~~Table~~As filed ofwith ~~Contents~~the Securities and Exchange Commission on July 3, 2025

As filed with the Securities and Exchange Commission on August 23, 2024

Registration No. 333-

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

UNDER

THE SECURITIES ACT OF 1933

JONES SODA CO.

(Exact name of registrant as specified in its charter)

Washington		2080		52-2336602
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification ~~Number~~No.)

~~4786~~1522 Western ~~1st~~ Avenue ~~South~~, Suite ~~103~~24150

Seattle, Washington ~~98134~~98101

(206) 624-3357
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

~~David Knight~~Scott Harvey

Chief Executive Officer and President

~~4786~~1522 Western ~~1st~~ Avenue ~~South~~, Suite ~~103~~24150

Seattle, Washington ~~98134~~98101

(206) 624-3357

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Andrew J. Bond, Esq. Nazia J. Khan, Esq. Sheppard, Mullin, Richter & Hampton LLP 1901 Avenue of the Stars, Suite 1600 Los Angeles, CA 90067 Telephone: (310) 228-3700 Ross Carmel, Esq. Jeff Cahlon, Esq. Sichenzia Ross Ference Carmel LLP 1185 Avenue of the Americas, 31st Floor New York, NY 10036 Telephone: (212) 930-9700

~~Approximate~~APPROXIMATE DATE ~~date~~OF ofCOMMENCEMENT ~~commencement~~OF ofPROPOSED ~~proposed~~SALE ~~sale~~TO toTHE ~~the public~~PUBLIC: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT IS DECLARED EFFECTIVE.

AsIf any ~~soon~~of asthe ~~practicable~~securities ~~after~~being ~~the~~registered ~~effective~~on ~~date~~this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of ~~this~~1933, ~~registration~~check ~~statement~~the following box. ☒

If this ~~any~~form ofis ~~the~~filed ~~securities~~to ~~being~~register ~~registered~~additional onsecurities ~~this~~for ~~Form~~an ~~are~~offering pursuant to beRule ~~offered~~462(b) onunder athe ~~delayed~~Securities orAct, ~~continuous~~check ~~basis~~the ~~pursuant~~following box toand ~~Rule~~list ~~415 under~~ the Securities Act ofregistration ~~1933~~statement ~~check~~number of the ~~following~~earlier ~~box:~~effective ☒ registration statement for the same offering. ☐

If this ~~Form~~form is ~~filed~~a topost-effective ~~register~~amendment ~~additional~~filed ~~securities for an offering~~ pursuant to Rule 462(bc) under the Securities Act, ~~please~~ check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this ~~Form~~form is a post-effective amendment filed pursuant to Rule 462(cd) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

IfIndicate by ~~this~~check ~~Form~~mark whether the registrant is a ~~post-effective~~large ~~amendment~~accelerated ~~filed~~filer, ~~pursuant~~an toaccelerated ~~Rule~~filer, ~~462(d)~~a ~~under~~non-accelerated ~~the~~filer, ~~Securities~~a ~~Act~~smaller reporting company, ~~check~~or ~~the~~an ~~following~~emerging ~~box~~growth ~~and~~company. ~~list~~See the ~~Securities~~definitions ~~Act~~of ~~registration~~“large ~~statement~~accelerated ~~number~~filer,” of“accelerated ~~the~~filer,” “smaller ~~earlier~~reporting ~~effective~~company” ~~registration~~and ~~statement~~“emerging ~~for~~growth company” in Rule 12b-2 of the ~~same~~Exchange ~~offering~~Act. ☐

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.

Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☒
						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 7(a)(2)(B) of the Securities Act. ☐

The Registrant ~~registrant~~ hereby amends this ~~registration~~Registration ~~statement~~Statement on such date or dates as may be necessary to delay its effective date until the Registrant ~~registrant~~ shall file a further amendment which specifically states that this ~~registration~~Registration ~~statement~~Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, ~~as amended,~~ or until the ~~registration~~Registration ~~statement~~Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

~~-1-~~The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

~~Table~~PRELIMINARY PROSPECTUS ofSUBJECT ~~Contents~~TO COMPLETION DATED JULY 3, 2025

~~The~~ shares of ~~information~~Common in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell nor does it seek an offer to buy these securities in any state where the offer or sale is not permittedStock

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED AUGUST 23, 2024

Jones Soda Co.

17This is a public offering of shares of common stock,~~155~~ no par value per share (“common stock”),~~400~~ ~~Shares~~of Jones Soda Co. We are offering $ of ~~Common~~shares ~~Stock~~of our common stock.

~~This~~Currently, our ~~prospectus~~common ~~relates~~stock tois ~~the~~quoted ~~resale~~on bythe ~~certain~~OTCQB ~~selling~~under ~~shareholders~~the ofsymbol ~~Jones~~“JSDA”, ~~Soda~~and ~~Co.,~~on athe ~~Washington~~Canadian ~~corporation~~Securities Exchange (“CSE”) under the symbol “~~Company~~JSDA.”) On , ~~identified~~2025, inthe ~~this~~last ~~prospectus~~reported sale price of upour tocommon ~~17,155,400~~stock ~~shares~~on (the ~~“Resale~~OTCQB ~~Shares”)~~and ofCSE ~~the~~was ~~Company’s~~$ and ~~common~~$ per ~~stock~~share, norespectively. ~~par~~The ~~value,~~final ~~including~~public ~~5,945,400~~offering ~~Resale~~price ~~Shares~~of ~~issuable~~the ~~upon~~shares of ~~exercise~~common ofstock ~~outstanding~~in ~~warrants.~~this ~~All~~offering ofwill ~~the~~be ~~Resale~~determined ~~Shares~~through ~~were~~negotiation ~~purchased~~between ~~from~~us and the ~~Company~~underwriters in athe ~~private~~offering ~~placement~~and ~~transaction~~the ~~and~~recent market ~~are~~price ~~being~~of ~~offered~~our ~~for~~common ~~resale~~stock byused throughout this prospectus may not be indicative of the ~~selling~~final ~~shareholders~~offering ~~only~~price.

~~The~~Currently, there ~~Resale~~is ~~Shares~~a ~~may~~limited bemarket ~~sold~~for byour ~~the~~common ~~selling~~stock. ~~shareholders~~We intend to orapply ~~through~~to ~~underwriters~~list orour ~~dealers,~~common ~~directly~~stock toon ~~purchasers~~The orNasdaq ~~through~~Capital ~~agents~~Market ~~designated~~(“Nasdaq”) under ~~from~~the ~~time~~symbol “JBEV”. Accordingly, we expect our common stock to ~~time.~~begin ~~For~~trading ~~additional~~on ~~information~~Nasdaq ~~regarding~~on or around the ~~methods~~date of ~~sale~~this prospectus, ~~you~~at ~~should~~which ~~refer~~point our common stock will cease to be traded on the ~~section~~OTCQB. ~~entitled~~There ~~“Plan~~is ofno ~~Distribution”~~assurance inthat an active trading market for our common stock will develop or be sustained. If our common stock is not approved for listing on The Nasdaq Capital Market, we will not consummate this ~~prospectus~~offering.

~~The prices~~We are ata ~~which~~“smaller ~~the~~reporting ~~selling~~company,” ~~shareholders~~as ~~may~~defined ~~sell~~in Rule 12b-2 of the ~~Resale~~Securities ~~Shares~~Exchange ~~will~~Act beof ~~determined~~1934, byas ~~the~~amended, ~~prevailing~~and ~~market~~have elected ~~price~~to ~~for~~take ~~shares~~advantage of ~~the~~certain ~~Company’s~~scaled ~~common~~disclosure ~~stock~~available orto insmaller ~~privately~~reporting ~~negotiated transactions~~companies. ~~The~~ ~~Company~~This ~~will~~prospectus ~~not~~is ~~receive~~intended ~~any~~to ~~proceeds~~comply with ~~from~~ the ~~sale~~requirements ofthat ~~the~~apply ~~Resale~~to ~~Shares~~an byissuer ~~the~~that ~~selling~~is ~~shareholders~~a smaller reporting company. See “Prospectus Summary—Implications of Being a Smaller Reporting Company.”

~~The~~Investing in ~~Company~~our ~~will~~common ~~bear~~stock ~~all~~involves ~~costs~~risks. ~~relating~~Please toread ~~the~~“Risk ~~registration~~Factors” ofbeginning ~~the~~on ~~Resale~~page ~~Shares,~~11 ~~other~~for ~~than~~factors ~~any~~you ~~selling~~should ~~shareholder’s~~consider before ~~legal~~investing orin ~~accounting~~our ~~costs~~common ~~or commissions~~stock.

The Company’s common stock is presently listed on the Canadian Securities Exchange under the symbol “JSDA” quoted on the OTCQB under the symbol “JSDA.” The closing price of the Company’s common stock on August 22, 2024, as reported by the OTCQB was $0.38 per share.

	Per Share	Total
Public offering price
Underwriting discounts and commissions⁽¹⁾
Proceeds, before expenses, to us

~~Investing~~(1) Underwriting indiscounts ~~our~~and ~~common~~commissions ~~stock~~do ~~involves~~not include a ~~high~~non-accountable ~~degree~~expense ofallowance ~~risk~~equal to 1.0% ~~See~~of the ~~section~~public ~~entitled~~offering ~~“Risk~~price payable ~~Factors”~~to ~~beginning~~the onunderwriters. ~~page~~The 9 registration statement, of which this prospectus ~~and~~is ~~elsewhere~~a inpart, ~~this~~also ~~prospectus~~registers for asale ~~discussion~~warrants (“Representative’s Warrants”) to purchase shares of ~~information~~common ~~that~~stock ~~should~~(5% of the shares sold in the offering) to be ~~considered~~issued to the representative of the underwriters. We have agreed to issue the Representative’s Warrants as a portion of the underwriting compensation payable to the underwriters in connection with anthis ~~investment~~offering. inWe ~~our~~refer ~~common~~you ~~stock~~to “Underwriting” beginning on page 74 of this prospectus for additional information regarding underwriting compensation.

We have ~~may~~granted ~~amend~~the orunderwriters ~~supplement~~a ~~this~~45-day ~~prospectus~~option ~~from time~~ to ~~time~~purchase byup ~~filing~~to additional shares ~~amendments~~of orcommon ~~supplements~~stock asat ~~required. You should read~~ the ~~entire~~public ~~prospectus~~offering ~~and~~price, ~~any~~less ~~amendments~~the orunderwriting ~~supplements carefully before you make your investment decision~~discount.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the ~~adequacy~~accuracy or ~~accuracy~~adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters ~~date~~expect to deliver the shares of ~~this~~common ~~prospectus~~stock is against payment on or about , ~~2024.~~ 2025

Sole Book-2-Runner

~~Table~~JOSEPH GUNNAR of& ~~Contents~~CO., LLC

The date of this prospectus is , 2025

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS		ii
TRADEMARKS, SERVICE MARKS AND TRADE NAMES		ii
MARKET AND INDUSTRY DATA		ii
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE		iii
PROSPECTUS SUMMARY		1
THE OFFERING		5
SUMMARY FINANCIAL DATA		7
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION		8
RISK FACTORS		11
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		31
USE OF PROCEEDS		33
DIVIDEND POLICY		33
CAPITALIZATION		33
DILUTION		35
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		37
BUSINESS		44
MANAGEMENT		55
EXECUTIVE AND DIRECTOR COMPENSATION		60
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		65
PRINCIPAL SHAREHOLDERS		66
DESCRIPTION OF CAPITAL STOCK		67
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS OF OUR COMMON STOCK		69
UNDERWRITING		74
LEGAL MATTERS		78
EXPERTS		78
WHERE YOU CAN FIND MORE INFORMATION		78

Neither we nor any of the underwriters have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or in any related free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor any of the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares of common stock offered by this prospectus, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date regardless of the time of delivery of this prospectus or any sale of shares of common stock. Our business, financial condition, results of operations and prospectus may have changed since that date.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or the possession or distribution of this prospectus or any free writing prospectus we may provide to you in connection with this offering in any jurisdiction where action for purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside the United States. See “Underwriting.”

The securities offered hereby have not been and will not be qualified for distribution to the public under the securities laws of any province or territory of Canada. The securities may not be offered or sold, directly or indirectly, in Canada or to a Canadian purchaser or to any person who is purchasing for distribution to, or for the account of, any person in Canada.

ABOUT THIS PROSPECTUS

As used in this prospectus, unless the context otherwise requires, references to “we,” “us,” “our,” the “Company,” “Jones” and similar references refer to Jones Soda Co., a Washington corporation, individually, or as the context requires, collectively with its wholly-owned subsidiaries. In addition, unless otherwise indicated or the context otherwise requires, all references in this prospectus to “Jones Soda” refer to our premium beverages, including Jones® Soda sold under the trademarked brand name “Jones Soda Co.®”

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This prospectus includes our trademarks, service marks and trade names which are protected under applicable intellectual property laws. This prospectus also contains trademarks, trade names, and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade names, and service marks referred to in this prospectus may appear without the ®, ™, or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this prospectus concerning the industries and markets in which we operate and competitive position is based on information from independent industry and research studies and reports, other third-party sources, and management estimates. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates and information. Although we have not independently verified the accuracy or completeness of any third-party information, we believe the information in this prospectus concerning the industries and markets in which we operate and competitive positions is reliable. Management estimates are derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data, and our experience in, and knowledge of, such industries and markets, which we believe to be reasonable. In addition, projections, assumptions, and estimates of the future performance of the industries and markets in which we operate and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us. Therefore, we caution you not to give undue weight to such projections, assumptions, and estimates.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The Securities and Exchange Commission (the “SEC”) allows us to “incorporate by reference” information that we file with them. Incorporation by reference allows us to disclose important information to you by referring you to those other documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We filed a registration statement on Form S-1, of which this prospectus forms a part, under the Securities Act of 1933, as amended (the “Securities Act”), with the SEC with respect to the securities being offered pursuant to this prospectus. This prospectus omits certain information contained in the registration statement, as permitted by the SEC. You should refer to the registration statement, including the exhibits, for further information about us and the securities being offered pursuant to this prospectus. Statements in this prospectus regarding the provisions of certain documents filed with, or incorporated by reference in, the registration statement are not necessarily complete and each statement is qualified in all respects by that reference. Copies of all or any part of the registration statement, including the documents incorporated by reference or the exhibits, may be obtained upon payment of the prescribed rates at the offices of the SEC listed ~~above~~below in “Where You Can Find More Information.” We are incorporating by reference the documents listed below, which we have already filed with the SEC, and all documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except as to any portion of any future report or document that is not deemed filed under such provisions:

1.	The Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024;
2.	The Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, filed with the SEC on May 15, 2024 and August 14, 2024, respectively;

1.	The Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 1, 2025, as amended pursuant to the Company’s Annual Report on Form 10-K/A filed with the SEC on May 1, 2025;

2.	The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 15, 2025;

3.	The Company’s Current Reports on Form 8-K (other than Current Reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) filed with the SEC on February 13, 2025, May 12, 2025 and June 30, 2025;

4.	The Company’s definitive Proxy Statement on Schedule 14A for its 2025 Annual Meeting of Shareholders filed with the SEC on June 4, 2025; and

5.	The description of the Company’s common stock contained in its Registration Statement on Form 8-A (File No. 00049803) filed with the SEC on May 7, 2002, as amended on March 20, 2003 (File No. 000-28820), under Section 12(g) of the Exchange Act, including any amendments or reports filed for the purpose of updating such description.

3.	The Company’s Current Reports on Form 8-K (other than Current Reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) filed with the SEC on March 18, 2024, May 17, 2024, May 23, 2024, July 16, 2024, July 23, 2024 ,August 1, 2024, and August 22, 2024;
4.	The Company’s definitive proxy statement on Schedule 14A for its 2024 Annual Meeting of Shareholders filed with the SEC on April 3, 2022; and

5. The description of the Company’s common stock contained in the registration statement on Form 8-A filed with the SEC on May 7, 2002, as amended on March 20, 2003, including any amendments or reports filed with the SEC for the purposes of updating such description.

Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or any subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement.

You may request, and we will provide you with, a copy of these filings, at no cost, by calling us at (206) 624-3357 or by writing to us at the following address:

Jones Soda Co.

~~4786~~1522 Western ~~1st~~ Avenue ~~South~~, Suite ~~103~~24150

Seattle, Washington ~~98134~~98101

Attention: Secretary

~~-3-~~iii

Table of Contents

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY	5
RISK FACTORS	9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	22
INDUSTRY AND MARKET DATA	24
USE OF PROCEEDS	24
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS	24
DIVIDEND POLICY	25
SELLING SHAREHOLDERS	25
PLAN OF DISTRIBUTION	30
DESCRIPTION OF SECURITIES	31
DESCRIPTION OF BUSINESS	34
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	46
MANAGEMENT	52
EXECUTIVE COMPENSATION	58
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	65
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	65
LEGAL MATTERS	67
EXPERTS	67
WHERE YOU CAN FIND MORE INFORMATION	67

You should rely only on the information contained in this prospectus or in any free writing prospectus that we may specifically authorize to be delivered or made available to you. We have not authorized anyone to provide you with information that is different from that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus may only be used where it is legal to offer and sell our securities. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date. We are not making an offer to sell these securities and are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

-4-

Table of Contents

PROSPECTUS SUMMARY

~~The following~~ This summary highlights selected information contained elsewhere in this prospectus ~~and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus~~. ItThis summary does not contain all of the information that ~~may~~you beshould ~~important~~consider before deciding to ~~you~~invest ~~and~~in ~~your~~our ~~investment~~common ~~decision~~stock. You should carefully read ~~this~~the entire prospectus, including the sections ~~matters~~entitled ~~set forth under~~ “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our financial statements and the related notes included ~~elsewhere~~or inincorporated ~~this~~by ~~prospectus.~~reference In in this prospectus, ~~unless~~before ~~context~~making ~~requires~~an ~~otherwise,~~investment ~~references~~decision. toSome ~~“we,”~~of ~~“us,”~~the ~~“our,”~~statements ~~“Jones~~in ~~Soda,”~~this ~~“Jones”~~prospectus orconstitute ~~“the~~forward-looking ~~Company”~~statements. See ~~refer~~“Cautionary toNote ~~Jones~~Regarding ~~Soda~~Forward-Looking CoStatements.~~, and its subsidiaries.~~”

Overview

We develop, produce, market and distribute premium beverages that we sell and distribute primarily in the United States and Canada through our network of independent distributors and directly to our national and regional retail accounts. We also sell products in select international markets. Our products are sold in grocery stores, convenience and gas stores, on fountain in restaurants, “up and down the street” in independent accounts such as delicatessens, sandwich shops and burger restaurants, as well as through our national accounts with several large retailers. We refer to our network of independent distributors as our direct store delivery (“DSD”) channel, and we refer to our national and regional accounts who receive shipments directly from us as our direct to retail (“DTR”) channel. We do not directly manufacture our products, but instead outsource the manufacturing process to third-party contract manufacturers. We also sell various products online, including soda with customized labels, wearables, candy and other items, and we license our trademarks for use on products sold by other manufacturers. In addition, during 2022, we developed and began to license a THC infused cannabis products under the “Mary Jones” brand name in various U.S. states that permitted the sale of THC infused products. On June 19, 2025, we sold all of the equity interests in our wholly-owned subsidiaries that held our THC infused cannabis business (excluding our hemp-derived Delta-9 THC business) in both the United States and Canada to an independent third party for $3,000,000 and entered into a License Agreement (as defined below) with MJ Holdings (as defined below). See “Recent Developments - Mary Jones Holdings and Mary Jones Beverage (Canada)” for additional information. We intend to continue to sell hemp-derived Delta-9 THC beverages and edibles under the “Mary Jones” name.

Products

Our strategy is to ~~continue~~evolve tofrom ~~focus~~a oncraft ~~our~~soda ~~core~~company ~~brand,~~ (Jones Soda,) ~~while~~to ~~also~~a ~~investing~~diverse inbeverage company covering additional ~~initiatives~~growing market segments including ~~fountain~~modern ~~related~~soda ~~beverages~~(Pop Jones and ~~the~~Fiesta ~~Mary~~ Jones) ~~brand~~and ~~for~~alternative ~~cannabis~~adult ~~infused~~beverages ~~sodas,~~(Mary ~~edibles,~~Jones and ~~syrups~~Spiked Jones). Our product line-up currently consists of the following:

Jones Soda

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

~~Fountain~~Pop Jones and Fiesta Jones (Modern Soda market segment)

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

Mary Jones and Spiked Jones (Alternative Adult Beverages market segment)

Jones started offering its hemp-derived Delta-9 THC products in 2024 through the Mary Jones brand, including with a line of four flavors of Mary Jones sodas (in both 5mg and 10mg THC variants). Since that time, Mary Jones has expanded its portfolio to include four flavors of 10mg Mary Jones shooters, four flavors of Mary Jones gummies, and a line of Mary Jones zero sugar sodas (which we anticipate launching in July 2025). The Mary Jones line is one of Jones’ fastest growing business segments with new DSD distributors picking up the line every month. We believe there is a growing market for these products as consumers continue to migrate away from traditional beer and wine products. We further believe Mary Jones is uniquely positioned to lead in this emerging category. Backed by over two decades of brand equity from Jones Soda, we believe we offer an instantly recognizable name, a loyal consumer base, and a proven reputation for flavor innovation and quality. This brand trust allows us to enter the HD9-THC market with a built-in advantage, one that we believe most new and existing competitors cannot replicate.

Additionally, we plan to launch our line of hard craft sodas “spiked” with alcohol under the brand name Spiked Jones in 2025.

Fountain (Food Services market segment)

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

We continue to see growing interest from larger quick service restaurants, corporate accounts, retailers, celebrity chefs and a variety of other outlets looking for differentiated offerings in their fountain soda. We ~~feel~~believe 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.

~~Mary Jones~~Recent Developments

~~We currently market and license through indirect subsidiaries our~~ Mary Jones ~~brand~~Holdings ~~in California~~ and Washington. These licensed products include 10mg Cannabis-Infused sodas and 100mg cannabis-infused soda packaged in a 16oz, 10-serving can. The flavors of these beverages are based on the Jones Soda original flavors. Additionally, in February 2024 we received approval to operate in Ontario, Canada, and intend to launch in that province 10mg THC infused sodas in a variety of flavors. Manufacturing and distribution of Mary Jones ~~products~~Beverage in (Canada is intended to be done through Tilray Brands, Inc. The new Mary Jones products continue Jones Soda's tradition of using photographs submitted by consumers on their bottle labels and printing quotes from fans under the bottle caps. )

~~-5-~~Securities Purchase Agreement

~~Table~~On June 19, 2025, the Company entered into a stock purchase agreement as amended on June 19, 2025 (as amended, the “SPA”) with Mary Jones Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of ~~Contents~~the Company (“MJ Holdings”), Mary Jones Beverage (Canada) Inc., a British Columbia corporation and wholly-owned subsidiary of the Company (“MJ Beverage” and together with MJ Holdings, the “MJ Subsidiaries”), and MJ Reg Disruptors, LLC, a Delaware limited liability company (the “Buyer”) pursuant to which, on June 19, 2025 (the “Closing Date”), the Buyer purchased all of the issued and outstanding shares of the MJ Subsidiaries from the Company for $3,000,000 (the “Share Purchase Price”) and inventory as set forth in the SPA for approximately $61,000. The Share Purchase Price was paid as follows: (i) $489,398.70 was paid on the Closing Date and (ii) $2,510,601.30 was paid pursuant to the issuance of the Note (as defined below).

WePursuant to ~~currently~~the ~~intend~~SPA, tothe ~~expand~~Company ~~both~~shall provide the ~~products~~Buyer ~~offered~~with ~~under~~any administrative services reasonably requested by the ~~Mary~~Buyer ~~Jones~~in ~~brand~~order to continue the Business (as ~~well~~defined herein) of the MJ Subsidiaries for a period to not exceed one year after the Closing Date (the “Transition Services”); provided, however, that the Transition Services shall not include (i) any services not provided by the Company to the Business in the ordinary course as of the ~~number~~Closing ~~states~~Date, or (ii) any legal, environmental, medical emergency response, Occupational Safety and ~~Canadian~~Health ~~provinces~~Administration wecompliance ~~offer~~or ~~such~~import-export ~~cannabis~~services (the “Excluded Services”). Pursuant to the SPA, the Buyer shall reimburse the Company for all of its out-of-pocket expenses to the extent reasonably incurred and necessary to provide the Transition Services. “Business” means the business of developing, licensing and selling THC infused cannabis products under inthe “Mary Jones” brand.

~~Co-Brand and Private Label Products~~2

~~From~~Furthermore, pursuant ~~time~~to the SPA, the parties thereto have agreed that if, during the period that is three years from the Closing Date, there is any change to ~~time~~the state laws within the United States or the laws within Canada which makes it unlawful for an MJ Subsidiary to continue to conduct its business in the ordinary course of business by selling cannabis products in substantially the same capacity as the MJ Subsidiaries were conducting business as of the Closing Date (each, ~~when~~a ~~opportunities~~“Change ~~meet~~of ~~our~~Law ~~required~~Event”), then the Buyer shall include in a notice to the Company the financial statements or other reasonable documentation supporting the calculation of the affected MJ Subsidiary’s net income (“Change of Law Notice”). Immediately following delivery of such notice, the Buyer’s obligations to continue to make payments against the outstanding balance of the Note and ~~operational~~any ~~metrics~~payments due under the License Agreement (as defined below) shall be suspended, weand ~~utilize~~the ~~our~~time ~~industry~~periods ~~expertise~~to make such payments tolled, until it is no longer unlawful for the MJ Subsidiaries to ~~provide~~conduct ~~private~~business in ~~label~~substantially ~~products~~the same manner as the MJ Subsidiaries were conducting as of the Closing Date. If such Change of Law Event is determined to be permanent (as defined in the SPA) or indefinite (as defined in the SPA), then the outstanding principal balance of the Note shall be reduced by an amount equal to the initial principal amount under the Note multiplied by the percentage set forth for ~~customers~~the affected jurisdiction as set forth in the SPA. NoPursuant to the SPA, during the Change of Law Period, except: (i) as expressly required or permitted pursuant to the SPA; or (ii) as required by applicable Law (as defined in the SPA), the Buyer and each MJ Subsidiary shall, and shall cause each of their respective Subsidiaries (as defined in the SPA) to, conduct its business in the ordinary course and in accordance with, in all material ~~examples~~respects, all applicable Laws, with the exception of ~~this~~the ~~opportunity~~Controlled ~~occurred~~Substances Act, 21 U.S.C. § 801 et seq. (“CSA”), as it applies to marijuana (including any implementing regulations and schedules in ~~2023~~effect at the relevant time) or any other U.S. federal law the violation of which is predicated upon a violation of the CSA as it applies to marijuana, and the Buyer and each MJ Subsidiary shall use commercially reasonable efforts to maintain and preserve their and their subsidiaries’ business organizations, properties, assets, rights, employees, goodwill and business relationships with customers, suppliers, partners and other persons with which the Buyer, each MJ Subsidiary or any of their respective subsidiaries has material business relations.

~~Sparkling~~Secured Promissory ~~Beverage Industry~~ Note

~~Our~~On ~~Jones~~June ~~Soda~~19, ~~beverages~~2025, ~~are~~in ~~classified~~connection with the SPA, the Buyer issued a secured promissory note in the ~~sparkling~~principal ~~beverage~~amount ~~category~~of $2,510,601.30 ~~which~~to ~~encompasses~~the ~~carbonated~~Company ~~soft~~(the ~~drinks~~“Note”). The Note accrues interest at the lower of 3% per annum and the lowest amount permitted by law; provided, however, if the Buyer satisfies its obligations under the Note, in full, pursuant to the terms thereof, any interest accrued pursuant to the Note shall be waived. Notwithstanding the foregoing, upon the occurrence of an Event of Default (~~CSD~~as defined in the Note), the outstanding principal amount of the Note together with any accrued and ~~craft~~unpaid ~~sodas.~~interest ~~According~~thereon toshall accrue interest at a ~~December~~rate ~~2022~~of ~~special~~10% ~~issue~~per annum. The Note shall mature upon the earlier of ~~Research~~(i) the Final Maturity Date (as defined below) and ~~Markets,~~(ii) ~~The~~in ~~World’s~~the ~~Largest~~event ~~Market~~of ~~Research~~prepayment ~~Store~~of the Note, the ~~size~~date that the principal amount of the ~~world's~~Note ~~craft~~together ~~soda~~with ~~industry~~the ~~was~~interest ~~estimated~~accrued atthereon is paid in full by the Buyer. The outstanding balance of the Note shall become due and payable as follows: (i) $~~641~~510,601.2430 ~~million~~of inthe ~~2021~~principal amount was due on June 27, ~~and~~2025 itof iswhich ~~anticipated~~$125,000 towas ~~rise~~paid toand $~~768~~385,601.0830 ~~million~~remains bypayable as of June 30, 2025; (ii) $500,000 of the principal amount shall be paid on or before June 19, 2026; (iii) $750,000 of the principal amount shall be paid on or before June 19, 2027; and (iv) $750,000 of the principal amount shall be paid on or before June 19, 2028 (the “Final Maturity Date”). Notwithstanding ~~"Craft~~the ~~sodas"~~foregoing, ~~refers~~the toCompany ~~sodas~~may ~~produced~~demand inrepayment ~~smaller~~of ~~quantities~~the ~~and~~Note ~~using~~at ~~more~~any ~~natural~~time ~~ingredients~~after the occurrence of an Event of Default.

Trademark License Agreement

On June 19, 2025 (the “License Effective Date”), in connection with the SPA, the Company entered into a trademark license agreement (the “License Agreement”) with MJ Holdings pursuant to which the Company granted MJ Holdings an exclusive, freely-usable and non-transferable, fully sublicensable license to use the Licensed IP (as defined in the License Agreement) during the term of such agreement in connection with the manufacture, sale, distribution, advertising, and promotion of all current and future products (the “Licensed Products”) each consisting of a mutually agreed upon composition, formula, recipe, flavor necessary for the Licensed Products and labeling, container size, and packaging, as applicable, to be made available by MJ Holdings for sale on-site at MJ Holdings’ places of business and/or by means of other distributors of MJ Holdings globally, including in any country or jurisdiction where the sale, marketing, and distribution of the Licensed Products is lawful. Pursuant to the License Agreement, MJ Holdings shall retain the exclusive right to any consumable product containing an emulsion derived from the cannabis plant with a THC concentration greater than 0.3% by dry weight and any Licensed IP in connection therewith. Furthermore, MJ Holdings shall own all Licensee Modified Formulas (as defined in the License Agreement) and such Licensee Modified Formulas may be incorporated and/or otherwise used in connection with a Licensed Product during the term of such agreement and at any time thereafter; provided, however, the Company shall be entitled to license the Licensee Modified Formulas on mutually agreeable terms and conditions. Notwithstanding the foregoing, the Company shall maintain exclusive rights to products containing Hemp (as defined in the SPA). Pursuant to the License Agreement, MJ Holdings shall pay the Company $150,000 on the one year anniversary of the License Effective Date and $225,000 on each subsequent anniversary of the License Effective Date (the “Licensing Fee”). The Licensing Fee shall be fixed and non-adjustable during the term of the License.

If either party to the License Agreement violates or fails to perform any material covenant, condition, or undertaking pursuant to such license Agreement or the SPA then the other party shall give written notice of such deficiency to the party in default. If the party in default fails to substantially correct such deficiency within 30 days after receipt of such notice, the other party shall have the option to terminate the license granted pursuant to the License Agreement. Furthermore, MJ Holdings may terminate the License Agreement upon 90 days notice to the Company. From the date of the termination of the License Agreement by either party until the 12 month anniversary thereafter, MJ Holdings shall have the right to sell all existing inventory in its possession of Licensed Products bearing the Licensed Marks (as defined in the License Agreement). Except as otherwise set forth in the License Agreement, upon expiration or termination of the License Agreement, all rights granted to MJ Holdings shall cease, and MJ Holdings shall refrain from further use of the Licensed Marks or any mark or name confusingly similar to the Licensed Marks in connection with the Licensed Products.

Pursuant to the License Agreement, to the extent MJ Holdings is presented with opportunities to sell all or substantially all of its assets, the Company shall have a right of first refusal with respect to such sale. If, on the other hand, the Company receives a bona fide offer to sell, transfer or license any of the Licensed IP outside the ordinary course of, or otherwise unrelated to, the Company’s business as conducted on the date of such offer, for which a final purchase price has been agreed to between such third party and the Company, then the Company shall first provide MJ Holdings a right of first refusal with respect to the purchase of such Licensed IP.

Two Shores Consent, Release and Termination

On June 19, 2025, in connection with the sale of all of the equity interests in the MJ Subsidiaries pursuant to the terms of the SPA, the Company entered into a Consent, Release and Termination (the “Two Shores Release”) with Two Shores Capital Corp. (“Two Shores”). Pursuant to the Two Shores Release, Two Shores consented to the sale of the MJ Subsidiaries and fully and irrevocably released the Former Guarantors (as defined in the Two Shores Release) from their obligations under the Guaranty (as defined in the Two Shores Release). In addition, the Liens (as defined in the Two Shores Release) held by Two Shares in the assets of each Former Guarantor were automatically terminated. Furthermore, the Releasing Parties (as defined in the Two Shores Release) released Two Shores and its successors, assigns, affiliates, directors, officers and other representatives (collectively, the “Releasees”) from all demands, actions, suits, and damages which the Releasing Parties had or may in the future have against the Releasees.

Related Party Loan Agreement

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

Our Focus: Sales Growth

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

● Expand the Jones Soda glass bottle business in existing and new sales channels; ● Expand our business in the modern soda category through our Pop Jones and Fiesta Jones brands; ● Expand our fountain program in the United States and Canada; ● Grow the Mary Jones brand of hemp-derived Delta-9 beverages, edibles, and other related products through our Mary Jones brand; and ● Grow the Spiked Jones brand of hard craft sodas “spiked” with alcohol.

●Our Corporate ~~Expand our fountain program in the United States and Canada; and,~~History

●We are ~~Grow~~a ~~the~~Washington ~~new~~corporation ~~Mary~~formed ~~Jones~~in ~~brand~~2000 ofas ~~Tetrahydrocannabinol~~a ~~(THC)~~successor to Urban Juice and ~~cannabidiol~~Soda Company Ltd., a Canadian company formed in 1986. Our principal place of business is located at 1522 Western Avenue, Suite 24150, Seattle, Washington 98101. Our telephone number is (~~CBD~~206) 624-~~infused~~3357. ~~beverages,~~Our ~~edibles,~~website ~~and~~address ~~other~~is ~~related~~www.jonessoda.com. ~~products~~The asinformation ~~well~~contained ason ~~the~~our ~~number~~website ofis ~~states~~not ~~where~~incorporated ~~such~~by ~~products~~reference into ~~are~~this ~~sold;~~prospectus.

~~Risks~~Implications of ~~Associated~~Being ~~with~~a ~~Our~~Smaller ~~Business~~Reporting Company

~~Our~~We are ~~ability~~a to“smaller ~~execute~~reporting oncompany,” meaning that the market value of our ~~business~~stock ~~strategy~~held isby ~~subject~~non-affiliates plus the proposed aggregate amount of gross proceeds to us as a ~~number~~result of ~~risks,~~this ~~which~~offering ~~are~~is ~~discussed~~less ~~more~~than ~~fully~~$700 inmillion and our annual revenue was less than $100 million during the ~~section~~most ~~titled~~recently ~~“Risk~~completed ~~Factors~~fiscal year.” ~~Investors~~We ~~should~~may ~~carefully~~continue ~~consider~~to ~~these~~be ~~risks~~a ~~before~~smaller ~~making~~reporting ancompany ~~investment~~after inthis offering if either (i) the market value of our common stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. ~~These~~As a ~~risks~~smaller ~~include~~reporting company, ~~among~~we ~~others~~may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we have chosen and may continue to choose to present only the ~~following:~~two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K which is incorporated by reference into this prospectus and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

~~● Our ability to successfully execute on our growth strategy and operating plans;~~4

● Our ability to continue to effectively utilize the proceeds from our financings completed in the third quarter of 2024;

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

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

● Our ability to create and maintain brand name recognition and acceptance of our products, which is critical to our success in our competitive, brand-conscious industry;

● Our ability to compete successfully against much larger, well-funded, established companies currently operating in the beverage industry generally, including in the fountain business, particularly from other major beverage companies;

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

● 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;

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Table of Contents

● 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;

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

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

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

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

Corporate Information

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. In November 2021, we incorporated Jones Soda Cannabis Inc., as a wholly-owned subsidiary of Jones Soda that will act as a holding company for our subsidiaries in each of the states in which we intend to operate our cannabis business. Our principal place of business is located at 4786 1st Avenue South, Suite 103, Seattle, Washington 98134, and our telephone number is (206) 624-3357. Our website address is www.jonessoda.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase shares of our common stock.

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THE OFFERING

Common stock offered by selling shareholders:		17,155,400 shares of common stock, including 5,945,400 shares of the Company’s common stock issuable upon exercise of outstanding warrants.
Shares of common stock offered by us		shares ( shares if the underwriters exercise their over-allotment option in full).
Offering price:		Market price or privately negotiated prices.
Shares of common stock to be outstanding after this offering		shares ( shares if the underwriters exercise their over-allotment option in full).
Common stock outstanding after the offering:		115,168,173
Over-allotment option to purchase additional shares of common stock		The underwriters have an option for a period of 45 days to purchase up to an additional shares of our common stock.
Use of proceeds:		We will not receive any proceeds from the sale of the Resale Shares by the selling shareholders.
Use of proceeds		We estimate that the net proceeds from this offering will be approximately $ million (or $ million if the underwriters exercise their over-allotment option in full), at an assumed public offering price of $ per share, which is the last reported sales price of our common stock on the OTCQB on , 2025, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds to in-license, acquire or invest in complementary businesses or products, however, we have no current commitments or obligations to do so. The expected use of net proceeds from this offering represents our intentions based upon our present plans and business conditions, which could change in the future as or plans and business conditions evolve. See “Use of Proceeds” for a more complete description of the intended use of proceeds from this offering.
Risk factors:		An investment in our securities involves a high degree of risk and could result in a loss of your entire investment. Prior to making an investment decision, you should carefully consider all of the information in this prospectus and, in particular, you should evaluate the risk factors set forth under the caption “Risk Factors” beginning on page 9.
Representative’s warrants		We have agreed to issue to the representative of the underwriters warrants to purchase a number of shares of common stock equal to 5% of the total number of shares issued in this offering. The Representative’s Warrants will be exercisable at 100% of the public offering price per share sold in this offering. The Representative’s Warrants will be exercisable at any time and from time to time commencing 180 days from the commencement of sales of securities in this offering, in whole or in part, and will expire on the five-year anniversary the commencement of sales of securities in this offering. The registration statement of which this prospectus forms a part also registers the Representative’s Warrants and the shares of common stock issuable upon exercise of the Representative’s Warrants. See “Underwriting” for more information
OTCQB Symbol:		JSDA
Lock-up agreements		We and our executive officers, directors and 5% or greater shareholders have agreed with the underwriters not to sell, transfer or dispose of any shares or similar securities for six months after the closing date of the offering, subject to certain exceptions. For additional information regarding our arrangement with the underwriters, please see “Underwriting.”
Risk factors		See “Risk Factors” on page 11 and other information included in this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
Trading symbols		Currently, our common stock is quoted on the OTCQB under the symbol “JSDA”, and on the CSE under the symbol “JSDA”. We intend apply to list our common stock on The Nasdaq Capital Market under the symbol “JBEV.”.

~~The number of shares of common stock to be outstanding immediately after this offering is based on 115,168,173 shares of common stock outstanding as of August 21, 2024 and excludes:~~5

●The number ~~1,398,979~~of shares of common stock ~~issuable~~that ~~upon~~will ~~the~~be ~~vesting~~outstanding ofafter this offering is based on 116,564,720 shares outstanding ~~restricted~~as ~~stock~~of ~~units;~~June 30, 2025, and excludes:

● 512,~~945~~528,~~400~~243 shares of common stock issuable upon exercise of ~~outstanding~~options at a weighted average exercise price of $0.26 per share; ● 6,695,400 shares of common stock issuable upon exercise of warrants ~~with~~at a weighted average exercise price of $0.5049 per share; ● 4,626,158 shares of common stock reserved for future issuance under our 2022 Omnibus Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan; and ● shares of common stock issuable upon exercise of warrants to be issued to the representative of the underwriters as part of this offering at an exercise price of $ (assuming a public offering price of $ per share which is the last reported sales price of our common stock on the OTCQB on , 2025).

●Except as ~~13,037,772~~otherwise ~~shares~~indicated ofherein, ~~common~~all ~~stock~~information ~~issuable~~in ~~upon~~this ~~exercise~~prospectus ofassumes ~~options~~or ~~with~~gives aeffect ~~weighted average exercise price of $0.40 per share;~~to:

● 7,120,555 shares of common stock reserved for future issuance under our 2022 Omnibus Equity Incentive Plan.

	●	a 1-for- reverse stock split of our common stock effected on , 2025 pursuant to which (i) every shares of outstanding common stock was decreased to one share of common stock, (ii) the number of shares of common stock for which each outstanding option and warrant to purchase common stock is exercisable was proportionally decreased on a 1-for basis and (iii) the exercise price of each outstanding option and warrant to purchase common stock was proportionally increased on a 1-for basis (the “Reverse Stock Split”). No fractional shares were issued as a result of the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole share; and

	●	no exercise by the underwriters of their option to purchase up to an additional shares of common stock from us in this offering to cover over-allotments.

~~-8-~~6

~~Table~~SUMMARY FINANCIAL ~~of Contents~~DATA

The following tables set forth our summary financial data as of the dates and for the periods indicated. We have derived the summary statement of operations data for the years ended December 31, 2024 and 2023 from our consolidated audited financial statements incorporated by reference in this prospectus. We have derived the summary condensed consolidated statement of operations data for the three months ended March 31, 2025 and 2024 and our balance sheet data as of March 31, 2025 from our unaudited interim condensed consolidated financial statements incorporated by reference in this prospectus. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal, recurring nature that are necessary for a fair presentation of the unaudited interim condensed consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future, and the results for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the full year or any other period. The following summary financial data should be read with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes and other information included or incorporated by reference in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future.

Statement of Operations Data:

	Year Ended December 31						Three Month Ended March 31, (unaudited)
	2024			2023			2025			2024
Net Revenue	$	19,155		$	16,669		$	4,608		$	4,999
Cost of goods sold		15,079			11,814			2,891			3,107
Gross profit		4,076			4,855			1,717			1,892
Operating expenses:
Selling and marketing		6,108			4,378			1,209			1,492
General and administrative		7,866			5,355			1,189			1,545
Total operating expenses		13,974			9,733			2,398			3,037
(Loss) from operations		(9,898	)		(4,878	)		(681	)		(1,145	)
Other income (expenses):
Interest income		22			52			1			9
Interest expense		(11	)		-			(78	)		-
Other income, net		17			5			(94	)		(6	)
Total other income		28			57			(171	)		3
Loss before income taxes		(9,870	)		(4,821	)		(852	)		(1,142	)
Income tax provision		(25	)		(33	)		-			(10	)
Net loss	$	(9,895	)	$	(4,854	)		(852	)		(1,152	)

Net loss per share - basic and diluted	$	(0.09	)	$	(0,05	)	$	(0,01	)	$	(0,01	)
Weighted average common shares outstanding - basic and diluted (1)		107,481,563			100,922,834			11,5865,227			101,477,735

(1) See Note 1 to our audited and unaudited financial statements incorporated by reference herein for an explanation of the method used to compute basic and diluted net loss per share.

Balance Sheet Data:

	March 31, 2025
	Actual			As Adjusted⁽¹⁾⁽²⁾
Cash	$	735		$
Working capital		1,279
Total assets		9,834
Accumulated deficit		(93,801	)
Total shareholders’ equity		1,396

(1)	On an as adjusted basis to give further effect to (i) our issuance and sale of shares of common stock in this offering at an assumed at an assumed public offering price of $ per share, which is the last reported sales price of our common stock OTCQB on , 2025, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. As adjusted balance sheet data is illustrative only and will change based on the actual public offering price and other terms of this offering determined at pricing.

(2)	Each $1.00 increase (decrease) in the assumed public offering price of $ per share, which is the last reported sales price of our common stock OTCQB on , 2025, would increase (decrease) the as adjusted amount of each of cash, working capital, total assets and total shareholders’ equity (deficit) by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 100,000 shares in the number of shares offered by us at the assumed public offering price of $ per share, which is the last reported sales price of our common stock OTCQB on , 2025, would increase (decrease) the as adjusted amount of each of cash, working capital, total assets and total shareholders’ equity (deficit) by approximately $ million. These unaudited adjustments are based upon available information and certain assumptions we believe are reasonable under the circumstances.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On June 19, 2025, the Company entered into the SPA with the MJ Subsidiaries and the Buyer pursuant to which, on June 19, 2025 (the “Closing Date”), the Buyer purchased all of the issued and outstanding shares of the MJ Subsidiaries from the Company for the Share Purchase Price and inventory as set forth in the SPA (the “Sale Transaction”) for approximately $61,000. The Share Purchase Price was paid as follows: (i) $489,398.70 was paid on the Closing Date and (ii) $2,510,601.30 was paid pursuant to the issuance of the Note in the principal amount of $2,510,601.30. The Note accrues interest at the lower of 3% per annum and the lowest amount permitted by law; provided, however, if the Buyer satisfies its obligations under the Note, in full, pursuant to the terms thereof, any interest accrued pursuant to the Note shall be waived. Notwithstanding the foregoing, upon the occurrence of an Event of Default (as defined in the Note), the outstanding principal amount of the Note together with any accrued and unpaid interest thereon shall accrue interest at a rate of 10% per annum. The Note shall mature upon the earlier of (i) the Final Maturity and (ii) in the event of prepayment of the Note, the date that the principal amount of the Note together with the interest accrued thereon is paid in full by the Buyer. The outstanding balance of the Note shall become due and payable as follows: (i) $510,601.30 of the principal amount was due on June 27, 2025 of which $125,000 was paid and $385,601.30 remains payable as of June 30, 2025; (ii) $500,000 of the principal amount shall be paid on or before June 19, 2026; (iii) $750,000 of the principal amount shall be paid on or before June 19, 2027; and (iv) $750,000 of the principal amount shall be paid on or before June 19, 2028.

