# EDGAR Filing Document

**Accession Number:** 0001083522
**File Stem:** 0001493152-26-023047
**Filing Date:** 2026-5
**Character Count:** 101102
**Document Hash:** a3183302444aeefd0920e4288453b41a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-023047.hdr.sgml**: 20260514

**ACCESSION NUMBER**: 0001493152-26-023047

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 80

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260514

**DATE AS OF CHANGE**: 20260514

**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:** 26978544

**BUSINESS ADDRESS:**
- **STREET 1:** 4786 1ST AVENUE SOUTH
- **STREET 2:** SUITE 103
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98134
- **BUSINESS PHONE:** 206 624-3357

**MAIL ADDRESS:**
- **STREET 1:** 4786 1ST AVENUE SOUTH
- **STREET 2:** SUITE 103
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98134

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** JONES SODA CO
- **DATE OF NAME CHANGE:** 20000815

**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 March 31, 2026

**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 May 14, 2026, there were 118,780,917 shares of the registrant's common stock issued and outstanding.

**JONES SODA CO.**

**FORM 10-Q**

**FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Explanatory Note](#JA_001) | 3 |
| [Cautionary Notice Regarding Forward Looking Statements](#JA_002) | 3 |
| [PART I. FINANCIAL INFORMATION](#JA_003) | 5 |
| [Item 1. Financial Statements (Unaudited)](#JA_004) | 5 |
| &nbsp;&nbsp;&nbsp;[a) Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025](#JA_005) | 5 |
| &nbsp;&nbsp;&nbsp;[b) Condensed Consolidated Statements of Operations – three months ended March 31, 2026 and 2025](#JA_006) | 6 |
| &nbsp;&nbsp;&nbsp;[c) Condensed Consolidated Statements of Comprehensive Income (Loss) – three months ended March 31, 2026 and 2025](#JA_007) | 7 |
| &nbsp;&nbsp;&nbsp;[d) Condensed Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2026 and 2025](#JA_008) | 8 |
| &nbsp;&nbsp;&nbsp;[e) Condensed Consolidated Statements of Cash Flows – three months ended March 31, 2026 and 2025](#JA_009) | 9 |
| &nbsp;&nbsp;&nbsp;[f) Notes to Condensed Consolidated Financial Statements](#JA_010) | 10 |
| [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#JA_011) | 20 |
| [Item 3. Quantitative and Qualitative Disclosures about Market Risk](#JA_012) | 23 |
| [Item 4. Controls and Procedures](#JA_013) | 23 |
| [PART II. OTHER INFORMATION](#JA_014) | 24 |
| [Item 1. Legal Proceedings](#JA_015) | 24 |
| [Item 1A. Risk Factors](#JA_016) | 24 |
| [Item 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, ISSUER PURCHASES OF EQUITY SECURITIES](#JA_017) | 24 |
| [Item 5. Other Information](#JA_020) | 24 |
| [Item 6. Exhibits](#JA_021) | 24 |

---

[**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 and our ability to continue as a going concern 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
 revenues from our hemp-derived HD9 products could be negatively impacted if recent federal legislation that would prohibit the unregulated
 sale of intoxicating hemp-based or hemp derived products (including delta-8/HD9) is not amended;

● 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;

● 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, 2025 filed with the Securities and Exchange Commission ("SEC") on March 31, 2026 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)

---

| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2026**<br> **(unaudited)** | **December 31,**<br> **2025** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $4439 | $3599 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance of $46 and $50, respectively | 5258 | 3603 |
| &nbsp;&nbsp;&nbsp;Note receivable |  | 1400 |
| &nbsp;&nbsp;&nbsp;Current licensing fees receivable | 150 | 150 |
| &nbsp;&nbsp;&nbsp;Inventories, net | 4153 | 2657 |
| &nbsp;&nbsp;&nbsp;Prefunded insurance premiums from financing | 144 | 214 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 568 | 1224 |
| &nbsp;&nbsp;&nbsp;Deferred financing costs | 415 | 415 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | **15127** | **13262** |
| Long-term licensing fees receivable | 1696 | 1647 |
| Fixed assets, net of accumulated depreciation of $658 and $583, respectively | 269 | 321 |
| **Total assets** | $**17092** | $**15230** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $7146 | $6378 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 4269 | 3960 |
| &nbsp;&nbsp;&nbsp;Revolving credit facility and loans | 3721 | 3022 |
| &nbsp;&nbsp;&nbsp;Insurance premium financing | 144 | 214 |
| &nbsp;&nbsp;&nbsp;Promissory notes | - | 190 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **15280** | **13764** |
| **Total liabilities** | **15280** | **13764** |
| **Commitments and contingencies (Note 14)** |  |  |
| **Shareholders' equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, no par value: |  |  |
| &nbsp;&nbsp;&nbsp;Authorized — 800,000,000. Issued and outstanding shares — 118,780,917 shares and 118,227,478 shares, respectively | 96155 | 95895 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 270 | 299 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (94613) | (94728) |
| **Total shareholders' equity** | **1812** | **1466** |
| **Total liabilities and shareholders' equity** | $**17092** | $**15230** |

