) Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| Date: August 14, 2025 |  |
|  | */s/ Brian Meadows* |
|  | Brian Meadows |
|  | Chief Financial Officer |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Jones Soda Co. (the "Company") on Form 10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Form 10-Q"), I, Scott Harvey, Chief Executive Officer of the Company, hereby certify that, to my knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The
 Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
 78o(d)); and

(2) The
 information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | |
|:---|:---|
| Date: August 14, 2025 |  |
|  | */s/ Scott Harvey* |
|  | **Scott Harvey** |
|  | Chief Executive Officer |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Jones Soda Co. (the "Company") on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Form 10-Q"), I, Brian Meadows, Chief Financial Officer of the Company, hereby certify that, to my knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002:

(1) The
 Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
 78o(d)); and

(2) The
 information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | |
|:---|:---|
| Date: August 14, 2025 |  |
|  | */s/ Brian Meadows* |
|  | Brian Meadows |
|  | Chief Financial Officer |

---