On the License Effective Date, in connection with the SPA, the Company entered into the License Agreement with MJ Holdings pursuant to which the Company granted MJ Holdings an exclusive, freely-usable and non-transferable, fully sublicensable license to use the Licensed IP (as defined in the License Agreement) during the term of such agreement in connection with the manufacture, sale, distribution, advertising, and promotion of the Licensed Products each consisting of a mutually agreed upon composition, formula, recipe, flavor necessary for the Licensed Products and labeling, container size, and packaging, as applicable, to be made available by MJ Holdings for sale on-site at MJ Holdings’ places of business and/or by means of other distributors of MJ Holdings globally, including in any country or jurisdiction where the sale, marketing, and distribution of the Licensed Products is lawful. Pursuant to the License Agreement, MJ Holdings shall retain the exclusive right to any consumable product containing an emulsion derived from the cannabis plant with a THC concentration greater than 0.3% by dry weight and any Licensed IP in connection therewith. Furthermore, MJ Holdings shall own all Licensee Modified Formulas (as defined in the License Agreement) and such Licensee Modified Formulas may be incorporated and/or otherwise used in connection with a Licensed Product during the term of such agreement and at any time thereafter; provided, however, the Company shall be entitled to license the Licensee Modified Formulas on mutually agreeable terms and conditions. Notwithstanding the foregoing, the Company shall maintain exclusive rights to products containing Hemp (as defined in the SPA). Pursuant to the License Agreement, MJ Holdings shall pay the Company $150,000 on the one year anniversary of the License Effective Date and $225,000 on each subsequent anniversary of the License Effective Date. The Licensing Fee shall be fixed and non-adjustable during the term of the License.

In connection with the completion of the Sale Transaction, the Company has prepared the following unaudited pro forma condensed consolidated financial statements (“Unaudited Pro Forma Statements”).

The Unaudited Pro Forma Statements are based on the Company’s historical consolidated financial statements adjusted to give effect to the Sale Transaction. The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2024, and the three months ended March 31, 2025, have been prepared with the assumption that the Sale Transaction occurred as of January 1, 2024 and January 1, 2025, respectively. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2025 has been prepared with the assumption that the Sale Transaction was completed as of the balance sheet date.

The Unaudited Pro Forma Statements do not necessarily reflect what the Company’s financial condition or results of operations would have been had the Sale Transaction occurred on the dates indicated, or which may result in the future. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The Unaudited Pro Forma Statements have been prepared by the Company based upon assumptions deemed appropriate by the Company’s management. An explanation of certain assumptions is set forth under the Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

The Unaudited Pro Forma Statements should be read in conjunction with the (i) audited consolidated financial statements for the Company for the fiscal year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 1, 2025 (the “2024 Form 10-K”) and incorporated by reference in this prospectus, and the (ii) unaudited financial statements for the Company for the three months ended March 31, 2025 included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2025, filed with the SEC on May 15, 2025 and incorporated by reference in this prospectus.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2025

(In thousands, except per share data)

	Registrant Historical			Adjustments				Proforma
ASSETS
Current assets:
Cash	$	735		$	(8	)	a	$	1,627
					1,000		d
					(100	)	f
Accounts receivable		3,635			(407	)	a		3,228
Inventories, net		3,908			(162	)	a		3,746
Prefunded insurance premiums from financing		128			-				128
Prepaid expenses and other current assets		1,311			(346	)	a		965
Total current assets		9,717			(23	)			9,694
Note receivable		-			2,590		c		1,590
					(1,000	)	d
Licensing fees receivable		-			1,696		e		1,696
Other assets		22			(22	)	a		-
Fixed assets		95			-				95
Total assets	$	9,834		$	3,241			$	13,075

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,182		$	(131	)	a	$	5,051
Accrued expenses		1,851			(13	)	a		1,838
Revolving credit facility		1,277			-				1,277
Due to affiliated entities		-			(1,174	)	a		-
					1,174		b
Insurance premium financing		128			-				128
Total current liabilities		8,438			(144	)			8,294
Total liabilities		8,438			(144	)			8,294
Commitments and contingencies (Note 9)
Shareholders’ equity:
Common stock, no par value:		94,974			(1,174	)	b		93,800
Accumulated other comprehensive income		223			-				223
Accumulated deficit		(93,801	)		373		a		(89,242	)
					2,590		c
					1,696		e
					(100	)	f
Total shareholders’ equity		1,396			3,385				4,781
Total liabilities and shareholders’ equity	$	9,834		$	3,241			$	13,075

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Year Ended December 31, 2024

(In thousands, except per share amounts)

	Registrant Historical			Adjustments				Proforma
	December 31, 2024			December 31, 2024				December 31, 2024
Net Revenue	$	19,155		$	(1,362	)	g	$	17,943
					150		i
Cost of goods sold		(15,079	)		946		g		(14,133	)
Gross profit		4,076			(266	)			3,810
Operating expenses:
Selling and marketing		6,108			(528	)	g		5,580
General and administrative		7,866			(53	)	g		7,862
					49		k
Total operating expenses		(13,974	)		532				(13,442	)
Loss from operations		(9,898	)		266				(9,632	)
Other income (expenses):
Interest income		22			(5	)	g		17
Interest expense		(11	)		-				(11	)
Other income (expense), net		17			(9	)	g		8
Gain on sale of subsidiaries		-			4,559		h		4,559
Total other income (expense)		28			4,545				4,573
Loss before income taxes		(9,870	)		4,811				(5,059	)
Income tax provision		(25	)		957		j		932
Net loss	$	(9,895	)	$	5,768			$	(4,127	)

Net loss per share - basic and diluted	$	(0.09	)	$	0.05			$	(0.04	)
Weighted average common shares outstanding - basic and diluted		107,481,563			108,181,006		l		108,181,006

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Three Months Ended March 31, 2025

(In thousands, except per share amounts)

	Registrant Historical			Adjustments				Proforma
	March 31, 2025			March 31, 2025				March 31, 2025
Net Revenue	$	4,608		$	(378	)	g	$	4,286
					56		i
Cost of goods sold		(2,891	)		56		g		(2,835	)
Gross profit		1,717			(266	)			1,451
Operating expenses:
Selling and marketing		1,209			(76	)	g		1,133
General and administrative		1,189			(6	)	g		1,189
					6		k
Total operating expenses		(2,398	)		76				(2,322	)
Loss from operations		(681	)		(190	)			(871	)
Other income (expenses):
Interest income		1			-				1
Interest expense		(78	)		-				(78	)
Other expense		(94	)		-				(94	)
Total other (expense) income		(171	)		-				(171	)
Loss before income taxes		(852	)		(190	)			(1,042	)
Income tax expense, net		-			-				-
Net loss	$	(852	)	$	(190	)		$	(1,042	)

Net loss per share - basic and diluted	$	(0.01	)	$	(0.00	)		$	(0.01	)
Weighted average common shares outstanding - basic and diluted		115,865,227			116,564,670	l			116,564,670

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

1.	Basis of Pro Forma Presentation

The unaudited pro forma condensed consolidated financial information is based on the Company’s historical consolidated financial statements as adjusted to give effect to the transaction accounting adjustments in accordance with GAAP to reflect the Sale Transaction.

The Sale Transaction met the criteria requiring discontinued operations presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The License Agreement and SPA are considered a disposition of significant business under Item 2.01 of the SEC’s Current Report on Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma condensed consolidated financial statements included herein in accordance with Article 11 of Regulation S-X and based on historical financial information of the Company. The historical consolidated financial information has been adjusted in the accompanying unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (i) directly attributable to the Sale Transaction and (ii) factually supportable. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, as is permitted by such rules and regulations.

The accompanying unaudited pro forma condensed consolidated balance sheet gives effect to the Sale Transaction as if it had occurred on March 31, 2025, the end of the most recent period for which a balance sheet is required. The accompanying unaudited pro forma condensed consolidated statement of operations for year ended December 31, 2024 and for the three months ended March 31, 2025 gives effect to the Sale Transaction.

Pro forma adjustments are presented for informational purposes only and are described in the accompanying notes based on information and assumptions currently available. The unaudited pro forma condensed consolidated financial information is not necessarily indicative of what the Company’s results of operations or financial condition would have been had the Sale Transaction been completed on the dates indicated above. In addition, it is not necessarily indicative of the Company’s future results of operations or financial condition and does not reflect all actions that have been or may be taken by the Company following the Sale Transaction.

The accompanying unaudited pro forma condensed consolidated financial statements are based on the audited consolidated financial statements and accompanying notes included in the 2024 Form 10-K. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2025 gives effect to the Sale Transaction as if it had occurred on March 31, 2025. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2024 and for the three months ended March 31, 2025 gives effect to the Sale Transaction.

Pro Forma Adjustments

Article 11 of Regulation S-X allows for the presentation of reasonably estimable synergies (or dis-synergies) and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). The Company has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed consolidated financial information.

The unaudited pro forma condensed consolidated financial information has been prepared to illustrate the effect of the Sale Transaction and has been prepared for informational purposes only.

The proforma Transaction Accounting Adjustments for the Sale Transaction, based on preliminary estimates that could change materially as additional information is obtained, are as follows:

	a)	Adjustment to eliminate the assets and liabilities attributable to the MJ Subsidiaries to reflect the disposition or exclusion of these entities from the pro forma financial statements.

	b)	Adjustment to eliminate intercompany balances related to the MJ Subsidiaries.

	c)	Adjustment to record the $3 million note receivable at its present value in accordance with Accounting Standards Codification (“ASC”) 310, based on the expected future cash flows discounted at 11.58% (estimated by the Company).

	d)	Adjustment to reflect $1 million in proceeds received at the closing of the transaction, consistent with the terms of the purchase agreement and recognized as part of the financing activities.

	e)	Adjustment to record the licensing agreement at its present value, in accordance with ASC 805, as part of the acquired intangible assets. Pursuant to the License Agreement, MJ Holdings shall pay the Company $150,000 on the one year anniversary of the License Effective Date and $225,000 on each subsequent anniversary of the License Effective Date.

	f)	Adjustment to recognize transaction-related costs of $100,000 incurred in connection with the closing, including legal, advisory, and other directly attributable expenses.

	g)	Adjustment to eliminate the operating results attributable to the MJ Subsidiaries, reflecting the disposition or exclusion of these entities from the historical financial statements presented on a pro forma basis.

	h)	Adjustment to recognize the gain on disposition, consistent with ASC 810, resulting from the derecognition of the net assets of the MJ Subsidiaries upon divestiture.

	i)	Adjustment to record licensing fee income pursuant to the terms of the License Agreement, consistent with ASC 606, recognizing revenue based on the transfer of control of licensed rights over time or at a point in time, as applicable.

	j)	Adjustment to reflect the estimated income tax provision on the gain from disposition.

	k)	Adjustment to recognize stock-based compensation expense related to the grant of 500,000 stock options, measured at fair value on the grant date and recognized in accordance with ASC 718. The fair value is determined using the Black-Scholes Option Pricing Model with the following weighted average assumptions: risk-free interest rate of 4.41%, expected annual volatility of 76%, expected life of 10 years and share price of $0.20.

	l)	Included 699,493 shares of common stock upon the vesting of restricted stock units.

Net Loss per Share

Net loss per share included on the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2024 and three months ended March 31, 2025 were calculated using the number of shares of our common stock outstanding at such dates and the issuance of additional shares subsequent to March 31, 2025.

Subsequent to March 31, 2025, 699,493 shares of common stock became outstanding upon the vesting of restricted stock units.

RISK FACTORS

~~Any investment~~ Investing in our common stock involves a high degree of risk. ~~Before~~You ~~deciding whether to purchase our common stock, investors~~ should carefully consider the ~~risks~~following ~~described~~risk ~~below,~~factors asand ~~may~~all beother ~~amended,~~information contained ~~supplemented~~in orand ~~superseded~~incorporated ~~from time to time~~ by ~~other~~reference ~~reports~~into wethis ~~file with the SEC. Our business~~prospectus, ~~financial~~including ~~condition,~~“Management’s ~~operating~~Discussion ~~results~~ and ~~prospects~~Analysis of ~~are~~Financial ~~subject~~Condition toand ~~the~~Results ~~following~~of ~~material~~Operations” ~~risks~~and asour ~~well~~financial asstatements ~~those material risks incorporated by reference. Additional risks~~ and ~~uncertainties~~related ~~not~~notes, ~~presently~~before ~~foreseeable~~purchasing ~~to us may also impair~~ our common ~~business operations~~stock. If any of the following risks ~~actually occurs~~occur, our business, financial condition, orand ~~operating~~ results of operations could be materially and adversely affected. In ~~such~~that case, the trading price of our common stock could decline, and ~~our~~you ~~shareholders~~ may lose ~~all~~some or ~~part~~all of ~~their~~your investment ~~in the shares of our common stock~~.

Risks Related to our Financial Condition and Capital Requirements

We have experienced recurring losses from operations and negative cash flows from operating activities.

We have experienced recurring losses from operations and negative cash flows from operating activities. We incurred a net loss of $0.9 million, $9.9 million and $4.9 million for the ~~year~~three months ended March 31, 2025 and the years ended December 31, 2024 and 2023., respectively. Our accumulated deficit ~~increased~~was to$93.8 million, $92.9 million and $83.1 million as of ~~December~~March 31, ~~2023~~2025, ~~compared~~December to31, ~~the~~2024 ~~prior~~and ~~year’s~~December ~~deficit~~31 ~~of $78~~2023, respectively.~~2 million.~~

We may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our financial condition. Our prior losses and possible future losses may have ~~had~~ an adverse effect on our financial condition. If our products do not achieve sufficient market acceptance and our revenues do not ~~increase~~sufficiently ~~as expected~~increase, we may continue to ~~generate~~incur operating losses for the foreseeable future. If we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to become and remain profitable would decrease the value of our ~~company~~Company and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. A decline in the value of our ~~company~~Company could cause you to lose all or part of your investment.

If we are not able to successfully execute on our future operating plans, our financial condition and results of operation may be materially adversely affected, and we may not be able to continue as a going concern.

It is critical that we meet our sales goals and increase sales revenues going forward as our operating plan already reflects prior significant cost containment measures, and we believe any further significant cost reductions could harm our operations. If we do not meet our sales revenue goals, our available cash and working capital will decrease and our financial condition will be negatively impacted Additionally, if we are unable to achieve profitability, we may be unable to continue our operations. There can be no assurances that we will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or additional financing through private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from our exercised stock options or any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If adequate working capital is not available, we may be forced to discontinue operations, which would cause investors to lose their entire investment.

We may need additional financing in the future, which may not be available when needed or may be costly and dilutive.

We may require additional financing to support our working capital needs in the future. The amount of additional capital we may require, the timing of our capital needs and the availability of financing to fund those needs will depend on a number of factors, including our strategic initiatives and operating plans, the performance of our business and the market conditions for debt or equity financing. Additionally, the amount of capital required will depend on our ability to meet our sales revenue goals and otherwise successfully execute our operating plan. We believe it is imperative that we meet our annual sales revenue objectives in order to lessen our reliance on external financing in the future. We intend to continually monitor and adjust our operating plan as necessary to respond to developments in our business, our markets and the broader economy. Although we believe various debt and equity financing alternatives ~~will~~may be available to us to support our working capital needs, financing arrangements ~~on acceptable terms~~ may not be available to us when needed or on terms acceptable to us or, if available, may be dilutive to our shareholders. In addition, the incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to make certain dividends, incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Moreover, these alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our existing shareholders. Any such financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements. If necessary, we may explore strategic transactions that we consider to be in the best interest of the Company and our shareholders, which may include, without limitation, public or private offerings of debt or equity securities, a rights offering, and other strategic alternatives; however, these options may not ultimately be available or feasible when needed. If we are unable to obtain funding on a timely basis, we may be required to curtail, delay or discontinue our operations or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

Risk Factors Relating to Our Current Brand and Beverage Industry

We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success.

Our business is substantially dependent upon awareness and market acceptance of our products and brands by our target market, - trendy, young consumers looking for a distinctive tonality in their beverage choices. In addition, our business depends on acceptance by our independent distributors and retailers of our brands as beverage brands that have the potential to provide incremental sales growth. If we are not successful in the revitalization and growth of our brand and product offerings, we may not achieve and maintain satisfactory levels of acceptance by independent distributors and retail consumers. Any failure of our Jones Soda brand to maintain or increase acceptance or market penetration would likely have a material adverse effect on our revenues and financial results.

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Our brand and image are keys to our business and any inability to maintain a positive brand image could have a material adverse effect on our results of operations.

Our success depends on our ability to maintain brand image for our existing products and effectively build up brand image for new products and brand extensions. We cannot predict whether our advertising, marketing and promotional programs will have the desired impact on our products’ branding and on consumer preferences. In addition, negative public relations and product quality issues, whether real or imagined, could tarnish our reputation and image of the affected brands and could cause consumers to choose other products. Our brand image ~~can~~may also be adversely affected by unfavorable reports, studies and articles, litigation, or regulatory or other governmental action, whether involving our products or those of our competitors.

Competition from traditional and large, well-financed non-alcoholic beverage manufacturers may adversely affect our distribution relationships and may hinder development of our existing markets, as well as prevent us from expanding our markets.

The beverage industry is highly competitive. We compete with other beverage companies not only for consumer acceptance but also for shelf space in retail outlets and for marketing focus by our distributors, all of whom also distribute other beverage brands. Our products compete with all non-alcoholic beverages, most of which are marketed by companies with substantially greater financial, marketing and other resources than ours. Some of these competitors are placing severe pressure on independent distributors not to carry competitive sparkling brands such as ours. We also compete with regional beverage producers ~~and “private label” soft drink suppliers~~.

Our direct competitors in the sparkling beverage category include traditional large beverage companies and distributors, and regional premium soft drink companies. These national and international competitors have advantages such as lower production costs, larger marketing budgets, greater financial and other resources and more developed and extensive distribution networks than ours. We may not be able to grow our volumes or maintain our selling prices, whether in existing markets or as we enter new markets.

Increased competitor consolidations, market-place competition, particularly among branded beverage products, and competitive product and pricing pressures could impact our earnings, market share and volume growth. If, due to such pressure or other competitive threats, we are unable to sufficiently maintain or develop our distribution channels, we may be unable to achieve our current revenue and financial targets. As a means of maintaining and expanding our distribution network, we intend to introduce product extensions and additional brands~~. We~~; however, we may not be successful in doing this, or it may take us longer than anticipated to achieve market acceptance of these new products and brands, if at all. Other companies may be more successful in this regard over the long term. Competition, particularly from companies with greater financial, marketing and ~~marketing~~other resources than ours, could have a material adverse effect on our existing markets, as well as on our ability to expand the market for our products.

We compete in an industry characterized by rapid changes in consumer preferences and public perception, so our ability to continue developing new products to satisfy the changing preferences of consumers will determine our long-term success.

Failure to introduce new brands, products or product extensions into the marketplace as current ones mature and to meet the changing preferences of consumers could prevent us from gaining market share and achieving long-term profitability. Product lifecycles can vary and consumer preferences and loyalties change over time. Although we try to anticipate these shifts and innovate new products to introduce to our consumers, we may not succeed. Consumer preferences also are affected by factors other than taste, such as health and nutrition considerations and obesity concerns, shifting consumer needs, changes in consumer lifestyles, increased consumer information and competitive product and pricing pressures. Sales of our products may be adversely affected by the negative publicity associated with these issues. If we do not adequately anticipate or adjust to respond to these and other changes in consumer preferences, we may not be able to maintain and grow our brand image and our sales may be adversely affected.

We may experience a reduced demand for some of our products due to health concerns (including obesity) and legislative initiatives against sweetened beverages.

Consumers are concerned about health and wellness; public health officials and government officials are increasingly vocal about obesity and its consequences. There has been a trend among some public health advocates and dietary guidelines to recommend a reduction in sweetened beverages, as well as increased public scrutiny, new taxes on sugar-sweetened beverages ~~(as described below)~~, and additional governmental regulations concerning the marketing and labeling/packing of the beverage industry. See Risk Factor - Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products and/or increase our costs. Additional or revised regulatory requirements, whether labeling, tax or otherwise, could have a material adverse effect on our financial condition and results of operations. Further, increasing public concern with respect to sweetened beverages could reduce demand for our beverages and increase desire for more low-calorie soft drinks, water, enhanced water, coffee-flavored beverages, tea, and beverages with natural sweeteners. We are continuously working to reduce calories and sugar in our Jones Cane Sugar products while launching additional products, to pair with existing brand extensions such as Jones Sugar Free that round out our diversified portfolio.

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Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products or increase our costs.

Taxes imposed on the sale of certain of our products by federal, state and local governments in the United States, or other countries in which we operate could cause consumers to shift away from purchasing our beverages. Several municipalities in the United States have implemented or are considering implementing taxes on the sale of certain “sugared” beverages, including non-diet soft drinks, fruit drinks, teas and flavored waters to help fund various initiatives. These taxes could materially affect our business and financial results.

Risk Factors Relating to the Cannabis Industry

Our plans to expand our cannabis operations may not be successful, which would have an adverse impact on our business, financial condition and results of operations.

Our strategy for growth in the cannabis industry is dependent on, among other things, our ability to partner with local licensed cannabis manufacturers to launch and market THC/CBD-infused and/or cannabis-infused beverages, tinctures, edibles and other products in various states. Although we intend to devote significant financial and other resources to expand our business to the production of cannabis-containing beverages and related products, these efforts may not be commercially successful or achieve the desired results. Our financial results and our ability to maintain or improve our competitive position will depend on our ability to effectively gauge the direction of the cannabis industry and successfully identify, develop, market and sell new or improved products and services in this changing marketplace. Our inability to successfully implement our cannabis strategy could have a material adverse effect on our business, financial condition and results of operations.

Companies that operate in the cannabis industry face unique and evolving risks.

If we expand our business to the production or sale of cannabis containing beverages, edibles and related products as currently planned, we and our operations may be adversely affected by the risks faced by companies operating in the cannabis industry, including but not limited to, the following:

Marijuana remains illegal under United States federal law

Marijuana is a Schedule-I controlled substance under the Controlled Substances Act, or CSA, and is illegal under federal law. It remains illegal under United States federal law to grow, cultivate, sell or possess marijuana for any purpose or to assist or conspire with those who do so. Additionally, 21 U.S.C. 856 a.1. states that it shall be unlawful to “knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance.” Even in those states in which the use of marijuana has been authorized, its use remains a violation of federal law. Since federal law criminalizing the use of marijuana is not preempted by state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely adversely affect demands for any cannabis products we develop.

Uncertainty of federal enforcement

On January 4, 2018, former Attorney General Sessions rescinded the previously issued memoranda (known as the Cole Memorandum) from the DOJ that had de-prioritized the enforcement of federal law against marijuana users and businesses that comply with state marijuana laws, adding uncertainty to the question of how the federal government will choose to enforce federal laws regarding marijuana. Former Attorney General Sessions issued a memorandum to all United States Attorneys in which the DOJ affirmatively rescinded the previous guidance as to marijuana enforcement, calling such guidance “unnecessary.” This one-page memorandum was vague in nature, stating that federal prosecutors should use established principles in setting their law enforcement priorities. Under previous administrations, the DOJ indicated that those users and suppliers of medical marijuana who complied with state laws, which required compliance with certain criteria, would not be prosecuted. On November 7, 2018, Jeff Sessions resigned from his position as Attorney General. The current Attorney General, Merrick Garland, has not indicated any change in enforcement priority for state-compliant marijuana businesses, however, substantial uncertainty regarding federal enforcement remains. Most recently, President Biden announced pardons for persons convicted for simple cannabis possession under federal law and indicated policy priorities geared toward cannabis reform. Regardless, the federal government has always reserved the right to enforce federal law regarding the sale and disbursement of medical or recreational marijuana, even if state law sanctioned such sale and disbursement. Although the rescission of the Cole Memorandum does not necessarily indicate that marijuana industry prosecutions are now affirmatively a priority for the DOJ, there can be no assurance that the federal government will not enforce such laws in the future. Likewise, although President Biden has made policy directive encouraging reform by states and federal agencies, those statements have not changed the underlying applicable federal law. As a result, it is now unclear if the DOJ will seek to enforce the CSA against those users and suppliers who comply with state marijuana laws.

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In 2014, Congress passed a spending bill, or the 2015 Appropriations Bill, containing a provision, or the Appropriations Rider, blocking federal funds and resources allocated under the 2015 Appropriations Bill from being used to “prevent such States from implementing their own State medical marijuana law.” The Appropriations Rider provided a budgetary constraint on the federal government from interfering with the ability of states to administer their medical marijuana laws, although it did not codify federal protections for medical marijuana patients and producers. Moreover, despite the Appropriations Rider, the DOJ maintains that it can still prosecute violations of the federal marijuana ban and continue cases already in the courts. However, the Ninth Circuit Court of Appeals and other courts have interpreted the language to mean that the DOL cannot prosecute medical marijuana operators complying strictly with state medical marijuana laws. Additionally, the Appropriations Rider must be re-enacted every year. The Appropriations Rider was renewed on December 20, 2019 through the signing of the fiscal year 2020 omnibus spending bill, effective through September 30, 2020, continued re-authorization of the Appropriations Rider cannot be guaranteed. Subsequently, the Appropriations Rider was extended through a series of stopgap spending bills on October 1, December 11, December 18, December 20 and December 22, 2020. On December 27, 2020 the Appropriations Rider was included in the fiscal year 2021 omnibus spending bill and remained in effect through September 30, 2021.

Despite the rescission of the Cole Memorandum, the Department of the Treasury, Financial Crimes Enforcement Network, has not rescinded the “FinCEN Memo” dated February 14, 2014, which de-prioritizes enforcement of the Bank Secrecy Act against financial institutions and marijuana-related businesses which utilize them. This memo appears to be a standalone document and is presumptively still in effect. At any time, however, the Department of the Treasury, Financial Crimes Enforcement Network, could elect to rescind the FinCEN Memo. This would make it more difficult for us and our clients and potential clients to access the U.S. banking systems and conduct financial transactions, which would adversely affect our operations.

We could become subject to racketeering laws

The Racketeer Influenced Corrupt Organizations Act (“RICO”) is a federal statute providing criminal penalties in addition to a civil cause of action for acts performed as part of an ongoing criminal organization. Under RICO, it is unlawful for any person who has received income derived from a pattern of racketeering activity (which includes most felonious violations of the CSA), to use or invest any of that income in the acquisition of any interest, or the establishment or operation of, any enterprise which is engaged in interstate commerce. RICO also authorizes private parties whose properties or businesses are harmed by such patterns of racketeering activity to initiate a civil action against the individuals involved. Although RICO suits against the cannabis industry are rare, a few cannabis businesses have been subject to a civil RICO action. Any violation of RICO could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens or criminal charges, including but not limited to, seizure of assets, disgorgement of profits, cessation of our business activities or divestiture.

Banking regulations could limit access to banking services and expose us to risk

In February 2014, the FCEN of the U.S. Department of the Treasury issued the FCEN Memo. The FCEN Memo states that in some circumstances, it may not be appropriate to prosecute banks that provide services to marijuana-related businesses for violations of federal money laundering laws. It refers to supplementary guidance that Deputy Attorney General Cole issued to federal prosecutors relating to the prosecution of money laundering offenses predicated on cannabis-related violations of the CSA. It is unclear at this time whether the current administration will follow the guidelines of the FCEN Memo. Under U.S. federal law, banks or other financial institutions that provide a cannabis-related business with a checking account, debit or credit card, small business loan, or any other service could be found guilty of money laundering, aiding and abetting, or conspiracy. As a result, any cannabis operations we develop may have the effect of limiting our access to banking or other financial services in the United States. The inability or limitation on our ability to open or maintain bank accounts in the United States, to obtain other banking services and/or accept credit card and debit card payments may make it difficult to operate and conduct our business. Although multiple legislative reforms related to cannabis and cannabis-related banking are currently being considered by the federal government in the United States, such as the Strengthening the Tenth Amendment Through Entrusting States Act, the Marijuana Opportunity, Reinvestment and Expungement Act and the Secure and Fair Enforcement Banking Act, there can be no assurance that any of these pieces of legislation will become law in the United States.

Further legislative development beneficial to our operations is not guaranteed

The success of our planned business expansion into cannabis products will depend on the continued development of the cannabis industry and the activity of commercial business and government regulatory agencies within the industry. The continued development of the cannabis industry is dependent upon continued legislative and regulatory authorization of cannabis at the state level and a continued laissez-faire approach by federal enforcement agencies. Any number of factors could slow or halt progress in this area. Further regulatory progress beneficial to the industry cannot be assured. While there may be ample public support for legislative action, numerous factors impact the legislative and regulatory process, including election results, scientific findings or general public events. Any one of these factors could slow or halt progressive legislation relating to cannabis and the current tolerance for the use of cannabis by consumers, which could adversely affect the demand for our product and operations.

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Changing legislation and evolving interpretations of the law

Laws and regulations affecting the medical and adult-use marijuana industry are constantly changing, which could detrimentally affect our planned cannabis operations. Local, state, and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with modification of operations to ensure compliance. In addition, violations of these laws, or allegations of such violations, could disrupt our planned cannabis business and result in a material adverse effect on our operations. We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our operations.

Dependence on client licensing

Our planned cannabis business will be dependent on us obtaining or partnering on various licenses from various municipalities and state licensing agencies. There can be no assurance that any or all licenses necessary for us to operate our planned cannabis businesses will be obtained, retained or renewed. If a licensing body were to determine that we had violated applicable rules and regulations, there is a risk the license granted to us could be revoked, which could adversely affect our operations.

Insurance risks

In the United States, many marijuana-related businesses are subject to a lack of adequate insurance coverage. In addition, many insurance companies may deny claims for any loss relating to marijuana or marijuana-related operations based on their illegality under federal law, noting that a contract for an illegal transaction is unenforceable.

The cannabis industry is an evolving industry and we must anticipate and respond to changes.

The cannabis industry is not yet well-developed, and many aspects of this industry’s development and evolution cannot be accurately predicted. While we have attempted to identify any risks specific to the cannabis industry that would be applicable to our planned cannabis operations, you should carefully consider that there are other risks that cannot be foreseen or are not described in this report, which could materially and adversely affect the development of our cannabis business and our future financial performance. We expect that the cannabis market and our business will evolve in ways that are difficult to predict. Our long-term success will depend on our ability to successfully adjust our strategy to meet the changing market dynamics. If we are unable to successfully adapt to changes in the cannabis industry, our operations could be adversely affected.

Risk Factors Relating to Our Business Operations and Financial Results

Our reliance on distributors, retailers and brokers could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets.

Our ability to maintain and expand our existing markets for our products, and to establish markets in new geographic distribution areas, is dependent on our ability to establish and maintain successful relationships with reliable distributors, retailers and brokers strategically positioned to serve those areas. Most of our distributors, retailers and brokers sell and distribute competing products, including non-alcoholic and alcoholic beverages, and our products may represent a small portion of their businesses. The success of this network will depend on the performance of the distributors, retailers and brokers of this network. There is a risk that the mentioned entities may not adequately perform their functions within the network by, without limitation, failing to distribute to sufficient retailers or positioning our products in localities that may not be receptive to our product. Our ability to incentivize and motivate distributors to manage and sell our products is affected by competition from other beverage companies who have greater resources than we do. To the extent that our distributors, retailers and brokers are distracted from selling our products or do not employ sufficient efforts in managing and selling our products, including re-stocking the retail shelves with our products, our sales and results of operations could be adversely affected. Furthermore, such third-parties’ financial position or market share may deteriorate, which could adversely affect our distribution, marketing and sales activities.

Our ability to maintain and expand our distribution network and attract additional distributors, retailers and brokers will depend on a number of factors, some of which are outside our control. Some of these factors include:

● the level of demand for our brands and products in a particular distribution area; ● our ability to price our products at levels competitive with those of competing products; and ● our ability to deliver products in the quantity and at the time ordered by distributors, retailers and brokers.

● our ability to price our products at levels competitive with those of competing products; and

● our ability to deliver products in the quantity and at the time ordered by distributors, retailers and brokers.

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We may not be able to successfully manage all or any of these factors in any of our current or prospective geographic areas of distribution. Our inability to achieve success with regards to any of these factors in a geographic distribution area will have a material adverse effect on our relationships in that particular geographic area, thus limiting our ability to maintain or expand our market, which will likely adversely affect our revenues and financial results.

We incur significant time and expense in attracting and maintaining key distributors.

Our marketing and sales strategy depends in large part on the availability and performance of our independent distributors. We currently do not have, nor do we anticipate in the future that we will be able to establish, long-term contractual commitments from some of our distributors. We may not be able to maintain our current distribution relationships or establish and maintain successful relationships with distributors in new geographic distribution areas. Moreover, there is the additional possibility that we may have to incur additional expenditures to attract and maintain key distributors in one or more of our geographic distribution areas in order to profitably exploit our geographic markets.

IfWe depend weon ~~lose~~a ~~any~~large customer and the loss of ~~our~~such ~~key~~customer ~~distributors~~could orhave ~~national~~a ~~retail~~material ~~accounts,~~adverse effect on our business, financial condition and results of operations ~~could be adversely affected~~.

WeFor the ~~continually~~three ~~seek~~months toended ~~expand~~March ~~and upgrade our distributor network~~31, ~~DTR~~2025 ~~accounts~~ and ~~national~~the ~~retail~~years ~~relationships.~~ended ~~However~~December 31, we2024 ~~may~~and ~~not~~2023, beone ~~able~~customer torepresented ~~maintain~~approximately ~~our~~12%, ~~key~~13% and ~~distributor~~20% ~~base. The loss~~ of ~~any of~~ our ~~key~~revenues, ~~distributors~~respectively. orOur ~~national~~current ~~accounts~~large ~~would~~customer ~~have~~could adecide ~~material~~to ~~adverse~~terminate ~~effect~~its onrelationship ~~our~~with ~~revenues,~~us ~~liquidity~~in ~~and~~the ~~financial~~future. ~~results,~~The loss ~~could~~of ~~negatively~~such ~~impact~~customer ~~our~~or ~~ability~~a tosubstantial ~~retain~~decrease ~~our~~in ~~relationships~~demand ~~with~~by ~~our~~such ~~other~~customer ~~distributors~~for ~~and~~ our ~~ability~~products tocould ~~expand~~have ~~our~~a ~~market,~~material ~~and~~adverse ~~would~~effect ~~place increased dependence~~ on our business, ~~other~~results ~~independent~~of ~~distributors~~operations and ~~national~~financial ~~accounts~~condition.

~~Our recent decision to cease utilizing our top independent distributor may negatively impact our financial results.~~ 13

We recently decided to switch independent distributors from Lassonde to Dot Foods Canada. For the year ended December 31, 2023, Lassonde was our top distributor as approximately 17% of our sales revenue during 2023 came from product distributed by Lassonde. There is no guarantee that Dot Foods Canada will be able to generate at least the same amount of revenue for us as Lassonde previously did, and if our revenues decline in 2023, our overall financial results will be negatively impacted.

It is difficult to predict the timing and amount of our sales because our distributors are not required to place minimum orders with us.

Our independent distributors and national accounts are not required to place minimum monthly or annual orders for our products. In order to reduce their inventory costs, independent distributors typically order products from us on a “just in time” basis in quantities and at such times based on the demand for the products in a particular distribution area. Accordingly, we cannot predict the timing or quantity of purchases by any of our independent distributors or whether any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past. Additionally, our larger distributors and national partners, may make orders that are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could negatively affect us.

If we do not adequately manage our inventory levels, our operating results could be adversely affected.

We need to maintain adequate inventory levels to be able to deliver products to distributors on a timely basis. Our inventory supply depends on our ability to correctly estimate demand for our products. Our ability to estimate demand for our products is imprecise, particularly for new products, seasonal promotions and new markets. If we materially underestimate demand for our products or are unable to maintain sufficient inventory of raw materials, we might not be able to satisfy demand on a short-term basis. If we overestimate distributor or retailer demand for our products, we may end up with too much inventory, resulting in higher storage costs, increased trade spend and the risk of inventory spoilage. If we fail to manage our inventory to meet demand, we could damage our relationships with our distributors and retailers and could delay or lose sales opportunities, which would unfavorably impact our future sales and adversely affect our operating results. In addition, if the inventory of our products held by our distributors and retailers is too high, they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results.

If we fail to maintain relationships with our independent contract manufacturers, our business could be harmed.

We do not manufacture our products but instead outsource the manufacturing process to third-party bottlers and independent contract manufacturers (co-packers). We do not own the plants or the majority of the equipment required to manufacture and package our beverage products, and we do not anticipate bringing the manufacturing process in-house in the future. Our ability to maintain effective relationships with contract manufacturers and other third parties for the production and delivery of our beverage products in a particular geographic distribution area is important to the success of our operations within each distribution area. Competition for contract manufacturers’ business is intense, especially in the western United States, and this could make it more difficult for us to obtain new or replacement manufacturers, or to locate back-up manufacturers, in our various distribution areas, and could also affect the economic terms of our agreements with our existing manufacturers. We may not be able to maintain our relationships with current contract manufacturers or establish satisfactory relationships with new or replacement contract manufacturers, whether in existing or new geographic distribution areas. The failure to establish and maintain effective relationships with contract manufacturers for a distribution area could increase our manufacturing costs and thereby materially reduce gross profits from the sale of our products in that area. Poor relations with any of our contract manufacturers could adversely affect the amount and timing of product delivered to our distributors for resale, which would in turn adversely affect our revenues and financial condition. In addition, our agreements with our contract manufacturers are terminable at any time, and any such termination could disrupt our ability to deliver products to our customers.

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Our dependence on independent contract manufacturers could make management of our manufacturing and distribution efforts inefficient or unprofitable.

We are expected to arrange for our contract manufacturing needs sufficiently in advance of anticipated requirements, which is customary in the contract manufacturing industry for comparably sized companies. Based on the cost structure and forecasted demand for the particular geographic area where our contract manufacturers are located, we continually evaluate which of our contract manufacturers to use. To the extent demand for our products exceeds available inventory or the production capacity of our contract manufacturing arrangements, or orders are not submitted on a timely basis, we will be unable to fulfill distributor orders on demand. Conversely, we may produce more product inventory than warranted by the actual demand for it, resulting in higher storage costs and the potential risk of inventory spoilage. Our failure to accurately predict and manage our contract manufacturing requirements and our inventory levels may impair relationships with our independent distributors and key accounts, which, in turn, would likely have a material adverse effect on our ability to maintain effective relationships with those distributors and key accounts.

Increases in costs or shortages of raw materials could harm our business and financial results.

The principal raw materials we use include glass bottles, aluminum cans, labels and cardboard cartons, aluminum closures, flavorings, sucrose/inverted pure cane sugar and sucralose. In addition, certain of our contract manufacturing arrangements allow such contract manufacturers to increase their charges to us based on their own cost increases. These manufacturing and ingredient costs are subject to fluctuation. Substantial increases in the prices of our ingredients, raw materials and packaging materials, to the extent that they cannot be recouped through increases in the prices of finished beverage products, would increase our operating costs and could reduce our profitability. If our supply of these raw materials is impaired or if prices increase significantly, it could affect the affordability of our products and reduce sales.

The beverage industry has experienced increased prices for glass bottles over the last several years and the availability of glass supply diminished for companies not under contract. Our fixed-price purchase commitment for glass, which helps mitigate the risk of unexpected price increases, expires at the end of 2025. The prices of any of the above or any other raw materials or ingredients may continue to rise in the future. Due to the price sensitivity of our products, we may not be able to pass such increases on to our customers, which could have a material adverse effect on our business and financial results.

If we are unable to secure sufficient ingredients or raw materials including glass, sugar, and other key supplies, we might not be able to satisfy demand on a short-term basis. Moreover, in the past there have been industry-wide shortages of certain concentrates, supplements and sweeteners and these shortages could occur again from time to time in the future, which could interfere with and delay production of our products and could have a material adverse effect on our business and financial results.

In addition, suppliers could fail to provide ingredients or raw materials on a timely basis, or fail to meet our performance expectations, for a number of reasons, including, for example, disruption to the global supply chain as a result of pandemics, which could cause a serious disruption to our business, increase our costs, decrease our operating efficiencies and have a material adverse effect on our business, results of operations and financial condition.

Increases in costs of energy and increased regulations may have an adverse impact on our gross margin.

Over the past few years, volatility in the global oil markets has resulted in high fuel prices, which many shipping companies have passed on to their customers by way of higher base pricing and increased fuel surcharges. If fuel prices increase, we expect to experience higher shipping rates and fuel surcharges, as well as energy surcharges on our raw materials. It is hard to predict what will happen in the fuel markets ~~in 2024 and beyond~~. Due to the price sensitivity of our products, we may not be able to pass such increases on to our customers.

Disruption within our supply chain, contract manufacturing or distribution channels could have an adverse effect on our business, financial condition and results of operations.

Our ability, through our suppliers, business partners, contract manufacturers, independent distributors and retailers, to make, move and sell products is critical to our success. Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as influenza, ~~and~~labor ~~other~~strikes, ~~pandemics~~military conflict, ~~labor~~geopolitical ~~strikes~~events or other reasons, could impair the manufacture, distribution and sale of our products. Many of these events are outside of our control. Failure to take adequate steps to protect against or mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations.

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We rely upon our ongoing relationships with our key flavor suppliers. If we are unable to source our flavors on acceptable terms from our key suppliers, we could suffer disruptions in our business.

We currently purchase our flavor concentrate from various flavor concentrate suppliers, and continually develop other sources of flavor concentrate for each of our products. Generally, flavor suppliers hold the proprietary rights to their flavors. Although we have the exclusive rights to flavor concentrates developed with our current flavor concentrate suppliers, we do not have the list of ingredients or formulas for our flavors and concentrates. Consequently, we may be unable to obtain these same flavors or concentrates from alternative suppliers on short notice. If we have to replace a flavor supplier, we could experience disruptions in our ability to deliver products to our customers, which could have a material adverse effect on our results of operations.

We rely on suppliers, manufacturers and contractors to distribute our products containing hemp-derived Delta-9 THC and events adversely affecting them would adversely affect us.

We intend to maintain a full supply chain for the provision of our products containing hemp-derived Delta-9 THC. Due to the novel and variable regulatory landscape for hemp-derived Delta 9 production in the United States, our third-party hemp suppliers, manufacturers and contractors may elect, at any time, to decline or withdraw services necessary for our operations. Loss of these suppliers, manufacturers and contractors, including for non-hemp-based ingredients in our hemp-derived Delta-9 products, may have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are unable to attract and retain key personnel, our efficiency and operations would be adversely affected; in addition, management turnover causes uncertainties and could harm our business.

Our success depends on our ability to attract and retain highly qualified employees in such areas as finance, sales, marketing and product development. We compete to hire new employees, and, in some cases, must train them and develop their skills and competencies. We may not be able to provide our employees with competitive salaries, and our operating results could be adversely affected by increased costs due to increased competition for employees, higher employee turnover or increased employee benefit costs.

To the extent we experience management turnover, our operations, financial condition and employee morale could be negatively impacted. In addition, competition for top management is high and it may take months to find a candidate that meets our requirements. If we are unable to attract and retain qualified management personnel, our business could suffer.

If we lose the services of our Chief Executive Officer, our operations could be disrupted and our business could be harmed.

Our business plan relies significantly on the continued services of David Knight, who we hired as our Chief Executive Officer and President in June of 2023. If we were to lose the services of Mr. Knight, our ability to execute our business plan could be materially impaired. We are not aware of any facts or circumstances that suggest he might leave us.

Our Chief Operating Operator has resigned effective March 12, 2024 which could result in a disruption in our operations or harm to our business.

Eric Chastain, our Chief Operating Officer and President of Jones Soda Beverage Division, who was appointed as our Chief Operating Officer effective June 2014 and was with the Company for 22 years resigned effective March 12, 2024. Our ability to execute our business plan could be materially impaired due to this.

If we fail to protect our trademarks and trade secrets, we may be unable to successfully market our products and compete effectively.

We rely on a combination of trademark and trade secrecy laws, confidentiality procedures and contractual provisions to protect our intellectual property rights. Failure to protect our intellectual property could harm our brand and our reputation, and adversely affect our ability to compete effectively. Further, enforcing or defending our intellectual property rights, including our trademarks, copyrights, licenses and trade secrets, could result in the expenditure of significant financial and managerial resources. We regard our intellectual property, particularly our trademarks and trade secrets to be of considerable value and importance to our business and our success, and we actively pursue the registration of our trademarks in the United States, Canada and internationally. However, the steps taken by us to protect these proprietary rights may not be adequate and may not prevent third parties from infringing or misappropriating our trademarks, trade secrets or similar proprietary rights. In addition, other parties may seek to assert infringement claims against us, and we may have to pursue litigation against other parties to assert our rights. Any such claim or litigation could be costly. In addition, any event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse effect on our ability to market or sell our brands, profitably exploit our products or recoup our associated research and development costs.