---

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 March 31,** | **Three Months ended March 31,** |
|  | **2026** | **2025** |
| **Net Revenue** | $**12432** | $**4230** |
| Cost of goods sold | (8534) | (2835) |
| **Gross profit** | **3898** | **1395** |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing | 2036 | 1113 |
| &nbsp;&nbsp;&nbsp;General and administrative | 1509 | 1203 |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | **(3545)** | **(2316)** |
| **Income (loss) from operations** | **353** | **(921)** |
| **Other income (expenses):** |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 14 | 1 |
| &nbsp;&nbsp;&nbsp;Interest expense | (240) | (78) |
| &nbsp;&nbsp;&nbsp;Other income (expense), net | (10) | (94) |
| &nbsp;&nbsp;&nbsp;**Total other income (expense)** | **(236)** | **(171)** |
| **Income (loss) before income taxes** | **117** | **(1092)** |
| Income tax provision | (2) | - |
| **Income (loss) from continuing operations** | **115** | **(1092)** |
| Income from discontinued operations |  | 240 |
| **Net income (loss)** | $**115** | $**(852)** |
| **Earning (loss) per share – basic** |  |  |
| Income (loss) from continuing operations | $0.00 | $(0.01) |
| Income from discontinued operations | $- | $0.00 |
| Total | $0.00 | $(0.01) |
| **Weighted average common shares outstanding** | **118614885** | **115865227** |
| **Earning (loss) per share – Diluted** |  |  |
| Income (loss) from continuing operations | $0.00 | $(0.01) |
| Income from discontinued operations | $- | $0.00 |
| Total | $0.00 | $(0.01) |
| **Weighted average common shares outstanding** | **121386039** | **115865227** |

---

See accompanying notes to condensed consolidated financial statements.

[**Table of Contents**](#toc_001)

**JONES SODA CO.**

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)**

**(Unaudited)**

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

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** |
| **Net income (loss)** | $**115** | $**(852)** |
| **Other comprehensive income (loss)** |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | (29) | 1 |
| **Total comprehensive income (loss)** | $**86** | $**(851)** |

---

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 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, 2025** | **118227478** | $**95895** | $**299** | $**(94728)** | $**1466** |
| Shares issued for restricted share units | 553439 |  |  |  |  |
| Fair value of warrants issued |  | 124 |  |  | 124 |
| Stock-based compensation |  | 136 |  |  | 136 |
| Net income |  |  |  | 115 | 115 |
| Other comprehensive loss | - | - | (29) | - | (29) |
| **Balance as of March 31, 2026** | **118780917** | $**96155** | $**270** | $**(94613)** | $**1812** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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** | $**222** | $**(92949)** | $**2156** |
| Stock-based compensation |  | 91 |  |  | 91 |
| Net loss |  |  |  | (852) | (852) |
| Other comprehensive income |  |  | 1 |  | 1 |
| **Balance as of March 31, 2025** | **115867659** | $**94974** | $**223** | $**(93801)** | $**1396** |

---

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 share data)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** |
| **OPERATING ACTIVITIES:** |  |  |
| **Net income (loss)** | $**115** | $**(852)** |
| Less: Income from discontinued operations | - | (240) |
| **Net income (loss) from continuing operations** | **115** | **(1092)** |
| Adjustments to reconcile net income (loss) to net cash flows used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Finance income | (10) |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 240 |  |
| &nbsp;&nbsp;&nbsp;Licensing fees | (39) |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 75 | 13 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 136 | 91 |
| &nbsp;&nbsp;&nbsp;Change in allowance for credit losses | 2 | (46) |
| &nbsp;&nbsp;&nbsp;Write-off of obsolete inventory |  | (25) |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (1291) | (1355) |
| &nbsp;&nbsp;&nbsp;Inventories | (1504) | (354) |
| &nbsp;&nbsp;&nbsp;Prefunded insurance premiums from financing | 63 | 70 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 276 | (320) |
| &nbsp;&nbsp;&nbsp;Accounts payable | 769 | 1771 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 320 | (627) |
| **Net cash used in continuing operations** | **(848)** | **(1874)** |
| **INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of note receivable | 1400 |  |
| &nbsp;&nbsp;&nbsp;Purchase of property, plant and equipment | (23) | - |
| **Net cash provided by (used in) investing activities** | **1377** | **-** |
| **FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net cash from revolving credit facility | 583 | 986 |
| &nbsp;&nbsp;&nbsp;Repayment of promissory notes | (190) |  |
| &nbsp;&nbsp;&nbsp;Repayments on insurance financing | (63) | (70) |
| **Net cash provided by financing activities** | **330** | **916** |
| **DISCONTINUED OPERATIONS:** |  |  |
| Net cash provided by operating activities of discontinued operations | - | 159 |
| **Net cash provided by discontinued operations** | **-** | **159** |
| **Net change in cash** | 859 | (799) |
| &nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash | (19) | 1 |
| Cash from continuing operations, beginning of period | 3599 | 1275 |
| Cash from discontinued operations, beginning of period |  | 258 |
| Less: Cash from discontinued operations, end of period |  | (8) |
| **Cash, end of period** | $**4439** | $**727** |
| **Supplemental disclosure:** |  |  |
| Fair value of warrants issued | $124 | $- |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;Interest | $112 | $66 |
| &nbsp;&nbsp;&nbsp;Income taxes | $- | $- |

---

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. 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

We are a Washington corporation and have the following subsidiaries: Jones Soda Co. (USA) Inc., Jones Soda (Canada) Inc., Pinestar Gold Inc., and Mary Jones Holdco 2, Inc. (collectively, the "Subsidiaries").

***Basis of presentation, consolidation and use of estimates***

The unaudited interim condensed consolidated financial statements as of and for the period ending March 31, 2026, 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, 2025*.

***Reclassifications***

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

***Liquidity***

As of March 31, 2026, and December 31, 2025, the Company had cash of approximately $4.4 million and $3.6 million, respectively, and working capital deficiency of approximately $0.2 million and $0.5 million, respectively. The Company reported a net income from continuing operations of approximately $0.1 million for the three months ended March 31, 2026, compared to a net loss from continuing operations of approximately $1.1 million for the three months ended March 31, 2025. As of March 31, 2026, the Company's accumulated deficit decreased to approximately $94.6 million, compared to approximately $94.7 million as of December 31, 2025.

For the three months ended March 31, 2026, net cash used in continuing operating activities was approximately $0.8 million, a decrease of about $1.0 million compared with $1.9 million used for the same period in 2025. Cash flow from continuing operations prior to the impact of non cash working capital improved by $1.6 million comparing the first quarter of 2026 to the prior period. First quarter 2026 non-cash working capital increased by $0.6 million driven by investment in inventories ($1.0 million increase) to support the increase in sales compared to the prior period which was partially offset by an increase in short term payables and accrued expenses ($0.4 million increase).

For the three months ended March 31, 2026, investing activities provided net cash of approximately $1.4 million, compared to $nil in 2025. The increase was primarily due to $1.4 million proceeds from sale of the note receivable.

For the three months ended March 31, 2026, net cash provided by financing activities totaled approximately $0.3 million. This amount primarily reflects net proceeds of $0.6 million from the credit facility, partially offset by a payment of approximately $0.3 million on an outstanding promissory note and $0.1 million repayments under the Company's insurance financing agreement.

Historically, 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. We have significantly reduced these losses from operations in 2025 and the first quarter of 2026, the Company achieved a positive net income of $0.1 million. The Company continues to focus on reducing its operating expenses while bringing products to market with higher margins and potentially higher customer demand. Additionally, the Company announced a $2.5 million brokered private placement on April 30<sup>th</sup>, 2026, and has a $10 million credit facility with Two Shores Capital Corp (the "Credit Facility"). All advances drawn under the Credit Facility will bear interest at a rate of 13.75% per annum and all present and future obligations arising under the Credit Facility are secured by a first priority security interest in all of the assets of the Company and the Company's United States Subsidiaries.

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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.

***Revenue recognition***

The Company's contracts have a single performance obligation which is satisfied at the point in time when the customer has title and the significant risks and rewards of ownership of the product. Title and the significant risk and rewards of ownership are deemed to transfer when products are loaded onto a truck for shipment or Free on Board ("FOB") shipping point. The Company primarily receives fixed consideration for sales of product, subject to adjustment as described below. Shipping and handling amounts paid by customers are primarily for online orders, and are included in revenue, and totaled approximately $0.09 million and $0.02 million for the three months ended March 31, 2026 and March 31, 2025, 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 March 31, 2026.

Revenue is recorded net of provisions for discounts, slotting fees payable by us to retailers to stock our products and promotion allowances. Discounts, slotting fees and promotional allowances vary the consideration the Company is entitled to in exchange for the sale of products to distributors. The Company estimates 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 consolidated balance sheets. Amounts paid for slotting fees are recorded as prepaid expenses on the consolidated balance sheets and amortized over the corresponding term. For the three months ended March 31, 2026 and 2025, our revenue was reduced by $1.3 million and $0.7 million, respectively, for slotting fees and promotional allowances.

All sales to distributors and customers are generally final. In limited instances we may accept returned product due to quality issues or distributor terminations, and in such situations we would have variable consideration. The Company's customers generally pay within 30 days from the receipt of a valid invoice. The Company offers prompt pay discounts of up to 2% to certain customers typically for payments made within 15 days. Prompt pay discounts are recorded as a deduction to revenues in the accompanying consolidated statements of operations. As of March 31, 2026, and December 31, 2025, 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 March 31, 2026, and December 31, 2025, allowances for credit losses were approximately $0.05 million and $0.05 million, respectively, and were netted against accounts receivable. No impairment losses were recognized for the three months ended March 31, 2026 and 2025. 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 March 31, 2026, one of the Company's independent customers accounted for approximately 40% of outstanding accounts receivable. As of December 31, 2025, a single customer represented approximately 44% of the Company's accounts receivable balance.

***Net earnings (loss) per share***

Basic net earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the respective periods. Diluted earnings per share is computed by adjusting the weighted average number of common shares to reflect the potential net exercise or conversion of all dilutive securities.

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 **

***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): Disaggregation of Income Statement Expenses, as clarified by ASU 2025-01. The guidance requires public business entities to disclose additional disaggregated information about certain income statement expense captions in the notes to the financial statements. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statement disclosures.

In December 2025, the FASB issued Accounting Standards Update 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments clarify the scope of Topic 270, standardize the form and content requirements for interim financial statements, and consolidate interim disclosure requirements within Topic 270. The ASU also introduces a disclosure principle requiring entities to describe events occurring after the end of the most recent annual period that have a material effect on the interim financial statements. The amendments do not change the fundamental nature of interim reporting and are not expected to result in significant additional disclosures. ASU 2025-11 is effective for the Company for interim periods within fiscal years beginning after December 15, 2027, with a one-year deferral for entities that are not public business entities. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its interim financial statement presentation and disclosures, but does not expect the adoption to have a material effect on its consolidated financial statements.