As part of the licensing strategy of our brands, we enter into licensing agreements under which we grant our licensing partners certain rights to use our trademarks and other designs. Although our agreements require that the use of our trademarks and designs is subject to our control and approval, any breach of these provisions, or any other action by any of our licensing partners that is harmful to our brands, goodwill and overall image, could have a material adverse impact on our business.

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If we encounter product recalls or other product quality issues, our business may suffer.

Product quality issues, real or imagined, or allegations of product contamination, even when false or unfounded, could tarnish our image and could cause consumers to choose other products. In addition, ~~because~~as a result of changing government regulations or implementation thereof, or allegations of product contamination, we may be required from time to time to recall products entirely or from specific markets. Product recalls could affect our profitability and could negatively affect brand image.

We could be exposed to product liability claims which could materially damage our reputation and brand image and have a material adverse effect on our financial condition.

Although we have product liability and basic recall insurance, insurance coverage may not be sufficient to cover all product liability claims that may arise. To the extent our product liability coverage is insufficient, a product liability claim ~~would~~may ~~likely~~ have a material adverse effect upon our financial condition. In addition, any product liability claim brought against us may materially damage the reputation and brand image of our products and business.

Our business is subject to many regulations and noncompliance is costly.

The production, marketing and sale of our beverages, including contents, labels, caps and containers, are subject to the rules and regulations of various federal, provincial, state and local health agencies. If a regulatory authority finds that a current or future product or production batch or “run” is not in compliance with any of these regulations, we may be fined, or production may be stopped, which would adversely affect our financial condition and results of operations. Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time to time and while we closely monitor developments in this area, we cannot anticipate whether changes in these rules and regulations will impact our business adversely. Additional or revised regulatory requirements, whether labeling, environmental, tax or otherwise, could have a material adverse effect on our financial condition and results of operations.

Significant additional labeling or warning requirements may inhibit sales of affected products.

Various jurisdictions may seek to adopt significant additional product labeling or warning requirements relating to the chemical content or perceived adverse health consequences of certain of our products. These types of requirements, if they become applicable to one or more of our products under current or future environmental or health laws or regulations, may inhibit sales of such products. In California, a law requires that a specific warning appear on any product that contains a component listed by the state as having been found to cause cancer or birth defects. This law recognizes no generally applicable quantitative thresholds below which a warning is not required. If a component found in one of our products is added to the list, or if the increasing sensitivity of detection methodology that may become available under this law and related regulations as they currently exist, or as they may be amended, results in the detection of an infinitesimal quantity of a listed substance in one of our beverages produced for sale in California, the resulting warning requirements or adverse publicity could affect our sales.

Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.

On March 25, 2024, our indirect wholly owned subsidiary, Mary Jones Michigan LLC, received a Notice of Claims (the “Core Claim”) for arbitration from Core Manufacturing, LLC (“Core”), who claimed that the Company was in breach of its commitments under the agreement between the Company and Core. Core ~~is seeking~~sought, amongst other damages, the enforcement of the break-up fee provision in such agreement, which they ~~calculate~~calculated to be $7,220,357. ~~Although~~On weJune ~~dispute~~10, ~~the~~2024, ~~allegations~~Mary ~~made~~Jones byMichigan LLC filed a legal claim against P3 Capital Partner LLC, an entity related to Core, in the United States Court for the Western District of Michigan, asserting fraud, conversion, and ~~intend~~breach toof ~~defend~~contract ~~ourselves~~in ~~vigorously~~connection with a $155,700 deposit previous paid to P3 in ~~this~~connection ~~matter~~with the license and manufacturing agreement between MJM and P3 (the “P3 Litigation” and together with the Core Claim, ~~there~~the ~~are~~“Litigation Matters”). noIn ~~assurances~~February ~~that~~2025, wea ~~will~~confidential besettlement ~~successful~~agreement was entered into between all the parties to the Litigation Matters, which has resulted in the ~~arbitration~~settlement ~~proceeding~~and/or dismissal of both Litigation Matters. Notwithstanding the foregoing, we may, in the future, become party to other litigation claims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our business operations. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we ~~are~~establish ~~found~~reserves ~~liable~~and ~~for~~disclose ~~all~~the relevant litigation claims or alegal ~~substantial~~proceedings, ~~portion~~as ofappropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of ~~damages~~management ~~Core~~judgment. Actual isoutcomes ~~seeking~~or losses may differ materially from those envisioned by our current assessments and estimates. Our policies and procedures require strict compliance by our employees and agents with all U.S. and local laws and regulations applicable to our business operations, including those prohibiting improper payments to government officials. Nonetheless, our ~~financial~~policies ~~position~~and ~~would~~procedures bemay ~~significantly~~not ~~impaired~~ensure full compliance by our employees and agents with all applicable legal requirements. Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits.

We may also become party to other litigation claims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our business operations. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves and disclose the relevant litigation claims or legal proceedings, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from those envisioned by our current assessments and estimates. Our policies and procedures require strict compliance by our employees and agents with all U.S. and local laws and regulations applicable to our business operations, including those prohibiting improper payments to government officials. Nonetheless, our policies and procedures may not ensure full compliance by our employees and agents with all applicable legal requirements. Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits.

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We are subject to risks inherent in sales of products in international markets.

Our operations outside of the United States, contribute to our revenue and profitability, and we believe that developing and emerging markets could present future growth opportunities for us. However, there can be no assurance that existing or new products that we manufacture, distribute or sell will be accepted or be successful in any particular foreign market, due to local or global competition, product price, cultural differences, consumer preferences or otherwise. There are many factors that could adversely affect demand for our products in foreign markets, including, but not limited to, our inability to attract and maintain key distributors in these markets; volatility in the economic growth of certain of these markets; changes in economic, political or social conditions, the status and renegotiations of the North American Free Trade Agreement, imposition of new or increased labeling, product or production requirements, or other legal restrictions; restrictions on the import or export of our products or ingredients or substances used in our products; inflationary currency, devaluation or fluctuation; and/or increased costs of doing business due to compliance with complex foreign and U.S. laws and regulations. If we are unable to effectively operate or manage the risks associated with operating in international markets, our business, financial condition or results of operations could be adversely affected.

Climate change may negatively affect our business.

There is growing concern that a gradual increase in global average temperatures may cause an adverse change in weather patterns around the globe resulting in an increase in the frequency and severity of natural disasters. While warmer weather has historically been associated with increased sales of our products, changing weather patterns could have a negative impact on agricultural productivity, which may limit availability or increase the cost of certain key ingredients such as sugar cane, natural flavors and supplements used in our products. Also, increased frequency or duration of extreme weather conditions may disrupt the productivity of the facilities that produce our products, the operation of our supply chain or impact demand for our products. In addition, the increasing concern over climate change may result in more regional, federal and global legal and regulatory requirements and could result in increased production, transportation and raw material costs. As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations.

Our business and operations ~~would~~may be adversely impacted in the event of a failure or interruption of our information technology infrastructure or as a result of a cybersecurity attack.

The proper functioning of our own information technology (“IT”) infrastructure is critical to the efficient operation and management of our business. We may not have the necessary financial resources to update and maintain our IT infrastructure, and any failure or interruption of our IT system could adversely impact our operations. In addition, our IT is vulnerable to cyberattacks, computer viruses, worms and other malicious software programs, physical and electronic break-ins, sabotage and similar disruptions from unauthorized tampering with our computer systems. We believe that we have adopted appropriate measures to mitigate potential risks to our technology infrastructure and our operations from these IT-related and other potential disruptions. However, given the unpredictability of the timing, nature and scope of any such IT failures or disruptions, we could potentially be subject to downtimes, transactional errors, processing inefficiencies, operational delays, other detrimental impacts on our operations or ability to provide products to our customers, the compromising of confidential or personal information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations.

Our results of operations may fluctuate from quarter to quarter for many reasons, including seasonality.

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. Timing of customer purchases will vary each year and sales can be expected to shift from one quarter to another. 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.

In addition, our operating results may fluctuate due to a number of other factors including, but not limited to:

● Our ability to maintain, develop and expand distribution channels for current and new products, develop favorable arrangements with third party distributors of our products and minimize or reduce issues associated with engaging new distributors and retailers, including, but not limited to, transition costs and expenses and down time resulting from the initial deployment of our products in each new distributor’s network; ● Unilateral decisions by distributors, grocery store chains, specialty chain stores, club stores, mass merchandisers and other customers to discontinue carrying all or any of our products that they are carrying at any time;

● Unilateral decisions by distributors, grocery store chains, specialty chain stores, club stores, mass merchandisers and other customers to discontinue carrying all or any of our products that they are carrying at any time;18

● Our ability to ~~maintain~~manage our resources to sufficiently support general operating activities, ~~develop~~promotion allowances and ~~expand~~slotting fees, promotion and selling activities, and capital expansion, and our ~~direct-~~ability to~~-retail~~ ~~sales~~sustain ~~channels~~profitability; ● Our ability to meet the competitive response by much larger, well-funded and ~~national~~established ~~retail~~companies ~~accounts~~currently operating in the beverage industry, as ~~well~~we asintroduce ~~our~~new ~~“myJones”~~competitive ~~business~~products; and ● Competitive products and pricing pressures and our ability to gain or maintain share of sales in the marketplace as a result of actions by competitors.

● Our ability to manage our resources to sufficiently support general operating activities, promotion allowances and slotting fees, promotion and selling activities, and capital expansion, and our ability to sustain profitability;

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● Our ability to meet the competitive response by much larger, well-funded and established companies currently operating in the beverage industry, as we introduce new competitive products; and

● Competitive products and pricing pressures and our ability to gain or maintain share of sales in the marketplace as a result of actions by competitors.

Due to these and other factors, our results of operations have fluctuated from period to period and may continue to do so in the future, which could cause our operating results in a particular quarter to fail to meet market expectations.

~~Our~~Changes in ~~business~~tax ~~and~~laws ~~periodic~~or ~~financial~~the ~~results~~imposition ~~can~~of beadditional ~~affected~~duties, byquotas, ~~currency~~tariffs, ~~rate~~and ~~fluctuations,~~other ~~because~~trade arestrictions ~~significant~~could ~~percentage~~adversely ofaffect our business ~~is in Canada~~.

Changes in U.S. and Canadian trade policy, such as the renegotiation of the U.S. Mexico Canada Agreement (“USMCA”) and the imposition of additional tariffs, present risks to our business. Currently, the Company’s soft drink beverage products originate under the USMCA and enter the US duty-free. Currently, the Company imports raw materials from the U.S. into Canada where it produces glass products for the U.S. and Canadian markets. Any change to these tariffs or the imposition of other trade restrictions (e.g., quotas) could adversely affect our ability to produce and market products at competitive prices which could impact sales and financial results. The Company may not be able to move its Canadian based glass production to the U.S. at a similar production cost if there is an adverse change to these tariffs or the imposition of other trade restrictions.

Our business and periodic financial results may be affected by currency rate fluctuations, because a significant percentage of our business is in Canada.

A significant percentage of our sales are conducted through our Canadian subsidiary, for which we receive revenues in the Canadian dollar. In addition, a significant percentage of our costs of goods are denominated in the Canadian dollar, due to our co-packing facility in Canada. Because of this we are affected by changes in U.S. exchange rates with the Canadian dollar.

In preparing our consolidated financial statements, certain financial information is required to be translated from the Canadian dollar to the U.S. dollar. The translation of our Canadian revenues, cash and other assets is adversely affected when the United States dollar strengthens against the Canadian dollar and is positively affected when the U.S. dollar weakens. Similarly, translation of our Canadian expenses and liabilities is positively affected when the U.S. dollar strengthens against the Canadian dollar and adversely affected when the U.S. dollar weakens. This exposure to foreign currency risk could significantly affect our revenues and profitability from our Canadian operations and could result in significant fluctuations to our periodic ~~income~~consolidated statements of operations and consolidated balance sheets.

Throughout ~~2023~~ 2024, the U.S. dollar’s strength fluctuated significantly in comparison to the Canadian dollar. AsBased on the Noon buying rates in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of ~~February~~New York, 9as of June 27, ~~2023~~2025, the Canadian dollar exchange rate for one U.S. dollar was equal to $0.~~74,~~7317 compared to $0.766944 as of December 31, ~~2023 but~~ 2024 and $0.747575 as of December 31, ~~2022~~2023. We cannot predict future changes in these exchange rates. We do not engage in foreign currency hedging transactions.

Changes in our effective tax rate may impact our results of operations.

We are subject to taxes in the U.S. and other jurisdictions. Tax rates in these jurisdictions may be subject to significant change due to economic and/or political conditions. A number of other factors may also impact our future effective tax rate including:

● the jurisdictions in which profits are determined to be earned and taxed; ● the resolution of issues arising from tax audits with various tax authorities; ● changes in valuation of our deferred tax assets and liabilities; ● increases in expenses not deductible for tax purposes, including write-offs of acquired intangibles and impairment of goodwill in connection with acquisitions; ● changes in availability of tax credits, tax holidays, and tax deductions; ● changes in share-based compensation; and ● changes in tax laws or the interpretation of such tax laws.

● the resolution of issues arising from tax audits with various tax authorities;

● changes in valuation of our deferred tax assets and liabilities;

● increases in expenses not deductible for tax purposes, including write-offs of acquired intangibles and impairment of goodwill in connection with acquisitions;

● changes in availability of tax credits, tax holidays, and tax deductions;

● changes in share-based compensation; and

● changes in tax laws or the interpretation of such tax laws and changes in generally accepted accounting principles.

Any material increase in the taxes we owe could materially impact our financial results and results of operations.

Global economic, political, social and other conditions, ~~including the possible pandemics,~~ may continue to adversely impact our business and results of operations.

The beverage industry, and particularly those companies selling premium beverages like us, can be affected by macro-economic factors, including changes in national, regional, and local economic conditions, unemployment levels and consumer spending patterns, which together may impact the willingness of consumers to purchase our products as they adjust their discretionary spending. Adverse economic conditions may adversely affect the ability of our distributors to obtain the credit necessary to fund their working capital needs, which could negatively impact their ability or desire to continue to purchase products from us in the same frequencies and volumes as they have done in the past. If we experience similar adverse economic conditions in the future, sales of our products could be adversely affected, collectability of accounts receivable may be compromised and we may face obsolescence issues with our inventory, any of which could have a material adverse impact on our operating results and financial condition.

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Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.

The United States generally accepted accounting principles and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, stock-based compensation, trade spend and promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management. Changes to these rules or their interpretation or changes in underlying assumptions, estimates or judgments by our management could significantly change our reported results.

We identified a material weakness in our internal control over financial reporting. If weremediation ~~are~~of ~~unable~~this tomaterial ~~maintain~~weakness is not effective, or ~~disclosure~~if ~~controls~~we ~~and~~fail ~~procedures~~to ~~and~~maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately or timely report our ~~stock~~financial ~~price~~condition ~~and~~or operating results, which may adversely affect investor confidence ~~could~~in beour ~~materially~~company and, ~~adversely~~as a ~~affected~~result, the value of our common stock.

We are required pursuant to ~~maintain~~Section ~~both~~404 ~~disclosure~~of ~~controls~~the Sarbanes-Oxley ~~and~~Act, ~~procedures~~as ~~and~~amended, or Section 404, to maintain internal control over financial reporting ~~that~~and ~~are~~to ~~effective~~assess and report on the effectiveness of those controls. ~~Because~~This assessment includes disclosure of ~~their~~any ~~inherent~~material ~~limitations,~~weaknesses identified by our management in our internal control over financial reporting,. ~~however~~Although ~~well~~we ~~designed~~prepare ~~and~~our ~~operated,~~financial ~~can~~statements ~~only~~in ~~provide~~accordance with ~~reasonable,~~accounting ~~and~~principles ~~not~~generally ~~absolute~~accepted in the United States, ~~assurance~~our ~~that~~internal ~~the~~accounting controls ~~will~~may ~~prevent~~not ormeet ~~detect~~all ~~misstatements.~~standards ~~Because~~applicable to ofcompanies ~~these~~with ~~and~~publicly ~~other~~traded ~~inherent~~securities. ~~limitations~~If ofwe ~~control~~fail ~~systems,~~to ~~there~~implement isany ~~only~~required ~~the~~improvements ~~reasonable~~to ~~assurance~~our ~~that~~internal ~~our~~control over financial reporting or disclosure controls ~~will~~and ~~succeed~~procedures, inwe ~~achieving~~may ~~their~~be ~~goals~~obligated ~~under~~to ~~all~~report ~~potential~~control ~~future~~deficiencies, ~~conditions.~~in ~~The~~which ~~failure~~case ofwe ~~controls~~could bybecome ~~design~~subject to ~~deficiencies~~regulatory sanction or ~~absence~~investigation. ofFurther, ~~adequate~~such ~~controls~~an outcome could ~~result~~damage ininvestor aconfidence ~~material~~in ~~adverse~~the ~~effect~~accuracy onand reliability of our ~~business and~~ financial ~~results,~~statements which ~~could~~may ~~also~~adversely ~~negatively~~affect ~~impact~~the ~~our~~value ~~stock~~of ~~price~~our ~~and~~common ~~investor confidence~~stock.

~~Risk~~Effective internal ~~Factors~~controls ~~Related~~over financial reporting are necessary for us to ~~Our~~provide ~~Common~~reliable ~~Stock~~financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. We have designed, implemented and tested the internal control over financial reporting required to comply with this obligation, which was and is time consuming, costly, and complicated. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Our management has concluded that our internal controls over financial reporting were as of the year ended December 31, 2024, and continue to be, ineffective, as a result of the following material weaknesses:

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

	●	During the transition period noted above, we lacked sufficient resources with respect to the number of people employed in our accounting department and the adequacy of their training in relation to our financial reporting requirements.

While we appointed a new Chief Financial Officer in February 2025 and hired additional CPA consultants for our year-end audit, there is no assurance that the foregoing will remediate the identified material weaknesses or that the controls will prevent or detect future material weaknesses. If we are not able to remediate the material weaknesses or maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

There can be no assurance that our acquisitions, investments or expansions of scope of existing relationships will have a beneficial impact on our business, financial condition and results of operations.

We have entered into and may in the future enter into additional acquisitions or investments with third parties that we believe will complement our existing business. Our ability to complete acquisitions or investments is dependent upon, and may be limited by, the availability of suitable candidates and capital. In addition, acquisitions or investments could present unforeseen integration or operational obstacles or costs, may not enhance our business, and/or may involve risks that could adversely affect us, including by diverting significant amounts of management time from operations in order to pursue and complete such transactions or maintain such relationships. Future acquisitions or investments could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that future acquisitions or investments will achieve, the expected benefits to our business or that we will be able to consummate future acquisitions or investments on satisfactory terms, or at all. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In addition, future acquisitions by us could result in future issuances of shares of our common stock which may result in additional dilution of the percentage ownership of our shareholders and could cause the trading price of our common stock to decline.

If, during the period that is three years from the Closing Date of the acquisition of the MJ Subsidiaries by the Buyer there occurs a Change of Law Event (as defined herein), the Buyer’s obligations to make payments to the Company may be reduced or suspended which could have a material adverse effect on the Company and its financial condition.

If, during the period that is three years from the Closing Date of the acquisition of the MJ Subsidiaries by the Buyer there is any change to the state laws within the United States or the laws within Canada that makes it unlawful for any MJ Subsidiary to continue to conduct its business in the ordinary course of business by selling cannabis products in substantially the same capacity as such subsidiary was conducting business as of the Closing Date (each, a “Change of Law Event”), the Buyer’s obligations to continue to make payments against the outstanding balance of the Note and any payments due under the License Agreement may be suspended, and the time periods to make such payments tolled, until it is no longer unlawful for the MJ Subsidiaries to conduct business in substantially the same manner as they were conducting business as of the Closing Date. If such Change of Law Event is determined to be permanent or indefinite (as such terms are defined in the SPA), then the outstanding principal balance of the Note shall be reduced as set forth in the SPA. (See “Prospectus Summary—Recent Developments”). Any reduction or suspension in payments by the Buyer to the Company could have a material adverse effect on the Company and its financial condition.

Risks Relating to Regulation and Compliance

Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products and/or increase our costs.

Our business is subject to many regulations and noncompliance may be costly.

The production, marketing and sale of our beverages, including contents, labels, caps and containers, are subject to the rules and regulations of various federal, provincial, state and local health agencies. If a regulatory authority finds that a current or future product or production batch or “run” is not in compliance with any of these regulations, we may be fined, or production may be stopped, which may adversely affect our financial condition and results of operations. Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations that our business is subject to are subject to change, and while we closely monitor developments in this area, we cannot anticipate whether changes in these rules and regulations will adversely impact our business. Additional or revised regulatory requirements, whether labeling, environmental, tax or otherwise, could have a material adverse effect on our financial condition and results of operations.

Significant additional labeling or warning requirements may inhibit sales of affected products.

We operate in highly regulated industries where the regulatory environments are rapidly developing and we may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where we carry on business.

Our business and activities are heavily regulated in all jurisdictions where we carry on business. Our operations are subject to various laws, regulations and guidelines by governmental authorities (including, in Canada, Health Canada) and other federal, provincial, state and local regulatory agencies relating to, among other things, the cultivation, manufacture, processing, marketing, labeling, packaging, management, transportation, distribution, import, export, storage, sale, and pricing of hemp-derived Delta-9 THC based products, and also including laws, regulations and guidelines relating to health and safety, insurance coverage, the conduct of operations and the protection of the environment (including relating to emissions and discharges to water, air and land, and the handling and disposal of hazardous and non-hazardous materials and wastes). Our operations may also be affected in varying degrees by government regulations with respect to, among other things, price controls, import or export controls, controls on currency remittance, increased income taxes, restrictions on foreign investment and government policies rewarding contracts to local competitors or requiring domestic producers or vendors to purchase supplies from a particular jurisdiction. Laws, regulations and guidelines, applied generally, grant government agencies and self-regulatory bodies broad administrative discretion over our activities, including the power to limit or restrict business activities as well as impose additional disclosure requirements on our products and services, as well as on our personnel (including management and our board of directors (“Board” or “Board of Directors”)).

Achievement of our business objectives is contingent, in part, upon compliance with regulatory requirements enacted by these governmental authorities and obtaining all necessary regulatory approvals for the cultivation, production, processing, storage, transportation, distribution, sale, import and export, as applicable, of our products. The hemp-derived Delta-9 THC industry is still new. The effect of relevant governmental authorities’ administration, application and enforcement of their respective regulatory regimes and delays in obtaining, or failure to obtain, necessary regulatory approvals may significantly delay or impact the development of markets, products and sales initiatives and could have a material adverse effect on our business, financial condition, results of operations and growth prospects. For example, in the U.S., registered federal trademark protection is only available for goods and services that can be lawfully used in interstate commerce; the United States Patent and Trademark Office is not currently approving any trademark applications for certain goods containing hemp-derived cannabinoids (such as dietary supplements and food) until the U.S. Food and Drug Administration (“FDA”) and the U.S. Department of Agriculture (“USDA”) provides clearer guidance on the regulation of such products.

The regulatory environment for our products is rapidly developing, and the need to build and maintain robust systems to comply with different and changing regulations in multiple jurisdictions increases the possibility that we may violate one or more applicable requirements. While we endeavor to comply with all relevant laws, regulations and guidelines, any failure to comply with the regulatory requirements applicable to our operations could subject us to negative consequences, including, but not limited to, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, asset seizures, revocation or imposition of additional conditions on licenses to operate our business, the denial of regulatory applications (including, in the U.S., by other regulatory regimes that rely on the positions of the U.S. Drug Enforcement Administration, FDA and USDA in the application of their respective regimes), the suspension or expulsion from a particular market or jurisdiction or of our key personnel, or the imposition of additional or more stringent inspection, testing and reporting requirements, any of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Additionally, scheduled or unscheduled inspections of our facilities or facilities of our third party suppliers, co-manufacturers, and distributors by applicable regulatory agencies could result in adverse findings that could require significant remediation efforts and/or temporary or permanent shutdown of our facilities or those of our third party suppliers. In the United States, failure to comply with FDA and USDA requirements (and analogous state agencies) may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions. The outcome of any regulatory or agency proceedings, investigations, inspections, audits, and other contingencies could harm our reputation, require us to take, or refrain from taking, actions that could harm our operations or require us to pay substantial amounts of money, harming our results of operations, financial condition and cash flows. Increasingly, communication and coordination among regulators has led in other industries to coordinated responses to regulatory and licensure applications. To the extent that regulators coordinate responses to license applications and regulatory conditions, limitations or denials of licenses in one jurisdiction may lead to denials in other jurisdictions. There can be no assurance that any pending or future regulatory or agency proceedings, investigations, inspections and audits will not result in substantial costs or a diversion of management’s attention and resources, adversely impact our future growth plans and opportunities or have a material adverse effect on our business, financial condition and results of operations.

If any part of our business activities are found to be in violation of any of federal, state, provincial or local laws or any other governmental regulations, in addition to the items described above:

	●	we may be subject to “Warning Letters,” untitled letters, fines, penalties, administrative sanctions, settlements, injunctions, litigation, product recalls and/or other enforcement actions arising from civil, administrative or other proceedings initiated that could adversely affect our business, financial condition, operating results, liquidity, cash flow and operational performance;

	●	the profits or revenues derived therefrom could be subject to anti-money laundering statutes, including the Money Laundering Control Act, which could result in significant disruption to our business operations and involve significant costs, expenses or other penalties; and

	●	our suppliers, service providers and distributors may elect, at any time, to breach, terminate or otherwise cease to participate in supply, distribution or other agreements, or other relationships, on which our operations rely.

Some products we sell are subject to developing and unpredictable regulations.

Some of our products may be subject to uncertain and evolving federal, state and local regulations including our hemp-derived Delta-9 products. Regulatory and related enforcement initiatives by authorities related to such products are unpredictable and impossible to anticipate. We anticipate that all levels of government that have not already done so, are likely to seek in some way to regulate these products, but the type, timing, and impact of such regulations remains uncertain. Accordingly, we cannot give any assurance that such actions will not have a material adverse effect on this emerging business and our strategy.

Possible yet unanticipated changes in federal and state law could cause any of our current products containing hemp-derived Delta-9 THC to be illegal, or could otherwise prohibit, limit or restrict any of our products containing hemp derived Delta-9.

We have certain products containing hemp-derived Delta-9 THC, and we may develop and launch additional products containing hemp-derived Delta-9 THC in the future. Until 2014, when 7 U.S. Code §5940 became federal law as part of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived from hemp, notwithstanding a minimal or non-existing THC content, were classified as Schedule I illegal drugs. The 2014 Farm Act expired on September 30, 2018, and was thereafter replaced by the Agricultural Improvement Act of 2018 on December 20, 2018 (the “2018 Farm Act”), which amended various sections of the U.S. Code, thereby removing hemp, defined as cannabis with less than 0.3% THC, from Schedule 1 status under the CSA, and legalizing the cultivation and sale of industrial-hemp at the federal level, subject to compliance with certain federal requirements and state law, amongst other things. More specifically, industrial hemp is defined as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Delta-9 THC is the psychoactive component of plants in the cannabis family generally identified as marihuana or marijuana. There is no assurance that the 2018 Farm Act will not be repealed or amended such that our products containing hemp-derived Delta-9 would once again be deemed illegal under federal law.

Our ability to develop, commercialize and distribute products containing hemp-derived Delta-9 may be limited by new laws and regulations.

The 2018 Farm Bill removed hemp from the CSA and established a federal regulatory framework for hemp production in the United States. Among other provisions, the 2018 Farm Bill: (a) explicitly amends the CSA to exclude all parts of the cannabis plant (including its cannabinoids, derivatives, and extracts) containing a THC concentration of not more than 0.3% on a dry weight basis from the CSA’s definition of “marihuana”; (b) permits the commercial production and sale of hemp; (c) precludes states, territories, and Indian tribes from prohibiting the interstate transport of lawfully-produced hemp through their borders; and (d) establishes the USDA as the primary federal agency regulating the cultivation of hemp in the United States, while allowing states, territories, and Indian tribes to obtain (or retain) primary regulatory authority over hemp activities within their borders after receiving approval of their proposed hemp production plan from the USDA.

Marijuana continues to be classified as a Schedule I substance under the CSA. As a result, any cannabinoids derived from marijuana, as opposed to hemp, or any products derived from hemp containing in excess of 0.3% THC on a dry-weight basis, remain Schedule I substances under U.S. federal law. Cannabinoids derived from hemp are indistinguishable from those derived from marijuana, and confusion surrounding the nature of products containing hemp-derived Delta-9, inconsistent interpretations of the definition of “hemp”, inaccurate or incomplete testing, farming practices and law enforcement vigilance or lack of education could result in our products being intercepted by federal and state law enforcement as marijuana and could interrupt and/or have a material adverse impact on our business. We could be required to undertake processes that could delay shipments, impede sales or result in seizures, proper or improper, that would be costly to rectify or remove and which could have a material adverse effect on our business, prospects, results of operations or financial condition. If we make mistakes in processing or labeling, and THC in excess of 0.3% on a dry-weight basis is found in our products, we could be subject to enforcement and prosecution under local, state, and federal laws which would have a negative impact on our business and operations.

Under the 2018 Farm Bill, states have authority to adopt their own regulatory regimes, and as such, regulations will likely continue to vary on a state-by-state basis. States take varying approaches to regulating the production and sale of hemp and hemp-derived products under state food and drug laws. The variance in state law and that state laws governing hemp production and products are rapidly changing may increase the chance of unfavorable law enforcement interpretation of the legality of the Company’s operations as they relate to the development and marketing of hemp-derived cannabinoid products. Further, variance in state laws may increase our compliance costs and risk of error. For instance, California recently passed emergency regulations outlawing products containing hemp-derived delta-9 THC, and Texas has proposed legislation to outlaw all forms of THC.

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

Variance in hemp regulation across jurisdictions is likely to persist. This patchwork of state laws may, for the foreseeable future, materially impact our business and financial condition, limit the accessibility of certain state markets, cause confusion amongst regulators, and increase legal and compliance costs. In the event that our operations are deemed to violate any laws or if we are deemed to be assisting others to violate a state or federal law, we could be subject to enforcement actions and penalties, and any resulting liability could cause us to modify or cease its operations.

Continued development of the industrial hemp and cannabis industries will be dependent upon new legislative authorization of industrial hemp and cannabis at the state level, and further amendment or supplementation of legislation at the federal level. Any number of events or occurrences could slow or halt progress all together in this space. While progress within the industrial hemp and cannabis industries is currently encouraging, growth is not assured. While there appears to be ample public support for favorable legislative action, numerous factors may impact or negatively affect the legislative process(es) within the various states where we have business interests. Any one of these factors could slow or halt use of industrial hemp, which could negatively impact our business and financial results.

The shifting compliance environment and the need to build and maintain robust systems to comply with different compliance in multiple jurisdictions increases the possibility that we may violate one or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to our business, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, any of which could adversely affect the ability to operate our business and its financial results.

We will be subject to certain restrictions of Nasdaq, which may constrain our ability to expand our business in the United States.

We intend to apply to list our shares of common stock on The Nasdaq Capital Market. If our shares of common stock are approved for listing on The Nasdaq Capital Market, so long as we choose to continue to be listed on such exchange, we must comply with Nasdaq requirements or guidelines when conducting business, especially when pursuing opportunities in the United States.

While Nasdaq has not issued official rules specific to the cannabis or hemp industry, stock exchanges in the United States, including Nasdaq, have historically refused to list certain cannabis-related businesses. Failure to comply with any requirements imposed by Nasdaq could result in the delisting of our shares from Nasdaq or denial of any application to have additional securities listed on Nasdaq, which could have a material adverse effect on the trading price of our common stock.

We may be subject to heightened scrutiny by regulatory authorities.

Any future investments, joint ventures or operations with respect to our Delta-9 THC products may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in the jurisdictions in which we operate. As a result, we may be subject to significant direct and indirect interaction with public officials. There can be no assurance that this heightened scrutiny will not in turn lead to the imposition of certain restrictions on our business.

Anti-money laundering and other banking laws and regulations may limit our ability to access financing and hamper our growth.

We are subject to a variety of domestic and international laws and regulations pertaining to money laundering, financial recordkeeping and proceeds of crime, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended and the rules and regulations thereunder, the Criminal Code (Canada) and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities internationally.

In the event that any of our operations or investments, any proceeds thereof, any dividends or distributions therefrom, or any profits or revenues accruing from such operations or investments are found to be in violation of money laundering legislation, such transactions may be viewed as proceeds of crimes under one or more of the statutes noted above or any other applicable legislation. This could restrict or otherwise jeopardize our ability to declare or pay dividends, effect other distributions or subsequently repatriate such funds back to Canada. Furthermore, while we have no current intention to declare or pay dividends in the foreseeable future, in the event that a determination was made that proceeds obtained by us could reasonably be shown to constitute proceeds of crime, we may decide or be required to suspend declaring or paying dividends without advance notice and for an indefinite period of time.

Risk Factors Related to this Offering and Our Common Stock

Our ability to maintain the listing of our common stock on The Nasdaq Capital Market, if obtained, will be subject to us meeting applicable listing criteria.

If our common stock is listed on The Nasdaq Capital Market, we must meet certain financial and liquidity criteria to maintain such listing. If we violate The Nasdaq Capital Market listing requirements, our common stock may be delisted. If we fail to meet any of Nasdaq’s continued listing standards, our common stock may be delisted. In addition, our Board of Directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.

If Nasdaq delists our common stock and we are not able to list our common stock on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our shareholders:

	●	the liquidity of our common stock;
	●	the market price of our common stock;
	●	our ability to obtain financing for the continuation of our operations;
	●	the number of investors that will consider investing in our common stock;
	●	the number of market makers in our common stock;
	●	the availability of information concerning the trading prices and volume of our common stock; and
	●	the number of broker-dealers willing to execute trades in shares of our common stock.

The delisting of our common stock could significantly impair the value of your investment.

The price of our common stock may be volatile, and a shareholder’s investment in our common stock could suffer a decline in value.

There has been significant volatility in the volume and market price of our common stock, and this volatility may continue in the future. InThe market ~~addition,~~price ~~factors~~of ~~such as quarterly variations in~~ our ~~operating~~common ~~results,~~stock ~~our~~may ~~issuance~~be ofsubject ~~new~~to ~~securities,~~wide ~~announcements~~fluctuations ~~about~~in ~~company~~response ~~developments and initiatives, litigation involving us, general trends relating~~ to ~~the beverage industry, actions by governmental agencies, national economic and stock market considerations as well as other events and circumstances beyond our control, could have~~ a ~~significant~~variety ~~impact on the future market price~~ of ~~our~~factors, ~~common~~including ~~stock and~~ the ~~relative volatility of such market price.~~following:

A● ~~prolonged~~quarterly ~~decline~~variations in ~~the price of~~ our ~~common~~operating ~~stock~~results; ~~could~~● ~~result in a reduction in the liquidity of~~ our ~~common~~issuance ~~stock and a reduction in our ability to raise capital. If we are unable to raise the funds required for all~~ of ~~our~~new ~~planned~~securities; ~~operations~~● ~~and~~announcements ~~key~~about ~~initiatives,~~Company wedevelopments ~~may be forced to allocate funds from other planned uses, which may negatively impact our business~~ and ~~operations, including our ability to develop new products and continue our current operations.~~initiatives;

~~Any future equity or debt issuances by us may have dilutive or adverse effects on our existing shareholders.~~26

~~From~~● ~~time~~failure to ~~time,~~meet or exceed any financial projections that we may ~~issue~~provide ~~additional~~to ~~shares~~the ofpublic; ~~common~~● ~~stock~~failure to meet or ~~convertible~~exceed ~~securities.~~the ~~The~~estimates ~~issuance~~and projections of ~~these~~the ~~securities~~investment ~~could~~community; ~~dilute~~● ~~our~~changes ~~shareholders’~~in ~~ownership~~the inmarket ~~our~~valuations ~~company~~of ~~and~~companies ~~may~~similar ~~include~~to ~~terms~~ours; ~~that~~● ~~give~~announcements ~~new~~of ~~investors~~significant ~~rights~~acquisitions, ~~that~~strategic ~~are~~collaborations, ~~superior~~joint toventures ~~those~~or ofcapital commitments by us or our ~~current~~competitors; ~~shareholders. Moreover,~~● ~~any~~additions ~~issuances~~or bydepartures usof key personnel; ● sales of ~~equity~~our ~~securities~~common ~~may~~stock beby atus or ~~below~~our shareholders in the ~~prevailing~~future; ~~market~~● ~~price~~trading volume of our common stock; ● changes in analysts’ estimates affecting our Company, our competitors and/or our industry; ● changes in ~~any~~the ~~event~~accounting ~~may~~methods ~~have~~used ain ~~dilutive~~or ~~impact~~otherwise onaffecting our ~~shareholders’~~industry; ~~ownership~~● fluctuations in interest rates and the availability of capital in the capital markets; ● addition or loss of significant customers, ~~which~~manufacturers, ~~could~~distributors ~~cause~~or other business partners; ● litigation involving us; ● general trends relating to the beverage industry; ● actions by governmental agencies; ● general economic, industry, political and market ~~price~~conditions due to military conflicts or war, inflation, health epidemics, the imposition of tariffs by the U.S. or other countries or trade wars; ● natural or manmade disasters which could significantly disrupt our ~~common~~operations; ~~stock~~● tothe ~~decline~~other factors described in this “Risk Factors” section; and ● events and circumstances beyond our control.

~~Our~~Any of ~~common~~these ~~stock~~factors ismay ~~traded~~result onin large and sudden changes in the ~~OTCQB Marketplace~~volume and ~~the~~price ~~Canadian~~at ~~Stock~~which ~~Exchange~~our common stock will trade. In addition, the ~~which~~stock ~~may~~markets have anexperienced ~~unfavorable~~extreme ~~impact~~price onand ~~our~~volume ~~stock~~fluctuations ~~price~~that have affected and ~~liquidity~~continue to affect the market prices of equity securities of many companies. If there is extreme market volatility and trading patterns in our common stock, it may create several risks for investors, including the following:

~~Our~~● ~~stock is traded on~~ the ~~OTCQB~~market ~~Marketplace~~price inof ~~the~~our ~~United~~common ~~States~~stock ~~and~~may ~~the~~experience ~~Canadian~~rapid ~~Stock Exchange (“CSE”) in Canada. The OTCQB~~ and ~~CSE~~substantial ~~are~~increases ~~significantly~~or ~~more~~decreases ~~limited~~unrelated ~~markets~~to ~~than~~our ~~the~~actual ~~United~~or ~~States~~expected ~~national~~operating ~~securities~~performance, ~~exchanges~~financial ~~such~~condition asor ~~the New York Stock Exchange~~prospects, orwhich ~~Nasdaq~~may ~~and~~make ~~there~~it ~~are~~more ~~lower~~difficult ~~financial~~for orprospective ~~qualitative~~investors ~~standards that a company must meet~~ to beassess ~~listed on~~ the ~~OTCQB~~rapidly ~~and~~changing ~~CSE.~~value ~~Trading~~of in our common stock; on● ~~each~~if ofour ~~the~~future ~~OTCQB~~market ~~and~~capitalization ~~the~~reflects ~~CSE~~trading ~~may~~dynamics beunrelated ~~subject~~ to ~~abuses,~~our ~~volatility~~actual ~~and~~or ~~shorting,~~expected ~~which~~operating ~~may~~performance, ~~have~~financial ~~little~~performance ~~to do with our operations~~ or ~~business~~ prospects~~. This~~, ~~volatility~~purchasers ~~could depress the market price~~ of our common stock ~~for~~could ~~reasons~~incur ~~unrelated~~substantial tolosses ~~operating~~as ~~performance.~~prices ~~The~~decline ~~Financial~~once ~~Industry~~the ~~Regulatory~~level ~~Authority~~of ~~(“FINRA”),~~market ~~which~~volatility has ~~jurisdiction~~abated; ~~over~~and ~~the~~● ~~OTCQB,~~if ~~has~~the ~~adopted~~future ~~rules~~market ~~that~~price ~~require~~of aour ~~broker-dealer~~common tostock ~~have~~declines, ~~reasonable~~investors ~~grounds~~may ~~for~~be ~~believing~~unable anto ~~investment~~resell istheir ~~suitable~~shares ~~for~~at ~~that~~or ~~customer~~above ~~when~~the ~~recommending~~price anat ~~investment~~which tothey aacquired ~~customer~~them. ~~FINRA~~We ~~believes~~cannot ~~that~~assure ~~there~~you ~~is a high probability~~ that ~~speculative~~the ~~low-priced~~market ~~securities~~of ~~will not be suitable for some customers and may make it more difficult for broker-dealers to recommend that their customers buy~~ our common stock, ~~which~~will ~~may result in a limited ability to buy and sell our stock. We currently do~~ not ~~meet~~fluctuate ~~applicable~~or ~~listing~~decline ~~standards~~significantly ~~of a market senior to the OTC~~ in the ~~United States and we may never apply or qualify for~~ future, ~~listing~~in onwhich ~~Nasdaq~~case oryou acould ~~senior~~incur ~~market~~substantial losses.

~~-20-~~Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of our common stock, regardless of our actual operating performance. In addition, shares of our common stock may be more thinly traded than securities of larger, more established beverage companies and, as a result of this lack of liquidity, sales of relatively small quantities of shares of our common stock by our shareholders may disproportionately influence the price of our common stock. The market price of our common stock may decline below the public offering price, and you may lose some or all of your investment. Furthermore, a prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. If we are unable to raise the funds required for all of our planned operations and key initiatives, we may be forced to allocate funds from other planned uses, which may negatively impact our business and operations, including our ability to develop new products and continue our current operations.

~~Table~~We could ofbe ~~Contents~~subject to securities class action litigation.

In the past, securities class action litigation has been brought against companies following a decline in the market price of their securities. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

If you purchase shares of our common stock in this offering, you will incur immediate and substantial dilution.

The offering price of our common stock is substantially higher than the net tangible book value per share of our common stock, which on an as-adjusted basis was $0.04 per share as of March 31, 2025. As a result, you will incur immediate and substantial dilution in net tangible book value when you buy our common stock in this offering. This means that you will pay a higher price per share than the amount of our total tangible assets, less our total liabilities, divided by the number of shares of our common stock outstanding. In addition, you may also experience additional dilution if options or other rights to purchase our common stock that are outstanding or that we may issue in the future are exercised, converted, or exchanged, or we issue additional shares of our common stock at prices lower than our net tangible book value at such time. For additional information, refer to the section entitled “Dilution.”

Future sales and issuances of our common stock, or securities convertible into or exercisable for our common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our shareholders and could cause the trading price of our common stock to decline.

From time to time, we may issue additional shares of common stock or securities convertible into or exercisable for our common stock, in one or more transactions at prices and in a manner we determine from time to time. We also expect to issue additional shares of our common stock to directors, officers, employees, and consultants pursuant to our equity incentive plan. The issuance of these securities could dilute our shareholders’ ownership in our Company and may include terms that give new investors rights that are superior to those of our current shareholders. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on our shareholders’ ownership interest, which could cause the market price of our common stock to decline.

Substantial future sales of our common stock, or the perception in the public markets that these sales may occur, could cause our share price to fall.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of our common stock intend to sell shares, could reduce the trading price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate. Upon the closing of this offering, we will have shares of our common stock outstanding (or shares, if the underwriters exercise in full their option to purchase additional shares of our common stock), assuming a public offering price of $ per share which is the last reported sales price of our common stock on the OTCQB on , 2025. The shares of common stock offered in this offering will be freely tradable without restriction under the Securities Act.

Subject to the restrictions set forth in the lock-up agreements entered into by each of our directors and officers and certain of our shareholders in connection with this offering, as described elsewhere in this prospectus, outstanding shares of our common stock may be freely sold in the public market at any time to the extent permitted by Rules 144 and 701 under the Securities Act, or to the extent that such shares have already been registered under the Securities Act. If any of these shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the currently intended purposes described in the section entitled “Use of Proceeds.” Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management may not apply our cash from this offering in ways that ultimately increases the value of any investment in our securities or enhances shareholder value. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing instruments and government securities. These investments may not yield a favorable return to our shareholders. If we do not invest or apply our cash in ways that enhance shareholder value, we may fail to achieve expected financial results, which may result in a decline in the price of our shares of common stock, and, therefore, may negatively impact our ability to raise capital, invest in or expand our business or continue our operations.

Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price.

The global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, inflationary pressure and interest rate changes, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflicts, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon our business plans. In addition, there is a risk that one or more of our current customers, distributors, manufacturers, financial institutions or other third parties with whom we do business may be adversely affected by the foregoing risks, which may have an adverse effect on our business.

We do not intend to pay any cash dividends on our shares of common stock in the near future, so our shareholders will not be able to receive a return on their shares unless they sell their shares.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. ~~There~~Accordingly, isinvestors nomust ~~assurance that future dividends will~~ be ~~paid,~~prepared ~~and~~to ifrely ~~dividends~~on ~~are~~sales ~~paid,~~of ~~there~~their isshares noafter ~~assurance~~price ~~with respect~~ appreciation to ~~the~~earn ~~amount~~an ofinvestment ~~any such dividend. Unless we pay dividends~~return, ~~our~~which ~~shareholders~~may ~~will~~never ~~not be able to receive a return on their shares unless they sell such shares~~occur.