**2.** **Discontinued Operations** 

On June 19, 2025 (the "Date of Disposition"), the Company completed the sale of all issued and outstanding equity interests in its cannabis beverage subsidiaries (the "Cannabis Subsidiaries") to MJ Reg pursuant to a share purchase agreement ("SPA"). As part of the transaction, the Company discontinued its Cannabis-Derived (THC) Beverage operations. The disposal group met the criteria for discontinued operations under ASC 205-20.

Under the SPA, MJ Reg purchased the Cannabis Subsidiaries for (i) a $3.0 million promissory note and (ii) inventory valued at approximately $0.06 million. The promissory note is payable in scheduled installments through June 19, 2028, bears interest at the lower of 3% per annum or the minimum rate permitted by law, and provides for a 10% default rate. Interest is waived if MJ Reg fully satisfies all obligations under the note.

In connection with the SPA, the Company entered into a trademark license agreement with MJ Holdings granting exclusive rights to use certain licensed intellectual property in connection with THC-based consumable products. The Company retains exclusive rights to Hemp-based products. Under the agreement, the Company is entitled to receive a fixed annual licensing fee of $0.15 million on the first anniversary of the License Effective Date and $0.255 million on each subsequent anniversary.

At the Date of Disposition, the Company measured the consideration at fair value using a weighted average cost of capital of 11.6%, resulting in the following valuations:

● Promissory Note — $2.59 million

● License Agreement — $1.70 million

Transaction costs incurred totaled $0.05 million. The Company recognized a gain on disposal of $3.9 million in 2025.

The Cannabis Subsidiaries' operating results for the periods presented are classified as discontinued operations. No activity occurred during the three months ended March 31, 2026, other than the ongoing assessment of collectability of the promissory note and licensing receivable. The Company continues to evaluate the carrying value of the related receivables each reporting period.

A summary of results from discontinued operations for the three months ended March 31, 2025 is presented below:

---

| | |
|:---|:---|
| **Net Revenue** | $**378** |
| Cost of goods sold | (56) |
| **Gross profit** | **322** |
| **Operating expenses:** |  |
| &nbsp;&nbsp;&nbsp;Selling and marketing | 76 |
| &nbsp;&nbsp;&nbsp;General and administrative | 6 |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | **(82)** |
| **Net income from discontinued operations** | $**240** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Note receivable** 

On June 19, 2025, the Company issued a promissory note with an aggregate principal amount of $3.0 million in connection with the disposition of the cannabis beverage subsidiaries to MJ Reg Disrupters LLC ("MJ Reg"). The note is payable in five installments as follows:

● $0.5 million at the Date of Disposition (received);

● $0.5 million due on June 27, 2025 (received);

● $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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In accordance with ASC 820, the Company applied its weighted average cost of capital of 11.6% to discount the future cash flows associated with the note and determined the initial fair value to be $2.59 million. The resulting discount is being amortized over the term of the note using the effective interest method.

On January 16, 2026, the Company entered into an Assignment and Assumption of Debt Agreement with Two Shores Capital Corp. ("Two Shores") and MJ Reg. Pursuant to the agreement, the Company assigned to Two Shores all of its rights, title, and interest in the promissory note with an outstanding principal balance of $2.0 million.

As consideration for the assignment, the Company received cash proceeds of $1.4 million. Upon execution of the agreement, the Company transferred to Two Shores all rights and obligations associated with the promissory note, including the right to receive all future payments. MJ Reg. consented to the assignment and confirmed that the outstanding principal amount of the promissory note was $2.0 million as of January 16, 2026.

In connection with the transaction, the Company issued to Two Shores 550,000 common stock warrants. Each warrant is exercisable for one share of the Company's common stock at an exercise price of $0.40 per share and expires on January 16, 2029.

The valuation of the warrants was performed using the Black-Scholes option pricing model, applying the following weighted-average assumptions:

&nbsp;&nbsp;&nbsp;&nbsp;● Stock
 price per share $0.385

● Risk
 free interest rate 3.828 %

● Expected
 volatility 91 %

● Expected
 life (in years) 3

● Expected
 dividend nil

The fair value of $0.1 million was recognized in finance costs for the three months ended March 31, 2026.

**4.** **Licensing fees receivable** 

In connection with the disposition of the cannabis beverage subsidiaries during the year ended December 31, 2025, the Company entered into the License Agreement (the "License Agreement") with Mary Jones Holdings Inc. ("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 agreed to maintain exclusive rights to products containing Hemp (as defined in the Securities Purchase Agreement between the Company, MJ Holdings, Mary Jones Beverage (Canada) Inc. and MJ Reg). Pursuant to the License Agreement, MJ Holdings agreed to pay the Company $0.15 million on the one-year anniversary of the License Effective Date (as defined in the License Agreement) 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 this License.

In accordance with ASC 820, the Company utilized its weighted average cost of capital of 11.6% to discount the expected future cash flows associated with the Licensing Fee and determined the initial fair value of the License Agreement to be $1.70 million. The resulting discount is being amortized over the term of the License Agreement using the effective interest method.

For the three months ended March 31, 2026, the Company recognized $0.04 million in licensing revenue and $0.01 million in finance income related to the amortization of the discount.

As of March 31, 2026 and December 31, 2025, the carrying value of the License Agreement receivable was $1.8 million, of which $0.15 million was classified as current.

***5.*** **Inventory** 

Inventory consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** <br> **(in thousands)** | **December 31, 2025** <br> **(in thousands)** |
| Finished goods | $3924 | $1923 |
| Raw materials | 229 | 734 |
|  | $**4153** | $**2657** |

---

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 March 31, 2026 and 2025, the Company recorded obsolete inventory expenses of approximately $nil and $0.03 million, respectively.

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***6.*** **Fixed Assets, net** 

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026**<br> **(in thousands)** | **December 31, 2025**<br> **(in thousands)** |
| Equipment | 642 | 642 |
| Office and computer equipment | 285 | 262 |
|  | **927** | **904** |
| Accumulated depreciation | (658) | (583) |
|  | $**269** | $**321** |

---

***7.*** **Accrued Expenses** 

Accrued expenses consisted of the following as of March 31, 2026 and December 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026**<br> **(in thousands)** | **December 31, 2025**<br> **(in thousands)** |
| Employee benefits | $546 | $387 |
| Goods and services tax | 35 | 29 |
| Sales and marketing | 2447 | 2262 |
| Other accruals | 1241 | 1282 |
| Accrued expenses | $**4269** | $**3960** |

---

***8.*** **Revolving Credit Facility** 

During the year ended December 31, 2024, the Company entered into a Revolving Financing and Assignment Agreement (the "RFAA") which provides a revolving credit facility up to an amount of $2,000,000 (the "Total Credit Facility") with an interest rate equal to the prime rate plus 3.50% per annum, with a floor rate of 6.00%. On February 24, 2025, the Company made a payment of $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 liabilities under the terms of the RFAA.

On February 5, 2025, the Company, through one of its Subsidiaries, entered into a Loan Agreement with Two Shores (the "2Shores Loan Agreement"), pursuant to which the Subsidiary may borrow up to an aggregate maximum amount of $5.0 million which was amended to $10.0 million on December 1, 2025, subject to the satisfaction of certain conditions. Advances under the 2Shores Loan Agreement bear interest at a rate of 13.75% per annum. All present and future obligations of the Subsidiary under the 2Shores 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. 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.

During the year ended December 31, 2025, in connection with the 2Shores Loan Agreement, the Company issued total 1,000,000 warrants to Two Shores, exercisable at a price of $0.45 per share for a period of three years from the date of issuance. The Company estimated the fair value of the warrants at $65,215 on the issuance date. This amount was recognized as finance costs in the 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 per share $0.20

● Risk
 free interest rate 3.91 %

● Expected
 volatility 79 %

● Expected
 life (in years) 3

● Expected
 dividend nil

As of March 31, 2026, the outstanding balance under the Loan Agreement, including accrued interest, was approximately $3.7 million (December 31, 2025 – $3.02 million).

**9.** **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 carried a fixed interest rate of 12% per annum and was payable monthly in arrears. The principal, together with accrued interest, was due and payable in full by October 10, 2025.

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

During the year ended December 31, 2025, the Company recognized interest expense of $0.02 million and repaid $0.30 million on the Note.

During the three months ended March 31, 2026, the Company fully settled the outstanding principal balance and the related origination fee of $0.20 million on the Note. As a result, the Note had no outstanding balance as of March 31, 2026 (December 31, 2025 – $0.2 million).

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***10.*** **Insurance Premium Financing** 

During the year ended December 31, 2025, the Company entered into various one-year financing agreements to fund a portion of its insurance premiums totaling $0.2 million, payable through monthly installments. The applicable interest rates ranged from 6.49% to 8.99%, and the agreements did not contain any financial or non-financial covenants.

As of March 31, 2026, the outstanding balance related to insurance premium financing was $0.14 million (December 31, 2025 – $0.2 million).

***11.*** **Membership Agreement Obligation** 

On September 1, 2022, the Company entered into a membership and licensing agreement with Saltbox Inc. that provides the Company with access to a shared office and warehouse facility located in Seattle, Washington. On February 28, 2025, the Company provided notice of its intent to terminate the month-to-month arrangement after identifying lower-cost facilities.

 

***12.*** **Shareholders' Equity** 

***<u>Omnibus Equity Incentive Plan</u>***

On March 15, 2022, our Board adopted the Jones Soda Co. 2022 Omnibus Equity Incentive Plan (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 Company's then currently outstanding equity incentive plan (the "2011 Plan"), plus (iii) the number of shares of common stock underlying forfeited awards under the 2011 Plan were 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 of Directors (the "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 is administered by the plan administrator (as defined in the 2022 Plan).

Under 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 March 31, 2026, 1,056,158 shares remained available for future awards under the 2022 Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)***  ***Stock options:*** 

A summary of our stock option activity is as follows:

Schedule of Stock Option Activity

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Outstanding Options** | **Outstanding Options** | **Outstanding Options** | **Outstanding Options** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2025** | **March 31, 2025** |
|  | **Number of Shares** | **Weighted Average Exercise Price ($)**<br> **(Per Share)** | **Number of Shares** | **Weighted Average Exercise Price ($)**<br> **(Per Share)** |
| Opening | 15373243 | 0.25 | 8647984 | 0.26 |
| Granted | 1000000 | 0.28 | 5250000 | 0.28 |
| Cancelled | (39875) | 0.29 |  |  |
| Forfeited / Expired | (470729) | 0.20 | (2269740) | 0.24 |
| **Closing** | **15862639** | **0.25** | **11628244** | **0.27** |
| **Exercisable** | **7123368** | **0.27** | **4513879** | **0.27** |