Anti-takeover provisions in our charter documents and under Washington law could make an acquisition of us, which may be beneficial to our shareholders, difficult and prevent attempts by our shareholders to replace or remove our current management.

Provisions in our ~~articles~~Articles of ~~incorporation~~Incorporation, ~~and~~as ~~bylaws~~amended, Amended and ~~under~~Restated Bylaws and Washington law may delay or prevent an acquisition of us or a change in our management. These provisions include a prohibition on shareholder actions by less than unanimous written consent, limitations on the ability of shareholders to call a special meeting of shareholders and advance notice procedures with respect to the nomination of candidates for election as directors. In addition, because we are incorporated in Washington, we are governed by the provisions of Chapter 23B.19 of the Washington Business Corporation Act, which, among other things, restricts the ability of shareholders owning 10% or more of our outstanding voting stock from merging or combining with us. Although we believe these provisions collectively provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our ~~board~~Board of ~~directors~~Directors, they would apply even if an offer may be considered beneficial by some shareholders. In addition, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management by making it difficult for shareholders to replace members of our ~~board~~ Board of ~~directors~~Directors, which is responsible for appointing the members of our management.

~~-21-~~29

~~Table~~We are ofa ~~Contents~~“smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.

~~SPECIAL~~We are ~~NOTE~~a ~~REGARDING~~“smaller ~~FORWARD~~reporting company” under applicable SEC rules, meaning that the market value of our common stock held by non-~~LOOKING~~affiliates plus ~~STATEMENTS~~ the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700.0 million and our annual revenue was less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250.0 million, or (ii) our annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates was less than $700.0 million. As a smaller reporting company, we may choose to present only the two most recent years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure in certain filings with the SEC, and we may take advantage of reduced disclosure obligations regarding executive compensation.

The financial reporting obligations of being a public company and maintaining a dual listing on the CSE and on Nasdaq will require significant company resources and management attention.

We are subject to the public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Act, and the listing requirements of the CSE. In addition, upon completion of this offering, we will be subject to the listing requirements of Nasdaq and we anticipate that we will incur significant legal, accounting, reporting and other expenses in order to maintain a dual listing on both the CSE as well as Nasdaq. Moreover, our listing on both the CSE and Nasdaq may increase price volatility due to various factors, including the ability to buy or sell shares of our common stock, different market conditions in different capital markets and different trading volumes. In addition, low trading volume may increase the price volatility of shares of our common stock.

General Risk Factors

If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected.

Any trading market for our common stock may be influenced in part by any research reports that securities industry analysts publish about us. We do not currently have and may never obtain research coverage by securities industry analysts. If no securities industry analysts commence coverage of us, the market price and market trading volume of our common stock could be negatively affected. In the event we are covered by analysts, and one or more of such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage of us, the market price and market trading volume of our common stock could be negatively affected.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and uncertainties. You should not place undue reliance on these forward-looking statements. All statements other than statements of historical facts contained in this prospectus are forward-looking statements. The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. In some cases, you can identify these forward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,” “estimate,” “expects,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms or other similar expressions, although not all forward-looking statements contain those words. We have based these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

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

● Our ability to successfully execute on our growth strategy and operating plans; ● Our ability to continue to raise capital to finance our operations; ● Our ability to manage our operating expenses and generate cash flow from operations; ● 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; ● 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 continue to effectively utilize the proceeds from our financings completed during the first half of 2022;~~31

● Our ability to ~~execute~~manage our ~~plans~~inventory tolevels ~~continue~~and to ~~license~~predict the timing and ~~market~~amount ~~THC/CBD~~of our sales; ● Our reliance on third-~~infused~~party contract manufacturers of our products and/ the geographic locations of their facilities, which could make management of our distribution efforts inefficient or ~~cannabis-infused~~unprofitable; ~~beverages~~● Our ability to secure a continuous supply and ~~edibles~~availability of raw materials, as well as other factors that may adversely affect our supply chain, including increases in raw material costs and ~~comply~~the ~~with~~potential shortages of glass in the ~~laws~~supply chain; ● Our ability to source our flavors on acceptable terms from our key flavor suppliers; ● Our ability to attract and ~~regulations~~retain ~~governing~~key ~~cannabis~~personnel, ~~hemp~~the orloss ~~related~~of ~~products,~~whom would directly affect our efficiency and ~~the~~operations ~~timing~~and could materially impair our ability to execute our growth strategy; ● Our ability to protect our trademarks and ~~costs~~trade ofsecrets, the ~~development~~failure of ~~this~~which ~~new~~may ~~product~~prevent ~~line~~us from successfully marketing our products and competing effectively; ● Litigation or legal proceedings, which could expose us to significant liabilities and damage our reputation; ● Our ability to comply with the many regulations to which our business is subject; ● Our ability to maintain an effective information technology infrastructure;

● Failures or security breaches of our information technology systems could disrupt our operations and negatively impact our business; ● Fluctuations in fuel and freight costs; ● Fluctuations in currency exchange rates, particularly between the United States and Canadian dollars; ● Tariffs affecting raw materials or finished goods transported between the United States and Canada; ● Regional, national or global economic, political, social and other conditions that may adversely impact our business and results of operations; ● Our ability to ~~manage~~maintain effective disclosure controls and procedures and internal control over financial reporting; ● Dilutive and other adverse effects on our ~~operating~~existing ~~expenses~~shareholders and ~~generate~~our ~~cash~~stock ~~flow~~price arising from ~~operations,~~future ~~along~~securities ~~with~~issuances; ~~our~~and ● Our ability to ~~secure~~access ~~additional~~the capital markets for any future equity financing ifand ~~our~~any ~~sales~~actual ~~goals~~or ~~take~~perceived ~~longer~~limitations to ~~achieve~~our ~~than~~common ~~anticipated;~~stock including the level of trading activity, volatility or market liquidity.

● 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;

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

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

-22-

Table of Contents

● 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;

● Our ability to comply with applicable regulatory requirements and effectively address investigations and administrative actions by government regulators with jurisdiction over our Mary Jones business;

● 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;

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

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

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

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

~~-23-~~32

Table of Contents

INDUSTRY AND MARKET DATA

This prospectus contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties. This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty, including those discussed in “Risk Factors.” We caution you not to give undue weight to such projections, assumptions and estimates. Further, industry and general publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these publications, studies and surveys are reliable, we have not independently verified the data contained in them. In addition, while we believe that the results and estimates from our internal research are reliable, such results and estimates have not been verified by any independent source.

USE OF PROCEEDS

~~The~~We estimate ~~selling~~that ~~shareholders~~we will receive ~~all~~net ~~of the~~ proceeds from ~~the~~this ~~sale~~offering of approximately $ million (or $ million if the ~~Resale~~underwriters ~~Shares~~exercise ~~offered~~their over-allotment byoption ~~them~~in ~~pursuant~~full), tobased ~~this~~upon ~~prospectus.~~an Weassumed ~~will~~$ per ~~not~~share ~~receive~~offering ~~any~~price, ~~proceeds~~which ~~from~~is the ~~sale~~last reported sales price of ~~the~~our ~~Resale~~common ~~Shares~~stock byon the ~~selling~~OTCQB ~~shareholders~~on , 2025 ~~covered~~and byafter ~~this~~deducting ~~prospectus~~estimated underwriting discounts and commissions and estimated offering expenses payable by us.

~~MARKET~~We currently ~~FOR~~expect ~~OUR~~to ~~COMMON~~use ~~STOCK~~the ~~AND~~net ~~RELATED~~proceeds ~~STOCKHOLDER~~from ~~MATTERS~~this offering for working capital and other general corporate purposes. The expected use of net proceeds from this offering represents our intentions based upon our present plans and business conditions, which could change in the future as or plans and business conditions evolve. We may find it necessary or advisable to use the net proceeds for other purposes, and we will have broad discretion in the application and specific allocations of the net proceeds of this offering. We intend to invest the net proceeds we receive from this offering that are not used as described above in short- and intermediate-term, interest-bearing obligations, investment-grade instruments or other securities.

~~Market~~Assuming no ~~Information~~exercise of the underwriters’ over-allotment option, each $1.00 increase (decrease) in the assumed public offering price of $ per share would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming that the number of shares offered by us remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each 100,000 share increase (decrease) in the number of shares offered in this offering would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming that the price per share for the offering remains at $ , and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Our common stock currently trades on the OTCQB Marketplace in the United States under the symbol “JSDA” and on the Canadian Securities Exchange in Canada under the symbol “JSDA.”

Shareholders

As of August 21, 2024, there were 115,168,173 shares of common stock issued and outstanding, held by approximately 252 holders of record, although there are a much larger number of beneficial owners.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table summarizes information about our equity compensation plans as of December 31, 2023.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holder		11,407,722	$	0.26		6,330,250
Equity compensation plans not approved by security holder		-		-		-
Total		11,407,722	$	0.26		6,330,250

-24-

Table of Contents

DIVIDEND POLICY

We have not paid any dividends on our shares of common stock, and we do not anticipate paying any dividends in the foreseeable future. We intend to retain any future earnings to finance the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our Board of Directors after considering our financial condition, results of operations, capital requirements, business prospects and other factors our Board of Directors deems relevant. Accordingly, you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them.

~~SELLING SHAREHOLDERS~~CAPITALIZATION

OnThe following ~~July~~table ~~26,~~sets ~~2024,~~forth the ~~Company~~cash ~~closed the first tranche of its previously announced private placement offering of units of the Company composed of: (i) one (1) share of common stock in the capital of the Company;~~ and ~~(ii)~~capitalization ~~one‐half~~as ~~(1/2)~~ of ~~one~~March detachable share purchase warrant for aggregate gross proceeds of $3,013,960 (the “Offering”). 7,535,000 Units consisting of 7,535,000 shares of the company’s common stock and 3,767,500 shares of the Company’s common stock issuable upon the exercise of warrants were issued in the first tranche of the Offering. On July 31, ~~2024~~2025, the Company closed the second tranche of the Offering where 1,600,000 Units, consisting of 1,600,000 shares of the Company’s common stock and 800,000 shares of the Company’s common stock issuable upon the exercise of warrants were issued for aggregate gross proceeds of $640,000. On August 21, 2024, the Company closed the third and final tranche of the Offering where 1,875,000 Units, consisting of 1,875,000 shares of the Company’s common stock and 937,500 shares of the Company’s common stock issuable upon the exercise of warrants were issued for aggregate gross proceeds of $750,000, consisting of $500,000 in cash. In connection with the Offering, the Company issued to Dominari Securities LLC, who acted as exclusive placement agent for the Offering, an aggregate of 440,400 Warrants as compensation for services rendered in the Offering. The Company also issued on September 15, 2023, 200,000 shares of the Company’s common stock to Paul Norman, the Chair of the Company’s board of directors upon the exercise of warrants held by Mr. Norman at an exercise price of $0.0602CAD per share.follows:

~~This~~● ~~prospectus~~on ~~relates to the resale from time to time by the selling security holders identified herein of up to~~ an ~~aggregate~~actual of 17,155,400 Resale Shares including 5,945,400 Resale Shares issuable upon exercise of outstanding warrants. The transactions by which the selling shareholders acquired their securities from us were exempt under the registration provisions of the Securities Act.basis;

~~The~~● ~~Resale~~on ~~Shares~~an ~~referred~~as toadjusted ~~above~~basis, ~~are~~to ~~being~~(i) ~~registered~~give effect to ~~permit~~the ~~public~~sale ~~sales~~of all of the ~~Resale~~equity ~~Shares,~~interests ~~and~~in ~~the~~our ~~selling~~wholly-owned ~~shareholders~~subsidiaries ~~may~~that ~~offer~~held ~~the~~our ~~shares~~THC ~~for~~infused ~~resale~~cannabis ~~from~~business ~~time~~in toboth ~~time~~the ~~pursuant~~United toStates ~~this~~and ~~prospectus.~~Canada ~~The~~to ~~selling~~an ~~shareholders~~independent ~~may~~third ~~also~~party ~~sell~~for $3,000,000, ~~transfer~~including orthe ~~otherwise~~issuance ~~dispose~~ of ~~all~~the orNote, aand ~~portion~~inventory ofas ~~their~~set ~~shares~~forth in ~~transactions~~the ~~exempt~~SPA ~~from~~for ~~the~~approximately ~~registration~~$61,000 ~~requirements~~and of(ii) the ~~Securities~~issuance ~~Act~~of or699,493 ~~pursuant~~shares toof ~~another~~common ~~effective~~stock ~~registration~~upon ~~statement~~the ~~covering~~vesting ~~those~~of ~~shares.~~restricted stock units; and

~~-25-~~● on a pro forma as adjusted basis, to give further effect to the issuance and sale of common stock in this offering at an assumed public offering price of $ per share which is the last reported sales price of our common stock on the OTCQB on , 2025, after deducting estimated underwriting discounts and estimated offering expenses payable by us.

~~Table of Contents~~33

The information ~~table~~discussed below ~~sets~~is ~~forth~~illustrative ~~certain~~only, ~~information~~and ~~regarding~~our ~~the~~cash ~~selling~~and ~~shareholders~~capitalization ~~and~~following the ~~Resale~~consummation ~~Shares~~of ~~offered~~this inoffering ~~this~~will ~~prospectus.~~be adjusted ~~The~~based ~~selling~~on ~~shareholders~~the ~~have~~actual ~~had~~public nooffering ~~material~~price ~~relationship~~and ~~with~~other usterms ~~within~~of ~~the~~this ~~past~~offering ~~three~~determined ~~years~~at ~~other~~pricing. ~~than~~You asshould ~~described~~read this information in ~~the~~conjunction ~~footnotes~~with toour financial statements and the ~~table~~related ~~below~~notes orand asthe a“Management’s ~~result~~Discussion and Analysis of ~~their~~Financial Condition ~~acquisition~~and Results of ~~our~~Operations” ~~shares~~contained orin and incorporated by reference into this prospectus and other ~~securities~~financial information contained in and incorporated by reference into this prospectus.

Beneficial ownership is determined in accordance with the rules of the SEC. The selling shareholder’s percentage of ownership of our outstanding shares in the table below is based upon 115,168,173 shares of common stock outstanding as of August 21, 2024.

	As of March 31, 2025
	Actual (‘000)			As Adjusted (‘000)			Pro Forma, As Adjusted⁽¹⁾ (‘000)

Cash	$	735			892		$

Shareholders’ equity:		94,974			(1,174	)
Common stock, no par value per share: 800,000,000 shares authorized, 115,865,227 shares issued and outstanding, actual; shares issued and outstanding, as adjusted; and shares issued and outstanding, pro forma as adjusted
Accumulated Other Comprehensive Income		223			-
Accumulated deficit		(93,801	)		4,559
Total shareholders’ equity		1,396			3,385
Total capitalization	$	2,131			4,277		$

Name of Selling Shareholder	Number of Shares of Common Stock Beneficially Owned Before this Offering (1)	Percentage of Common Stock Beneficially Owned Before this Offering	Shares of Common Stock Offered in this Offering	Shares of Common Stock Beneficially Owned After this Offering (2)		Percentage of Common Stock Beneficially Owned After this Offering (2)
1000516271 Ontario Inc.(3)	150,000(4)	*	150,000(4)		-	-
Philip Albright	1,137,500(5)	*	262,500(6)		875,000	*
Zoran Arandjelovic	377,500(7)	*	187,500(8)		190,000	*
Bixa Capital Corp. (9)	375,000(10)	*	375,000(10)		-	-
Mills A. Brown	1,179,788(11)	*	600,000(12)		579,788	*
Conant Harbor Trust(13)	375,000(14)	*	375,000(14)		-	-
Wayne Dottor	201,121(15)	*	150,000(16)		51,121	*
Go Faster Investments Inc. (17)	1,087,500(18)	*	1,087,500(18)		-	-
Hanley-Jones Holdings, LLC(19)	375,000(20)	*	375,000(20)		-	-
Patrick Lazure	301,550(21)	*	150,000(22)		151,550	*
Mindset Value Wellness Fund(23)	937,500(24)	*	937,500(24)		-	-
The Mindset Venture Fund(23)	937,500(25)	*	937,500(25)		-	-
NE SPC II LP(26)	4,875,000(27)	5%	4,875,000(27)		-	-
Nordwand Foundation(28)	3,000,000(29)	3%	3,000,000(29)		-	-
Paul Norman(30)	3,253,570(31)	3%	200,000		3,053,570(32)	3%
Perlus Microcap Fund LP(33)	1,500,000(34)	*	1,500,000(34)		-	-
Joe Quinn	274,439(35)	*	187,500(36)		86,939	*
Daniel Roemerman	1,000,000(37)	*	450,000(38)		550,000	*
SSB Capital Inc. (39)	75,000(40)	*	75,000(40)		-	-
Daniel Thiel	2,180,000(41)	2%	690,000(42)		1,490,000	1%
Dominari Securities LLC	440,400(43)	*	440,400(43)		-	-
Wilford and Marci Farnsworth Trust(44)	350,000(45)	*	150,000(46)		200,000	*
TOTAL	24,383,368	21%	17,155,400	7,227,968			6%

(1) Each $1.00 increase (decrease) in the assumed public offering price of $ per share which is the last reported sales price of our common stock on the OTCQB on , 2025 would increase (decrease) the pro forma as adjusted amount of each of cash, total shareholders’ equity and total capitalization by $ million, assuming the number of shares offered by us remains the same, and after deducting underwriting discounts and estimated offering expenses payable by us. Similarly, each 100,000 increase (decrease) in the number of shares sold in this offering would increase (decrease) the pro forma as adjusted amount of each of cash, total shareholders’ equity and total capitalization by $ million, assuming the assumed public offering price of $ per share remains the same, and after deducting underwriting discounts and estimated offering expenses payable by us.

*The number ~~Less~~of ~~than~~shares ~~1%.~~of our common stock to be outstanding after this offering is based on 115,865,227 shares of our common stock outstanding as of March 31, 2025, assumes no exercise by the underwriters of their over-allotment option and excludes:

~~-26-~~● 11,628,244 shares of common stock issuable upon exercise of options at a weighted average exercise price of $0.27 per share;

~~Table~~● 5,945,400 shares of ~~Contents~~common stock issuable upon exercise of warrants at a weighted average exercise price of $0.50 per share;

(1)	Under applicable SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire within 60 days through the exercise of any option or warrant or through the conversion of a convertible security. Also under applicable SEC rules, a person is deemed to be the “beneficial owner” of a security with regard to which the person directly or indirectly, has or shares (a) voting power, which includes the power to vote or direct the voting of the security, or (b) investment power, which includes the power to dispose, or direct the disposition, of the security, in each case, irrespective of the person’s economic interest in the security. To our knowledge, subject to community property laws where applicable, each person named in the table has sole voting and investment power with respect to the shares of common stock shown as beneficially owned by such selling shareholder, except as otherwise indicated in the footnotes to the table.
(2)	Represents the amount of shares that will be held by the selling shareholder after completion of this offering based on the assumptions that (a) all Resale Shares registered for sale by the registration statement of which this prospectus is part will be sold and (b) no other shares of our common stock are acquired or sold by the selling shareholder prior to completion of this offering. However, each selling shareholder may sell all, some or none of the Resale Shares offered pursuant to this prospectus and may sell other shares of our common stock that they may own pursuant to another registration statement under the Securities Act or sell some or all of their shares pursuant to an exemption from the registration provisions of the Securities Act, including under Rule 144.
(3)	Jonathan Held and Mike Dai are the Directors of 1000516271 Ontario Inc. and in such capacity have the right to vote and dispose of the securities held by such entity.
(4)	Represents (i) 100,000 shares of common stock and (ii) 50,000 shares of common stock issuable upon the exercise of warrants.
(5)	Represents (i) 1,050,000 shares of common stock and (ii) 87,500 shares of common stock issuable upon the exercise of warrants.
(6)	Represents (i) 175,000 shares of common stock and (ii) 87,500 shares of common stock issuable upon the exercise of warrants.
(7)	Represents (i) 315,000 shares of common stock and (ii) 62,500 shares of common stock issuable upon the exercise of warrants.
(8)	Represents (i) 125,000 shares of common stock and (ii) 62,500 shares of common stock issuable upon the exercise of warrants.
(9)	Andrew Delzotto is the Director of Bixa Capital Corp. and in such capacity has the right to vote and dispose of the securities held by such entity.
(10)	Represents (i) 250,000 shares of common stock and (ii) 125,000 shares of common stock issuable upon the exercise of warrants.
(11)	Represents (i) 979,788 shares of common stock and (ii) 200,000 shares of common stock issuable upon the exercise of warrants.
(12)	Represents (i) 400,000 shares of common stock and (ii) 200,000 shares of common stock issuable upon the exercise of warrants.
(13)	Don Harshbarger and Wanda Harshbarger are the Trustees of Conant Harbor Trust and in such capacity have the right to vote and dispose of the securities held by such entity.
(14)	Represents (i) 250,000 shares of common stock and (ii) 125,000 shares of common stock issuable upon the exercise of warrants.
(15)	Represents (i) 151,121 shares of common stock and (ii) 50,000 shares of common stock issuable upon the exercise of warrants.

●

307,830 shares of common stock reserved for future issuance under our 2022 Omnibus Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan; and

~~-27-~~● shares of common stock issuable upon exercise of warrants to be issued to the representative of the underwriters as part of this offering at an exercise price of $ (assuming a public offering price of $ per share which is the last reported sales price of our common stock on the OTCQB on , 2025).

~~Table of Contents~~34

(16)	Represents (i) 100,000 shares of common stock and (ii) 50,000 shares of common stock issuable upon the exercise of warrants.
(17)	Devlin DeFrancesco is the President of Go Faster Investments Inc. and in such capacity has the right to vote and dispose of the securities held by such entity.
(18)	Represents (i) 725,000 shares of common stock and (ii) 362,500 shares of common stock issuable upon the exercise of warrants.
(19)	Sean Jones is the Principal of Hanley-Jones Holdings, LLC and in such capacity has the right to vote and dispose of the securities held by such entity.
(20)	Represents (i) 250,000 shares of common stock and (ii) 125,000 shares of common stock issuable upon the exercise of warrants.
(21)	Represents (i) 251,550 shares of common stock and (ii) 50,000 shares of common stock issuable upon the exercise of warrants.
(22)	Represents (i) 100,000 shares of common stock and (ii) 50,000 shares of common stock issuable upon the exercise of warrants.
(23)	Aaron Edelheit is the General Partner of each of Mindset Value Wellness Fund and The Mindset Venture Fund and in such capacity has the right to vote and dispose of the securities held by each such entity.
(24)	Represents (i) 625,000 shares of common stock and (ii) 312,500 shares of common stock issuable upon the exercise of warrants.
(25)	Represents (i) 625,000 shares of common stock and (ii) 312,500 shares of common stock issuable upon the exercise of warrants.
(26)	David Scobie is the Director of NE SPC II LP and in such capacity has the right to vote and dispose of the securities held by such entity.
(27)	Represents (i) 3,250,000 shares of common stock and (ii) 1,625,000 shares of common stock issuable upon the exercise of warrants.
(28)	Douglas Fathers is the Executive Director of Nordwand Foundation and in such capacity has the right to vote and dispose of the securities held by such entity.
(29)	Represents (i) 2,000,000 shares of common stock and (ii) 1,000,000 shares of common stock issuable upon the exercise of warrants.
(30)	The securities are owned by Paul Timothy Norman Trust. Paul Norman is the Trustee of Paul Timothy Norman Trust and in such capacity has the right to vote and dispose of the securities held by such trust.
(31)	Represents (i) 2,155,849 shares of common stock, (ii) 150,000 stock options with an exercise price of $0.209 per share, (iii) 580,000 stock options with an exercise price of $0.26 per share, (iv) 37,037 stock options with an exercise price of $0.675 per share, (v) 104,690 stock options with an exercise price of $0.2388, per share, (vi) 80,645 stock options with an exercise price of $0.31 per share, and (vii) 145,349 restricted stock units that vest on September 30, 2024.
(32)	Represents (i) 1,955,849 shares of common stock, (ii) 150,000 stock options with an exercise price of $0.209 per share, (iii) 580,000 stock options with an exercise price of $0.26 per share, (iv) 37,037 stock options with an exercise price of $0.675 per share, (v) 104,690 stock options with an exercise price of $0.2388, per share, (vi) 80,645 stock options with an exercise price of $0.31 per share, and (vii) 145,349 restricted stock units that vest on September 30, 2024.
(33)	David LaSalle and James Boucherat are Partners of Perlus Microcap Fund LP and in such capacity have the right to vote and dispose of the securities held by such entity.
(34)	Represents (i) 1,000,000 shares of common stock and (ii) 500,000 shares of common stock issuable upon the exercise of warrants.

DILUTION

~~-28-~~If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the public offering price per share and the net tangible book value per share of our common stock immediately after this offering.

~~Table~~Our historical net tangible book value (deficit) as of ~~Contents~~March 31, 2025, was $9.8 million, or $0.08 per share of common stock. Historical net tangible book value (deficit) per share is determined by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of common stock deemed to be outstanding.

(35)	Represents (i) 211,939 shares of common stock and (ii) 62,500 shares of common stock issuable upon the exercise of warrants.
(36)	Represents (i) 125,000 shares of common stock and (ii) 62,500 shares of common stock issuable upon the exercise of warrants.
(37)	Represents (i) 850,000 shares of common stock and (ii) 150,000 shares of common stock issuable upon the exercise of warrants.
(38)	Represents (i) 300,000 shares of common stock and (ii) 150,000 shares of common stock issuable upon the exercise of warrants.
(39)	Alina Semjonov is the CEO of SSB Capital Inc. and in such capacity has the right to vote and dispose of the securities held by such entity.
(40)	Represents (i) 50,000 shares of common stock and (ii) 25,000 shares of common stock issuable upon the exercise of warrants.
(41)	Represents (i) 1,950,000 shares of common stock and (ii) 230,000 shares of common stock issuable upon the exercise of warrants.
(42)	Represents (i) 460,000 shares of common stock and (ii) 230,000 shares of common stock issuable upon the exercise of warrants.
(43)	Represents 440,400 shares of common stock issuable upon the exercise of warrants.
(44)	Wilford M. Farnsworth, III is the Trustee of Wilford and Marci Farnsworth Trust and in such capacity has the right to vote and dispose of the securities held by such entity.
(45)	Represents (i) 300,000 shares of common stock and (ii) 50,000 shares of common stock issuable upon the exercise of warrants.
(46)	Represents (i) 100,000 shares of common stock and (ii) 50,000 shares of common stock issuable upon the exercise of warrants.

After giving effect to (i) the sale of all of the equity interests in our wholly-owned subsidiaries that held our THC infused cannabis business in both the United States and Canada to an independent third party for $3,000,000, including the issuance of the Note, and inventory as set forth in the SPA for approximately $61,000 and (ii) the issuance of 699,493 shares of common stock upon the vesting of restricted stock units, our pro forma net tangible book value (deficit) as of March 31, 2025 was $4.78 million, or $0.04 per share of common stock.

~~-29-~~After giving further effect to the sale of shares of common stock in this offering at an assumed public offering price of $ per share, the last reported sales price of our common stock on the OTCQB on , 2025, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value per share as of March 31, 2025 was $ , or $ per share of common stock. This represents an immediate increase in as adjusted net tangible book value of $ per share to existing shareholders and immediate dilution of $ per share to new investors purchasing shares of common stock in this offering. The following table illustrates this dilution:

Table of Contents

Assumed public offering price per share		$
Pro forma net tangible book value (deficit) per share as of March 31, 2025	$
Increase in pro forma as adjusted net tangible book value per share attributable to investors in this offering	$
Pro forma as adjusted net tangible book value per share after this offering	$
Dilution to new common stock investors in this offering		$

~~PLAN~~The information OFdiscussed ~~DISTRIBUTION~~above is illustrative only, and the dilution information following this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed public offering price of $ per share, the last reported sales price of our common stock on the OTCQB on , 2025, would increase (decrease) the pro forma as adjusted net tangible book value per share after this offering by approximately $ , and dilution in pro forma as adjusted net tangible book value per share to new investors by approximately $ , assuming that the amount offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

UpIf the underwriters exercise their over-allotment option to ~~17,155,~~purchase ~~400~~additional ~~Resale~~shares ~~Shares,~~of ~~including~~common 5stock from us in full,~~945,400~~ ~~Resale~~the ~~Shares~~pro ~~issuable~~forma ~~upon~~as adjusted ~~exercise~~net oftangible ~~outstanding~~book ~~warrants,~~value ~~are~~after ~~being~~the ~~offered~~offering bywould ~~this~~be ~~prospectus~~$ per share, ~~all~~the ofincrease ~~which~~in ~~are~~pro ~~being~~forma ~~registered~~as ~~for~~adjusted ~~sale~~net ~~for~~tangible ~~the~~book ~~accounts~~value ofper share relative to the ~~selling~~net ~~shareholders.~~tangible Webook ~~will~~value ~~not~~per ~~receive~~share ~~any~~to ofexisting shareholders ~~the~~would ~~proceeds~~be ~~from~~$ per share and the ~~sale~~dilution byin ~~the~~pro forma ~~selling~~as ~~shareholders~~adjusted net tangible book value to new investors would be $ per share, in each case assuming a public offering price of ~~the~~$ per ~~Resale~~share, ~~Shares.~~the Welast ~~will~~reported ~~bear~~sales ~~all~~price ~~fees~~of ~~and~~our ~~expenses~~common ~~incident~~stock toon ~~this~~the ~~registration~~OTCQB on , 2025.

The selling shareholders may sell all or a portion of the Resale Shares beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Resale Shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Resale Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale (if a public market exists), at varying prices determined at the time of sale, or at negotiated prices. All sales may be effected in transactions, which may involve crosses or block transactions:35

●The number ~~on any national securities exchange or quotation service on which the securities may be listed or quoted at the time~~ of ~~sale;~~shares ~~● in the over-the-counter market; ● in transactions otherwise than on these exchanges or systems or in the over-the-counter market; ● through the writing~~ of ~~options,~~our ~~whether~~common ~~such~~stock options are listed on an options exchange or otherwise; ● ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; ● block trades in which the broker-dealer will attempt to ~~sell~~be ~~the~~outstanding securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; ● purchases by a broker-dealer as principal and resale by the broker-dealer for its account; ● an exchange distribution in accordance with the rules of the applicable exchange; ● privately negotiated transactions; ● settlement of short sales entered into after ~~the effective date of the registration statement of which~~ this ~~prospectus~~offering is abased ~~part;~~on ~~● sales pursuant to Rule 144~~115,865,227 shares ~~Rule~~of ~~144A~~our orcommon ~~Regulation~~stock Soutstanding ~~under~~as ~~the~~of ~~Securities~~March ~~Act~~31, ~~if available~~2025, ~~rather~~assumes ~~than~~no ~~under~~exercise ~~this~~by ~~prospectus; ● broker-dealers may agree with~~ the ~~selling~~underwriters ~~shareholders to sell a specified number~~ of ~~such~~their ~~securities~~over-allotment atoption and ~~a stipulated price per share;~~excludes:

● a11,628,244 ~~combination~~shares of ~~any~~common ~~such~~stock ~~methods~~issuable ofupon ~~sale;~~exercise ~~and~~of ●options ~~any~~at ~~other~~a ~~method~~weighted ~~permitted~~average ~~pursuant~~exercise toprice ~~applicable~~of ~~law~~$0.27 per share;

If● ~~the selling shareholders effect such transactions by selling Resale Shares to or through underwriters~~5, ~~broker-dealers or agents~~945,400 such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the Resale Shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the Resale Shares or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of shares of common stock inissuable ~~the~~upon ~~course~~exercise of ~~hedging~~warrants inat ~~positions~~a ~~they~~weighted ~~assume.~~average ~~The~~exercise ~~selling~~price ~~shareholders may also sell shares~~ of ~~common stock short and deliver Resale Shares covered by this prospectus to close out short positions and to return borrowed common stock in connection with such short sales~~$0.50 ~~The~~per ~~selling shareholders may also loan or pledge common stock to broker-dealers that in turn may sell such shares of common stock.~~share;

~~-30-~~● 307,830 shares of common stock reserved for future issuance under our 2022 Omnibus Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under the plan; and

~~Table~~● shares of ~~Contents~~common stock issuable upon exercise of warrants to be issued to the representative of the underwriters as part of this offering at an exercise price of $ (assuming a public offering price of $ per share which is the last reported sales price of our common stock OTCQB on , 2025).

The following ~~selling~~table ~~shareholders~~summarizes, ~~may~~on ~~pledge~~the oras ~~grant~~adjusted abasis ~~security~~described ~~interest~~above, inthe ~~some~~total ornumber ~~all~~ of ~~the~~shares ~~Resale~~of ~~Shares~~common ~~owned~~stock bywe ~~them~~issued and, ~~if they default in~~ sold, the ~~performance~~total ofconsideration ~~their~~we ~~secured~~received ~~obligations,~~and the ~~pledgees~~average orprice ~~secured~~per ~~parties~~share ~~may~~(i) ~~offer~~paid ~~and~~to ~~sell~~us ~~the~~by ~~Resale~~existing ~~Shares~~shareholders ~~from~~or ~~time~~(ii) to ~~time~~be ~~pursuant~~paid toby ~~this~~new investors ~~prospectus~~purchasing orour ~~any~~common ~~amendment~~stock toin this ~~prospectus~~offering ~~under~~at ~~Rule~~the ~~424(b)(3)~~assumed orpublic ~~other~~offering ~~applicable~~price ~~provision~~ of ~~the~~$ per ~~Securities Act~~share, ~~amending,~~the iflast ~~necessary,~~reported ~~the~~sales ~~list~~price of ~~selling~~our ~~shareholders~~common tostock ~~include~~on the ~~pledgee~~OTCQB on , ~~transferee~~2025, orbefore ~~other~~deducting ~~successors~~underwriting indiscounts ~~interest~~and ascommissions ~~selling~~and ~~shareholders~~estimated ~~under~~offering ~~this~~expenses ~~prospectus.~~payable ~~The~~by ~~selling~~us ~~shareholders also may transfer~~ and ~~donate~~(iii) the ~~Resale~~average ~~Shares~~price per inshare ~~other~~paid ~~circumstances~~by inexisting ~~which~~shareholders ~~case~~and ~~the~~by ~~transferees,~~new ~~donees,~~investors ~~pledgees~~who orpurchase ~~other~~shares ~~successors~~of incommon ~~interest~~stock ~~will~~in ~~be the selling beneficial owners for purposes of~~ this ~~prospectus.~~offering:

The selling shareholders and any broker-dealer participating in the distribution of the Resale Shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the Resale Shares is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of Resale Shares being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

	Shares Purchased				Total Consideration				Average Price
	Number	Percentage			Amount	Percentage			Per Share
Existing shareholders				%	$			%	$
New investors				%				%	$
Total			100.0	%	$		100.0	%	$

~~Under~~A $1.00 increase (decrease) in the ~~securities~~assumed ~~laws~~public offering price of ~~some~~$ per ~~states~~share, the ~~Resale~~last ~~Shares~~reported ~~may~~sales beprice ~~sold~~of our common stock on the OTCQB on , 2025, would increase (decrease) the total consideration paid by new investors by $ million and, in ~~such~~the ~~states~~case ~~only~~of ~~through~~an ~~registered~~increase, orwould ~~licensed~~increase ~~brokers~~the orpercentage ~~dealers~~of total consideration paid by new investors to % and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors to %, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. InAn ~~addition~~increase (decrease) of 100,000 shares in ~~some~~the ~~states~~number of shares offered by us, as set forth on the ~~Resale~~cover ~~Shares~~page ~~may~~of ~~not~~this beprospectus, ~~sold~~would ~~unless~~increase ~~such~~(decrease) the ~~securities~~total ~~have~~consideration ~~been~~paid ~~registered~~by ornew ~~qualified~~investors ~~for~~by ~~sale~~$ million and, in ~~such~~the ~~state~~case orof an ~~exemption~~increase, ~~from~~would ~~registration~~increase orthe ~~qualification~~percentage isof ~~available~~total consideration paid by new investors to % and, isin ~~complied~~the ~~with~~case of a decrease of 100,000 shares, would decrease the percentage of total consideration paid by new investors to %, assuming no change in the assumed public offering price.

~~There~~The table ~~can~~above beassumes no ~~assurance~~exercise ~~that~~of ~~any~~the ~~selling~~underwriters’ ~~shareholders~~over-allotment ~~will~~option ~~sell~~in ~~any~~this oroffering. ~~all~~If ofthe underwriters’ over-allotment option is exercised in full, the ~~Resale~~number ~~Shares~~of ~~registered~~common ~~pursuant~~shares held by new investors purchasing common stock in this offering increase to % of the ~~registration~~total ~~statement,~~number of ~~which~~shares of common stock outstanding after this ~~prospectus~~offering, and ~~forms~~the anumber ~~part~~of shares held by existing shareholders would be reduced to % of the total number of shares of common stock outstanding after this offering.

~~The~~To the ~~selling~~extent ~~shareholders~~that ~~and~~stock ~~any~~options ~~other~~or ~~person~~warrants ~~participating~~are inexercised, ~~such~~we ~~distribution~~issue ~~will~~new bestock ~~subject~~options tounder ~~applicable~~our ~~provisions~~equity ofincentive ~~the Exchange Act and the rules and regulations thereunder~~plan, ~~including,~~or ~~without~~we ~~limitation,~~issue ~~Regulation~~additional common Mstock ofin the ~~Exchange Act~~future, ~~which~~there ~~may~~will ~~limit~~be ~~the~~further ~~timing~~dilution ofto ~~purchases~~investors ~~and sales of any of the Resale Shares stock by the selling shareholders and any other~~ participating ~~person. Regulation M may also restrict the ability of any person engaged~~ in ~~the~~this ~~distribution~~offering. ofIn ~~the~~addition, ~~Resale~~if ~~Shares~~we toraise ~~engage~~additional capital inthrough ~~market-making activities with respect to~~ the ~~Resale~~sale ~~Shares. All~~ of ~~the~~equity ~~foregoing~~or ~~may~~convertible ~~affect~~debt ~~the~~securities, ~~marketability of~~ the ~~Resale~~issuance ~~Shares and the ability~~ of ~~any~~these ~~person~~securities orcould ~~entity~~result ~~to engage~~ in ~~market-making~~further ~~activities with respect~~ dilution to ~~the~~our ~~Resale Shares~~shareholders.

~~DESCRIPTION OF SECURITIES~~36

~~General~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

~~Our~~AND RESULTS ~~authorized~~OF ~~capital stock consists of 800,000,000 shares of common stock, without par value.~~OPERATIONS

AsThe following discussion and analysis of ~~August~~our ~~21,~~financial ~~2024~~condition and results of operations should be read in conjunction with the section entitled “Summary Financial Data,” ~~there~~our ~~were~~financial ~~252 holders~~statements, ofthe ~~record~~accompanying notes, ~~although~~and ~~there~~the ~~are~~other afinancial information ~~much~~included ~~larger~~or ~~number~~incorporated ofby ~~beneficial~~reference ~~owners~~in this prospectus. AsThe offollowing ~~August~~discussion 21below contains forward-looking statements that involve risks and uncertainties such as our plans, ~~2024~~estimates, ~~there~~hopes, ~~were~~beliefs, ~~115~~intentions,~~168~~ and strategies regarding the future. Our actual results could differ materially from those in the forward-looking statements below. Factors that could cause or contribute to such differences in our actual results include,~~173~~ ~~shares~~but ofare ~~common~~not ~~stock~~limited ~~issued~~to, those discussed below and ~~outstanding~~in the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

The following description of our capital stock is intended as a summary only and is qualified in its entirety by reference to our Articles of Incorporation and Bylaws which are filed as exhibits to the registration statement of which this prospectus is a part.

Common Stock

All outstanding shares of common stock are of the same class and have equal rights and attributes. The holders of our common stock are entitled to one vote per share on all matters submitted to a vote of shareholders of the Company. All shareholders are entitled to share equally in all dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of our common stock are entitled to share ratably in all assets remaining after payment of all liabilities. The shareholders do not have cumulative voting or preemptive rights.

Options

As of August 21, 2024 the Company had 13,037,772 shares of common stock issuable pursuant to outstanding stock options and an additional 7,120,555 shares of common stock available for future grants of awards under the Company’s 2022 Omnibus Equity Incentive Plan (the “2022 Plan”).

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Restricted Stock Units

As of August 21, 2024, the Company had 1,398,979 shares of common stock issuable upon the vesting of an aggregate of 1,398,979 restricted stock units granted under the 2022 Plan, of which 50% are scheduled to vest on September 30, 2024 and an additional 50% are scheduled to vest on December 31, 2024.

Warrants

As of August 21, 2024, warrants to purchase up to 5,945,400 shares of our common stock were outstanding.

Registration Rights

In connection with the issuance of the Units in the Offering, we entered into registration rights agreements with each of the purchasers of the Units in the Offering pursuant to which we are required to file a registration statement with the SEC within 30 days of the closing of the Offering that registers for resale of the shares of common stock issued in the Offering as well as the shares of common stock underlying the warrants issued in the Offering. This prospectus covers a total of 17,155,400 shares of our common stock, including 5,945,400 shares of common stock subject to outstanding warrants.

Antitakeover Effects of Certain Provisions of our Articles of Incorporation, Bylaws and Washington Law

Certain provisions of our Articles of Incorporation, Bylaws and Washington law may discourage, delay or prevent a change in the control of us or a change in our management, even if doing so would be beneficial to our shareholders. The existence of these anti-takeover provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock.

Shareholder Meetings; Quorum. Our Bylaws provide that our shareholders may call a special meeting only upon the request of holders of at least 10% of the votes entitled to be cast on any matter proposed for consideration at such special meeting. Additionally, our president or our Board of Directors may call special meetings of shareholders. Except as required by law, a quorum at any annual or special meeting of shareholders consists of the presence of at least 33 1/3% of the shares entitled to be cast by each voting group.

Unanimous Written Consent of Shareholders. Washington law limits the ability of shareholders to act by written consent by requiring unanimous written consent for shareholder action to be effective. This limit may lengthen the amount of time required to take shareholder actions and would effectively prevent the amendment of our Articles of Incorporation and Bylaws and the removal of directors by our shareholders without holding a meeting of shareholders.

Requirements for Advance Notification of Shareholder Nominations. Our Bylaws contain advance notice procedures with respect to the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee thereof. The existence of these advance notification provisions may make it more difficult for a third party to acquire, or may discourage a third party from acquiring, control of our Board of Directors.

Washington Anti-Takeover Statute. Washington law imposes restrictions on certain transactions between a corporation and certain significant shareholders. Chapter 23B.19 of the RCW generally prohibits a “target corporation” from engaging in certain significant business transactions with an “acquiring person,” which is defined as a person or group of persons that beneficially owns 10% or more of the voting securities of the target corporation, for a period of five years after the date the acquiring person first became a 10% beneficial owner of the voting securities of the target corporation, unless the business transaction or the acquisition of shares is approved by a majority of the members of the target corporation’s Board of Directors prior to the time the acquiring person first became a 10% beneficial owner of the target corporation’s voting securities. Such prohibited transactions include, among other things:

● a merger or consolidation with, disposition of assets to, or issuance or redemption of stock to or from, the acquiring person;

● termination of 5% or more of the employees of the target corporation as a result of the acquiring person’s acquisition of 10% or more of the shares; or

● receipt by the acquiring person of any disproportionate benefit as a shareholder.

After the five-year period, a “significant business transaction” may occur if it complies with “fair price” provisions specified in the statute. A corporation may not “opt out” of this statute. We expect the existence of this provision to have an antitakeover effect with respect to transactions that our Board of Directors does not approve in advance and may discourage takeover attempts that might result in the payment of a premium over the market price for common stock held by shareholders or otherwise might benefit shareholders.

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Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Odyssey Trust Company. The transfer agent’s and registrar’s address is 350 – 409 Granville Street, Vancouver, British Columbia, Canada V6C 1T2.

Listing

Our common stock currently trades on the OTCQB Marketplace under the symbol “JSDA” and on the CSE in Canada under the symbol "JSDA."

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DESCRIPTION OF BUSINESS

Overview

We develop, produce, market and distribute premium beverages that we sell and distribute primarily in the United States and Canada through our network of independent distributors and directly to our national and regional retail accounts. We also sell products in select international markets. Our products are sold in grocery stores, convenience and gas stores, on fountain in restaurants, “up and down the street” in independent accounts such as delicatessens, sandwich shops and burger restaurants, as well as through our national accounts with several large retailers. We refer to our network of independent distributors as our ~~direct store delivery (“~~DSD”) channel, and we refer to our national and regional accounts who receive shipments directly from us as our ~~direct to retail (“~~DTR”) channel. We do not directly manufacture our products, but instead outsource the manufacturing process to third-party contract manufacturers. We also sell various products online, including soda with customized labels, wearables, candy and other items, and we license our trademarks for use on products sold by other manufacturers. In addition, during 2022, we developed and began to license a THC infused cannabis products under the “Mary Jones” brand name in various U.S. states that permitted the sale of THC infused products. We also have a royalty-free license in perpetuity to intellectual property related to Mary Jones for us to license Mary Jones products for use only in Canada.

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 4786 1st Avenue South, Suite 103, Seattle, WA 98134. Our telephone number is (206) 624-3357.