---

 

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The following table summarizes information about stock options outstanding and exercisable under our stock incentive plans as of March 31, 2026:

Schedule of Stock Options Outstanding And Exercisable

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Exercise Price** | **Number Outstanding** | **Weighted Average Remaining Contractual Life**<br> **(Years)** | **Weighted Average Exercise Price Per Share ($)** | **Number Exercisable** | **Weighted Average Remaining Contractual Life**<br> **(Years)** | **Weighted Average Exercise Price Per Share ($)** |
| $0.165 to $0.25 | 7765817 | 8.25 | 0.19 | 2985920 | 6.82 | 0.20 |
| $0.251 to $0.40 | 7486290 | 8.32 | 0.29 | 3527958 | 7.41 | 0.28 |
| $0.401 to $0.55 | 421458 | 4.99 | 0.49 | 420416 | 4.99 | 0.49 |
| $0.551 to $0.70 | 189074 | 5.44 | 0.62 | 189074 | 5.44 | 0.62 |
|  | **15862639** | **8.16** | **0.25** | **7123368** | **6.97** | **0.27** |

---

 

***(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 $0.025 million 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.

On July 16, 2025, the Company granted 2,213,765 RSUs to members of its Board of Directors. The aggregate grant-date fair value of the RSUs was $0.4 million, determined in accordance with ASC 718, Compensation—Stock Compensation. Under the terms of the award, 50% of the RSUs vested immediately upon grant. The remaining 50% are scheduled to vest in equal installments on September 30, 2025 and December 31, 2025, subject to continued service.

During the three months ended March 31, 2026 and 2025, no RSUs were issued, vested, or canceled.

As of March 31, 2026, and December 31, 2025, the Company had no RSUs outstanding.

[**Table of Contents**](#toc_001)

***(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 March 31, 2026, the Company had unrecognized compensation expense related to stock options of $1.6 million, respectively, and related to RSUs of $nil, respectively. These amounts are expected to be recognized over the remaining vesting periods.

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

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31, 2026** | **March 31, 2025** |
| Stock options | $136 | $91 |
| Restricted stock |  |  |
|  | $**136** | $**91** |
| **Consolidated Statements of Operations account:** |  |  |
| Selling and marketing | $31 | $12 |
| General and administrative | 105 | 79 |
|  | $**136** | $**91** |

---

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:

**** 

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2025** |
| Expected dividend yield |  |  |
| Expected stock price volatility | 82.5% | 75.0% |
| Risk-free interest rate | 4.34% | 4.47% |
| Expected term (in years) | 10.0 | 10.0 |
| Weighted-average grant date fair-value per share | $0.24 | $0.22 |

---

As of March 31, 2026, the aggregate intrinsic value of outstanding stock options was approximately $0.1 million, while the intrinsic value of exercisable options was approximately $0.4 million. Intrinsic value is calculated as the quoted market price of the stock at the balance sheet date less the exercise price of the option.

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

A summary of our warrants activity is as follows:

** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Outstanding Options** | **Outstanding Options** | **Outstanding Options** | **Outstanding Options** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2025** | **March 31, 2025** |
|  | **Number of Shares** | **Weighted Average Exercise Price ($)**<br> **(Per Share)** | **Number of Shares** | **Weighted Average Exercise Price ($)**<br> **(Per Share)** |
| Opening | 6945400 | 0.49 | 5945000 | 0.50 |
| Granted | 550000 | 0.40 | - | - |
| **Closing** | **7495400** | **0.49** | 5945000 | 0.50 |

---

As discussed in Note 3, on January 16, 2026, in connection with the Assignment and Assumption of Debt Agreement, the Company issued to Two Shores 550,000 common stock warrants, each exercisable for one share of the Company's common stock at an exercise price of $0.40 per share and expiring on January 16, 2029.

The following table presents a summary of the Company's outstanding warrants as of March 31, 2026:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **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 | 0.32 | $0.50 | 3767500 |
| July 31, 2026 | 800000 | 0.33 | $0.50 | 800000 |
| August 21, 2026 | 1377900 | 0.39 | $0.50 | 1377900 |
| May 30, 2028 | 750000 | 2.17 | $0.45 | 750000 |
| August 5, 2028 | 250000 | 2.35 | $0.45 | 250000 |
| January 16, 2029 | 550000 | 2.80 | $0.40 | 550000 |
|  | **7495400** |  |  | **7495400** |

---

 

[**Table of Contents**](#toc_001)

 

***13.*** **Segment Information** 

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 of the Company, who is also the Chief Executive Officer , 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 ended March 31, 2026 and 2025:

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

Schedule of Net Sales and Income (Loss) from Operations by Geographic Location

---

| | | |
|:---|:---|:---|
| | **Three months ended** | **Three months ended** |
| <br>(in thousands) | **March 31, 2026** | **March 31, 2025** |
| **Segment Results – Net sales** |  |  |
| &nbsp;&nbsp;&nbsp;United States | $9551 | $3642 |
| &nbsp;&nbsp;&nbsp;Canada | 2881 | 588 |
| &nbsp;&nbsp;&nbsp;**Total** | $**12432** | $**4230** |

---

Net sales generated in the United States accounted for 77% and 86% of total revenue during the three months ended March 31, 2026 and 2025, respectively.

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

---

| | | |
|:---|:---|:---|
| | **Three months ended** | **Three months ended** |
| <br>(in thousands) | **March 31, 2026** | **March 31, 2025** |
| **Segment Results – Income (loss) from continuing operations** |  |  |
| &nbsp;&nbsp;&nbsp;United States | $(92) | $(1371) |
| &nbsp;&nbsp;&nbsp;Canada | 207 | 279 |
| &nbsp;&nbsp;&nbsp;**Total** | $**115** | $**(1092)** |

---

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

***14.*** **Commitments and Contingencies** 

***Commitments***

 ****

As of March 31, 2026, we continue to have commitments to various suppliers of raw materials. Purchase obligations under these commitments are expected to total $5.6 million.

***Legal proceedings***

 ****

The California Department of Public Health ("CDPH") issued a cease-and-desist letter to the Company regarding 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 we maintain 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 complaint, 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. On December 17, 2025, the California Department of Public Health filed a "Notice of Entry of Dismissal and Proof of Service".

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 consolidated financial position, results of operations or liquidity.

***15.*** **Subsequent Events** 

The Company announced a $2.5 million brokered private placement on April 30, 2026.

[**Table of Contents**](#toc_001)

---

| | |
|:---|:---|
| **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 Quarterly Report on Form 10-Q (this "Report") and our audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission (*"*SEC*"*) on March 31, 2026.*

*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 North America through our network of independent distributors and directly to our national and regional retail accounts. We also sell premium soda beverage products in select international markets. Our premium soda beverage products are sold primarily 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 any of our premium soda beverage products but instead outsource the manufacturing process to third-party contract manufacturers. We also sell various premium beverage soda 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 the alternative adult beverages (Mary Jones & 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, Berry Lemonade, Root Beer and Orange & Cream.

***Pop 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 product lines to capitalize on this growing market opportunity.

***Mary Jones and Spike Jones (Alternative Adult Beverages market segment)***

 ****

*Hemp-derived Delta-9 THC Products*

Jones started offering its hemp-derived Delta-9 THC ("HD9") 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 three flavors of 10mg Mary Jones shooters, four flavors of Mary Jones gummies, and a line of Mary Jones zero sugar sodas. 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. Although we believe there is currently a growing market for these products as consumers continue to migrate away from traditional beer and wine products, on November 12, 2025, the federal spending legislation passed to reopen the U.S. federal government contained a provision, which when implemented, would materially alter the federal treatment of hemp-derived products by prohibiting the unregulated sale of intoxicating hemp-based or hemp-derived products (including HD9 products), while also capping legal hemp products at 0.4 milligrams of total THC (and similar-effect cannabinoids) per product. The Company believes that when implemented, this legislation would likely require the Company to significantly reformulate or discontinue the Company's current hemp-derived HD9 product lines.

[**Table of Contents**](#toc_001)

*Alcoholic Beverages*

 

We launched in the third quarter of 2025 our line of hard craft sodas "spiked" with alcohol under the brand name "Spiked Jones". We believe that the trust that our loyal customers place on our brand allows us to enter the alcohol market with a built-in advantage, one that we believe most new and existing competitors cannot replicate.

***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 continue to see opportunities in this market segment for customers 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; and

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

**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 March 31, 2026 and 2025***

---

| | | | |
|:---|:---|:---|:---|
|  | **2026**<br>(Dollars in thousands) | **2025**<br>(Dollars in thousands) |<br>**% Change** |
| Revenue | $12432 | $4230 | 193.9% |
| Cost of Goods Sold | (8534) | (2835) | 201.0% |
| Gross Profit | 3898 | 1395 | 179.4% |
| % of Revenue | 31.3% | 32.9% |  |

---

***Quarter Ended March 31, 2026 Compared to Quarter Ended March 31, 2025***

*Revenue*

For the quarter ended March 31, 2026, revenue increased by approximately $8.2 million, or 193.9%, to approximately $12.4 million compared to approximately $4.2 million for the quarter ended March 31, 2025. The increase in sales revenue was primarily the result of Fallout branded products sold through our club channel. HD9 Sales declined from $0.9M to $0.2M in the quarter ended March 31, 2026.

For the quarter ended March 31, 2026, trade spend and promotional allowances, which reduced the amount of revenue for the sales of our product, totaled approximately $1.4 million, an increase of approximately $0.6 million, or 97%, compared to approximately $0.7 million for the quarter ended March 31, 2025, primarily driven trade spend associated with our Fallout branded products sold through our club channel. While total trade spend increased, as a percentage of gross revenue it declined from 13.5% to 9.5% in the first quarter of 2026 compared to the same quarter of 2025.

*Gross Profit*

For the quarter ended March 31, 2026, gross profit increased by approximately $2.5 million, or 179.4%, to approximately $3.9 million compared to approximately $1.4 million for the quarter ended March 31, 2025 as a result of higher sales revenue in the current quarter. For the quarter ended March 31, 2026, gross margin decreased slightly to 31.3% from 32.9% in the quarter ended March 31, 2025. This 1.6 percentage point decrease in gross profit margin was primally driven by a decline in sales revenues from our HD9 products in 2026, which generally have higher-margins than our other products. The Company continues to look for opportunities to decrease its cost of goods sold with its co-manufacturers and our warehouse and freight providers.