Products

Jones Soda

~~Fountain~~Pop Jones and Fiesta Jones (Modern Soda market segment)

Mary Jones and Spiked Jones (Alternative Adult Beverages market segment)

Additionally, we plan to launch our line of hard craft sodas “spiked” with alcohol under the brand name Spiked Jones in 2025.

Fountain (Food Services market segment)

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

Mary Jones

We currently market and license through indirect subsidiaries our Mary Jones brand in California and Washington. These licensed products include 10mg Cannabis-Infused sodas and 100mg cannabis-infused soda packaged in a 16oz, 10-serving can. The flavors of these beverages are based on the Jones Soda original flavors. Additionally, in February 2024 we received approval to operate in Ontario, Canada, and intend to launch in that province 10mg THC infused sodas in a variety of flavors. Manufacturing and distribution of Mary Jones products in Canada is intended to be done through Tilray Brands, Inc. The new Mary Jones products continue Jones Soda's tradition of using photographs submitted by consumers on their bottle labels and printing quotes from fans under the bottle caps.

We currently intend to expand both the products offered under the Mary Jones brand as well as the number states and Canadian provinces we offer such cannabis infused products in.

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Co-Brand and Private Label Products

From time to time, when opportunities meet our required financial and operational metrics, we utilize our industry expertise to provide private label products for customers. No material examples of this opportunity occurred in 2023.

Sparkling Beverage Industry

Our Jones Soda beverages are classified in the sparkling beverage category, which encompasses carbonated soft drinks (CSD) and craft sodas. According to a December 2022 special issue of Research and Markets, The World’s Largest Market Research Store, the size of the world's craft soda industry was estimated at $641.24 million in 2021, and it is anticipated to rise to $768.08 million by 2027. "Craft sodas" refers to sodas produced in smaller quantities and using more natural ingredients.

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 ~~fountain~~business ~~program~~ in the ~~United~~modern ~~States~~soda ~~and~~category ~~Canada;~~through our Pop Jones and, Fiesta Jones brands;

● ~~Grow~~Expand ~~the~~our ~~new~~fountain ~~Mary~~program ~~Jones~~in ~~brand~~the ofUnited ~~Tetrahydrocannabinol~~States ~~(THC)~~ and ~~cannabidiol (CBD)-infused beverages, edibles, and other related products as well as the number of states where such products are sold~~Canada;

●

Grow the Mary Jones brand of hemp-derived Delta-9 THC beverages, edibles, and other related products through our Mary Jones brand; and

●

Grow the Spiked Jones brand of hard craft sodas “spiked” with alcohol.

Recent Developments

On June 19, 2025, we sold all of the equity interests in our wholly-owned subsidiaries that held our THC infused cannabis business in both the United States and Canada to an independent third party for $3,000,000 and inventory as set forth in the SPA for approximately $61,000. A portion of the Share Purchase Price was paid pursuant to the issuance of the Note. In addition, we entered into a License Agreement with MJ Holdings. See “Business - Recent Developments - Mary Jones Holdings and Mary Jones Beverage (Canada)” for additional information.

On June 19, 2025, in connection with the sale of all of the equity interests in the MJ Subsidiaries pursuant to the terms of the SPA, the Company entered into the Two Shores Release with Two Shores pursuant to which Two Shores consented to the sale of the MJ Subsidiaries and fully and irrevocably released the Former Guarantors from their obligations under the Guaranty. In addition, the Liens held by Two Shares in the assets of each Former Guarantor were automatically terminated. Furthermore, the Releasing released the Releasees from all demands, actions, suits, and damages which the Releasing Parties had or may in the future have against the Releasees.

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

Results of Operations

Years Ended December 31, 2024 and 2023

	2024			2023			% Change
	(Dollars in thousands)			(Dollars in thousands)
Revenue	$	19,155		$	16,669			14.91	%
Cost of Goods Sold		(15,079	)		(11,814	)		27.64	%
Gross Profit		4,076			4,855			(16.05	%)
% of Revenue		21.28	%		29.13	%

Net Revenue

For the year ended December 31, 2024, our net revenue was approximately $19.2 million, representing an increase of $2.5 million, or 14.9%, compared to approximately $16.7 million in revenue for the year ended December 31, 2023. This growth in net sales revenue was primarily driven by a higher beverage segment sales volume of 15% growth year over year and 9% growth in our Cannabis (THC) business in the U.S. and Canada. The percentage of our revenues generated in Canada for 2024 and 2023 was 18% and 18%, respectively.

For the year ended December 31, 2024, trade spending and promotional allowances, which reduced our gross revenue from product sales, totaled approximately $4.1 million. This represents an increase of approximately $2.5 million, or 156%, compared to approximately $1.6 million for the year ended December 31, 2023. This increase was mainly attributable to promotional and pricing programs related to Mary Jones products and core Jones Soda sales in Canada, mostly due to the transition to a new distributor in Canada.

Gross Profit

For the year ended December 31, 2024, gross profit decreased by $0.8 million, or 16.1%, to approximately $4.1 million compared to approximately $4.9 million for the year ended December 31, 2023, driven by one time inventory impairment charges of $1.2 million in the fourth quarter of 2024 due to slow moving new products launched in 2024. The Company launched several innovative products in 2024, some of which have been slow moving in the Mary Jones (Adult Beverages) market and one in its Core soda business. As a result, for the year ended December 31, 2024, gross margin decreased to 21.3% from 29.1% for the year ended December 31, 2023. The impairment charges discussed above reduced gross margin by 6.5% in 2024. The Company has subsequently rationalized its product set and is focused on smaller production runs on a focused product set for its core soda business, the modern soda category and the adult beverages category.

Selling and Marketing Expenses

Selling and marketing expenses for the year ended December 31, 2024, were approximately $6.1 million, an increase of $1.7 million, or 39.5%, from approximately $4.4 million for the year ended December 31, 2023. This increase was primarily driven by higher online marketing expenditure for both the Jones Soda and Mary Jones brands. Additionally, we expanded our marketing initiatives with companies involved in action sports, including an agreement with Thrill One Sports & Entertainment, in the year ended December 31, 2024, which did not occur in the year ended December 31, 2023.

As a result, selling and marketing expenses as a percentage of revenue increased to 31.9% in the year ended December 31, 2024, from 26.3% in the year ended December 31, 2023. We intend to manage selling and marketing expenses with our working capital resources and it is a major management focus to reduce this percentage of revenue in the coming quarters.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2024 were approximately $7.9 million, an increase of $2.5 million, or 46.9%, compared to approximately $5.4 million for the year ended December 31, 2023. This increase was primarily a result of increased legal and regulatory expenditures related to our Mary Jones business and the Litigation Matters. In addition, there was increased travel expenditures related to the development of a new supply chain and meeting with sponsorship partners. In February 2025, a confidential settlement agreement was entered into between all the parties to the Litigation Matters, which has resulted in the settlement and/or dismissal of both Litigation Matters. In addition, the Company is focused on reducing travel expenses in 2025. General and administrative expenses as a percentage of revenue increased to 41.1% for the year ended December 31, 2024, from 32.1% for the year ended December 31, 2023. We intend to carefully manage general and administrative expenses in line with our working capital resources and it is a major management focus to reduce this percentage of revenue in the coming quarters.

Other income (expense)

We earned approximately $22,000 of interest income for the year ended December 31, 2024, compared to $52,000 for the year ended December 31, 2023. We incurred $11,000 in interest expenses for the year ended December 31, 2024 compared to nil for the year ended December 31, 2023.

Income Tax Expense

We had income tax expense of approximately $25,000 and $33,000 for the years ended December 31, 2024 and 2023, respectively, primarily related to the tax provision on income from our Canadian operations. 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 overall consolidated pretax loss, state and foreign income taxes, 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 Loss

Net loss for the year ended December 31, 2024 increased to approximately $9.9 million from a net loss of $4.9 million for the year ended December 31, 2023 or an increase of $5 million. The majority of the increase in net loss in 2024 compared to 2023 was primarily driven by inventory impairment charges of $1.2 million discussed above, increased sales and marketing expenditures of $1.7 million and increased legal and travel costs of $1.5 million. The Company is focused on tighter management of inventory, legal and sales and marketing expenditures in 2025.

Three months ended March 31, 2025 and 2024

	(Dollars in thousands)			(Dollars in thousands)			% Change
Revenue	$	4,608		$	4,999			(7.8	%)
Cost of Goods Sold		(2,891	)		(3,107	)		(7.0	%)
Gross Profit		1,717			1,892			(9.2	%)
% of Revenue		37.3	%		37.8	%

Revenue

For the quarter ended March 31, 2025, revenue decreased by approximately $0.4 million, or 7.8%, to approximately $4.6 million compared to approximately $5.0 million for the quarter ended March 31, 2024. The decrease in sales revenue was primarily the result of a large pipeline fill by a new distributor in Canada in the first quarter of 2024 that was not repeated in the current period. First quarter 2025 revenues included significantly higher sales of hemp-derived Delta-9 products compared to the prior period.

For the quarter ended March 31, 2025, trade spend and promotional allowances, which reduced the amount of revenue for the sales of our product, totaled approximately $0.7 million, an increase of approximately $0.3 million, or 75%, compared to approximately $0.4 million for the quarter ended March 31, 2024, mostly driven by timing of incentive and retailer programs.

Gross Profit

For the quarter ended March 31, 2025, gross profit decreased by approximately $0.2 million, or 9.2%, to approximately $1.7 million compared to approximately $1.9 million for the quarter ended March 31, 2024 as a result of lower sales revenue in the current quarter. For the quarter ended March 31, 2025, gross margin decreased slightly to 37.3% from 37.8% in the quarter ended March 31, 2024. 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, 2025 were approximately $1.2 million, a decrease of approximately $0.3 million, or 20%, from approximately $1.5 million for the first quarter ended March 31, 2024. This decrease was primarily a result of decreased online marketing spend and tradeshows and sponsorships for both the Jones Soda and Mary Jones brands in the first quarter of 2025 compared to the same quarter of 2024. Selling and marketing expenses as a percentage of revenue decreased to 25.8% in the first quarter ended March 31, 2025 from 29.8% in the same period in 2024. We intend to continue to look for clear return on investment from our selling and marketing expenses to drive profitable sales. For the three months ended March 31, 2025 and 2024, non-cash expenses included in selling and marketing expenses (stock compensation and depreciation) were approximately $17,000 and $26,000, respectively.

General and Administrative Expenses

General and administrative expenses for the first quarter ended March 31, 2025 were approximately $1.2 million compared to $1.5 million in the first quarter ended March 31, 2024, or a reduction of $0.3 million. General and administrative expenses as a percentage of revenue decreased to 26.2% in the first quarter ended March 31, 2025 from 30.9% in the same quarter in 2024, or an approximately 5 percentage points decrease. We intend to continue to look for additional opportunities to reduce our general and administrative costs beyond the cost reductions achieved in the first quarter of 2025. For the three months ended March 31, 2025 and 2024, non-cash expenses included in general and administrative expenses (stock compensation and depreciation) were approximately $87,000 and $147,000, respectively.

Income Tax Expense

We incurred approximately $nil and $10,000 of income tax expense during the quarter ended March 31, 2025 and 2024, respectively. We have not recorded any tax benefit for the loss in our U.S. operations as we have recorded a full valuation allowance on our U.S. net deferred tax assets. We expect to continue to record a full valuation allowance on our U.S. net deferred tax assets until we sustain an appropriate level of taxable income through improved U.S. operations. Our effective tax rate is based on recurring factors, including the forecasted mix of income before taxes in various jurisdictions, estimated permanent differences and the recording of a full valuation allowance on our U.S. net deferred tax assets.

Net loss

Net loss for the quarter ended March 31, 2025 was approximately $0.9 million compared to net loss of approximately $1.2 million for the quarter ended March 31, 2024 or an improvement of $0.3 million. This decrease in net loss was primarily due to the decreases in selling and marketing expenses and general and administrative expenses in the first quarter of 2025 compared to the first quarter of 2024, being partially offset by reduced sales revenues in the current quarter compared to the same quarter last year.

Liquidity and Capital Resources

As of March 31, 2025, we had cash of approximately $0.7 million and as of December 31, 2024 and 2023, we had cash of approximately $1.5 million and $3.9 million, respectively. As of March 31, 2025, December 31, 2024 and December 31, 2023, we had working capital of approximately $1.3 million, $2.0 million and $7.2 million, respectively. Net cash used in operating activities for the three months ended March 31, 2025 and 2024, was approximately $1.7 million and $1.0 million, respectively, and net cash used in operations during fiscal years 2024 and 2023 totaled approximately $5.9 million and $3.8 million, respectively. The $2.3 million increase in cash used in operations in fiscal 2024, was driven by an increase in net loss after adjusting for non-cash items of $3.7 compared to the prior year which was offset by an increase in cash generated from non cash working capital of $1.7 million compared to the prior year. We reported a net loss of approximately $0.8 million for the three months ended March 31, 2025, compared to a net loss of approximately $1.2 million for the three months ended March 31, 2024. We incurred a net loss of approximately $9.9 million for the year ended December 31, 2024 compared to a net loss of approximately $4.9 million for the year ended December 31, 2023. Our accumulated deficit was $93.8 million, $92.9 million and $83.1 million as of March 31, 2025, December 31, 2024 and December 31, 2023, respectively.

For the three months ended March 31, 2025, net cash provided by financing activities totaled approximately $0.9 million, primarily driven by net proceeds of $1.3 million from the new credit facility, partially offset by a $0.3 million payment related to the termination of a prior credit facility and $0.1 million, reflecting repayments under our insurance financing agreement. In contrast, for the three months ended March 31, 2024, net cash used in financing activities amounted to approximately $0.1 million, reflecting repayments under the Company’s insurance financing agreement, partially offset by proceeds from the exercise of Pinestar warrants.

For the year ended December 31, 2024, net cash inflow from financing activities totaled approximately $3.7 million, compared to a net cash outflow of $0.2 million during the year ended December 31, 2023. During 2024, we completed a private placement offering, resulting in net cash proceeds of $3.6 million (see Note 7 to our audited consolidated financial statements incorporated herein by reference), net proceeds from a revolving credit facility of $0.3 million and $0.1 million proceeds received from the exercise of warrants and options. This was offset by repayment on an insurance financing agreement amounting to $0.2 million and withholding taxes related to the RSUs of $0.2 million. The cash outflow in 2023 was primarily due to repayments on our insurance financing agreement, partially offset by proceeds received from the exercise of outstanding warrants.

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

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

Based on management’s current operating plan, the Company believes its cash on hand, projected cash generated from product sales and funds received from under the Loan Agreement are sufficient to fund the Company’s operations for a period of at least 12 months subsequent to the issuance of the condensed consolidated financial statements incorporated by reference herein. There is no assurance that management’s current operating plan will be successful.

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.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this prospectus. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

There are certain critical accounting estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We have identified below our accounting policies that we use in arriving at key estimates that we consider critical to our business operations and the understanding of our results of operations. This is not a complete list of all of our accounting policies, and there may be other accounting policies that are significant to us. For a detailed discussion on the application of these and our other accounting policies, see Note 1 to our audited consolidated financial statements incorporated by reference in this prospectus.

Revenue Recognition

We recognize revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. We only apply the five-step model (as described in Note 1 to our audited consolidated financial statements incorporated by reference in this prospectus) to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods and services transferred to the customer.

Inventory

We hold raw materials and finished goods inventories, which are manufactured and procured based on our sales forecasts. We value inventory at the lower of cost or net realizable value and include adjustments for estimated obsolete or excess inventory, on a first in-first out basis. These valuations are subject to customer acceptance, planned and actual product changes, demand for the particular products, and our estimates of future realizable values based on these forecasted demands. We regularly review inventory detail to determine whether a write-down is necessary. We consider various factors in making this determination, including recent sales history and predicted trends, industry market conditions and general economic conditions. The amount and timing of write-downs for any period could change if we make different judgments or use different estimates. We also determine whether a provision for obsolete or excess inventory is required on products that are over 12 months from production date or any changes related to market conditions, slow-moving inventory or obsolete products.

Trade Spend and Promotion Expenses

Throughout the year, we run trade spend and promotional programs with distributors and retailers to help promote on- shelf discounts to our consumers.

Additionally, in more limited instances, we enter into customer marketing agreements or various other slotting arrangements. The provisions for discounts, slotting fees and promotion allowances are recorded as an offset to revenue and shown net on the consolidated statements of operations. Estimates are made to accrue for amounts that have not yet been invoiced in the month that the program occurs, or in the case of slotting, when the commitment is made.

Income Taxes

We establish income tax liabilities to remove some or all of the income tax benefit of any of our income tax positions based upon one of the following:

	●	the tax position is not “more likely than not” to be sustained,
	●	the tax position is “more likely than not” to be sustained, but for a lesser amount, or
	●	the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken.

Our liability for uncertain tax positions contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various tax positions.

Our income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. These audits include questions regarding our tax positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. As these audits progress, events may occur that cause us to change our liability for uncertain tax positions. To the extent we prevail in matters for which a liability for uncertain tax positions has been established, or are required to pay amounts in excess of our established liability, our effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement generally would require use of our cash and may result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement may be recognized as a reduction in our effective tax rate in the period of resolution.

BUSINESS

Overview

We develop, produce, market and distribute premium beverages that we sell and distribute primarily in the United States and Canada through our network of independent distributors and directly to our national and regional retail accounts. We also sell products in select international markets. Our products are sold in grocery stores, convenience and gas stores, on fountain in restaurants, “up and down the street” in independent accounts such as delicatessens, sandwich shops and burger restaurants, as well as through our national accounts with several large retailers. We refer to our network of independent distributors as our DSD channel, and we refer to our national and regional accounts who receive shipments directly from us as our 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. In addition, during 2022, we developed and began to license THC infused cannabis products under the “Mary Jones” brand name in various U.S. states that permitted the sale of THC infused products. On June 19, 2025, we sold all of the equity interests in our wholly-owned subsidiaries that held our THC infused cannabis business in both the United States and Canada to an independent third party for $3,000,000 and entered into a License Agreement with MJ Holdings. See “Recent Developments - Mary Jones Holdings and Mary Jones Beverage (Canada)” for additional information.

Products

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

Jones Soda

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

Pop Jones and Fiesta Jones (Modern Soda market segment)

Mary Jones and Spiked Jones (Alternative Adult Beverages market segment)

Additionally, we plan to launch our line of hard craft sodas “spiked” with alcohol under the brand name Spiked Jones in 2025.

Fountain (Food Services market segment)

We continue to see growing interest from larger quick service restaurants, corporate accounts, retailers, celebrity chefs and a variety of other outlets looking for differentiated offerings in their fountain soda. We believe 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.

Recent Developments

Mary Jones Holdings and Mary Jones Beverage (Canada)

Securities Purchase Agreement

On June 19, 2025, we entered into the SPA with the MJ Subsidiaries and the Buyer pursuant to which, on the Closing Date, the Buyer purchased all of the issued and outstanding shares of the MJ Subsidiaries from us for the Share Purchase Price and inventory as set forth in the SPA for approximately $61,000. The Share Purchase Price was paid as follows: (i) $489,398.70 was paid on the Closing Date and (ii) $2,510,601.30 was paid pursuant to the issuance of the Note.

Pursuant to the SPA, we shall provide the Buyer with Transition Services for a period to not exceed one year after the Closing Date; provided, however, that the Transition Services shall not include the Excluded Services. Pursuant to the SPA, the Buyer shall reimburse us for all of our out-of-pocket expenses to the extent reasonably incurred and necessary to provide the Transition Services.

Furthermore, pursuant to the SPA, the parties thereto have agreed that if, during the period that is three years from the Closing Date, there is any Change of Law Event, then the Buyer shall provide us with a Change of Law Notice. Immediately following delivery of such notice, the Buyer’s obligations to continue to make payments against the outstanding balance of the Note and any payments due under the License Agreement shall be suspended, and the time periods to make such payments tolled, until it is no longer unlawful for the MJ Subsidiaries to conduct business in substantially the same manner as the MJ Subsidiaries were conducting as of the Closing Date. If such Change of Law Event is determined to be permanent (as defined in the SPA) or indefinite (as defined in the SPA), then the outstanding principal balance of the Note shall be reduced by an amount equal to the initial principal amount under the Note multiplied by the percentage set forth for the affected jurisdiction as set forth in the SPA. Pursuant to the SPA, during the Change of Law Period, except: (i) as expressly required or permitted pursuant to the SPA; or (ii) as required by applicable Law, the Buyer and each MJ Subsidiary shall, and shall cause each of their respective Subsidiaries to, conduct its business in the ordinary course and in accordance with, in all material respects, all applicable Laws, with the exception of the CSA, as it applies to marijuana (including any implementing regulations and schedules in effect at the relevant time) or any other U.S. federal law the violation of which is predicated upon a violation of the CSA as it applies to marijuana, and the Buyer and each MJ Subsidiary shall use commercially reasonable efforts to maintain and preserve their and their subsidiaries’ business organizations, properties, assets, rights, employees, goodwill and business relationships with customers, suppliers, partners and other persons with which the Buyer, each MJ Subsidiary or any of their respective subsidiaries has material business relations.

Secured Promissory Note

On June 19, 2025, in connection with the SPA, the Buyer issued us the Note in the principal amount of $2,000,000. The Note accrues interest at the lower of 3% per annum and the lowest amount permitted by law; provided, however, if the Buyer satisfies its obligations under the Note, in full, pursuant to the terms thereof, any interest accrued pursuant to the Note shall be waived. Notwithstanding the foregoing, upon the occurrence of an Event of Default, the outstanding principal amount of the Note together with any accrued and unpaid interest thereon shall accrue interest at a rate of 10% per annum. The Note shall mature upon the earlier of (i) the Final Maturity Date and (ii) in the event of prepayment of the Note, the date that the principal amount of the Note together with the interest accrued thereon is paid in full by the Buyer. The outstanding balance of the Note shall become due and payable as follows: (i) $510,601.30 of the principal amount was due on June 27, 2025 of which $125,000 was paid and $385,601.30 remains payable as of June 30, 2025; (ii) $500,000 of the principal amount shall be paid on or before June 19, 2026; (iii) $750,000 of the principal amount shall be paid on or before June 19, 2027; and (iv) $750,000 of the principal amount shall be paid on or before June 19, 2028. Notwithstanding the foregoing, we may demand repayment of the Note at any time after the occurrence of an Event of Default.

Trademark License Agreement

On June 19, 2025, in connection with the SPA, we entered into the License Agreement with MJ Holdings pursuant to which we granted MJ Holdings an exclusive, freely-usable and non-transferable, fully sublicensable license to use the Licensed IP during the term of such agreement in connection with the manufacture, sale, distribution, advertising, and promotion of 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 and such Licensee Modified Formulas may be incorporated and/or otherwise used in connection with a Licensed Product during the term of such agreement and at any time thereafter; provided, however, the Company shall be entitled to license the Licensee Modified Formulas on mutually agreeable terms and conditions. Notwithstanding the foregoing, the Company shall maintain exclusive rights to products containing Hemp (as defined in the SPA). Pursuant to the License Agreement, MJ Holdings shall pay us $150,000 on the one year anniversary of the License Effective Date and $225,000 on each subsequent anniversary of the License Effective Date. The Licensing Fee shall be fixed and non-adjustable during the term of the License.

If either party to the License Agreement violates or fails to perform any material covenant, condition, or undertaking pursuant to such license Agreement or the SPA then the other party shall give written notice of such deficiency to the party in default. If the party in default fails to substantially correct such deficiency within 30 days after receipt of such notice, the other party shall have the option to terminate the license granted pursuant to the License Agreement. Furthermore, MJ Holdings may terminate the License Agreement upon 90 days notice to us. From the date of the termination of the License Agreement by either party until the 12 month anniversary thereafter, MJ Holdings shall have the right to sell all existing inventory in its possession of Licensed Products bearing the Licensed Marks. Except as otherwise set forth in the License Agreement, upon expiration or termination of the License Agreement, all rights granted to MJ Holdings shall cease, and MJ Holdings shall refrain from further use of the Licensed Marks or any mark or name confusingly similar to the Licensed Marks in connection with the Licensed Products.

Pursuant to the License Agreement, to the extent MJ Holdings is presented with opportunities to sell all or substantially all of its assets, we shall have a right of first refusal with respect to such sale. If, on the other hand, we receive a bona fide offer to sell, transfer or license any of the Licensed IP outside the ordinary course of, or otherwise unrelated to, our business as conducted on the date of such offer, for which a final purchase price has been agreed to between such third party and us, then we shall first provide MJ Holdings a right of first refusal with respect to the purchase of such Licensed IP.

Sparkling Beverage Industry

Our Jones Soda beverages are classified in the sparkling beverage category, which encompasses carbonated soft drinks and craft sodas. According to Research and Markets, the global market for craft soda was estimated to be $700.3 million in 2023 and is projected to reach $915.4 million by 2030. “Craft sodas” refers to sodas produced in smaller quantities and using more natural ingredients.

Our Focus: Sales Growth

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

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

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

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

●	Grow the Mary Jones brand of hemp-derived Delta-9 THC beverages, edibles, and other related products through our Mary Jones brand; and

●	Grow the Spiked Jones brand of hard craft sodas “spiked” with alcohol.

Product Distribution and Sales Strategy

Premium Soda Beverages

Our core products are distributed and sold throughout the United States and Canada and in select international markets. Our primary distribution channels are our ~~direct store delivery (~~DSD) channel (sales and distribution through our network of independent distributors) and our ~~direct to retail (~~DTR) channel (sales directly to national and regional retail accounts). We also have our online channel for internet sales of various products. We strategically build our national and regional retailer network by focusing on distribution systems that we believe will provide top-line drivers for our products and increased availability and visibility of our products in our core markets. In building and expanding our DSD channel, we also consider international markets and look for regions that data suggests have a high affinity for the Jones brand and can be pursued within our financial resources.

Part of our strategy in building our distribution system is to blend our DSD and DTR distribution channels, delivering different offerings through alternate channels. In addition to determining the most advantageous distribution channel, we work to ensure that our products are placed on shelves that are normally restricted to national mainstream brands and in the cold-aisle of stores, thus providing us access to the important “take home market.” We have also introduced the JONES Cane Sugar Fountain program through a network of fountain distributors in select regions across the United States and Canada to provide our premium products and uniquely customized fountain equipment.

For the year ended December 31, 2024, DOT Foods Inc. (“DOT”), one of our independent distributors and our top account by revenue represented approximately 13% of revenue, and for the year ended December 31, 2023, A. Lassonde Inc. (“Lassonde”), one of our independent distributors and our top account by revenue at the time represented approximately 20% of revenue ~~during 2023~~. We intend to continue to expand our distributor network and DTR accounts, which we hope will result in a decreased dependence on any one or more of our independent distributors (including ~~Lassonde~~DOT) or national retail accounts. In particular, it has been mutually decided to end our relationship with Lassonde in 2024 and have entered into an agreement with Dot Foods Canada, who we hope will become our largest distributor in 2024.

We contract with independent trucking companies to have our product shipped from our contract manufacturers to independent warehouses and then on to our distributors and national retail accounts. Distributors then sell and deliver our products either to sub-distributors or directly to retail accounts. We recognize revenue upon receipt by our distributors and national account customers of our products, net of discounts and promotional allowances, and all sales are final; however, in limited instances, due to credit issues, quality or damage issues, or distributor changes, we may accept returned product, which to date has not been material.

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DSD (direct store delivery)

We maintain a network of independent distributors across the United States and Canada that sell our portfolio of branded products. We have also secured distribution in select international markets and are evaluating other international opportunities for our products. We choose our distributors based on our perception of their ability to build our brand franchise in convenience stores, grocery stores, on fountain in restaurants and “up and down the street” in independent accounts such as delicatessens and sandwich shops.

Typically, we grant our independent distributors exclusive distribution rights in defined territories, which may include invasion fees in the event we provide any of our products directly to one of our national retailers located in the distributor’s region. We are also obligated to pay termination fees for cancellations of most of these written distributor agreements, unless the termination is for “cause.

We intend to continue our efforts to reinforce and expand our distribution network by partnering with new distributors and replacing underperforming distributors. In addition to the efforts of our independent distributors in obtaining distribution of our products, we actively seek to obtain listings for our products with key retail grocery, convenience and mass merchandiser accounts, which are serviced through our independent distributor network.

Product availability at a specific store location for any of our retailers is subject to the retailer preference, consumer demand, and localized store variances. To find a retailer that carries our products, our product locator is available on our website under “Store Locator.”48

Product availability at a specific store location for any of our retailers is subject to retailer preference, consumer demand, and localized store variances. To find a retailer that carries our products, our product locator is available on our website, www.jonessoda.com.

DTR (direct to retail)

Our direct to retail channel of distribution is an important part of our strategy to target large national or regional restaurant chains and retail accounts, including convenience store chains, mass merchandisers and premier food-service businesses. Through these programs, we negotiate directly with the retailer to carry our products, and the account is serviced through the retailer’s appointed distribution system (rather than through our DSD network). These arrangements are terminable at any time by these retailers or us and contain no minimum purchase commitments or termination fees.

Co-Brand and Private Label

We offer private label products directly to retailers. Our expertise in innovation and managing the manufacturing process allow for efficiencies for both us and the customer. We are able to produce these products with minimal sell through risk and ship them through our network of independent trucking companies or a preferred partner of the customer.

Fountain Distribution

We sell direct to certain retailers in addition to working with a network of fountain distributors in select focus regions within the United States and Canada to provide our premium products, including our fountain and slush products, and uniquely customized fountain equipment.

Sales

Our premium beverage products are sold throughout the United States and Canada, primarily in grocery stores, convenience and gas stores, on fountain in restaurants and “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. ~~In 2023, sales in the United States represented approximately 81% of total sales, while sales in Canada represented approximately 19% (primarily through our distributor relationship with Lassonde).~~

Mary Jones Brand

Our Mary Jones Brand is currently marketed and licensed through indirect subsidiaries in California and Washington. We partner with different co-manufacturing and distribution partners in each respective state, region, or province in which we license these products.

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Our Premium Soda Brands

Building our Brand

We have ~~built~~established our brand toprimarily athrough ~~large extent on~~ our fun and independent image, as well as by ~~providing~~offering what we believe to be unique and exciting flavors that appeal to consumers ~~who~~seeking ~~prefer~~ alternatives to ~~the~~mainstream ~~large "~~“corporate"” carbonated soft ~~drink brands~~drinks. WeThis ~~believe this~~ market is largely driven by ~~trendy~~young, ~~young~~trendy consumers who are looking for a distinctive ~~tonality~~products ~~and~~with better ingredients ~~in their beverage choices~~. While we are known for our ~~unique and~~ innovative flavors, we also ~~feature~~offer traditional ~~flavors~~ones, ~~and~~which ~~feel~~broadens ~~that~~ our ~~broad~~ appeal ~~helps~~and ~~position~~positions us as a leader in the growing premium craft beverage segment ~~of the industry~~. Additionally, through the labels on our bottles and our invitation to consumers to send in photographs to be featured on the Jones Soda labels, we focus on building brand loyalty and customer engagement. We select photos throughout the year to be placed on our bottles and cans for distribution, and also invite consumers to celebrate special occasions and memories by creating their own label through myJones.com. In that space, consumers have the ability to customize their own label and product with a photo and short caption using a proprietary patented process.

WeThrough the ~~continue~~labels toon ~~attempt to “bring~~ our ~~labels~~bottles, ~~to life” with a series of augmented reality labels showcasing extreme athletes and artists in action that~~ we ~~believe~~also ~~builds~~focus on ~~Jones~~building ~~Soda’s~~brand ~~long-time~~loyalty ~~association with action sports~~ and ~~creators~~customer ofengagement ~~all~~by ~~kinds,~~inviting ~~involving~~consumers ~~influencers ranging from a gravity-defying professional scooter rider with 150,000 Instagram followers~~ to asubmit ~~tattoo artist, jewelry designer and street muralist. These labels are “brought~~ photographs to ~~life”~~be ~~with~~featured aon ~~new~~ Jones Soda ~~app~~labels. ~~that~~Throughout ~~shoppers simply download~~ the ~~Jones~~year, ~~Soda~~we ~~app~~select ~~and~~photos ~~use their phone camera~~ to ~~scan~~place ~~the image~~ on ~~any~~our ~~bottle~~bottles ~~carrying~~and acans ~~“Reel~~for ~~Label” icon~~distribution. ~~The scan triggers a short video bringing the viewer inside the unique world of its creator, whether he or she is painting a mural in time-lapse or doing a hardflip at the skatepark.~~

InWe aim ~~addition~~ to ~~creative~~“bring ~~labeling on~~ our ~~products,~~labels weto ~~provide~~life” ~~our~~with ~~distributors~~augmented ~~with~~reality ~~point-of-sale~~(“AR”) ~~promotional~~labels, ~~materials~~showcasing athletes and ~~branded~~artists ~~apparel~~in ~~items~~action. This Weeffort ~~believe~~builds ~~that~~on our ~~labeling,~~long-time ~~marketing~~connection with action sports and ~~promotional~~creators. ~~materials~~Using ~~are~~the ~~important~~Jones ~~elements~~Soda toapp, ~~creating~~consumers ~~and~~can ~~increasing~~scan ~~consumer~~the ~~appeal,~~“Reel Label” asicon ~~well~~on asour ~~distributor~~bottles ~~and~~to ~~retailer~~view ~~awareness,~~short ~~and~~videos that ~~our~~bring ~~branding~~these ~~efforts~~creators’ ~~have~~worlds ~~helped~~to uslife—whether ~~achieve~~it ~~strong~~is ~~consumer~~a ~~connections~~time-lapse of ~~and~~a ~~affinity~~mural ~~levels~~being ~~for~~painted ~~our~~or ~~products~~an athlete performing a hardflip at the skatepark.

Beyond creative labeling, we provide distributors with point-of-sale materials and branded apparel to increase consumer appeal and awareness. These marketing efforts, combined with our innovative labeling, have helped establish strong connections and loyalty to the Jones Soda brand.

Brand Marketing

Our marketing team has developed a strong brand positioning and ~~brand~~ identity, ~~that~~which we believe is an ~~integral~~essential asset ~~and~~that wekeeps ~~believe allows~~ our brand ~~to be~~ widely recognized ~~known~~and inpositively aviewed ~~positive~~by ~~way among~~ a large demographic. We have ~~focused~~positioned ~~on positioning~~ ourselves as an alternative to mainstream soda brands, ~~and~~often targeting ~~try to focus on~~ locations where ~~such~~these brands are not sold. We ~~also~~ have aalso ~~program~~sponsored ~~of sponsoring~~ alternative ~~sport~~sports athletes to promote our products in youth ~~alternative~~ -oriented sports, including ~~Ultimate Fighting Championship~~UFC, auto- racing, skateboarding, BMX biking, snowboarding, and skiing. ~~In addition~~Additionally, we ~~completed~~have asponsored ~~program~~emerging ~~of sponsoring up-and-coming~~ musicians and artists. WeThis ~~believe~~strategy ~~this~~helps ~~effort~~us toconnect ~~position~~with ~~our products in alternative accounts and venues helps draw~~ a younger ~~generation~~audience ~~of customers~~ that ~~value~~values ~~their~~ independence ~~away~~ from ~~the~~ larger soft drink brands.

Social Media

~~Our~~A key ~~core~~ marketing pillar for us is the open access our consumers have to define the brand ~~through~~via ~~our~~ social media ~~channels~~ and our website, ~~at Jonessoda~~www.jonessoda.com. We ~~actively~~engage ~~participate in social media campaigns as a way of direct engagement~~ with our consumers inthrough ~~order~~social tomedia ~~listen~~campaigns to ~~their voices and~~ better understand their ~~issues~~preferences and ~~changes in consumer~~ trends. Social media ~~represents~~has ~~one of the largest shifts in~~ shifted modern business away from ~~static~~traditional advertising, and we have had success in creating social ~~media~~ hubs ~~through~~on ~~forums~~platforms ~~such~~like as Facebook, ~~Twitter~~X, and Instagram. Our consumers have ~~responded~~welcomed ~~by bringing~~ us ~~onto~~into their social media ~~pages and into their~~ lives, creating a personal connection that we believe ~~helps~~strengthens ~~ensure~~their ~~they are actively engaged~~ engagement with our brand and ~~our~~ products.

Consumer-Submitted Photos

We are ~~well-~~known for ~~the~~featuring consumer -submitted photos on our labels and cans. We ~~invite~~encourage ~~our~~ consumers to send usin photos of their lives, ~~and~~ which we select ~~from~~to ~~those~~feature ~~photos for use~~ on our labels. ~~Photos~~These photos can be submitted through our ~~website at our~~ “Jones Soda Photo Gallery.” on our website.

Customized Photo Labels

We offer ~~also provide our~~ Jones Soda customers,—whether ~~ranging from~~ businesses toor ~~end~~individuals—the ~~consumers,~~chance ~~customized~~to ~~and~~create personalized 12-packs ofwith ~~Jones~~custom ~~Soda~~labels featuring ~~(in bottles) that they can create with~~ their own photos ~~on the labels~~. ~~The~~This ~~strategy of this~~ program isnot toonly ~~provide~~provides a ~~customized~~unique ~~and personalized~~ product offering tobut ~~our~~also ~~consumers~~serves as ~~well as~~ an innovative marketing opportunity for our ~~Jones Soda~~ brand. Consumers can upload their photos through our website and create their own “myJones” labels. The personalized labels are downloaded at our headquarters, applied to 12-packs of Jones Soda and delivered to the consumer. We believe our photo strategy has increased awareness for, as well as provided for increased consumer interactivity with, the Jones Soda brand.

We believe this personalized approach has increased awareness and consumer interaction with the Jones Soda brand.

Point of Sale and Consumer Awareness

WeTo increase consumer awareness of our products, we use point-of-sale materials such as posters, stickers, hats, and T-shirts ~~to create and increase consumer awareness of our proprietary products and brands~~. In response to consumer demand, we also sell our products and ~~our~~branded ~~wearables~~apparel on our website. InWe ~~selected cities, we~~ participate atin ~~a “~~grassroots” -level ~~at certain~~ community and sporting events in anselected ~~attempt~~cities to ~~create~~build ~~and increase~~ brand awareness and loyalty. AsOur ~~noted above, we use recreational~~ vehicles~~, vans and independent distributor vehicles~~ —painted ~~with~~in ~~the~~ Jones colors and logos—help to create excitement ~~consumer awareness~~ and ~~enthusiasm~~support ~~at these events and to assist~~ distributors as they open new retail accounts ~~and markets~~.

Occasionally, we partner with companies to manufacture Jones-37related products which extends and enhances our brand. We also engage in cross-promotional campaigns with other companies to further our reach.

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From time to time, we partner with companies that will manufacture Jones-related products that we feel extend and enhance our Jones brand. We currently have a licensing arrangement with a third party to manufacture and distribute Jones Soda Flavor Booster hard candy. In addition to these marketing techniques, we also pursue cross-promotional campaigns with other companies.

Events

InWe invest ~~addition to all of the above marketing efforts, we are also investing~~ in ~~various~~ events that ~~are~~align ~~in alignment~~ with our brand ~~demographic.~~and Wecore ~~invest~~demographic, inincluding skateboarding events and ~~partner~~partnerships with like-minded companies ~~that we believe maintain a similar connection to our core demographic~~. These ~~At these~~ events, weallow ~~are~~us ~~able~~ to display our logo, ~~and~~offer ~~participate~~product insamples, ~~sampling~~and ~~activities where we~~ encourage ~~the tasting of our products to encourage~~ purchases ~~of our brand~~ at retail ~~establishments where our products are sold~~locations. We ~~anticipate~~plan ~~investing~~to continue investing in ~~more of~~ these events asto westrengthen ~~focus~~the ~~on marketing efforts in support of our core brand,~~ Jones Soda brand.

Brand and Product Development - Premium Soda Beverages

We recognize ~~understand~~ the importance of continually creating new ~~beverage~~beverages ~~products~~ and enhancing ~~our~~ existing products to meet ~~the~~evolving ~~ever-changing~~ consumer ~~taste profile~~tastes. ~~We continue to expand our~~ Our Jones Cane Sugar Fountain program, ~~that~~which ~~allows~~offers ~~for~~ our ~~Jones~~sodas ~~Soda product line to be offered~~ “on tap.” Weat ~~partner with~~ restaurants and grocery stores, ~~that~~is ~~prefer~~a tokey ~~offer~~part ~~new~~of ~~innovative~~this strategy. ~~and~~We ~~pure~~work ~~cane~~with ~~sugar fountain opportunities for their guests and we utilize a~~ select ~~group of~~ fountain distributors to ~~service~~provide these innovative products to retail customers.

Our strategy is to focus on innovative products that will be accepted by consumers, retailers and distributors. We believe this is accomplished by keeping open dialog directly with our consumers through our website, blogs and social media as well as with our retail and distributor partners to ensure we are current with consumer trends in the beverage industry.50

WeOur focus ~~develop~~is ~~the~~on ~~majority~~developing ofinnovative ~~our~~products ~~brands~~that ~~and~~resonate ~~products~~with ~~in-house.~~consumers, Weretailers, ~~used~~and adistributors. ~~similar~~We ~~process~~maintain ~~initially~~open tocommunication with ~~create~~our ~~the~~consumers ~~Jones~~via ~~Soda~~our ~~brand~~website, blogs, and wesocial ~~intend~~media, toas ~~continue~~well ~~utilizing~~as ~~this~~with ~~process to create~~ our ~~future~~retail ~~brands~~ and ~~products.~~distributor ~~This~~partners ~~process~~to ~~primarily~~stay ~~consists~~current ofwith industry ~~the following steps:~~trends.

●The majority ~~Market~~of ~~Evaluation.~~our Webrand ~~evaluate the strengths~~ and ~~weaknesses~~product ofdevelopment ~~certain~~occurs ~~categories~~in-house, ~~and~~using ~~segments of~~ the ~~beverage~~same ~~industry~~process ~~with~~that alaunched ~~view~~the toJones ~~pinpointing~~Soda ~~potential opportunities~~brand. This process includes:

●1. Market Evaluation: We assess industry segments to identify potential opportunities. 2. Financial Evaluation: We consider price sensitivity and the ability to meet margin requirements. 3. Distributor Evaluation: We ~~evaluate~~analyze ~~consumer~~existing ~~price~~and ~~tolerance~~potential distribution channels. 4. Production Evaluation: We assess contract packing capacity, strategic production locations, and ~~sensitivity~~quality control. ~~All~~5. ~~new~~Image ~~products~~and ~~must~~Design: beBased ~~able~~on toour ~~scale~~evaluations, we develop brand concepts and ~~meet~~work ~~strict~~with ~~margin~~flavor ~~requirements~~houses to test and choose flavors.

● Distributor Evaluation. We analyze existing and potential distribution channels, whether DSD, DTR or a blend of these channels. This analysis addresses, among other things, which companies will distribute particular beverage brands and products, where such companies may distribute such brands and products, and what will motivate these distributors to distribute such brands and products.

● Production Evaluation. We review all aspects of production of our beverages, including contract packing capacity, strategic production locations, and quality control, and prepare a cost analysis of the various considerations that will be critical to producing our brands and products.

● Image and Design. Based on our evaluation of the market, distributors and production issues, we create and develop the concept for a beverage brand, product or product extension. Our technical services department then works with various flavor concentrate houses to test, choose and develop product flavors for the brand.

We believe that the ongoing process of creating new brands, products and product extensions will be an important factor in our long-term success. For example, we recently completed successful special release programs in the fourth quarter of 2023 where we sold the products “Orange Chocolate” and “Turkey and Gravy.”

In addition to creating new brands, we believe we need to continuously improve our core product line, Jones Soda, as consumer tastes continue to change. We intend that each new flavor of Jones Soda that we introduce will be made with less sugar and no artificial colors or flavors whenever possible. In addition, we intend to continue to re-formulate and re-introduce lower calorie content versions of each of our existing flavors of Jones Soda as and when we believe we have created an acceptable replacement that will appeal to existing customers and attract new customers.

Brand and Product Development – Mary Jones

The Mary Jones ~~products~~brand ~~are~~is ~~influenced~~inspired by the original Jones Soda ~~original~~ flavors. We believe the popularity of ~~our main-line~~ Jones Soda ~~products~~has ~~have~~ paved the way for growth in ~~for~~ the Mary Jones ~~brand and products~~line. ItAlthough iswe ~~important to us to~~ differentiate ~~our~~the ~~Mary~~two ~~Jones~~brands ~~brand from our Jones Soda Brand~~ for ~~many reasons including~~ safety and compliance, ~~however~~reasons, ~~even with this differentiation,~~ we ~~are~~leverage ~~able~~the toequity ~~utilize~~of the Jones Soda brand ~~equity~~ to ~~market~~support and ~~grow~~market Mary Jones products. As the Mary Jones brand. ~~Additionally~~grows, we will continue to innovate and develop ~~the~~new ~~Mary Jones~~ products and flavors ~~as the brand gains momentum~~.

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Competition

Premium Beverage ~~Industry~~Market Segment

The beverage industry is highly competitive. ~~Principal~~Our ~~methods~~primary ofcompetitors ~~competition~~include inlarge ~~the~~soft drink manufacturers and regional premium beverage companies. ~~industry~~Competition factors include: brand image, distribution, price, product quality, and innovation.

●We compete ~~brand~~not ~~name~~only for consumer acceptance but also for shelf space and ~~image;~~marketing focus with our distributors. While our products are premium offerings priced similarly or higher than competitors, we believe our quality sets us apart.