*Selling and Marketing Expenses*

Selling and marketing expenses for the first quarter ended March 31, 2026 were approximately $2.0 million, an increase of approximately $0.9 million, or 82.9%, from approximately $1.1 million for the first quarter ended March 31, 2025. This increase was primarily a result of increase Broker and Royalty payments related to fallout product sales. Selling and marketing expenses as a percentage of revenue decreased to 16.4% in the first quarter ended March 31, 2026 from 26.3% in the same period in 2025. 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 ended March 31, 2026 and 2025, non-cash expenses included in selling and marketing expenses (stock compensation and depreciation) were approximately $0.1 million and $0.01 million, respectively.

*General and Administrative Expenses*

General and administrative expenses for the first quarter ended March 31, 2026 were approximately $1.5 million compared to $1.2 million in the first quarter ended March 31, 2025 or an increase of $0.3 million. This increase was primary related to increased salary and benefits during the current quarter compared to the same quarter in 2025. General and administrative expenses as a percentage of revenue decreased to 12.1% in the first quarter ended March 31, 2026 from 28.4% in the same quarter in 2025. We intend to continue to look for additional opportunities to reduce our G&A costs. For the three months ended March 31, 2026 and 2025, non-cash expenses included in general and administrative expenses (stock compensation and depreciation) were approximately $0.1 million and 0.1 million, respectively.

[**Table of Contents**](#toc_001)

*Income Tax Expense*

We incurred no income tax expense during the quarters ended March 31, 2026 and 2025. 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*

Net income for the quarter ended March 31, 2026 was approximately $0.1 million compared to net loss of approximately $0.9 million for the quarter ended March 31, 2025 or an improvement of $1.0 million. This increase in net income was primarily due to the increase of $2.5 million in gross profit being partially offset by an increase of $1.2 million in operating expenses, an approximately $0.2 million decrease in income from discontinued operations and an increase in other expenses of approximately $0.1 million in the first quarter of 2026 compared to the first quarter of 2025.

**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 March 31, 2026, and December 31, 2025, the Company had cash of approximately $4.4 million and $3.6 million, respectively, and working capital deficiency of approximately $0.2 million and $0.5 million, respectively. The Company reported a net income from continuing operations of approximately $0.1 million for the three months ended March 31, 2026, compared to a net loss from continuing operations of approximately $1.1 million for the three months ended March 31, 2026. As of March 31, 2026, the Company's accumulated deficit decreased to approximately $94.6 million, compared to approximately $94.7 million as of December 31, 2025.

For the three months ended March 31, 2026, net cash used in continuing operating activities was approximately $0.8 million, a decrease of about $1.0 million compared with $1.9 million used for the same period in 2025. Cash flow from continuing operations prior to the impact of non cash working capital improved by $1.6 million comparing the first quarter of 2026 to the prior period. First quarter 2026 non-cash working capital increased by $0.6 million driven by investment in inventories ($1.0 million increase) to support the increase in sales compared to the prior period which was partially offset by an increase in short term payables and accrued expenses ($0.4 million increase).

For the three months ended March 31, 2026, investing activities provided net cash of approximately $1.4 million, compared to $nil in 2025. The increase was primarily due to $1.4 million proceeds from sale of the note receivable.

For the three months ended March 31, 2026, net cash provided by financing activities totaled approximately $0.3 million. This amount primarily reflects net proceeds of $0.6 million from the credit facility, partially offset by a payment of approximately $0.3 million on a promissory notes and $0.1 million of repayments under the Company's insurance financing agreement.

Historically, 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. We have significantly reduced these losses from operations in 2025 and the first quarter of 2026, the Company achieved a positive net income of $0.1 million. The Company continues to focus on reducing its operating expenses while bringing products to market with higher margins and potentially higher customer demand. Additionally, the Company announced a $2.5 million brokered private placement on April 30, 2026, and has a $10 million credit facility with Two Shores Capital Corp (the "Credit Facility"). All advances drawn under the Credit Facility will bear interest at a rate of 13.75% per annum and all present and future obligations arising under the Credit Facility are secured by a first priority security interest in all of the assets of the Company, Jones Soda Co (USA) Inc., the Company's wholly-owned subsidiary and the Company's other United States subsidiaries.

**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, 2025, filed with the SEC on March 31, 2026. There have been no material changes in our critical accounting policies during the three months ended March 31, 2026.

[**Table of Contents**](#toc_001)

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

---

Not applicable.

---

| | |
|:---|:---|
| **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 March 31, 2026.

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

There were no changes in our internal controls over financial reporting during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

[**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.

---

| | |
|:---|:---|
| **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, 2025.

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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.

---

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

---

None.

---

| | |
|:---|:---|
| **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) |
| 10.1 | [Assignment and Assumption of Debt Agreement between Jones Soda Co. (USA) Inc., Two Shores Capital Corp., and MJ Reg Disrupters, LLC dated January 16, 2026 (Filed herewith)](ex10-1.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.<br> (Registrant) | JONES SODA CO.<br> (Registrant) |
| May 14, 2026 |  |  |
|  | 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)

![](ex10-1_006.jpg)

![](ex10-1_007.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: May 14, 2026 |  |
|  | */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: May 14, 2026 |  |
| | */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 fiscal quarter Ended March 31, 2026, 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: May 14, 2026 |  |
|  | */s/ Scott Harvey* |
|  | **Scott Harvey** |
|  | Chief Executive Officer |

---

[A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.]

## 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 fiscal quarter Ended March 31, 2026 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: May 14, 2026 |  |
| | */s/ Brian Meadows* |
|  | Brian Meadows |
|  | Chief Financial Officer |

---

[A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.]