● distribution;

● shelf-management;

● licensing;

● price;

● labeling and packaging;

● advertising;

● product quality and taste;

● trade and consumer promotions; and

● development of new brands, products and product extensions.

We compete with other beverage companies not only for consumer acceptance but also for shelf space in retail stores and for marketing focus by our distributors, all of whom also distribute other beverage brands. Our products compete with all non-alcoholic beverages, most of which are marketed by companies with substantially greater financial resources than ours. We also compete with regional beverage producers and “private label” soft drink suppliers. Our direct competitors in the sparkling beverage industry include traditional large soft drink manufacturers and distributors as well as regional premium soft drink companies.

In order to compete effectively in the beverage industry, from time to time we develop and introduce new products and product extensions.

Although we believe that we will be able to continue to create competitive and relevant brands and products to satisfy consumers’ changing preferences, there can be no assurance that we will be able to do so or that other companies will not be more successful in this regard over the long term.

Pricing of the products is also important. We believe that our products are priced in the same price range or higher than competitive brands and products, and compete on quality as they are premium product offerings.

~~Cannabis~~Delta-9 Market ~~Industry~~ Segment

WeThe hemp-derived ~~face~~Delta-9 ~~intense~~THC ~~competition~~market inis ~~the~~rapidly ~~Cannabis industry from other companies~~expanding, ~~some~~with ofan ~~which~~influx ~~have longer operating histories and more financial resources and longer history~~ of ~~the~~new ~~production~~entrants ~~and~~seeking ~~marketing~~to ofcapitalize ~~cannabis~~on ~~products~~regulatory ~~than then we do. Competitors are primarily branded~~ flexibility and ~~private~~growing ~~label cannabis companies who are operating in multiple states. We are currently in direct competition with Keef Brands, Cann Social Tonics, and Tonik Beverages, none of which are national~~ consumer ~~packaged goods brands in the United States~~demand. WeAs ~~are confident that our cannabis products will be highly competitive. We seek~~ a competitive advantage over our competitors by applying our Mary Jones brand name recognition and by offering quality cannabis products to our loyal customer base. Because of the early stage of the cannabis industry in the United States and Canadaresult, ~~we also face additional competition from new entrants. If~~ the ~~number~~competitive oflandscape ~~users~~is ofbecoming ~~medical~~increasingly ~~and recreational cannabis increases~~crowded, ~~the~~with ~~demand~~a ~~for~~wide ~~products~~range ~~will increase and we expect that competition will become more intense, as current and future competitors begin to offer an increasing number~~ of ~~diversified~~ products ~~and~~varying significantly ~~pricing strategies. To remain competitive, we believe we will be required to make a high level of investment~~ in ~~our planned licenses~~quality, ~~partnerships,~~ branding, ~~products~~ and ~~technologies,~~consumer ~~distribution, research and development, marketing, sales and client support~~trust. We may not have sufficient resources to maintain its marketing, sales and client support efforts on a competitive basis which could materially and adversely affect our business, financial condition, and results of operations of our planned cannabis business.

Our primary competitors in the hemp-39derived Delta-9 beverage segment include Keef Brands, Cann Social Tonics, and Cycling Frog. While these companies have established multi-state operations and longer histories in cannabis-adjacent markets, we believe they have not achieved national brand recognition or broken into the broader consumer packaged goods landscape in a meaningful way.

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We believe Mary Jones is uniquely positioned to lead in this emerging category. Backed by over two decades of brand equity from Jones Soda, we believe we offer an instantly recognizable name, a loyal consumer base, and a proven reputation for flavor innovation and quality. This brand trust allows us to enter the hemp-derived Delta-9 market with a built-in advantage, one that we believe most new and existing competitors cannot replicate.

We recognize that competition will intensify as consumer awareness and demand grow. The market will likely see increased pricing pressure, expanded product assortments, and a proliferation of brands attempting to gain share. We intend to prioritize strategic investments in branding, formulation, compliance, sales infrastructure, and retail distribution, focusing on long-term value creation through consistent growth, product integrity, and brand affinity.

Production

Contract Packing Arrangements

We do not directly manufacture our premium soda beverage products, but instead outsource the manufacturing process to third-party bottlers and independent contract manufacturers (co-packers). We currently use primary co-packers located in Canada and the United States. Once the product is manufactured, the finished products are stored either at the co-packer’s location or in nearby third-party warehouses. Other than minimum case volume requirements per production batch or “run” for most co-packers, we do not have annual minimum production commitments with our co-packers. Our co-packers may terminate their arrangements with us at any time, in which case we could experience disruptions in our ability to deliver products to our customers. We continually review our contract packing needs in light of regulatory compliance and logistical requirements and may add or change co-packers based on those needs.

Raw Materials

The raw materials used in the manufacturing of our premium soda beverage products consist primarily of concentrate, flavors, supplements, sugar, bottles, cans, labels, trays, caps and packaging. Substantially all of the raw materials used in the preparation, bottling and packaging of our bottle and can products are purchased by us or by our contract manufacturers in accordance with our specifications. These raw materials are purchased from suppliers selected by us or by our contract manufacturers. We believe that we have adequate sources of raw materials, which are available from multiple suppliers.

We purchase flavor concentrate from our suppliers. Generally, flavor concentrate suppliers own the proprietary rights to the flavors. Although we do not have the list of ingredients or formulas for our flavors, we have exclusive rights to the use of the flavor concentrates developed with our suppliers. In connection with the development of new soda products and flavors, independent suppliers bear a large portion of the expense for product development, thereby enabling us to develop new products and flavors at relatively low cost. If we have to replace a flavor supplier, we could experience disruptions in our ability to deliver products to our customers, which could have a material adverse effect on our results of operations.

The costs of raw materials fluctuate and in certain instances we enter into supply agreements to address these risks. We have a fixed price supply agreement with our primary glass supplier which expires at the end of 2025. The price of glass continues to increase each year due to the shortage of available glass in the industry; however, our supply agreement with our glass supplier provides us with some price protection through ~~2024~~2025.

Quality Control

Our premium soda beverage products are made from high-quality ingredients and natural and artificial flavors. We seek to ensure that all of our products satisfy our high-quality standards. Contract manufacturers are selected and monitored by our quality control representatives in an effort to ensure adherence to our production procedures and quality standards.

For every batch or “run” of product, our contract manufacturer undertakes extensive testing of product quality and packaging. This includes testing levels of sweetness, carbonation, taste, product integrity, packaging and various regulatory cross checks. ~~Samples~~BME (Beginning, Middle, End) samples from each production run are analyzed and categorized in a reference library. For each product, the contract manufacturer must transmit all quality control test results to us for reference following each production run.

Testing also includes microbiological checks and other tests to ensure the production facilities meet the standards and specifications of our quality assurance program. Water quality is monitored during production and at scheduled testing times to ensure compliance with beverage industry standards. The water used to produce our products is filtered and is also treated to reduce alkalinity. Flavors are pre-tested by the flavor concentrate supplier before shipment to contract manufacturers. We are committed to ongoing product improvement with a view towards ensuring the high quality of our product through a stringent co-packer selection, training and communication program.

Cannabis Operations

During 2022, we began to develop, market and license our cannabis-infused beverage brand under the “Mary Jones” brand name in California to complement our existing soda beverage business. Similar to the manufacturing process with our premium soda products we outsource the manufacturing and distribution of our products to third parties with whom we enter licensing agreements with concerning our cannabis products being manufactured and sold. We operate our cannabis operations in California and Washington under newly created California subsidiary that is separate from our current soda beverage business. We currently plan to expand our cannabis operations into other states that have legalized the recreational use of cannabis using a similar structure to our operations in California.

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Regulation

Premium Beverage Business

The production and marketing of our proprietary beverages are subject to the rules and regulations of various federal, provincial, state and local health agencies, including in particular Health Canada, Agriculture and Agri-Food Canada (“AAFC”) and the ~~United States Food and Drug Administration (~~FDA). The FDA and AAFC also regulate labeling of our products. From time to time, we may receive notifications of various technical labeling or ingredient reviews with respect to our products. We believe that we have a compliance program in place to ensure compliance with production, marketing and labeling regulations.

Legal requirements have been enacted in several jurisdictions in the United States and Canada requiring that deposits or certain eco-taxes or fees be charged for the sale, marketing and use of certain non-refillable beverage containers. The precise requirements imposed by these measures vary. Other beverage container-related deposit, recycling, eco-tax and/or product stewardship proposals have been introduced in various jurisdictions in the United States and Canada. We anticipate that similar legislation or regulations may be proposed in the future at local, state and federal levels, both in the United States and Canada.

~~Cannabis~~Products Containing ~~Business~~Hemp-Derived Delta 9

~~Application~~The 2018 Farm Bill removed hemp from the CSA and established a federal regulatory framework for hemp production in the United States. Among other provisions, the 2018 Farm Bill: (a) explicitly amends the CSA to exclude all parts of ~~Federal~~the ~~Law~~cannabis plant (including its cannabinoids, derivatives, and extracts) containing a THC concentration of not more than 0.3% on a dry weight basis from the CSA’s definition of “marihuana”; (b) permits the commercial production and sale of hemp; (c) precludes states, territories, and Indian tribes from prohibiting the interstate transport of lawfully-produced hemp through their borders; and (d) establishes the USDA as the primary federal agency regulating the cultivation of hemp in the United States, while allowing states, territories, and Indian tribes to obtain (or retain) primary regulatory authority over hemp activities within their borders after receiving approval of their proposed hemp production plan from the USDA.

~~Although~~Under the ~~certain~~2018 Farm Bill, states have ~~legalized~~authority ~~either~~to ~~medical~~adopt ~~marijuana~~their orown ~~medical~~regulatory regimes, and ~~adult~~as ~~use cannabis~~such, atregulations ~~the~~will ~~federal~~likely ~~level,~~continue ~~cannabis~~to ~~currently~~vary on ~~remains~~ a ~~Schedule~~state-by-state Ibasis. ~~drug~~States ~~under~~take varying approaches to regulating the ~~Controlled~~production ~~Substances~~and ~~Act~~sale of ~~1970~~hemp ~~(21~~and ~~U.S.C.~~hemp-derived §§products ~~811~~under state etfood ~~seq~~and drug laws.). ~~Under~~While ~~United~~some ~~States~~states ~~federal~~explicitly ~~law,~~authorize aand ~~Schedule~~regulate Ithe ~~drug~~production orand ~~substance~~sale ~~has~~of ahemp ~~high~~products ~~potential~~or otherwise provide legal protection for ~~abuse~~authorized individuals to engage in commercial hemp activities, noother ~~accepted~~states ~~medical~~have ~~use~~expressly inoutlawed ~~the~~hemp-derived THC ~~United~~products ~~States~~or maintained outdated drug laws that do not distinguish between marijuana, hemp and/or ahemp-derived ~~lack~~Delta of9 ~~accepted~~resulting ~~safety~~in hemp ~~for~~being ~~the~~classified ~~use~~as ofa ~~the~~controlled ~~drug~~substance under ~~medical~~state ~~supervision~~law. AsIn ~~such~~these states, ~~cannabis~~sale ~~related~~of ~~practices~~hemp-derived orDelta ~~activities~~9, ~~including~~notwithstanding ~~without limitation~~origin, is ~~the~~either ~~cultivation,~~restricted ~~manufacture,~~to ~~importation,~~state ~~possession,~~medical ~~use,~~ or ~~distribution~~adult-use ofmarijuana ~~cannabis,~~program ~~remain~~licensees ~~illegal~~or ~~under~~remains ~~United~~otherwise ~~States~~unlawful ~~federal~~under ~~law~~state laws.

~~Although federally illegal~~Trademarks, Flavor ~~the~~Concentrate ~~U.S.~~Trade federal government’s approach to enforcement of such laws has trended toward non-enforcement. On August 29, 2013, the U.S. Department of Justice (“DOJ”) issued a memorandum known as the “Cole Memorandum” to all U.S. Attorneys’ offices (federal prosecutors). The Cole Memorandum generally directed U.S. Attorneys not to prioritize the enforcement of federal marijuana laws against individuals and businesses that rigorously comply with state regulatory provisions in states with strictly regulated medical or recreational cannabis programs. While not legally binding, and merely prosecutorial guidance, the Cole Memorandum laid a framework for managing the tension between state and federal laws concerning state regulated marijuana businesses.Secrets

~~However,~~In the onUnited ~~January 4~~States, ~~2018,~~we ~~the~~own ~~Cole Memorandum was revoked by Attorney General Jeff Sessions. While this did not create~~ a ~~change~~number inof ~~federal~~trademark ~~law,~~registrations as(designated by the ~~Cole~~® ~~Memorandum~~symbol) ~~was~~and ~~not~~pending ~~itself~~trademark ~~law,~~applications ~~the~~(designated by ~~revocation removed~~ the ~~DOJ’s~~™ ~~guidance~~symbol) tofor ~~U.S.~~use ~~Attorneys that state regulated cannabis industries substantively~~ in ~~compliance~~connection with ~~the~~our ~~Cole~~products, ~~Memorandum’s~~including ~~guidelines~~“JONES®,” ~~should~~“JONES ~~not~~SODA beCO.®,” “LEMONCOCCO®” aand ~~prosecutorial~~“MARY ~~priority~~JONES®”.

In addition to his revocation of the Cole Memorandum, Attorney General Sessions also issued a one-page memorandum known as the “Sessions Memorandum.” The Sessions Memorandum confirmed the rescission of the Cole Memorandum and explained the rationale of the DOJ in doing so: the Cole Memorandum, according to the Sessions Memorandum, was “unnecessary” due to existing general enforcement guidance adopted in the 1980s, as set forth in the U.S. Attorney’s Manual (the “USAM”). The USAM enforcement priorities, like those of the Cole Memorandum, are also based on the federal government’s limited resources, and include “law enforcement priorities set by the Attorney General,” the “seriousness” of the alleged crimes, the “deterrent effect of criminal prosecution,” and “the cumulative impact of particular crimes on the community.”53

~~While~~In general, ~~the~~trademark ~~Sessions~~registrations ~~Memorandum~~expire ~~emphasizes~~10 ~~that~~years ~~marijuana~~from ~~is a Schedule I controlled substance, and reiterates~~ the ~~statutory~~filing ~~view~~date ~~that~~or ~~cannabis~~registration ~~is a “dangerous drug and that marijuana activity is a serious crime~~date,” itwith ~~does not otherwise indicate that~~ the ~~prosecution~~exception ofin ~~marijuana-related offenses is now a DOJ priority. Furthermore~~Canada, ~~the~~where ~~Sessions~~trademark registrations ~~Memorandum~~may ~~explicitly~~expire ~~describes~~either ~~itself~~10 asor a15 ~~guide~~years tofrom ~~prosecutorial discretion. Such discretion is firmly in~~ the ~~hands~~registration ~~of U~~date.S. ~~Attorneys~~All intrademark ~~deciding~~registrations ~~whether~~may tobe ~~prosecute~~renewed ~~marijuana-related~~for offenses. Our outside U.S. counsel continuously monitors all U.S. Attorney comments related to regulated medical and adult-use cannabis laws to assess various risks and enforcement priorities within each jurisdiction. Dozens of U.S. Attorneys across the country have affirmed that their view of federal enforcement priorities has not changed, although a ~~few~~nominal ~~have displayed greater ambivalence~~fee.

In his February 2021 confirmation hearing, current Attorney General Merrick Garland affirmed the principles of prosecutorial discretion from the rescinded Cole Memorandum. He noted that “It does not seem to me a useful use of limited resources that we have to be pursuing prosecutions in states that have legalized and are regulating the use of marijuana either medically or otherwise.” Attorney General, Merrick Garland, has not officially indicated any change in enforcement priority for state-compliant marijuana businesses, however, uncertainty regarding federal enforcement remains.

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Most recently, on October 6, 2022, President Joe Biden announced a three-step program to bring broad changes to federal cannabis policy. As an initial step towards reform, President Biden began the process of pardoning all federal offenders convicted of simple cannabis possession. As a second step, President Biden also encouraged Governors to take similar steps to pardon state simple cannabis possession charges. Finally, President Biden directed the Department of Health and Human Services and Attorney General Merrick Garland to “expeditiously” review cannabis’s status as a Schedule I controlled drug pursuant to the federal Controlled Substances Act. In early 2024, the Department of Health and Human Services and the Food and Drug Administration made a recommendation to reschedule cannabis. With these positive developments it is important to acknowledge that these policy directives have not yet changed the “laws on the books” and so there remains uncertainty regarding whether such policies and enforcement priorities may change in the future.

Regardless, marijuana remains a Schedule I controlled substance at the federal level, and neither the Cole Memorandum nor its rescission has altered that fact. The federal government of the United States has always reserved the right to enforce federal law in regard to the sale and disbursement of medical or recreational marijuana, even if state law sanctioned such sale and disbursement. From a regulatory and enforcement perspective, the criminal risk today remains identical to the risk on January 3, 2018. It remains unclear whether the risk of enforcement has been altered.

Additionally, under U.S. federal law it may potentially be a violation of federal money laundering statutes for financial institutions to take any proceeds from marijuana sales or any other Schedule I substance. Banks and other financial institutions could be prosecuted and possibly convicted of money laundering for providing services to cannabis businesses. Under U.S. federal law, banks or other financial institutions that provide a cannabis business with a checking account, debit or credit card, small business loan, or any other service could be found guilty of money laundering or conspiracy. Despite these laws, the U.S. Department of the Treasury issued a memorandum in February of 2014 (the “FinCEN Memorandum”) outlining the pathways for financial institutions to bank state-sanctioned marijuana businesses. Under these guidelines, financial institutions must submit a “suspicious activity report” (“SAR”) as required by federal money laundering laws. These marijuana related SARs are divided into three categories: marijuana limited, marijuana priority, and marijuana terminated, based on the financial institution’s belief that the marijuana business follows state law, is operating out of compliance with state law, or where the banking relationship has been terminated.

On the same day the FinCEN Memorandum was published, the DOJ issued a memorandum (the “2014 Cole Memo”) directing prosecutors to apply the enforcement priorities of the Cole Memorandum in determining whether to charge individuals or institutions with crimes related to financial transactions involving the proceeds of marijuana-related conduct. The 2014 Cole Memo has been rescinded as of January 4, 2018, along with the Cole Memorandum, removing guidance that enforcement of applicable financial crimes was not a DOJ priority.

However, Attorney General Sessions’ revocation of the Cole Memorandum and the 2014 Cole Memo has not affected the status of the FinCEN Memorandum, nor has the Department of the Treasury given any indication that it intends to rescind the FinCEN Memorandum itself. Though it was originally intended for the 2014 Cole Memo and the FinCEN Memorandum to work in tandem, the FinCEN Memorandum can act as a standalone document which explicitly lists the eight enforcement priorities originally cited in the Cole Memorandum. As such, the FinCEN Memorandum remains intact.

Enforcement Proceedings under Federal Law

Although the Cole Memorandum and 2014 Cole Memo have been rescinded, the United States Congress has repeatedly enacted legislation to protect the medical marijuana industry from prosecution. The United States Congress has passed appropriations bills each of the last three years that included the Rohrabacher Amendment Title: H.R.2578 — Commerce, Justice, Science, and Related Agencies Appropriations Act, 2016, which by its terms does not appropriate any federal funds to the U.S. DOJ for the prosecution of medical cannabis offenses of individuals who are in compliance with State medical cannabis laws. Subsequent to the issuance of the Sessions Memorandum on January 4, 2018, the United States Congress passed its omnibus appropriations bill, SJ 1662, which for the fourth consecutive year contained the Rohrabacher-Blumenauer Amendment language (the “Leahy Amendment”) and continued the protections for the medical cannabis marketplace and its lawful participants from interference by the DOJ up and through the 2018 appropriations deadline of September 30, 2018. The deadline has passed, but the Leahy Amendment has remained in effect by virtue of a series of short-term spending bills signed on September 28, 2018, December 7, 2018, January 25, 2019 and February 8, 2019. On February 15 the amendment was renewed through the signing of the fiscal year 2019 omnibus spending bill, effective through September 30, 2019. On May 16, 2019, a House subcommittee released a base appropriations bill with the amendment included. On September 26, 2019 the Senate Appropriations Committee approved a base appropriations bill with the amendment included. On September 27, 2019 the amendment was renewed through a stopgap spending bill, and again on November 21, 2019. On December 20, 2019 the amendment was renewed through the signing of the fiscal year 2020 omnibus spending bill, effective through September 30, 2020. In July 2020, a House subcommittee introduced a base appropriations bill with the amendment included. The amendment was then renewed through a series of stopgap spending bills on October 1, 2020, December 11, 2020, December 18, 2020, December 20, 2020, and December 22, 2020. On December 27, 2020, the amendment was renewed through the signing of the fiscal year 2021 omnibus spending bill, effective through September 30, 2021. In 2021, President Joe Biden became the first president to propose a budget with the Leahy Amendment included. The amendment was then renewed through a series of stopgap spending bills on September 30, December 3, February 18, and March 11. On March 15 the amendment was renewed through the signing of the FY 2022 omnibus spending bill, effective through September 30, 2022. The amendment remains effective in March 2024.

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State Regulatory Environment

The following sections describe the legal and regulatory landscape in California, which is the first state where we intend to commence our planned cannabis operations. While we will work to ensure that our operations comply with applicable state laws, regulations, and licensing requirements, for the reasons described above and the risks further described under the heading “Risk Factors”, there are significant risks associated with our planned cannabis business. Readers are strongly encouraged to carefully read and consider all of the risk factors contained under the heading “Risk Factors” below.

California Regulatory Landscape

In 1996, California was the first state to legalize medical marijuana through Proposition 215, the Compassionate Use Act of 1996. This legalized the use, possession and cultivation of medical marijuana by patients with a physician recommendation for treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which marijuana provides relief.

In 2003, Senate Bill 420 was signed into law establishing an optional identification card system for medical marijuana patients.

In September 2015, the California legislature passed three bills collectively known as the Medical Cannabis Regulation and Safety Act (“MCRSA”). The MCRSA established a licensing and regulatory framework for medical marijuana businesses in California. The system created multiple license types for dispensaries, infused products manufacturers, cultivation facilities, testing laboratories, transportation companies, and distributors. Edible infused product manufacturers would require either volatile solvent or non-volatile solvent manufacturing licenses depending on their specific extraction methodology. Multiple agencies would oversee different aspects of the program and businesses would require a state license and local approval to operate. However, in November 2016, voters in California overwhelmingly passed Proposition 64, the Adult Use of Marijuana Act (“AUMA”) creating an adult-use marijuana program for adults 21 years of age or older. AUMA had some conflicting provisions with MCRSA, so in June 2017, the California State Legislature passed Senate Bill No. 94, known as Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), which amalgamates MCRSA and AUMA to provide a set of regulations to govern a medical and adult-use licensing regime for cannabis businesses in the State of California. The four agencies that originally regulated marijuana at the state level were the Bureau of Cannabis Control (“BCC”), California Department of Food and Agriculture (“DFA”), California Department of Public Health (“DPH”), and California Department of Tax and Fee Administration. MAUCRSA went into effect on January 1, 2018.

On July 1, 2019, California enacted A.B. 97. In relevant part, the bill authorizes licensing authorities to issue citations and fines to a licensee or an unlicensed person who violates MAUCRSA. The maximum fine is $5,000 per violation for licensees and $30,000 per violation for unlicensed persons. Each day of a violation constitutes a separate violation.

A.B. 97 also repeals a prior requirement that an applicant for a provisional license first hold a temporary license. The bill also requires applicants for provisional licenses to submit evidence of compliance with the California Environmental Quality Act, limits the validity of a provisional license to 12 months with subsequent renewals as approved by the relevant licensing authority, and allows licensing authorities to revoke provisional licenses for failing to diligently pursue final licensure. Finally, the bill requires the DPH to establish a certification program for manufactured cannabis products comparable to the National Organic Program and the California Organic Food and Farming Act.

On October 12, 2019, California enacted A.B. 1529. The bill mandates that all cannabis vaping cartridges and cannabis vaporizers must include a universal symbol identifying the product as a vaping product.

On July 12, 2021, California Governor Gavin Newsom signed into law Assembly Bill 141 (AB-141), which creates the Department of Cannabis Control (“DCC”). The DCC is in the process of consolidating the state’s cannabis program oversight from three of the existing agencies – the BCC, the DFA, and the DPH – under a single department in an effort to centralize and simplify regulatory and licensing oversight in California. DCC similarly announced its intention to create a single Licensing Division that would be responsible for licensing of all cannabis businesses. On or about September 15, 2021, the DCC filed emergency regulations to consolidate, clarify, and make consistent cannabis regulations to the California Office of Administrative Law. After a limited comment period, these consolidated emergency regulations were approved and became effective on or about September 27, 2021. These regulations created consistent standards for cannabis licensees across all license types, by aligning application requirements, unifying terminology, and clarifying ownership and financial interest requirements. Further consolidated regulations and modifications of existing regulations were issued in March 2024.

At present, to legally operate a medical or adult-use cannabis business in California, the operator must have both a local and state license. This requires license holders to operate in cities with marijuana licensing programs. Therefore, cities in California are allowed to determine the number of licenses they will issue to marijuana operators or can choose to outright ban marijuana.

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California Licensing Requirements

A medicinal retailer license permits the sale of medicinal cannabis and cannabis products to a medicinal cannabis patient in California who possesses a physician’s recommendation. Only certified physicians may provide medicinal marijuana recommendations. An adult-use retailer license permits the sale of cannabis and cannabis products to any individual age 21 years of age or older who presents a valid government-issued photo identification.

An adult-use or medicinal cultivation license permits cannabis cultivation activity which means any activity involving the planting, growing, harvesting, drying, curing, grading or trimming of cannabis. Such licenses further permit the production of a limited number of non-manufactured cannabis products and the sales of cannabis to certain licensed entities within the state of California for resale or manufacturing purposes.

An adult-use or medical manufacturing license permits the manufacturing of cannabis products. Manufacturing includes the compounding, blending, extracting, infusion, packaging or repackaging, labeling or relabeling, or other preparation of a cannabis product.

In the state of California, only cannabis that is grown in the state can be sold in the state. Although California is not a vertically-integrated system, the state allows licensees to make wholesale purchase of cannabis from, or a distribution of cannabis and cannabis product to, another licensed entity within the state.

Holders of marijuana licenses in California are subject to a detailed regulatory scheme encompassing: security, staffing, sales, manufacturing standards, inspections, inventory, advertising and marketing, product packaging and labeling, records and reporting, and more. As with all jurisdictions, the full regulations, as promulgated by each applicable state agency, should be consulted for further information about any particular operational area.

Licensed cannabis businesses may partner with non-licensed business entities pursuant to intellectual property licensing agreements subject to certain disclosure requirements and approvals by the DCC.

California Dispensary Requirements

Cannabis retailers may only sell cannabis products that were received by the retail licensee from a licensed distributor or licensed microbusiness authorized to engage in distribution, and the licensed retailer must verify that the cannabis goods have not exceeded their best-by, sell-by, or expiration date if one is provided. The goods must have undergone appropriate laboratory testing, and the batch number labeled on the package of cannabis goods must match the batch number on the corresponding certificate of analysis for regulatory compliance testing. The packaging and goods must comply with all applicable laws in order for the goods to be sold at the retail location. In addition to cannabis goods, a licensed retailer may sell only cannabis accessories and licensee’s branded merchandise. A licensed retailer may not provide free cannabis goods except for in certain limited circumstances.

Cannabis retailers may only display cannabis goods for inspection and sale in the retail area. Such goods may be removed from their packaging and placed in containers to allow for customer inspection, so long as the containers are not readily accessible to customers without assistance of retailer personnel. A container must be provided to the customer by the licensed retailer or its employees, who must remain with the customer at all times that the container is being inspected by the customer. Cannabis goods removed from their packaging in this way may not be sold or consumed. They must be destroyed appropriately when they are no longer being used for display.

California Reporting Requirements

The state of California uses METRC as the state’s track-and-trace (“T&T”) system used to track commercial cannabis activity and movement across the distribution chain for all state-issued annual licensees. The system allows for other third-party system integration via application programming interface. Only licensees have access to METRC.

California Storage, Transportation, and Security Requirements

To ensure the safety and security of cannabis business premises and to maintain adequate controls against the diversion, theft, and loss of cannabis or cannabis products, California’s marijuana businesses are required to do the following:

• maintain a fully operational security alarm system;

• contract for security guard services;

• maintain a video surveillance system that records continuously 24 hours a day;

• ensure that the facility’s outdoor premises have sufficient lighting;

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• not dispense from its premises outside of permissible hours of operation;

• store cannabis and cannabis product only in areas per the premises diagram submitted to the state of California during the licensing process;

• store all cannabis and cannabis products in a secured, locked room or a vault;

• report to local law enforcement within 24 hours after being notified or becoming aware of the theft, diversion, or loss of cannabis; and

• ensure the safe transport of cannabis and cannabis products between licensed facilities, maintain a delivery manifest in any vehicle transporting cannabis and cannabis products. Only vehicles registered with the BCC that meet BCC distribution requirements are to be used to transport cannabis and cannabis products.

DCC Inspections

The DCC, and its authorized representatives, shall have full and immediate access to inspect and enter onto any premises licensed by the DCC. Prior notice of an inspection, investigation, review, or audit is not required. The DCC may also test any vehicle or equipment possessed by, in control of, or used by a licensee or their agents and employees for the purpose of conducting commercial cannabis activity. Moreover, it may test any cannabis goods or cannabis-related materials, or products possessed by, in control of, or used by a licensee or their agents and employees for the purpose of conducting commercial cannabis activity. The DCC may also copy any materials, books, or records of any licensee or their agents and employees. Failure to cooperate with and participate in any DCC investigation pending against the licensee may result in a licensing violation subject to discipline.

Trademarks, Flavor Concentrate Trade Secrets and Patent Rights

In the United States, we own a number of trademark registrations (designated by the ® symbol) and pending trademark applications (designated by the ™ symbol) for use in connection with our products, including “JONES®,” “JONES SODA CO.® “LEMONCOCCO ®” and “ MARY JONES®,”.

In general, trademark registrations expire 10 years from the filing date or registration date, with the exception in Canada, where trademark registrations expire 15 years from the registration date. All trademark registrations may be renewed for a nominal fee.

Although our flavor concentrate suppliers generally own the proprietary rights to the flavors, we have the exclusive rights to our flavor concentrates developed with our current flavor concentrate suppliers, which we protect as trade secrets. We will continue to take appropriate measures to maintain the secrecy and proprietary nature of our flavor concentrates.

We consider our trademarks and trade secrets to be of considerable value and importance to our business.

Seasonality

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 or "~~SKUs" 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.

Human Capital

We believe the strength of our workforce is one of the significant contributors to our success. Attracting, developing and retaining talent with the right skills to drive our business is central to our purpose, mission and long-term growth strategy. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. The principal purposes of our equity incentive plan is to attract, retain and reward personnel through the granting of stock-based compensation awards, in order to increase shareholder value and the success of our Company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

As of ~~August~~June 2130, ~~2024~~2025, we have 28 27 employees, all of which are full-time, and with the exception of ~~one~~two ~~employee~~employees located in Canada are all located in the United States. Of our 28 27 employees, 1415 are employed in sales and marketing capacities, 64 are employed in ~~administrative~~finance and accounting capacities and 8 are employed in customer service, manufacturing and quality control capacities. None of our employees are represented by labor unions.

~~-45-~~Facilities

~~Table~~Our corporate ofheadquarters ~~Contents~~are located at 1522 Western Avenue, Suite 24150, Seattle, Washington 98101. We believe this to be sufficient to meet our needs for the foreseeable future.

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Legal Proceedings

~~You~~From time ~~should~~to ~~read~~time, ~~the~~we ~~following~~may ~~discussion~~become ofinvolved ~~our financial condition and results of operations~~ in ~~conjunction~~various ~~with~~lawsuits ~~financial statements~~ and ~~notes~~legal ~~thereto~~proceedings, aswhich ~~well~~arise asin the ~~“Risk~~ordinary ~~Factors”~~course ~~and “Description~~ of ~~Business” sections included elsewhere in this prospectus~~business. ~~The~~Litigation is ~~following~~subject ~~discussion~~to ~~contains~~inherent ~~forward-looking statements that reflect our plans~~uncertainties, ~~estimates~~ and ~~beliefs.~~an ~~Our~~adverse ~~actual~~result ~~results~~in ~~could~~these ~~differ~~or ~~materially~~other ~~from~~matters ~~those~~may ~~discussed~~arise infrom ~~the~~time ~~forward-looking~~to ~~statements.~~time ~~Factors~~ that ~~could~~may ~~cause~~harm orour ~~contribute~~business. We toare ~~these~~currently ~~differences~~not ~~include~~party ~~those~~to, ~~discussed~~and ~~below~~our ~~and~~property ~~elsewhere~~is innot ~~this~~the ~~prospectus~~subject of, ~~particularly~~any inmaterial ~~“Risk~~legal ~~Factors~~proceedings.”

~~Overview~~Our Corporate History and Information

We are ~~develop,~~a ~~produce,~~Washington ~~market~~corporation ~~and~~formed ~~distribute premium beverages that we sell and distribute primarily~~ in ~~North~~2000 ~~America~~as ~~through~~a ~~our~~successor ~~network of independent distributors and directly~~ to ~~our~~Urban ~~national~~Juice and ~~regional~~Soda ~~retail~~Company ~~accounts~~Ltd., Wea ~~also~~Canadian ~~sell premium soda~~company ~~beverage~~formed ~~products~~ in ~~select international markets and license cannabis infused beverages and syrups in California, Washington and Canada~~1986. Our principal ~~premium~~place ~~soda~~of ~~beverage~~business ~~products~~is ~~are~~located ~~sold~~at ~~primarily~~1522 inWestern ~~grocery stores~~Avenue, ~~convenience~~Suite ~~and gas stores~~24150, ~~on fountain in restaurants~~Seattle, ~~“up~~Washington ~~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~~98101. WeOur ~~refer~~telephone tonumber ~~our~~is ~~network of independent distributors as our direct store delivery~~ (~~“DSD”~~206) 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 624-~~party contract manufacturers~~3357. WeOur ~~also~~website ~~sell~~address ~~various~~is ~~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~~www. ~~In addition, we currently market and license several cannabis infused beverages and syrups in California, Canada, and Washington through third party manufacturers and distributors~~jonessoda.com. WeThe ~~plan~~information tocontained ~~expand~~on our ~~cannabis~~website ~~product~~is ~~offerings~~not ~~(including~~incorporated ~~the~~by ~~development~~reference into ofthis ~~hemp-derived Delta-9 THC products) and the states in which we offer such products~~prospectus.

~~Our Focus: Sales Growth~~54

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 fountain program in the United States and Canada; and

● Grow the Mary Jones brand, which includes Tetrahydrocannabinol (THC) and cannabidiol (CBD)-infused beverages, edibles, and other related products.

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 or "SKUs" 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.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this Report. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

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There have been no material changes in our critical accounting policies during the three months ended June 30, 2024, or through the date of this report.

Revenue Recognition

We recognize revenue under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. We only apply the five-step model (as described in Note 1 to the Consolidated Financial Statements of this Report) to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods and services transferred to the customer.

Inventory

Trade Spend and Promotion Expenses

Throughout the year, we run trade spend and promotional programs with distributors and retailers to help promote on- shelf discounts to our consumers. Additionally, in more limited instances, we enter into customer marketing agreements or various other slotting arrangements. The provisions for discounts, slotting fees and promotion allowances are recorded as an offset to revenue and shown net on the consolidated statement of operations. Estimates are made to accrue for amounts that have not yet been invoiced in the month that the program occurs, or in the case of slotting, when the commitment is made.

Results of Operations

Quarter Ended June 30, 2024 Compared to Quarter Ended June 30, 2023

Revenue

For the quarter ended June 30, 2024, revenue increased by approximately $2.4 million, or 48.9%, to approximately $7.2 million compared to approximately $4.8 million for the quarter ended June 30, 2023. The increase in sales revenue was primarily the result of an increase in sales volume of the Mary Jones branded products, increase in our Nuka Cola sales online, in addition to an increase in revenue related to core Jones Soda sales in Canada.

For the quarter ended June 30, 2024, trade spend and promotion allowances, which reduced the amount of revenue for the sales of our product, totaled approximately $1.2 million, an increase of approximately $764,000, or 193.3%, compared to approximately $394,000 for the quarter ended June 30, 2023, primarily due to promotional and pricing programs related to Mary Jones products and core Jones Soda sales in Canada.

Gross Profit

For the quarter ended June 30, 2024, gross profit increased by approximately $1.0 million, or 64.3% to approximately $2.6 million compared to approximately $1.6 million for the quarter ended June 30, 2023. For the quarter ended June 30, 2024, gross margin increased to 35.8% from 32.4% for the quarter ended June 30, 2023. This increase was primarily driven by proactive pricing adjustments and supply chain optimization especially in Canada where the Company has moved to DOT Foods as its primary distributor, as well as increased sales of our Mary Jones branded products which generally have higher margins than our other products.

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Selling and Marketing Expenses

Selling and marketing expenses for the third quarter ended June 30, 2024 were approximately $1.9 million, an increase of approximately $848,000 or 78.5% compared to approximately $1.1 million for the quarter-ended June 30, 2023. This increase was primarily a result expenses related to the launch of new products introduced in 2024 and rebranding costs, most of which we believe to be one-time expenses. We also incurred an increase in online marketing spend for both the Jones Soda and Mary Jones brands. Additionally, we increased our marketing initiatives with companies involved with action sports, including a partnership with Thrill One Sports & Entertainment, in the second quarter of 2024 that did not occur in the second quarter of 2023. Selling and marketing expenses as a percentage of revenue increased to 26.9% in the second quarter ended June 30, 2024 from 22.5% in the same period in 2023. We intend to continue to balance selling and marketing expenses with our working capital resources. For the three months ended June 30, 2024 and 2023, non-cash expenses included in selling and marketing expenses (stock compensation and depreciation) were approximately $38,000 and $28,000, respectively.

General and Administrative Expenses

General and administrative expenses for the second quarter ended June 30, 2024 were approximately $2.2 million, an increase of approximately $730,000, or 48.4%, compared to approximately $1.5 million for the quarter ended June 30, 2023. This increase was primarily a result of increased legal expenditures related to our Mary Jones business, in addition to increased travel expenditures in connection with the Company’s growth plan that includes new supply chain and sponsorship partners. General and administrative expenses as a percentage of revenue decreased slightly to 31.3% in the second quarter ended June 30, 2024 from 31.4% in the same quarter in 2023. We intend to continue to carefully manage general and administrative expenses with our working capital resources. For the three months ended June 30, 2024 and 2023, non-cash expenses included in general and administrative expenses (stock compensation and depreciation) were approximately $435,000 and $268,000, respectively. The increase in non-cash expenses included in general and administrative expenses in the second quarter of 2024 was primarily due to the restricted stock units granted to members of the Company’s Board of Directors in the current quarter ended June 30, 2024 resulting in a higher expense than the expense associated with the stock options granted to members of the Company’s Board of Directors in the same quarter of 2023.

Interest Expense

We incurred $7,000 in interest expense for the quarter ended June 30, 2024 due to our current line of credit balance, compared to nil for the quarter ended June 30, 2023.

Income Tax Expense

We incurred approximately $11,000 and $17,000 of income tax expense during the quarters ended June 30, 2024 and 2023, respectively, primarily related to the tax provision on income from our Canadian operations. 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 loss

Net loss for the quarter ended June 30, 2024 was approximately $1.6 million compared to net loss of approximately $1.0 million for the quarter ended June 30, 2023. This increase in net loss was primarily due to the increased sales and marketing and general and administrative costs associated with the development of new products and other operating expenses to support Company's growth plans being partially offset by increased revenues.

Six months ended June 30, 2024 compared to six months ended June 30, 2023

Revenue

For the six months ended June 30, 2024, revenue increased by approximately $3.5 million, or 40.1%, to approximately $12.2 million compared to approximately $8.7 million for the six months ended June 30, 2023. The increase in sales revenue was primarily the result of an increase in sales volume of the Mary Jones branded products, an increase in our Nuka Cola sales online, and an increase in revenue related to core Jones Soda sales in Canada.

For the six months ended June 30, 2024, trade spend and promotion allowances, which reduced the amount of revenue for the sales of our product, totaled approximately $1.6 million, an increase of approximately $901,000, or 128.9%, compared to approximately $699,000 for the six months ended June 30, 2023, primarily due to promotional and pricing programs related to Mary Jones products and core Jones Soda sales in Canada.

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Gross Profit

For the six months ended June 30, 2024, gross profit increased by approximately $1.8 million, or 65.3%, to approximately $4.5 million compared to approximately $2.7 million for the six months ended June 30, 2023. For the six months ended June 30, 2024, gross margin increased to 36.6% from 31.1% for the six months ended June 30, 2023. This increase was primarily driven by proactive pricing adjustments, supply chain optimization, and increased sales of our Mary Jones branded products which generally have higher margins than our other products.

Selling and Marketing Expenses

Selling and marketing expenses for the six months ended June 30, 2024 increased by approximately $1.3 million to $3.4 million in comparison to $2.1 million for the six months ended June 30, 2023. This increase was primarily a result of expenses related to the launch of new products introduced in 2024 and rebranding costs, most of which we believe to be one-time expenses. We also incurred an increase in online marketing spend for both the Jones Soda and Mary Jones brands. Additionally, we increased our marketing initiatives with companies involved with action sports in the first half of 2024 that did not occur in the first half of 2023. Selling and marketing expenses as a percentage of revenue increased to 28.1% in the six months ended June 30, 2024 from 24.3% in the same period in 2023. We intend to continue to balance selling and marketing expenses with our working capital resources. For the six months ended June 30, 2024 and 2023, non-cash expenses included in selling and marketing expenses (stock compensation and depreciation) were approximately $65,000 and $55,000, respectively.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2024 were approximately $3.8 million, an increase of approximately $819,000, or 27.6%, compared to approximately $3.0 million for the six months ended June 30, 2023. This increase was primarily a result of increased legal expenditures related to our Mary Jones business, in addition to increased travel expenditures in connection with the Company’s growth plan that includes new supply chain and sponsorship partners. General and administrative expenses as a percentage of revenue decreased to 31.1% in the six-month period ended June 30, 2024 from 34.2% in the same period in 2023. We will continue to carefully manage general and administrative expenses with our working capital resources. For the six months ended June 30, 2024 and 2023, non-cash expenses included in general and administrative expenses (stock compensation and depreciation) were approximately $582,000 and $515,000, respectively. The increase in non-cash expenses included in general and administrative expenses in the first half of 2024 was primarily due to restricted stock units granted to members of the Company’s Board of Directors in first half of 2024 being partially offset by fewer stock options granted to officers and directors in this period compared to the same period in the prior year.

Interest Expense

We incurred $7,000 in interest expense for the six months ended June 30, 2024 due to our current line of credit balance, compared to nil for the six months ended June 30, 2023.

Income Tax Expense

We incurred approximately $21,000 and $22,000 of income tax expense during the six months ended June 30, 2024 and 2023, respectively, primarily related to the tax provision on income from our Canadian operations. 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 loss

Net loss for the six months ended June 30, 2024 was approximately $2.7 million compared to net loss of approximately $2.4 million for the six months ended June 30, 2023. This increase in net loss was primarily due to the increased sales and marketing and general and administrative costs associated with the development of new products and other operating expenses to support the Company's growth plans being partially offset by increased revenues.

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Years Ended December 31, 2023 and 2022

Revenue

For the year ended December 31, 2023, revenue was approximately $16.7 million, a decrease of $2.4 million, or 12.7%, from approximately $19.1 million in revenue for the year ended December 31, 2022. This decrease was primarily a result of $1.5 million in revenues from core bottle soda sales from a one-time inventory stocking event with one of our largest customers in 2022 that was not repeated during 2023. Additionally, the decrease in sales revenue was also a result of a decrease in fountain sales and sales related to the food services during 2023 compared to 2022. Additionally, we experienced a decrease in Canadian DSD sales. These decreases were partially offset by an approximate increase of $950,000 in licensing revenues from our Mary Jones beverages and syrups sold during 2023. For both years ended December 31, 2023 and 2022, promotion allowances and slotting fees, which offset revenue, totaled approximately $1.6 million.

During 2023 and 2022, the percentage of our revenues generated in Canada was 18% and 19%, respectively.

Gross Profit

	Year Ended December 31,
	2023			2022			% Change
	(Dollars in thousands)
Gross Profit	$	4,855		$	5,143			-5.6	%
% of Revenue		29.1	%		26.9	%

For the year ended December 31, 2023, gross profit decreased by $288,000, or 5.6%, to approximately $4.9 million compared to approximately $5.1 million for the year ended December 31, 2022, as a result of reduced sales revenue in 2023 being partially offset by reduced costs primarily due to improved supply chain management and proactive pricing adjustments. For the year ended December 31, 2023, gross margin increased to 29.1% from 26.9% for the year ended December 31, 2022.

Selling and Marketing Expenses

Selling and marketing expenses for the year ended December 31, 2023 were approximately $4.4 million, a decrease of $587,000, or 11.8%, from approximately $5.0 million for the year ended December 31, 2022. This decrease was primarily a result of non-cash stock consideration paid by the Company in connection with two sponsorship agreements entered into by the Company during 2022 that did not occur again in 2023. Selling and marketing expenses as a percentage of revenue was 26.3% for the year ended December 31, 2023 compared to 26.0% for the year ended December 31, 2022. We will continue to work on balancing selling and marketing expenses with our working capital resources.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2023 were approximately $5.4 million, a decrease of $900,000, or 14.6%, compared to approximately $6.3 million for the year ended December 31, 2022. This decrease was primarily a result of fewer general business start-up costs associated with the development of our Mary Jones brand in 2023 compared to 2022. General and administrative expenses as a percentage of revenue decreased to 32.1% for the year ended December 31, 2023 from 32.9% in 2022. We will continue work on balancing general and administrative expenses with our working capital resources.

Interest Expense

We incurred no interest expense during 2023, compared to approximately $377,000 for the year ended December 31, 2022. The $377,000 interest expense incurred during 2022 was primarily related to the conversions of both the Contingent Convertible Debentures and the remaining 2018 Convertible Notes (each as discussed in Note 5) that resulted in all capitalized costs associated with the issuance of these notes being fully expensed upon conversion. The interest expense incurred during 2022 was non-cash.

Interest Income

We earned approximately $52,000 of interest income for the year ended December 31, 2023, compared to $6,000 for the year ended December 31, 2022. This increase was attributed to the increase in interest rates in 2023 compared to 2022.

Income Tax Expense

We had income tax expense of $33,000 and $28,000 for the years ended December 31, 2023 and 2022, respectively, primarily related to the tax provision on income from our Canadian operations. 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.

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Net Loss

Net loss for the year ended December 31, 2023 decreased to approximately $4.9 million from a net loss of $6.4 million for the year ended December 31, 2022. The decrease in net loss was primarily due to the decreased marketing and administrative costs associated with the launch of our cannabis infused beverage and syrups that occurred in 2022 and the beforementioned non-cash stock consideration paid by the Company in connection with two sponsorship agreements entered into by the Company during the third quarter of 2022 that did not repeat in 2023.

Liquidity and Capital Resources

As of June 30, 2024 and December 31, 2023, we had cash and cash-equivalents of approximately $1.5 million and $3.9 million, respectively, and working capital of approximately $5.2 million and $7.2 million, respectively. Net cash used in operations during the six months ended June 30, 2024 and 2023 totaled approximately $2.5 million for both June 30, 2024 and June 30, 2023. We incurred a net loss of approximately $2.7 million for the six months ended June 30, 2024 compared to a net loss of approximately $2.4 million for the six months ended June 30, 2023. Our accumulated deficit increased to $85.8 million as of June 30, 2024 compared to an accumulated deficit of $83.1 million as of December 31, 2023.

For the six months ended June 30, 2024, net cash provided by financing activities totaled approximately $97,000 most significantly due to the proceeds from our line of credit offset by the repayments on our insurance financing agreement. For the six months ended June 30, 2023, net cash used in financing activities totaled approximately $408,000 due to repayments on our insurance financing agreement.

We have experienced recurring losses from operations and negative cash flows from operating activities. These factors initially raised substantial doubt regarding the Company’s ability to continue as a going concern. The Company has increased gross margins in 2023 and in the six months ended June 30, 2024. In 2024, the Company is restructuring its customer distribution channels and has partnered with certain distributors. For the six months ended June 30, 2024, our current distributor network has resulted in more favorable margins and the trend should continue throughout 2024. Additionally, the Company is concentrating on product mix and customer channels that yield higher sales and margins (such as the food service channel), focused on the sales growth in the Mary Jones Brand. Moving forward, we have put a strong emphasis on monitoring and reducing operating costs when and if possible. On May 17, 2024, the Company signed a financing agreement from a creditor to provide the Company with a $2 million revolving credit facility for working capital needs.

Additionally, subsequent to June 30, 2024 the Company closed two tranches of a private placement equity raise for an aggregate amount of $3.7 million of gross proceeds for the Company (the "Private Placement”).

Based on management's current operating plan, the Company believes its cash and cash equivalents on hand, projected cash generated from product sales, proceeds from the Private Placement, and funds available from the committed revolving credit facility 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 and alleviates the conditions that initially raised substantial doubt regarding the Company's ability to continue as a going concern.

During the six months ended June 30, 2024 and 2023, we received $37,000 and nil, respectively from the cash exercise of stock options. From time to time, we may receive additional cash through the exercise of stock options or stock warrants. However, we cannot predict the timing or amount of cash proceeds we may receive from the exercise, if at all, of any of the outstanding stock options or warrants.

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MANAGEMENT

~~Set~~The following ~~forth~~table ~~below~~provides ~~is certain~~ information regarding our executive officers and ~~directors.~~members ~~Each~~ of ~~the directors listed below was elected to~~ our Board of Directors to(ages ~~serve~~as ~~until our next annual meeting~~ of ~~shareholders or until his or her successor is elected and qualified. The following table sets forth information regarding~~ the ~~members~~date of ~~our Board of Directors and our executive officers as August 21, 2024~~this prospectus):

NAME	AGE	POSITION
Name	Age	Title
David Knight	60	President, Chief Executive Officer
Scott Harvey	63	Chief Executive and President
Eric Bitner	44	Chief Operating Officer
Brian Meadows	60	Chief Financial Officer
Jerry Goldner	5657	Chief Growth Officer
Joe Culp	32	Interim Chief Financial Officer and Director Finance
Paul Norman	60	Chairman of the Board of Directors
Mark Murray	64	Director
Ronald Dissinger	66	Director
Paul Norman	58	Chairman of the Board of Directors
Clive Sirkin	62	Director
Gregg Reichman	6364	Director
Clive Sirkin	60	Director
Mark Murray	66	Director
Ronald Dissinger	65	Director

~~David Knight~~Executive Officers

~~Mr.~~Scott Harvey, ~~Knight was appointed as our President and~~ Chief Executive ~~Officer~~ effective June 23, 2023. Prior to this appointment, Mr. Knight has accumulated 37 years of global marketing sales, and corporate communications experience with several diverse companies. From 2021 to March 2023, Mr. Knight was the Chief Beverage Officer ~~for CFH Ltd. where he built a beverage division that included CBD beverages, from 2019 to 2021 he was the Chief Revenue Officer for PIN Business Network, from 2017 to 2019 he was the Chairman~~ and CEO of Rego Payment Architectures, and from 2007 to 2017, Mr. Knight was CEO and Co-founder of SX Latin Liquors, a start-up company that developed and launched a new product range of Latin spirits. Mr. Knight was also the Vice President of Internal Communications for eBay Inc. from 2006 to 2008, the Vice President of International Marketing for eBay Inc. from 2004 to 2006, the Vice President of Marketing Gatorade International for PepsiCo International from 2001 to 2004, and the Vice President of Marketing Asia Pacific for Quaker Oats from 2000 to 2001. Mr. Knight has a Bachelor of Business, Marketing from the University of New South Wales in Sydney, Australia.

~~Eric~~Scott Harvey ~~Bittner~~was appointed as the Company’s Chief Executive Officer and President on February 5, 2025. Prior to joining the Company, Mr. Harvey served as Brand President of Dunn Brothers Coffee, a chain of coffee shops offering small-batch roast coffee, from July 2023 to February 2025. He has also held executive posts with Golden Krust Caribbean Bakery as President and Chief Executive Officer from January 2022 to July 2023, Black Rifle Coffee Company as President and Chief Operating Officer from September 2018 to August 2021, Nathan’s Famous as Executive VP from July 2015 to September 2018 and Einstein Noah Restaurant Group as SVP Restaurant Operations from January 1995 to June 2015. Mr. Harvey earned a B.S. in hotel and restaurant management from Johnson & Wales University.

~~Mr.~~Brian Meadows, ~~Bittner was appointed as the Company’s~~ Chief ~~Operating~~Financial Officer, effective March 12, 2024. Mr. Bittner has extensive leadership experience in the beverage industry where he has been primarily focused on the commercialization of vertically integrated platforms across multiple beverage categories. He most recently was Senior Vice President of North American Manufacturing at Fevertree USA Inc. from September 2022 to May 2023, where he was responsible for developing the North American manufacturing strategy and expanding their operational footprint. Prior to that, he was Senior Vice President of Operations at Roar Beverages, Inc. from July 2021 to September 2022. He has also held several supply chain leadership positions, including Vice President Supply Chain at Proud Source Water from March 2021 to July 2021, Director, Supply Chain Strategy and Operations Development at Keurig Dr. Pepper Inc. from 2019 to 2021, and Hot Fill Manager at Niagara Bottling LLC from 2012 to 2019. Throughout the course of his career, Mr. Bittner has overhauled and redesigned craft breweries into diversified co-packers that are strategically focused on spirits, ready-to-drink cocktails, and a wide array of crafted cannabinoid-based drinks. Mr. Bittner obtained both his Master of Science, Nutrition, and his Bachelor of Science, Nutrition and Food Science from Florida State University.

~~Jerry~~Brian Meadows ~~Goldner~~was appointed as the Company’s Chief Financial Officer on February 5, 2025. Mr. Meadows brings to the Company experience as a senior executive of companies in several industries. Since October 2020, Mr. Meadows has served as Chief Financial Officer of Atmofizer Technologies Inc. (CSE: ATMO) (OTC PINK: ATMFF), a clean technology company. From December 2020 to December 2024, Mr. Meadows served as Chief Financial Officer for Simply Better Brands Corporation (TSXV: SBBC) (OTCQX: SBBCF), a platform with diversified assets in the plant-based and wellness consumer product categories, and from 2018 to 2020 he worked as an independent consultant. From 2007 to 2018, Mr. Meadows served as Chief Financial Officer and from 2011 until 2018 he served as President of GLG Life Tech Corporation (TSX: GLG), a sustainable and vertically integrated producer of zero-calorie natural sweeteners. Mr. Meadows holds a BBA from Wilfrid Laurier University and an MBA from the University of Glasgow, and has both Certified Financial Analyst (CFA) and a Certified Public Accountant (CPA) designations.

~~Mr.~~ Jerry Goldner ~~was appointed as the Company's Chief Growth Officer effective October 23~~, 2023. Mr. Goldner's career spans across many senior executive leadership positions at companies in the food and beverage industry and he has a long proven history in creating and accelerating company value and growth. Prior to this appointment as the Company’s Chief Growth Officer, Mr. Goldner served in various roles with Stryve Foods including: SVP Marketing/GM from May to October 2023, Chief Customer Officer from August 2022 to October 2023 and Vice President of Sales from April 2021 to August 2022. He was also Chief Growth Officer at CFH, Ltd from September 2020 to April 2021, President of Skout Backcountry from April 2017 to September 2020, Senior Vice President of Sales for Farmwise from July 2016 to April 2017, GM/SVP at Saxco International from August 2013 to January 2016, Vice President North American Marketing and Sales for Owens-Illinois from May 2012 to March 2013, Vice President North American sales for Tribe foods/Nestle from January 2010 to May 2012, and Director Marketing, Account Specific Marketing, Promotions and Marketing Services for Kellogg Company from 1990 to 2009.

Jerry Goldner was appointed as the Company’s Chief Growth Officer in October 2023. Mr. Goldner’s career spans across many senior executive leadership positions at companies in the food and beverage industry, and he has a long proven history in creating and accelerating company value and growth. Prior to this appointment as the Company’s Chief Growth Officer, Mr. Goldner served in various roles with Stryve Foods, a healthy snack company, from April 2021 to October 2023, including SVP Marketing/GM from May 2023 to October 2023, Chief Customer Officer from August 2022 to October 2023 and Vice President of Sales from April 2021 to August 2022. He also served as the Chief Growth Officer at CFH, Ltd/CFH Bioscience Ltd, a vertically integrated CBD company based in Colorado from September 2020 to April 2021 and President of Skout Backcountry, an organic, plant-52based snack company, from April 2017 to September 2020. Mr. Goldner has held various other positions including Senior Vice President of Sales for Farmwise, GM/SVP at Saxco International, Vice President North American Marketing and Sales for Owens-Illinois, Vice President North American Sales for Tribe Foods/Nestle and Director Marketing, Senior Director Alternate Channel Innovation, Director Account Specific Marketing, Director Promotions/Marketing Services, Senior Manager Trade Marketing Innovation, and Senior Sales Manager Gulf States team for the Kellogg Company over his 19 years. Mr. Goldner holds an MBA from Rockhurst University and an undergraduate degree in Marketing from the University of Missouri where he also worked for Coca-Cola and Anheuser/Busch.

~~Table of Contents~~55

~~Joe Culp~~Directors

~~Mr. Culp has served as our Interim Chief Financial Officer and Principal Financial Officer since March 2022~~Paul Norman, ~~and~~Chairman ~~our Director~~ of Finance since January 2023. He has been our Principal Accounting Officer since March 8, 2021, and has served in various financial positions since joining us in January 2019, including as Principal Financial Officer from March 8, 2021 to November 23, 2021 and Controller from March 2021 to January 2023. Previously, Mr. Culp served as a senior accountant in the ~~audit~~Board ~~department~~ of Moss Adams LLP from 2014 to November 2018, performing audits for both public and private companies across various industries including manufacturing, public utilities, financial institutions, health care, and contractors. Mr. Culp received a Bachelor of Arts degree in Accounting and Master's in Accounting, both from Washington State University, and is a Certified Public Accountant.Directors

~~Mark~~Paul Norman ~~Murray~~has been a director of the Company since August 2019 and has served as the Chairman of the Company’s Board of Directors since March 15, 2022. In addition, from October 25, 2024 to February 5, 2025, Mr. Norman served as Interim Chief Executive Officer of the Company and from November 12, 2024 until February 5, 2025, he served as Interim Chief Financial Officer of the Company. Mr. Norman is a global consumer products leader with over 30 years of experience creating brand and shareholder value. Until May 21, 2025, he served as a director of TRUBAR Inc. (formerly Simply Better Brands Corp.) (TSX-V: SBBC) (OTCQX: SBBCF), a platform with diversified assets in the plant-based and wellness consumer product categories. Mr. Norman previously served as Chief Executive Officer of Blue Triton Brands from 2022 to 2023, the President of CHW Acquisition Corporation (Nasdaq: CHWA), a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, from February 2021 to August 2022, when such company completed a business combination transaction. From 2019 to 2020, he served as chairman and CEO of Heavenly RX, a privately held CBD wellness company. Prior to Heavenly RX, Mr. Norman spent three decades at the Kellogg Company, the multinational food-manufacturing company, where he served as President of Kellogg’s North American business from 2015 to 2018, and Chief Growth Officer from 2013 to 2015. In addition to his time at Kellogg, from 2016 to 2018 Mr. Norman served as a member of the Grocery Manufacturers Association board of directors, where he served on the executive committee. He also served as a Trustee of the Food Marketing Institute Foundation board from 2016 to 2018. Mr. Norman received a bachelor’s degree with honors in French from Portsmouth Polytechnic. Mr. Norman was originally an “Investor Designee” of Heavenly RX, as defined in the Investor Rights Agreement dated as of July 11, 2019 by and among the Company, Heavenly RX Ltd. and certain shareholders named therein (“IRA”), and was appointed to the Board of Directors in accordance with the terms and conditions of such agreement. We believe Mr. Norman is qualified to serve as a director of our Company because of his extensive experience in the food and beverage industry as well as his experience holding senior executive positions in a Fortune 500 public company.

~~Mr. Murray was our President and Chief Executive Officer from December 1~~Ronald Dissinger, 2020 through June 23, 2023, and has been a director of Jones Soda since May 19, 2021. Prior to that, he was the President of JGC Food Company (“JGC”), a position he held from 2017 to May 2019, and was previously the Vice President of Sales and Marketing of JGC from 2013 to 2017. He was the Vice President of Sales of Harry’s Fresh Foods from 2011 and 2013 and Vice President of National Accounts of Solo Cup Company from 2008 to 2011. Prior to 2008, Mr. Murray held numerous other roles in sales and marketing, including a 22-year career with Kraft Foods. Mr. Murray received a Bachelor of Arts degree in Marketing, from Michigan State University. We believe Mr. Murray is qualified to serve on our Board of Directors because he brings first-hand knowledge of the Company's day-to-day operations as well as an understanding of the operational, financial and strategic issues facing our Company.Director

~~Paul~~Ronald Dissinger ~~Norman~~has served as a director of the Company since May 2023 and from November 4, 2024 until November 12, 2024, he served as Interim Chief Financial Officer of the Company. Prior to joining the Board, from January 2010 until his retirement in 2017, Mr. Dissinger served as the Senior Vice President and Chief Financial Officer of the Kellogg Company. Previously, Mr. Dissinger had served in a number of financial roles with the Kellogg Company, including Assistant Controller, Vice President and Chief Financial Officer Europe, and Vice President and Chief Financial Officer North America. Mr. Dissinger obtained a bachelor of science from Albright College in 1980 and is also a Certified Management Accountant. We believe Mr. Dissinger brings to our Board of Directors executive leadership experience and expertise and finance and accounting.

~~Mr. Norman has been a director of Jones Soda since August 2019 and has served as the Chairman of our Board of Directors since March 15~~Clive Sirkin, 2022. Mr. Norman is a global consumer products leader with over 30 years of experience creating brand and shareholder value. He currently serves as chairman of the boards of directors of Simply Better Brands Corp. (TSX: SBBC)(OTCQB: PKANF). Mr. Norman previously served as the President of CHW Acquisition Corporation (Nasdaq: CHWA), a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, from February 2021 to August 2022, when such company completed a business combination transaction. From 2019 to 2020, he served as chairman and CEO of HeavenlyRx, a privately held CBD wellness company. Prior to HeavenlyRx, Mr. Norman spent three decades at Kellogg, the $11 billion multinational food-manufacturing company, where his tenure was defined by transformation, profitable growth and shareholder value creation through strategic portfolio management, innovation and diverse talent development and leadership. He has deep experience in building brands while successfully navigating complex regulatory environments where challenges around marketing and nutrition/ ingredient labeling restrictions are constantly evolving. As President of Kellogg’s $9 billion North American business from 2015 to 2018, Mr. Norman led initiatives such as the exit of Direct Store Delivery, which transformed U.S. Snacks to a warehouse pull model. He was instrumental in accelerating mergers and acquisitions activity at Kellogg, including Kellogg’s acquisition of RX bar in 2017 for $600 million. In his role, Mr. Norman interacted regularly with the Kellogg board of directors, attending all board meetings and collaborating closely with several sub-committees. He also participated in analyst and investor calls for the company. Prior to serving as President of Kellogg’s North American business in 2015, Mr. Norman served as the company’s Chief Growth Officer from 2013 to 2015, where he developed the Kellogg global category operating model. In that role he focused on long-term innovation, building sales and marketing capability, and long-term strategy for the company’s breakfast and snacks categories. Concurrent with the Chief Growth Officer role, Mr. Norman served as interim President of the U.S. Morning Foods business, which generated approximately $3 billion in revenues. In 2008, he was promoted to president of Kellogg International, where he built a team and platform to support international growth, a key pillar of the company’s growth plan. As part of that team, Mr. Norman helped to facilitate the acquisition of Pringles® in 2012, which was key to the company’s plans for global expansion and growth. In 2012, he led the integration of Pringles® and the restructuring of Kellogg’s European business to implement the new “Wired to Win” operating model, which resulted in significantly improved European top and bottom line performance. From 2004 to 2008, Mr. Norman led U.S. Morning Foods, which included cereal, PopTarts®, the Kashi Company, and the frozen foods division, to five years of sequential profitable sales and share growth. He was named managing director of Kellogg’s U.K./ Republic of Ireland business in 2002, where he successfully led a turnaround in sales performance and helped to grow the company’s cereal market share for the first time in 11 years. In 2000, Mr. Norman became president of Kellogg Canada Inc. and from 1989 to 2000, he held progressively more senior marketing roles at U.S. Morning Foods across France, Canada, Latin America and the U.S. In addition to his time at Kellogg, from 2016 to 2018 Mr. Norman served as a member of the Grocery Manufacturers Association board of directors, where he served on the executive committee. He also served as a Trustee of the Food Marketing Institute Foundation board, from 2016 to 2018. Mr. Norman received a bachelor’s degree with honors in French from Portsmouth Polytechnic. We believe Mr. Norman is qualified to serve on our Board of Directors because of his branding, business strategy and marketing expertise and experience in the food industry. Mr. Norman is an “Investor Designee” of Heavenly Rx, as defined in the Investor Rights Agreement between the Company and Heavenly Rx and was appointed to the Board of Directors in accordance with the terms and conditions of such agreement.Director

Clive Sirkin has been a director of the Company since August 2019. Mr. Sirkin is a seasoned marketing executive who has held various executive roles in large multinational consumer packaged goods companies. He was most recently the Chief Growth Officer for the Kellogg Company from January 2016 through February 2019. In this capacity he was a member of the company’s Executive Committee and was responsible for research and development, innovation, sales, marketing, research and analytics and setting the category strategy for the company. Prior to Kellogg, Mr. Sirkin served as the Chief Marketing Officer of Kimberly-~~53-~~Clark from March 2012 to November 2015, overseeing all marketing across their business to business and business to consumer divisions. This followed a more than 16 year career in advertising at Leo Burnett, where he served in various leadership capacities across multiple geographies culminating in being named Group Managing Director with responsibility for setting the global business strategy for the group. He also served on the Global Executive Committee and the board of the company. Mr. Sirkin currently serves on the boards of Screendragon ltd., UCAN, 70 Faces Media and Marketeam.ai and previously served on the board of Fyllo Tech. He earned a B. Comm. degree from the University of Witwatersrand in South Africa. Mr. Sirkin was originally an “Investor Designee” of Heavenly RX, as defined in the IRA, and was appointed to the Board of Directors in accordance with the terms and conditions of such agreement. We believe Mr. Sirkin is qualified to serve on our Board of Directors because of his marketing expertise and experience in the food industry.

~~Table of Contents~~56

Gregg Reichman, Director

~~Mr.~~ Gregg Reichman has been a director of ~~Jones~~the ~~Soda~~Company since February ~~27,~~ 2023. Mr. Reichman ishas served as the Co-Founder of Active Funding Group LLC (“AFG”) since 2009, a business that focuses on entrepreneurial real estate ventures and on the distressed real estate sector. Under Mr. Reichman’s guidance, AFG grew from a startup to a successful private lending company. We believe Mr. Reichman brings to our Board of Directors executive leadership experience and experience with mergers and acquisitions.

~~Clive~~Mark Murray, ~~Sirkin~~Director

~~Mr.~~Mark Murray ~~Sirkin~~was ~~has~~our ~~been~~President aand ~~director~~Chief ofExecutive ~~Jones~~Officer ~~Soda~~from ~~since~~December ~~August~~2020 ~~2019.~~through ~~Mr.~~June ~~Sirkin~~2023, isand ~~a seasoned marketing executive who~~ has ~~held~~been ~~various~~a ~~executive~~director ~~roles~~of ~~in large multinational consumer packaged goods companies. He was most recently~~ the ~~Chief Growth Officer for the Kellogg~~ Company ~~from~~since May ~~January 2016 through February 2019~~2021. InPrior ~~this~~to ~~capacity~~that, he was athe ~~member~~President of ~~the~~JGC ~~company's~~Food ~~Executive~~Company ~~Committee~~(“JGC”), ~~and~~a ~~was~~privately-owned ~~responsible~~food ~~for~~manufacturer ~~R&D,~~specializing in ~~innovation~~fresh soups, ~~sales~~sauces, ~~marketing~~sides, ~~research~~ and ~~analytics~~entrées, ~~and~~a ~~setting~~position ~~the~~he ~~category~~held ~~strategy~~from ~~for~~2017 ~~the company. Prior~~ to ~~Kellogg~~May 2019, ~~Clive~~and ~~served~~was aspreviously the ~~Chief~~Vice ~~Marketing~~President ~~Officer~~of Sales and Marketing of ~~Kimberly-Clark~~JGC from ~~March~~2013 ~~2012~~ to ~~November 2015, overseeing all marketing across their B2B and B2C divisions~~2017. ~~This~~In ~~followed a 16+ year career in advertising at Leo Burnett~~addition, ~~where~~ he ~~served~~was inpreviously ~~various~~the ~~leadership~~Vice ~~capacities~~President ~~across~~of ~~multiple~~Sales ~~geographies~~of ~~culminating~~Harry’s inFresh ~~being~~Foods from ~~named~~2011 ~~Group~~and ~~Managing~~2013 ~~Director~~and ~~with~~Vice ~~responsibility~~President ~~for~~of ~~setting~~National ~~the~~Accounts ~~global~~of ~~business~~Solo ~~strategy~~Cup ~~for~~Company ~~the~~from ~~group.~~2008 Heto ~~served~~2011. onPrevious ~~the~~to ~~Global~~2008, ~~Executive Committee and the Board of the company.~~ Mr. ~~Sirkin~~Murray ~~currently~~held ~~serves~~numerous other onroles ~~the~~in ~~Boards~~sales ofand ~~Screendragon ltd.~~marketing, ~~Fyllo~~including ~~Tech,~~a ~~UCAN~~22-year ~~and~~career 70with ~~Faces~~Kraft ~~Media~~Foods. ~~He earned a B~~Mr. ~~Comm.~~Murray ~~degree~~received ~~from~~a ~~the~~Bachelor ~~University~~ of ~~Witwatersrand~~Arts degree in ~~South~~Marketing, from ~~Africa~~Michigan inState ~~1985~~University. We believe Mr. ~~Sirkin~~Murray is qualified to serve on our Board of Directors because ofhe ~~his~~brings ~~marketing~~first-hand ~~expertise and experience in the food industry. Mr. Sirkin is an “Investor Designee”~~ knowledge of ~~HeavenlyRx, as defined in~~ the ~~Investor Relations Agreement between the~~ Company’s ~~and~~day-to-day ~~HeavenlyRx,~~operations ~~and~~as ~~was~~well ~~appointed~~as toan ~~the~~understanding ~~Board~~ of ~~Directors in accordance with~~ the ~~terms~~operational, financial and ~~conditions~~strategic ofissues ~~such~~facing ~~agreement~~our Company.

Ronald Dissinger

Mr. Dissinger has been a director of Jones Soda since May 25, 2023. Mr. Dissinger served in financial leadership roles with Kellogg Company both domestically and internationally. From January 2010 until his recent retirement, Mr. Dissinger was the Senior Vice President and Chief Financial Officer of the Kellogg Company. Previously, Mr. Dissinger had served in a number of financial roles with the Kellogg Company, including Assistant Controller, Vice President and Chief Financial Officer Europe, and Vice President and Chief Financial Officer North America. Mr. Dissinger obtained a bachelor of science from Albright College in 1980 and is also a Certified Management Accountant. We believe Mr. Dissinger brings to our Board of Directors executive leadership experience and expertise and Finance and Accounting.

Family Relationships and Other Arrangements

There are no family relationships among our ~~executive~~directors ~~officers~~ and ~~directors~~executive officers. There are no arrangements or understandings between or among our executive officers and directors pursuant to which any director or executive officer was or is to be selected as a director or executive officer.

Involvement in Certain Legal Proceedings

We are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation S-K.

~~-54-~~Composition of our Board of Directors

~~Table~~Our business and affairs are managed under the direction of ~~Contents~~our Board of Directors. We currently have five directors, who are elected annually. Our current directors will continue to serve as directors until their death, resignation, removal or successor is duly elected. No director is required to make any specific amount or percentage of his business time available to us. Each of our officers intends to devote such amount of his time to our affairs as is required or deemed appropriate.

CORPORATE GOVERNANCE STANDARDS AND DIRECTOR INDEPENDENCE

We are committed to good corporate governance practices. These practices provide an important framework within which our Board of Directors and management pursue our strategic objectives for the benefit of our shareholders.

Board Leadership Structure and Role in Risk Oversight

The Board of Directors selects the Chairman by consensus. Mr. Norman currently serves as the Chairman of the Board. The Board of Directors does not have a specific policy on whether the roles of Chief Executive Officer and Chairman of the Board should be separate, or if the roles are separate, whether the Chairman of the Board should be selected from the non-employee directors. Currently, these roles are separate and the Chairman is a non-employee director. The Board of Directors believes that it should have discretion to determine the most appropriate leadership structure within the Board of Directors from time to time.

The Board of Directors believes having an independent Chairman of the Board is the appropriate leadership structure for the Board of Directors at this particular time. The Board of Directors believes this structure ensures a greater role for the independent directors in the oversight of the Company, as well as their active participation in setting agendas and establishing priorities and procedures for the work of the Board of Directors. The Board of Directors also believes its administration of risk oversight, as discussed below, has not affected the Board's leadership structure.

The Board of Directors oversees the Company’s risk management process, while executive management oversees and manages risk on a day-to-day operational basis. The Board of Directors receives regular reports from executive management on areas of material risk to the Company, including operational, financial, legal, regulatory and strategic risks. While the Board of Directors is ultimately responsible for risk oversight, each of the committees of the Board of Directors assists in fulfilling these oversight responsibilities. The Audit Committee oversees management of financial risks by identifying key areas of risk for the Company, reviewing management's policies, programs and policies to deal with risk, identifying members of management whose responsibility it is to manage risks and receiving reports from such persons. The Compensation and Governance Committee is responsible for overseeing the management of risks relating to corporate governance and the compensation of executives, employees and non-employee directors. The independent members of the board manage risks associated with Board composition, including the independence of Board members. The Chair of the relevant Board committee reports on its discussions regarding risk management to the full Board of Directors, enabling the Board of Directors and its committees to coordinate the risk oversight roles.

Director Independence

Our Board of Directors has ~~determined~~undertaken ~~that~~a ~~four~~review of ~~our~~the independence of each director. ~~nominees~~Based on information provided by each director concerning her or his background, employment and affiliations, our Board of Directors has determined each of Messrs. ~~Reichman,~~ Norman, Dissinger, Reichman and Sirkin, ~~are~~do ~~“independent~~not ~~directors”~~have ~~within~~any relationships that would interfere with the ~~meaning~~exercise of independent judgment in carrying out the ~~listing~~responsibilities of ~~standards~~a director and that each of these directors is “independent” as that term is defined under The Nasdaq Stock Market ~~(“Nasdaq”)~~. In In making ~~its~~these ~~independence~~ determinations, our Board of Directors considered ~~all~~the current and prior relationships ~~between~~that ~~any~~each non-employee director has with our Company and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the ~~directors~~beneficial ~~and~~ownership of our ~~Company~~shares by each non-employee director and the transactions described in the section titled “Certain Relationships and Related Party Transactions.”

~~Committee of our Board of Directors~~57

~~Our Board~~ Committees of ~~Directors has an Audit Committee, a Compensation and Governance Committee (the “Compensation Committee”), and a Mergers and Acquisitions and Investments Committee.~~ Our ~~entire~~ Board of Directors serves in place of a Nominating Committee, and our independent directors are responsible for, among other things, identifying individuals qualified to become members of our Board of Directors and approving director candidates for election to our Board of Directors.

Our Board of Directors has an Audit Committee, a Compensation and Governance Committee (the “Compensation Committee”), and a Mergers and Acquisitions and Investments Committee. Our entire Board of Directors serves in place of a Nominating Committee, and our independent directors are responsible for, among other things, identifying individuals qualified to become members of our Board of Directors and approving director candidates for election to our Board of Directors. The composition and responsibilities of each of the committees of our Board of Directors are described below. Members serve on these committees until their death, resignation or until otherwise determined by our Board of Directors. Our Board of Directors may establish other committees as it deems necessary or appropriate from time to time.

Audit Committee

The Audit Committee represents our Board of Directors in discharging its responsibilities relating to our accounting, reporting, financial and internal control practices, and any related party transactions. Among its responsibilities, the Audit Committee: is responsible for selecting, retaining or replacing our independent auditors; ~~reviews~~reviewing the scope, fees and result of their audit; ~~reviews~~reviewing the independence of ~~the~~our auditors; ~~reviews~~reviewing and ~~approves~~approving any non-audit services and related fees; isbeing informed of ~~their~~the auditors significant audit findings and management'’s responses; ~~reviews~~reviewing the adequacy of our accounting and financial personnel; ~~reviews~~reviewing our financial reporting processes and internal controls over financial reporting and disclosure controls and procedures; and ~~oversees~~overseeing legal and regulatory compliance matters, including reviewing and approving all significant related party transactions and potential conflict of interest situations. In ~~The~~addition, our Audit Committee reviews ~~the~~our quarterly and annual financial statements and recommends their acceptance to ~~the~~our Board of Directors. The Audit Committee also periodically reviews, in consultation with the Compensation Committee, our Code of Conduct and Code of Ethics, and establishes and reviews (a) procedures for receipt, retention and treatment of complaints regarding our accounting, internal controls and auditing matters; and (b) procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The Audit Committee operates under a written charter setting forth the functions and responsibilities of the committee, which is reviewed by the committee on a periodic basis, and by the Board of Directors as appropriate. A current copy of the charter is available on our website at www.jonessoda.com under the Investor Relations tab under the heading “Corporate Governance.”

~~-55-~~The Audit Committee is currently comprised of Messrs. Dissinger (Chair), Sirkin, and Reichman. The Board of Directors has determined that, after consideration of all relevant factors, Messrs. Dissinger, Sirkin, and Reichman qualify as an “independent” director under applicable SEC and Nasdaq rules. Each member of the Audit Committee is able to read and understand fundamental financial statements, including our consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows. Further, no member of the Audit Committee has participated in the preparation of our consolidated financial statements, or those of any of our current subsidiaries, at any time during the past three years. The Board of Directors have determined that Ronald Dissinger qualifies as an “audit committee financial expert” as defined under applicable SEC rules.

Table of Contents

The audit committee is currently comprised of Messrs. Dissinger, (Chair), Sirkin, and Reichman. The Board of Directors have determined that, after consideration of all relevant factors, Messrs. Dissinger, Sirkin, and Reichman qualify as an “independent” director under applicable SEC and Nasdaq rules. Each member of the Audit Committee is able to read and understand fundamental financial statements, including our consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows. Further, no member of the Audit Committee has participated in the preparation of our consolidated financial statements, or those of any of our current subsidiaries, at any time during the past three years. The Board of Directors have determined that Ronald Dissinger qualifies as an “audit committee financial expert” as defined under applicable SEC rules.

Compensation and Governance Committee

The Compensation Committee is currently comprised of ~~Messrs~~Mr. Sirkin (Chair), ~~Reichman~~ Mr. Norman, and ~~Norman~~since November 12, 2024, Mr. Dissinger. Our Board of Directors has determined that, after consideration of all relevant factors, each of the directors who served on the Compensation Committee during the year ended ~~2023~~December 31, 2024, except for Mr. Murray who briefly served on the Compensation Committee from October 25, 2024 to November 12, 2024 to replace Mr. Norman who resigned from the Compensation Committee on October 25, 2024 in connection with his appointment as the Company’s Interim Chief Executive Officer, qualified as “independent” and “non-employee” directors under applicable Nasdaq and SEC rules and qualified as an “outside director” pursuant to the Internal Revenue Code and the regulations promulgated thereunder. The Compensation Committee makes recommendations to our Board of Directors regarding our general compensation policies as well as the compensation plans and specific compensation levels for our executive officers.

The Compensation Committee has a number of functions and responsibilities as delineated in its written charter, which is reviewed by the committee on an annual basis, and by our Board of Directors as appropriate. A ~~current~~ copy of the Compensation Committee charter is available on our website at www.jonessoda.com under the Investor Relations tab under the heading “Corporate Governance.”

The primary functions of the Compensation Committee are to (i) assist our Board of Directors with its responsibilities relating to compensation of our Chief Executive Officer and other executives, employees and directors who are not our employees, (ii) advise our Board of Directors in connection with our retirement, welfare and other benefit plans, and (iii) develop, update, as necessary, and recommend to our Board of Directors corporate governance principles and policies applicable to us, and monitor compliance with such principles and policies. The Compensation Committee, when appropriate, may delegate authority to subcommittees and may delegate authority to one or more designated members of the committee, our Board of Directors or our officers. Additionally, the Compensation Committee, in its sole discretion, may retain compensation consultants, independent counsel, accounting and other professionals without seeking approval of our Board of Directors with respect to the selection, fees or retention terms for these advisors. The Compensation Committee did not retain a compensation consultant in 2023.58

~~Under~~The primary ~~its~~functions ~~charter,~~of the Compensation Committee ~~establishes~~are ~~and~~to ~~annually~~(i) ~~reviews~~assist ~~policies~~our ~~regarding~~Board ~~executive~~of ~~compensation.~~Directors ~~With~~with ~~respect~~its responsibilities relating to compensation of our Chief Executive Officer, ~~the~~and ~~Compensation~~other ~~Committee~~executives, ~~solicits~~employees ~~input~~and ~~from~~directors ~~the~~who ~~full~~are ~~Board~~not ofour ~~Directors and~~employees, ~~based~~(ii) onadvise ~~that~~our ~~input,~~Board ~~develops~~of ~~corporate~~Directors in ~~goals~~connection ~~and~~with ~~objectives~~our ~~relevant~~retirement, towelfare ~~the~~and ~~Chief~~other ~~Executive~~benefit ~~Officer’s compensation~~plans, ~~evaluates~~(iii) ~~the~~develop, ~~Chief~~update, ~~Executive~~as ~~Officer’s~~necessary, ~~performance in light of those goals~~ and ~~objectives~~recommend ~~and recommends~~ to our Board of Directors ~~the~~corporate ~~Chief~~governance ~~Executive~~principles ~~Officer’s compensation based on this evaluation~~ and ~~other~~policies ~~relevant~~applicable ~~information.~~to ~~For other executive officers~~us, ~~the~~and ~~Chief~~monitor ~~Executive~~compliance ~~Officer~~with ~~provides~~such ~~the~~principles ~~Compensation~~and ~~Committee~~policies ~~a performance assessment~~ and (iv) ~~recommendation~~administer ~~regarding~~our ~~performance~~Clawback ~~goals and compensation~~Policy. The Compensation Committee, ~~reviews~~when ~~this information and the recommendations~~appropriate, asmay ~~well~~delegate asauthority ~~other~~to ~~relevant~~subcommittees ~~information,~~ and ~~recommends~~may ~~the~~delegate authority ~~compensation~~to ofone ~~these~~or ~~officers~~more ondesignated anmembers ~~annual~~of ~~basis~~the tocommittee, our Board of Directors ~~for~~or ~~approval~~our officers. ~~With~~Additionally, ~~respect~~the toCompensation Committee, ~~equity~~in ~~grants~~its sole discretion, ~~the~~may ~~Compensation~~retain ~~Committee~~compensation ~~has~~consultants, ~~the~~independent ~~authority~~counsel, accounting and other professionals without seeking approval ~~from~~of our Board of Directors, towith ~~approve~~respect ~~all equity awards~~ to ~~employees~~the ~~and executive officers~~selection, ~~although~~fees ~~our~~or ~~general~~retention ~~practice~~terms isfor tothese ~~obtain~~advisors. ~~approval~~The ~~from~~Compensation Committee ~~our~~did ~~Board~~not ofretain ~~Directors~~a ofcompensation ~~equity~~consultant ~~awards~~in 2024.

Under its charter, the Compensation Committee establishes and annually reviews policies regarding executive compensation. With respect to our Chief Executive Officer, the Compensation Committee solicits input from the full Board of Directors and, based on that input, develops corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of those goals and objectives and recommends to our Board of Directors the Chief Executive Officer’s compensation based on this evaluation and other relevant information. For other executive officers, the Chief Executive Officer provides the Compensation Committee with a performance assessment and recommendation regarding performance goals and compensation. The Compensation Committee reviews this information and the recommendations, as well as other relevant information, and recommends the compensation of these officers on an annual basis to our Board of Directors for approval. With respect to equity grants, the Compensation Committee has the authority, without approval from our Board of Directors, to approve all equity awards to employees and executive officers, although our general practice is to obtain approval from our Board of Directors of equity awards.

The Chief Executive Officer reports to the Compensation Committee periodically on the results of the evaluations of our executive officers (other than the Chief Executive Officer). In addition to the Chief Executive Officer’s involvement in setting individual performance goals, conducting evaluations and making compensation recommendations for other executive officers, our management team plays an active role in updating the Compensation Committee on the trends and challenges of hiring, retaining and competing for talent. The management team periodically suggests alternative forms of compensation or compensation strategies to assist the Compensation Committee in recommending to our Board of Directors compensation packages that will enable us to attract and retain key talent.

Under its charter, the Compensation Committee also reviews director compensation practices, including analysis of our practice in comparison to other companies, and recommends to our Board of Directors revisions to the Company’s director compensation program. In addition, the Compensation Committee develops, periodically reviews and recommends to our Board of Directors director and executive stock ownership guidelines, and provides oversight and recommendations to our Board of Directors regarding our tax-qualified and nonqualified benefit plans. In addition, the Compensation Committee develops and recommends to our Board of Directors procedures for selection of the Chairperson of the Board, and helps develop an annual meeting calendar for our Board of Directors. The Compensation Committee recommends to our Board of Directors, as appropriate, the number, type, functions and structure and independence of the committees of our Board of Directors, and helps determine procedures for selection of the Chief Executive Officer and assists with the development and maintenance of a succession plan. The Compensation Committee also periodically reviews, in consultation with the Audit Committee, our Code of Conduct and Code of Ethics, and consults with and supports the Audit Committee with respect to the establishment of (a) procedures for receipt, retention and treatment of complaints regarding our accounting, internal controls and auditing matters; and (b) procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The Compensation Committee also develops, reviews and recommends such other corporate governance policies and principles as it deems appropriate.

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Mergers and Acquisitions and Investment Committee

The Mergers and Acquisitions and Investments Committee examines possible strategic acquisitions and significant investments by us to formulate recommendations concerning any such possible transactions to our Board as a whole. The Mergers and Acquisitions and Investments Committee is currently comprised of Messrs. Reichman (Chair), Dissinger, and Norman.

~~Director~~Code of ~~Nominations~~Ethics ~~Process~~and Code of Conduct

Our entire Board of Directors serves in as the Nominating Committee, and our independent directors are responsible for, among other things, identifying individuals qualified to become members of our Board of Directors and approving director candidates for election to our Board of Directors, including the development of policies and procedures to assist in the performance of these responsibilities. In the event there is a vacancy on our Board of Directors, the independent members of our Board of Directors will initiate the effort to identify appropriate director candidates. The independent members of our Board of Directors will also periodically review the appropriate size of our Board of Directors, any appropriate restrictions on service on our Board of Directors, such as term limits and retirement policy, standards regarding our definition of “independence,” establish performance criteria/expectations for director performance, and oversee the criteria and method for evaluating the effectiveness of our Board of Directors. See “Considerations in Evaluating Director Nominees” for more information on our director nominating process.

Code of Business Conduct and Ethics

We have a Code of Ethics that applies to our Chief Executive Officer and other senior financial officers, as well as a Code of Conduct applicable to all directors, officers and employees. A copy of each is posted on our website at www.jonessoda.com under the Investor Relations tab, under “Corporate Governance” and under the headings “Code of Ethics” and “Code of Conduct,” respectively. If we waive any material provision of our Code of Conduct or Code of Ethics for our Chief Executive Officer or senior financial officers or substantively change the codes, we will disclose that fact on our website within four business days.

~~Anti-hedging~~59

AsEXECUTIVE AND ~~part~~DIRECTOR of our Insider Trading Policy, all of our officers, directors and employees are prohibited from engaging in short sales of our securities and any hedging or monetization transactions involving our securities. Our Insider Trading Policy further prohibits such persons from holding our securities on margin in a margin account or otherwise pledging our securities. As of December 31, 2023, none of our directors or executive officers had pledged any shares of our common stock.COMPENSATION

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows, for the fiscal years ended December 31, ~~2023~~ 2024 and ~~2022~~2023, all compensation awarded or paid by us to, or earned by, the following persons (referred to as our “Named Executive Officers” or “NEOs”):

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)(1)			Option Awards ($)(2)		All Other Compensation ($)			Total
David Knight	2023		181,731		-		-			1,172,000		-			1,353,731
David Knight (3)	2024		323,078		-		-			-		36,176			359,254
President and Chief Executive Officer	2022		-		-		-			-		-			-
Former President and Chief Executive Officer	2023		181,731		-		-			207,960		-			1,353,731
Mark Murray	2023		361,201		50,000		468,000					600	(3)		879,801
Paul Norman (4)	2024		-		-		80,000	(5)		-		-			80,000
Former President and Chief Executive Officer	2022		313,795		90,000		-			-		1,800	(3)		405,595
Former Interim Chief Executive Officer and Interim Chief Financial Officer	2023		-		-		-			-		-			-
Eric Chastain (4)	2023		208,000		-		-			28,800		1,800	(3)		238,600
Jerry Goldner	2024		250,000		-		-			225,855		-			475,855
Former Chief Operating Officer, President of the Jones Beverage Division, and Corporate Secretary	2022		200,000		35,280		-			25,000		1,800	(3)		262,080
Chief Growth Officer	2023		48,397		-		-			-		-			48,397
Joe Culp	2023		130,000		-		-			17,280		-			147,280
Gabe Carimi	2024		168,525		-		-			-		-			168,525
Interim Chief Financial Officer	2022		118,404		16,200		-			25,000		-			159,604
Former VP Operations and General Manager Mary Jones (6)	2023		-		-		-			-		-			-

(1)	Stock awards awarded to NEOs consist primarily of ~~restricted stock units (“~~RSUs”) issued under the Company’s 2022 Omnibus Equity Incentive Plan (the “2022 Plan”). The amounts shown do not reflect whether the recipient has actually realized or will realize a financial benefit from such awards. The amounts shown represent the aggregate grant date fair value of awards granted as determined in accordance with Financial Accounting Standards Board ASC Topic 718 (~~defined~~“ASC ~~below~~Topic 718”). See Note 7 to our consolidated financial statements ~~included~~ in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 (the “2024 Annual Report”) incorporated by reference herein regarding the assumptions underlying the valuation of equity awards.
(2)	Represents the aggregate grant date fair value for awards granted, as applicable, in accordance with ~~Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“~~ASC Topic 718”). See Note 7 to our consolidated financial statements ~~included~~ in ~~our~~the 2024 Annual Report onincorporated ~~Form~~by ~~10-K~~reference ~~for~~herein ~~the year ended December 31, 2023~~ regarding the assumptions underlying the valuation of equity awards.
(3)	~~Consisted~~Mr. ofKnight aceased ~~car~~to ~~allowance~~serve as President and ~~cell~~Chief ~~phone~~Executive ~~allowance~~Officer of the Company on October 25, 2024.
(4)	Mr. ~~Chastain~~Norman ~~resigned~~served as ~~the~~Interim ~~Company’s~~ Chief ~~Operating~~Executive Officer from October 25, ~~President~~2024 ofto ~~Jones~~February ~~Beverage~~5, ~~Division~~2025 and ~~Corporate~~Interim ~~Secretary~~Chief onFinancial ~~March~~Officer from November 12, 2024 to February 5, 2025. He did not receive any compensation for serving in these roles.
(5)	Mr. Norman was granted RSUs in connection with his service on the Board and as chair of the Board.
(6)	Effective as of June 13, 2025, Gabe Carimi ceased to serve as VP Operations and General Manager of Mary Jones.

Narrative Disclosure to Summary Compensation Table

The following describes the material factors necessary to understand the compensation disclosed in the Summary Compensation Table above.

David Knight. Mr. Knight, the Company'’s former President and CEO ashad ~~of June 23, 2023 has~~ an annual base salary ~~increase~~ of $350,000 as of June 23, 2023. Additionally, Mr. Knight is was eligible to receive an annual cash bonus of $175,000 (the “Annual Bonus”) in the event that the Company ~~achieves~~ achieved annual revenues in the applicable fiscal year of at least $23,452,000~~.00~~ (calculated in accordance with Generally Accepted Accounting Principles in the United States) (the “Knight Revenue Target”) and at least ($959,000) in annual adjusted EBITDA (as calculated in a manner consistent with the calculation of adjusted EBITDA in the previous fiscal year) (the “Knight EBITDA Target”). The Annual Bonus iswas to be adjusted upward by $2,500 for each 1% that the Company’s actual annual revenues and adjusted EBITDA ~~exceed~~exceeded the Knight Revenue Target and the Knight EBITDA Target, up to a maximum of $175,000 (the total Annual Bonus paid in any given year ~~shall~~ not to exceed $350,000). Based on the Company’s performance, Mr. Knight did not receive an Annual Bonus payment in either 2023 or 2024.

Pursuant to the terms of the employment agreement between the Company and David Knight, on June 8, 2023, the Board granted Mr. Knight non-58qualified stock options to purchase 4,000,000 shares of common stock of the Company pursuant to the 2022 Plan. The options were subject to time-based vesting as follows, in each case subject to Mr. Knight’s continued service through the applicable time vesting date: (1) 1,333,333 of the options vested on June 19, 2024, (2) an additional 1,333,333 of the options was scheduled to vest on June 19, 2025, and (3) the remaining 1,333,334 of the options was scheduled to vest on June 19, 2026. On October 25, 2024, Mr. Knight ceased to serve as President and Chief Executive Officer of the Company and all of his unvested options were forfeited at that time.

~~Table~~Jerry Goldner. Mr. Goldner has served as our Chief Growth Officer since October 23, 2023. Pursuant to an employment agreement between the Company and Mr. Goldner, dated October 23, 2023 (the “Goldner Employment Agreement”), Mr. Goldner is entitled to a base salary of ~~Contents~~$250,000 per year (the “Goldner Base Salary”), and is eligible for an annual cash bonus of $87,500 (the “Goldner Annual Bonus”) in the event that the Company achieves annual revenues in the applicable fiscal year of an amount established annually by the Compensation Committee (the “Goldner Revenue Target”) and in an amount in annual adjusted EBITDA (as calculated in a manner consistent with the calculation of adjusted EBITDA in the previous fiscal year) as established annually by the Compensation Committee (the “Golder EBITDA Target”). In accordance with the terms of the Goldner Employment Agreement as part of the Goldner Annual Bonus, Mr. Goldner is eligible for an additional payment if the Company’s annual revenues and adjusted EBITDA both exceed the Goldner Revenue Target and the Goldner EBITDA Target respectively by at least 1%. The Annual Bonus is to be adjusted upward by 1% of the Goldner Base Salary, up to a maximum of 15% of the Goldner Base Salary, for each 1% of the lesser of either the Company’s actual annual revenues exceeding the Goldner Revenue Target or annual adjusted EBITDA exceeding the Goldner EBITDA Target. According to the Goldner Employment Agreement, the total Goldner Annual Bonus paid in any given year shall not exceed 50% of the Goldner Base Salary. Based on the Company’s performance, Mr. Goldner did not receive a Goldner Annual Bonus in either 2023 or 2024.

Pursuant to the ~~terms~~Goldner ~~of the~~ Employment Agreement, ~~the Board~~ on ~~June~~October 823, 2023, the Board granted Mr. ~~Knight~~Goldner non-qualified stock options ~~(the “Stock Options”)~~ to purchase ~~four million (4~~1,~~000~~200,000) shares of common stock of the Company pursuant to the ~~Company’s standard option award agreement and the terms and conditions of the Company’s~~ 2022 ~~Omnibus Equity Incentive~~ Plan ~~(the “2022 Plan”)~~. The ~~Stock~~options ~~Options~~are ~~shall~~subject ~~vest~~to time-based vesting as follows, in each case subject to Mr. ~~Knight~~Goldner’s continued service through the applicable time vesting date: (1) 1400,~~333,333~~000 of the ~~Stock~~options ~~Options~~vested ~~shall vest on June 19~~October 24, 2024, (2) an additional 1400,~~333,333~~000 of the ~~Stock~~options ~~Options~~ shall vest on ~~June~~October 1924, 2025, and (3) the remaining 1400,~~333,334~~000 of the ~~Stock~~options ~~Options~~ shall vest on ~~June~~October 1924, 2026.

~~Mark Murray~~Gabe Carimi. Mr. ~~Murray,~~Carimi ~~the~~served ~~Company’s~~as ~~former~~our Vice President ~~and~~of ~~CEO~~Operations ~~had~~from anMarch ~~annual~~4, ~~base~~2024 ~~salary of~~to ~~$290~~June 13,~~000 until~~ ~~May~~2025 ~~27,~~and ~~2022~~the General Manager of Mary Jones from October 2024 to June 13, 2025 when ~~the~~he ~~Company~~ceased ~~entered~~to ~~into~~serve as VP Operations and General Manager of Mary Jones. Pursuant to an ~~employment~~offer letter ~~agreement~~dated ~~with~~February ~~Mark~~27, ~~Murray~~2024 which was terminated on June 13, 2025 (the “~~Murray~~Carimi ~~Employment~~Offer ~~Agreement~~Letter”), ~~pursuant to which~~ Mr. ~~Murray’s~~Carimi was entitled to ~~receive~~ a base salary of $~~330~~200,000~~. Effective~~ asper year, and was eligible for an annual cash bonus of ~~February~~30% ~~28,~~of ~~2023,~~his base salary in the ~~Board~~event that the Company achieved annual revenues in the applicable fiscal year of ~~Directors~~an ~~approved~~amount aestablished ~~cash~~annually ~~bonus~~by ~~for~~the ~~Mr.~~Compensation ~~Murray~~ Committee and in ~~the~~an amount in annual adjusted EBITDA (as calculated in a manner consistent with the calculation of ~~$140,000~~adjusted ~~related~~EBITDA toin ~~2022~~the ~~performance~~previous fiscal year) as established annually by the Compensation Committee. Mr. Carimi did not receive an annual bonus in 2024.

Pursuant to the terms of the Murray Employment Agreement, the Board granted to Mr. Murray one million eight hundred thousand (1,800,000) RSUs, which were to vest as follows, in each case subject to Mr. Murray’s continued service through the applicable time vesting date: (1) 600,000 of the RSUs vested on August 15, 2022, (2) 600,000 of the RSUs were to vest on May 15, 2023, and (3) the remaining 600,000 of the RSUs were to vest on August 15, 2024. However, on December 30, 2022, the Company entered into a rescission agreement with Mr. Murray, whereby each of the Company and Mr. Murray agreed to rescind and cancel for no consideration all 1,200,000 currently outstanding RSUs previously granted to Mr. Murray as well as all 600,000 shares of the Company’s common stock previously issued to Mr. Murray as a result of the vesting of 600,000 RSUs in August 2022. On February 15, 2023, in connection with the terms of the Murray Employment Agreement the Board granted 1,800,000 RSUs to Mark Murray that vest into shares of the Company’s common stock on a one-for-one basis in accordance with the following vesting schedule: (i) 600,000 RSUs on February 15, 2023, (ii) 600,000 RSUs on May 15, 2023, and (iii) 600,000 RSUs on August 15, 2024.61

~~On June 23, 2023 Mr. Murray retired from the~~ The Company. Inalso ~~connection~~agreed ~~with~~in ~~Mr. Murray's retirement,~~ the ~~Company~~Carimi ~~and~~Offer ~~Mr.~~Letter ~~Murray~~to ~~entered~~grant ~~into a Release of Claims Agreement, dated June 8, 2023 (the “Severance Agreement”). Pursuant~~ to ~~the terms of the Severance Agreement,~~ Mr. ~~Murray~~Carimi isnon-qualified ~~entitled~~stock options to ~~receive~~purchase ~~an aggregate severance amount of $221~~500,~~346.15~~000 ~~(representing~~shares ~~his prorated base salary for the remainder~~ of ~~2023~~common stock ~~and 50%~~ of ~~his~~the ~~minimum~~Company ~~bonus~~pursuant ~~for~~to ~~2023) and a continuation of his health benefits for~~ the ~~remainder~~2022 ~~of 2023. Mr. Murray’s 600~~Plan,~~000~~ ~~vested stock options will also continue~~ to bevest ~~exercisable~~annually ~~until~~in ~~the~~equal ~~earlier~~installments ofover ~~six~~a ~~months~~three-year period from the date ~~he is no longer a director on the Board, or their respective expiration date, and his 600,000 unvested RSUs will continue to be subject the terms~~ of ~~such RSUs as long as he continues to serve on the Board~~grant.

~~Eric~~Outstanding Equity ~~Chastain. Mr.~~Awards Chastain, Company's former Chief Operating Officer since June 2014, as Corporate Secretary since December 2015 and as the President of the Jones Beverage Division since November 8, 2021. Mr. Chastain previously served as Vice President of Operations from 2002 until June 2014 when he was promoted to Chief Operating Officer. On February 16, 2023, upon the recommendation of the Company’s Compensation and Governance Committee Mr. Chastain’s annual base salary was increased from $200,000 per year to $208,000 per year, retroactively effective as of January 1, 2023. Effective as of February 28, 2023, the Board of Directors approved a cash bonus for Mr. Chastain in the amount of $36,000 related to 2022 performance. In February 2023, we awarded to Mr. Chastain stock options to purchase 120,000 shares of the Company’s common stock, which have an exercise price of $0.24 per share and vest as follows: (i) 25% vest on February 15, 2024 and (ii) an additional 1/48th vest at ~~the~~Fiscal ~~conclusion of each additional one~~Year-month period thereafter, in each case subject to Mr. Chastain’s continued employment with us. In February 2022, we awarded to Mr. Chastain stock options to purchase 50,000 shares of the Company’s common stock, which have an exercise price of $0.50 per share and vest as follows: (i) 25% vest on February 2, 2023 and (ii) an additional 1/48th vest at the conclusion of each additional one-month period thereafter, in each case subject to Mr. Chastain’s continued employment with us. During 2023 and 2022, Mr. Chastain was paid a $150 per month cell phone allowance. Eric Chastain resigned from the Company effective March 12, 2024. End

~~Joe~~The following ~~Culp.~~table ~~Mr.~~presents ~~Culp~~information ~~has~~about ~~served~~outstanding asequity ~~Interim~~awards ~~Chief~~held ~~Financial~~by ~~Officer~~each ~~and Principal Accounting Officer since March 15, 2022, our Director~~ of ~~Finance since January 1, 2023 and~~ our ~~Principal~~Named ~~Accounting~~Executive ~~Officer~~Officers ~~since March 8, 2021. Previously, Mr. Culp served~~ as our Controller from March 8, 2021 to January 1, 2023. He has served in various financial roles since joining us in January 2019, including as Principal Financial Officer from March 8, 2021 to November 23, 2021. Effective as of ~~January~~December 131, 2023, Mr. Culp’s annual base salary was increased from $120,000 to $130,200. In addition, effective February 28, 2023, the Board approved a cash bonus in the amount of $16,200 for Mr. Culp. In February 2023, we awarded to Mr. Culp stock options to purchase 72,000 shares of the Company’s common stock, which have an exercise price of $0.24 per share and vest as follows: (i) 25% vest on February 16, 2024 ~~and (ii) an additional 1/48th vest at the conclusion of each additional one-month period thereafter, in each case subject to Mr~~. Culp’s continued employment with us. In addition, in February 2022, we awarded to Mr. Culp stock options to purchase 50,000 shares of the Company’s common stock, which have an exercise price of $0.50 per share and vest as follows: (i) 25% vest on February 3, 2023, and (ii) an additional 1/48th vest at the conclusion of each additional one-month period thereafter, in each case subject to Mr. Culp’s continued employment with us.

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			Option Awards
			Number of Securities Underlying Unexercised Options (#)				Option Exercise		Option Expiration
Name	Grant Date		Exercisable		Unexercisable		Price ($)		Date
David Knight ⁽¹⁾		6/8/2023		1,333,333		-	$	0.21		1/25/2025
Paul Norman ⁽²⁾		-		-		-		-		-
Jerry Goldner ⁽³⁾		2/16/2024		400,000		400,000	$	0.26		2/16/2034
Jerry Goldner ⁽³⁾		3/26/2024		-		400,000	$	0.2289		3/26/2034
Gabe Carimi ⁽⁴⁾		-		-		-		-

Table of Contents

(1)	Mr. Knight’s was granted 4,000,000 stock options granted in June 2023, of which 1,333,333 were vested at the time that Mr. Knight ceased to serve as President and Chief Executive Officer of the Company on October 25, 2024. All unvested stock options held by Mr. Knight were forfeited on the date that he ceased to serve as an officer of the Company.

(2)	Mr. Norman’s stock compensation is presented under the Board of Directors Compensation information.

(3)	Mr. Goldner was granted 800,000 stock options on February 14, 2024. Of these, 50% will vested October 24, 2024, and the remaining 50% will vest on October 24, 2025. Additionally, he was granted 400,000 options, which will vest on October 24, 2026 (in each case, subject to Mr. Goldner’s continued service with the Company).

(4)	Effective as of June 13, 2025, Gabe Carimi ceased to serve as VP Operations and General Manager of Mary Jones.

~~Outstanding Equity Awards at Fiscal Year-End 2023 Table~~62

The following table presents information about outstanding equity awards held by each of our Named Executive Officers as of December 31, 2023.

		Option Awards
		Number of Securities Underlying Unexercised Options (#)
Name	Grant Date	Exercisable		Unexercisable		Option Exercise Price ($)	Option Expiration Date
David Knight (1)	6/8/2023	—		4,000,000	$	0.21	6/8/2033
Mark Murray (2)	5/18/2021	100,000		—		0.59	5/18/2031
	11/3/2020	400,000	(5)	—		0.17	11/3/2030
	11/3/2020	100,000	(5)	—		0.17	11/3/2030
Eric Chastain (3)	2/16/2023	—		120,000		0.24	2/16/2033
	2/3/2022	22,917		27,083		0.50	2/3/2032
	3/23/2021	50,000	(5)	—		0.49	3/23/2031
	3/26/2020	50,000	(5)	—		0.22	3/26/2030
	3/6/2018	25,000	(5)	—		0.35	3/6/2028
	3/6/2018	25,000	(5)	—		0.35	3/6/2028
	12/8/2016	50,000		—		0.49	12/8/2026
	12/8/2016	50,000		—		0.49	12/8/2026
	11/18/2015	50,000		—		0.41	11/18/2025
Joe Culp (4)	2/16/2023	—		72,000		0.24	2/16/2033
	2/3/2022	22,917		27,083		0.50	2/3/2032
	3/23/2021	50,000	(5)	—		0.49	3/23/2031
	11/5/2019	25,000	(5)	—		0.40	11/5/2029
	1/24/2019	25,000	(5)	—		0.28	1/24/2029

		Stock Awards
Name	Grant Date	Number of shares or units of stock that have not vested (#)		Market value of shares of units of stock that have not vested ($)		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)		Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
Mark Murray (2)	2/15/2023		600,000	$	156,000		-	$	-

(1)

Mr. Knight's stock options vest as follows (in each case, subject to Mr. Knight’s continued service with the Company): •4,000,000 stock options granted in June 2023 vest over a three-year period; 1,333,333 of the Stock Options vest on June 19, 2024, the next 1,333,333 of the Stock Options vest on June 19, 2025, and the remaining 1,333,334 of the Stock Options vest on June 19, 2026.

(2)

Mr. Murray's stock options and RSUs vest as follows (in each case, subject to Mr. Murray’s continued service on the Board of Directors): •1,800,000 RSUs were granted to Mark Murray in February of 2023 that vest into shares of the Company’s common stock on a one-for-one basis, 1,200,000 have already vested and have been released to Mr. Murray and the remaining 600,000 RSUs vest on August 15, 2024; •100,000 stock options granted in May 2021 all vested in 2022 in connection with certain quantitative performance metrics that were met; •400,000 stock option granted in November 2020 vest over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter, and •100,000 stock options granted in November 2020 were fully vested upon grant.

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(3)	Mr. Chastain's stock options vest as follows (in each case, subject to Mr. Chastain’s continued service with the Company): •Stock options granted in February 2023 vest over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; •Stock options granted in February 2022 vest over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; •Stock options granted in March 2021 vested over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; •Stock options granted in March 2020 vested over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; •For the stock options granted in March 2018, 50% vest over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; and 50% vested in March 2019 after certain performance metrics were met; •Stock options granted in December 2016 vested in 2017 as certain quantitative performance metrics were met; •Stock options granted in December 2016 vested over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter, and •Stock options granted in November 2015 vested over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter;
(4)	Mr. Culp's stock options vest as follows (in each case, subject to Mr. Culp’s continued service with the Company): •Stock options granted in February of 2023 vest over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; •Stock options granted in February of 2022 vest over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; Stock options granted in March 2021 vested over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; •Stock options granted in November 2019 vested over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter; and •Stock options granted in January 2019 vested over a period of 48 months, with 25% vesting after one year and an additional 1/48th vesting each one-month period of continuous service completed thereafter.
(5)	As described more fully below in the Additional Narrative Disclosure Section regarding the Company’s 2011 Incentive Plan (the “2011 Plan”), the vesting of this award was accelerated by the Company’s Board of Directors on September 30, 2021.

Additional Narrative Disclosure

On March ~~September 30~~15, ~~2021~~2022, ~~the~~our Board ofadopted ~~Directors~~the 2022 Plan, which became effective upon approval by our shareholders on May 16, 2022. Under the 2022 ~~recommendation~~Plan, the sum of (i) 10,000,000 shares of the ~~Compensation~~Company’s ~~Committee~~common stock, ~~approved~~plus an(ii) ~~amendment~~the tonumber of shares of common stock reserved, but unissued under the 2011 Plan, toplus ~~decrease~~(iii) the number of shares of common stock underlying forfeited awards under the 2011 Plan are initially available for issuance ~~pursuant~~of ~~to future~~ awards under the ~~2011~~2022 Plan. ~~from 4~~Additionally,~~785,597~~ the number of shares of the Company’s common stock available toreserved ~~2,500,000~~under ~~shares~~the of2022 ~~common~~Plan ~~stock.~~is Insubject ~~addition,~~to an annual increase on the ~~Board~~first day of ~~Directors~~each ~~approved~~calendar anyear ~~amendment~~beginning towith the ~~outstanding~~first January ~~awards~~1 ~~previously~~following ~~granted~~the ~~under~~effective date of the ~~2011~~2022 Plan toand ~~provide~~ending ~~that~~with ~~upon~~the last January 1 during the ~~closing~~initial ten-year term of the ~~statutory~~2022 Plan, ~~plan~~equal to the lesser of ~~arrangements~~(A) ~~under~~4% of the ~~Business~~shares ~~Corporations~~of ~~Act~~the Company’s common stock outstanding (~~British~~which ~~Columbia)~~shall ~~between~~include shares issuable upon the ~~Company~~exercise or conversion of all outstanding securities or rights convertible into or exercisable for shares, including without limitation, preferred stock, warrants and ~~Pinestar~~employee ~~Gold~~options ~~Corp.~~to ~~(“Plan~~purchase ofany ~~Arrangement”~~shares), on the ~~vesting~~final day of ~~all~~the ~~awards~~immediately ~~outstanding~~preceding ascalendar year and (B) such lesser number of ~~September~~shares 30of common stock as determined by our Board. The Company may grant incentive stock options, non-statutory ~~2021~~stock ~~shall~~options, bestock ~~accelerated~~appreciation rights, RSUs, restricted stock units and ~~such~~other stock-based awards ~~shall~~to ~~thereafter~~participants ~~become~~to acquire ~~immediately~~shares ~~vested~~of inCompany ~~full~~common ~~and~~stock under the ~~restrictions~~2022 ~~thereon shall lapse~~Plan. The 2022 Plan ofwill ~~Arrangement~~be ~~closed~~administered onby ~~February~~the ~~15,~~plan administrator (as defined in the 2022 Plan.

On March 15, 2022, our Board of Directors adopted the 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 2011 Incentive Plan (the “2011 Plan”), plus (iii) the number of shares of common stock underlying forfeited awards under the 2011 Plan are initially available for issuance of awards under the 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) four percent (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 Company may grant incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, 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 Compensation Committee.

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Compensation Practices

We have evaluated the risks arising from our compensation policies and practices for our employees and concluded that such risks are not reasonably likely to have a material adverse effect on the Company. In this regard, the following factors, among others, were considered:

● Compensation is in line with the Company’s business plan and discourages inappropriate risk-taking for short-term gains;; ● Long-term incentive compensation is primarily in the form of stock options that generally vest over multiple year periods, thereby aligning the interests of management and other key employees with the long-term interests of our shareholders; ● Annual cash bonuses can be both discretionary, and in the case of certain executives, governed by a fixed formula as outlined in an employment agreement; and ● Sales commissions are not an element of our compensation practices for our Named Executive Officers or other senior management.

●Company Policies ~~Long-term~~and ~~incentive~~Practices ~~compensation~~Related isto ~~primarily in~~ the ~~form~~Grant of ~~stock~~Certain ~~options~~Equity ~~that~~Awards ~~generally~~Close ~~vest~~in ~~over~~Time ~~multiple~~to ~~year periods, thereby aligning~~ the ~~interests~~Release of ~~management~~Material ~~and~~Nonpublic ~~other key employees with the long-term interests of our shareholders;~~Information

●The Compensation ~~Annual~~Committee ~~cash~~last ~~bonuses~~granted ~~are~~a ~~discretionary~~stock ~~and~~option ~~are~~in February 2025. The Company does not ~~governed~~(i) bygrant stock options or similar awards to directors, officers and significant shareholders who file reports with the SEC under Section 16 (a) ~~fixed~~under ~~formula;~~the Exchange Act or other Vice Presidents and above who directly report to the Chief Executive Officer, in anticipation of the release of material nonpublic information that is likely to result in changes to the price of the Company’s shares of common stock, such as a significant positive or negative earnings announcement, or (ii) time the public release of such information based on stock option grant dates. In addition, the Company does not grant stock options or similar awards during the four business days prior to or the one business day following the filing of periodic reports or the filing or furnishing of a Current Report on Form 8-K that discloses material nonpublic information. These restrictions do not apply to RSUs or other types of equity awards that do not include an exercise price related to the market price of the Company’s stock on the date of grant. The Company typically grants annual retention stock options to all of its employees during the Compensation Committee meeting taking place in the first quarter of each year. The Company also grants stock options to new hires soon after the employee start date.

~~● Sales commissions are not an element of our compensation practices for our Named Executive Officers or other senior management.~~63

The Company’s executive officers would not be permitted to choose the grant date for any stock option grants. During fiscal 2024, none of the Company’s named executive officers were awarded stock options.

Director Compensation

The following table sets forth information with respect to compensation paid by us to our non-employee directors ~~(all directors except for Mr. Murray)~~ during the last completed fiscal year ended December 31, ~~2023~~2024:

(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
		Fees Earned or Paid in Cash				Stock Awards(1)			Option Awards(2)		Non-Equity Incentive Plan Compensation		Change in Pension Value & Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
					Change in
Name		($)				($)			($)		($)		($)		($)		($)
					Pension Value &
Paul Norman(3)			-				80,000	(3)		-		-		-		-		(3	)
	Fees				Nonqualified
Clive Sirkin			-				80,000			-		-		-		-		80,000
	Earned or			Non-Equity	Deferred
Ronald Dissinger (4)			-				80,000			-		-		-		-		80,000
	Paid in	Stock	Option	Incentive Plan	Compensation	All Other
Gregg Reichman			-				80,000			-		-		-		-		80,000
	Cash	Awards	Awards(1)	Compensation	Earnings	Compensation	Total
Mark Murray			-				65,000			-		-		-		-		65,000
Name	($)	($)	($)	($)	($)	($)	($)
Chad Bronstein (5)			-				-			-		-		-		-		-
Paul Norman	35,000	-	320,250	-	-	-	355,250
Clive Sirkin	30,000	-	234,450	-	-	-	264,450
Ronald Dissinger	-	-	94,050	-	-	-	94,050
Gregg Reichman	-	-	101,070	-	-	-	101,070
Chad Bronstein	21,000	-	171,900	-	-	-	192,900
Jamie Colbourne (2)	32,000	-	226,200	-	-	-	258,200

(1) The amounts in this column represent the aggregate grant date fair values for stock option awards, computed in accordance with FASB ASC Topic 718 for awards granted during the current year. For a discussion of valuation assumptions, see Note 7 to our financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

	(1)	The amounts in this column represent the aggregate grant date fair values for stock awards, computed in accordance with Accounting Standards Codification (“ASC”) Topic 718 for awards granted during the current year. For a discussion of valuation assumptions, see Note 7 to our financial statements in our 2024 Annual Report incorporated by reference herein.

	(2)	The amounts in this column represent the aggregate grant date fair values for stock option awards, computed in accordance with ASC Topic 718 for awards granted during the current year. For a discussion of valuation assumptions, see Note 7 to our financial statements in our 2024 Annual Report incorporated by reference herein.

	(3)	Mr. Norman served as Interim Chief Executive Officer from October 25, 2024 to February 5, 2025 and Interim Chief Financial Officer from November 12, 2024 to February 5, 2025 but did not receive any additional compensation for serving in such capacity. Mr. Norman’s compensation for service on the Board is reported in the summary compensation table above.

	(4)	Mr. Dissinger served as Interim Chief Financial Officer of the Company from November 4, 2024 to November 12, 2024 but did not receive any additional compensation for serving in such capacity.

	(5)	Mr. Bronstein did not stand for re-election to the Board at the annual meeting of the Company’s shareholders held on May 13, 2024.

~~(2)~~In February ~~Jamie~~2023, ~~Colbourne~~the ~~resigned~~Board ~~from~~adopted a non-employee director compensation plan that consisted of a combination of cash and stock options. On June 26, 2024, Messrs. Norman, Sirkin, Dissinger and Reichman were granted 581,394 RSUs as compensation for service on the Board as well as service as chair of either the Board or a Board committee in 2024, while Mr. Murray was granted 472,383 RSUs for service on ~~April~~the Board 1in 2024. Such RSUs vested according to the following vesting schedule: 50% on June 30, ~~2023~~2024, 25% on September 30, 2024 and the remaining 25% on December 31, 2024.

InWe also ~~February~~maintain ~~2023,~~liability ~~the~~insurance ~~Board~~for ~~adopted~~all ~~a non-employee director compensation plan that consisted~~ of aour ~~combination~~directors ~~of cash~~ and ~~stock~~executive ~~options and on February 15, 2023 the Board granted the following stock options under the 2022 Plan to non-employee directors as consideration for their service on the Board:~~officers.

● 420,000 stock options to Chad Bronstein with an exercise price of $0.26 per share and the following vesting schedule: (i) 140,000 stock options vested upon issuance, (ii) 140,000 stock options will vest on February 15, 2024, and (iii) the remaining 140,000 stock options will vest on February 15, 2025;64

● 750,000 stock options to Paul Norman with an exercise price of $0.26 per share and the following vesting schedule: (i) 250,000 stock options vested upon issuance, (ii) 250,000 stock options will vest on May 15, 2023, and (iii) the remaining 250,000 stock options will vest on August 15, 2024;

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● 120,000 stock options to Paul Norman as consideration for his service as Chair of the Board, with an exercise price of $0.26 per share and the following vesting schedule: (i) 40,000 stock options vested upon issuance, (ii) 40,000 stock options will vest on February 15, 2024, and (iii) the remaining 40,000 stock options will vest on February 15, 2025;

● 750,000 stock options to Jamie Colbourne with an exercise price of $0.26 per share and the following vesting schedule: (i) 250,000 stock options vested upon issuance, (ii) 250,000 stock options will vest on May 15, 2023, and (iii) the remaining 250,000 stock options will vest on August 15, 2024;

● 120,000 stock options to Jamie Colbourne as consideration for his service as Chair of the Audit Committee, with an exercise price of $0.26 per share and the following vesting schedule: (i) 40,000 stock options vested upon issuance, (ii) 40,000 stock options will vest on February 15, 2024, and (iii) the remaining 40,000 stock options will vest on February 15, 2025;

● 420,000 stock options to Clive Sirkin with an exercise price of $0.26 per share and the following vesting schedule: (i) 140,000 stock options vested upon issuance, (ii) 140,000 stock options will vest on May 15, 2023, and (iii) the remaining 140,000 stock options will vest on August 15, 2024; and

● 120,000 stock options to Clive Sirkin as consideration for his service as Chair of the Compensation and Governance Committee, with an exercise price of $0.26 per share and the following vesting schedule: (i) 40,000 stock options vested upon issuance, (ii) 40,000 stock options will vest on February 15, 2024, and (iii) the remaining 40,000 stock options will vest on February 15, 2025.

Additionally, on February 15, 2023, the Board approved the following one-time cash payments to the then current non-employee directors on the Board: (i) Chad Bronstein - $21,000; (ii) Clive Sirkin - $30,000; (iii) Jamie Colbourne - $32,000; and (iv) Paul Norman - $35,000.

On April 3, 2023, the Board, upon the recommendation of the Compensation Committee granted the following stock options to Gregg Reichman in connection with his appointment to the Board:

● 140,000 stock options with an exercise price of $0.236 per share and the following vesting schedule: (i) 47,000 stock options on April 3, 2024, (ii) 47,000 stock options on April 3, 2025, and (iii) the remaining 46,000 stock options on April 3, 2026;

● 120,000 stock options as consideration for his service as the Chair of the Mergers and Acquisitions and Investment Committee of the Board, with an exercise price of $0.236 per share and the following vesting schedule: (i) 40,000 stock options on April 3, 2024, (ii) 40,000 stock options on April 3, 2025, and (iii) the remaining 40,000 stock options on April 3, 2026;

On May 25,2023, the Board decided to amend its policy concerning non-employee director compensation to remove the cash compensation portion and only issue stock options. On May 25, 2023 the Board granted the following stock options under the 2022 Plan to non-employee directors as consideration for their service on the Board:

● 300,000 stock options to Chad Bronstein with an exercise price of $0.21 per share and the following vesting schedule: (i) 100,000 stock options on January 2, 2024, (ii) 100,000 stock options on January 2, 2025, and (iii) the remaining 100,000 stock options on January 2, 2026;

● 450,000 stock options to Ronald Dissinger with an exercise price of $0.21 per share and the following vesting schedule: (i) 150,000 stock options on May 25, 2024, (ii) 150,000 stock options on May 25, 2025, and (iii) the remaining 150,000 stock options on May 25, 2026.

● 450,000 stock options to Paul Norman with an exercise price of $0.21 per share and the following vesting schedule: (i) 150,000 stock options on January 2, 2024, (ii) 150,000 stock options on January 2, 2025, and (iii) the remaining 150,000 stock options on January 2, 2026.

● 190,000 stock options to Gregg Reichman with an exercise price of $0.21 per share and the following vesting schedule: (i) 63,334 stock options on January 2, 2024, (ii) 63,333 stock options on January 2, 2025, and (iii) the remaining 63,333 stock options on January 2, 2026.

● 450,000 stock options to Clive Sirkin with an exercise price of $0.21 per share and the following vesting schedule: (i) 150,000 stock options on January 2, 2024, (ii) 150,000 stock options on January 2, 2025, and (iii) the remaining 150,000 stock options on January 2, 2026.

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In addition to cash and stock-based compensation, non-employee directors are reimbursed for their out-of-pocket expenses, in accordance with our reimbursement policies, incurred in attending meetings of the Board of Directors and committee meetings and conferences with our management. We also maintain liability insurance for all of our directors and executive officers.

PAY VERSUS PERFORMANCE

The table below shows for 2023 and 2022 the “total” compensation for Mark Murry our principal executive officer (“PEO”) until June 23, 2023, and David Knight, our current PEO and our other Named Executive Officers from the Summary Compensation Table above; the “Compensation Actually Paid” to those officers calculated using rules required by the SEC; our total shareholder return; and our net income. “Compensation Actually Paid” does not represent the value of shares received by the officers during the year, but rather is an amount calculated under Item 402(v) of Regulation S-K.

(a)	(b)		(c)		(d)		(e)		(f)		(g)
Year	Summary Compensation Table Total for PEO ($) (1)		Compensation Actually Paid to PEO ($) (2)		Average Summary Compensation Table Total for Non-PEO NEOs ($)		Average Compensation Actually paid to Non-PEO NEOs (2)($)		Value of Initial Fixed $100 Investment Based On Total Shareholder Return ($) (3)		Net loss (In thousands) ($) (4)
2023		2,233,531		1,921,531		192,940		185,007		55		(4,854	)
2022		405,595		361,845		210,842		194,084		36		(6,404	)

(1) Includes total compensation of $879,801 and $405,595 for Mark Murray for the years ended December 3, 2023 and 2022, respectively, and total compensation of $1,353,731 for David Knight during the year ended December 31, 2023.

(2) Reflects compensation actually paid to our PEO and non-PEO NEOs in 2023 and 2022, consisting of the respective amounts set forth in column (b) and (d) of the table above, adjusted as set forth in the following table, as determined in accordance with SEC rules:

	2023 – PEO ($) (5)			2022 – PEO ($)			2023-Non-PEO NEOs ($)			2022 -Non-PEO NEOs ($)
Summary Compensation Table (“SCT”) Total Compensation		2,233,531			405,595			192,940			210,842
Deduct: Amounts Reported under the "Option Awards" and Equity Awards Columns in the SCT		(1,640,000	)		-			(23,040	)		(25,000	)
Add: Fair Value of Awards Granted during the year that Remain Unvested as of Year-end		1,328,000			-			23,040			25,000
Change in Fair Value from Prior Year-end to current Year-end of Awards Granted Prior to year that were Outstanding & Unvested as of Year-end		-			-			(6,500	)		-
Change in Fair Value from Prior Year-end to Vesting Date of Awards Granted Prior to year that Vested during year		-			(43,750	)		(1,433	)		(16,758	)
Compensation Actually Paid		1,921,531			361,845			185,007			194,084

(3) For the relevant fiscal year, represents the cumulative total shareholder return (TSR) of the Company for the measurement periods ending on December 31, 2023, and December 31, 2022.

(4) Reflects “Net loss” in the Company’s Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and December 31, 2022.

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Table of Contents

(5) Includes $468,000 in aggregate grant date fair value of RSUs granted to Mark Murray and $1,172,000 in aggregate grant date fair value of Stock Options granted to David Knight, minus $156,000 in aggregate grant date fair value of unvested RSUs held by Mark Murray at December 31, 2023 and $1,172,000 in aggregate grant date fair value of unvested Stock Options held by David Knight at December 31, 2023.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

~~There~~During the ~~were~~last notwo ~~transactions~~fiscal ~~since~~years, ~~January~~except 1,the ~~2023,~~loan ~~nor~~agreement ~~are~~between ~~there~~the ~~any~~Company ~~proposed~~and ~~transactions~~Mr. asNorman, ofdescried ~~the~~below, ~~date~~there ofwere ~~this~~no ~~Proxy~~transactions ~~Statement~~to which we were a party, asincluding totransactions in which the amount involved ~~exceeds~~in the transaction exceeded the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and in which any ~~related~~of ~~person~~our ~~has~~directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than ~~the~~ equity and other compensation, termination, change in control and other arrangements, which are described ~~above~~elsewhere ~~under~~in this prospectus. Except as set forth herein, we are not a party to any related party transactions and no transactions are currently proposed in which the ~~headings~~amount ~~“Director~~of ~~Compensation”~~the transaction exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years and ~~“Executive~~in ~~Compensation~~which a related person had or will have a direct or indirect material interest.”

~~The~~On May ~~Board of Directors~~7, ~~upon the recommendation of the Audit Committee~~2025, ~~has~~we ~~adopted~~entered into a ~~written~~loan ~~policy~~agreement ~~for~~with the ~~review~~Chairman ~~and~~of ~~approval~~our orBoard ~~ratification~~ of ~~related~~Directors ~~person~~in ~~transactions.~~the ~~Under~~amount ~~the~~of ~~policy~~$450,000. ~~our~~The ~~directors~~interest ~~and~~rate on ~~executive~~this ~~officers~~loan ~~are~~is ~~expected~~12% toper ~~disclose~~annum. toThe ~~our~~ principal ~~financial officer (or~~, iftogether ~~the~~with ~~transaction~~accrued ~~involves~~interest ~~the~~and ~~principal financial officer, to the CEO) (either, as applicable, the “Designated Officer”) the material facts of any transaction that could be considered~~ a ~~related~~loan ~~person~~fee ~~transaction promptly upon gaining knowledge~~ of ~~the transaction. For purposes of our policy~~$22,000 ~~a related person transaction~~ is ~~generally~~due ~~defined~~in asfull ~~any~~by October ~~transaction involving a related person as defined under Item 404(a) of Regulation S-K~~10, ~~the~~2025. ~~SEC's~~A ~~related person transaction disclosure rule~~$22,000 ~~without~~loan ~~regard~~fee tois aalso ~~dollar~~due ~~threshold~~upon ~~for such transaction~~repayment.

The Board of Directors, upon the recommendation of the Audit Committee, has adopted a written policy for the review and approval or ratification of related person transactions. Under the policy, our directors and executive officers are expected to disclose to our principal financial officer (or, if the transaction involves the principal financial officer, to the CEO) (either, as applicable, the “Designated Officer”) the material facts of any transaction that could be considered a related person transaction promptly upon gaining knowledge of the transaction. For purposes of our policy, a related person transaction is generally defined as any transaction involving a related person as defined under Item 404(a) of Regulation S-K, the SEC’s related person transaction disclosure rule, without regard to a dollar threshold for such transaction.

If the Designated Officer determines that the transaction is a related person transaction under our policy, the Designated Officer will notify the Chair of the Audit Committee and submit the transaction to the Audit Committee, which will review and determine whether to approve or ratify the transaction.

When determining whether to approve or ratify a related person transaction, the Audit Committee will review relevant facts regarding the related person transaction, including:

● the extent of the related person'’s interest in the transaction; ● whether the terms are comparable to those generally available in arm’s-length transactions; and ● whether the related person transaction is consistent with the best interests of the Company.

●The related ~~whether~~person involved in the ~~terms~~related ~~are~~person ~~comparable~~transaction may participate in the approval/ratification process only to ~~those~~provide ~~generally~~additional information ~~available~~as inneeded ~~arm'~~for the Audit Committee’s~~-length~~ ~~transactions;~~review. If any related person transaction is not approved or ratified by the Audit Committee, the Audit Committee may take such action in respect of the transaction as it may deem necessary or desirable in the best interests of the Company and its shareholders. If any related person transaction is ongoing or is part of a series of transactions, the Audit Committee may establish guidelines as necessary to appropriately review the ongoing related person transaction. After initial approval/ratification of the transaction, the Audit Committee will review the related person transaction on a regular basis (at least annually).

● whether the related person transaction is consistent with the best interests of the Company.

The related person involved in the related person transaction may participate in the approval/ratification process only to provide additional information as needed for the Audit Committee's review. If any related person transaction is not approved or ratified by the Audit Committee, the Audit Committee may take such action in respect of the transaction as it may deem necessary or desirable in the best interests of the Company and its shareholders. If any related person transaction is ongoing or is part of a series of transactions, the Audit Committee may establish guidelines as necessary to appropriately review the ongoing related person transaction. After initial approval/ratification of the transaction, the Audit Committee will review the related person transaction on a regular basis (at least annually).

The Audit Committee is authorized to administer our related person transactions policy, and may amend, modify and interpret the policy as it deems necessary or desirable. Any material amendments or modifications to the policy will be reported to the full Board of Directors at its next regularly scheduled meeting. In addition, the Audit Committee will conduct a regular review and assessment of the policy.

~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS~~65

~~AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS~~PRINCIPAL SHAREHOLDERS

The following table sets forth ~~as of August 21, 2024~~ certain information regarding the beneficial ownership of our ~~outstanding~~ common stock byas ~~the~~of ~~following~~June ~~persons~~30, or2025 ~~groups~~by:

● each ~~person~~of ~~who~~our isNamed Executive Officers; ● each of our directors; ● all of our current directors and executive officers as a group; and ● each shareholder known by us to own beneficially more than 5% of ~~the~~our ~~outstanding shares of~~ common stock;.

●Beneficial ownership is determined in accordance with the ~~Named~~rules ~~Executive~~of ~~Officers~~the ~~identified~~SEC and includes voting or investment power with respect to the securities. Shares of common stock that may be acquired by an individual or group within 60 days of June 30, 2025, pursuant to the exercise of options or warrants or conversion of preferred stock or convertible debt are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. ~~Summary~~Percentage ~~Compensation~~of ~~Table~~ownership ~~above;~~before the offering is based on 116,564,720 shares of common stock outstanding as of June 30, 2025. Percentage of ownership after the offering is based on shares of common stock issued and outstanding after the completion of this offering.

●Except as ~~each~~indicated in footnotes to this table and pursuant to applicable community property laws, we believe that the shareholders named in this table have sole voting and investment power with respect to all shares of ~~our~~common ~~directors;~~stock shown to be beneficially owned by them, based on information provided to us by such shareholders. Unless otherwise indicated, the address for each director and executive officer listed is: c/o Jones Soda Co., 1522 Western Avenue, Suite 24150, Seattle, Washington 98101.

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			Beneficial Ownership of Common Stock (1)
			Securities Currently Exercisable			Total			Percentage of Shares Beneficially owned
Name and Address of Beneficial Owner	No. of Shares		or Within 60 Days			Beneficial Ownership			Before Offering			After Offering
5% Owners
SOL Verano Blocker 1 LLC		12,601,860		-			12,601,860			10.9	%			%
Executive Officers and Directors
Scott Harvey, Chief Executive Officer		-		-			-			-			-
Brian Meadows, Chief Financial Officer		-		-			-			-			-
Mark Murray, Director		2,032,382		600,000	(2)		2,632,382			2.3	%			%
Jerry Goldner Chief Growth Officer		400,000		-			400,000			*			*
Clive Sirkin, Director		2,581,604		922,372	(3)		3,503,976			3.0	%			%
Paul Norman, Director		2,486,545		1,102,372	(4)		3,588,917	(5)		3.1	%			%
Gregg Reichman, Director		1,416,664		299,667	(6)		1,716,331			1.5	%			%
Ronald Dissinger, Director		581,393		-			581,393			*			*
All current directors and executive officers as a group (8) persons)⁽⁷⁾		9,498,588		2,924,411			11,651,606			10.4	%			%

~~Table~~* Represents beneficial ownership of ~~Contents~~less than 1%.

●(1) ~~all~~The oftable ~~our~~is ~~directors~~based ~~and~~upon information supplied by such principal shareholders, executive officers asand adirectors. ~~group~~(2) Consists of 100,000 stock options with an exercise price of $0.59 per share and 500,000 stock options with an exercise price of $0.165 per share. (3) Consists of 300,000 stock options with an exercise price of $0.209 per share, 400,000 stock options with an exercise price of $0.26 per share, 37,037 stock options with an exercise price of $0.675 per share, 104,690 stock options with an exercise price of $0.2388, per share, and 80,645 stock options with an exercise price of $0.31 per share. (4) Consists of 300,000 stock options with an exercise price of $0.209 per share, 580,000 stock options with an exercise price of $0.26 per share, 37,037 stock options with an exercise price of $0.675 per share, 104,690 stock options with an exercise price of $0.2388, per share, and 80,645 stock options with an exercise price of $0.31 per share. (5) The securities are owned by Paul Timothy Norman Trust. Paul Norman is the Trustee of Paul Timothy Norman Trust and in such capacity has the right to vote and dispose of the securities held by such trust. (6) Consists of 125,667 stock options with an exercise price of $0.209 per share and 174,000 stock options with an exercise price of $0.236 (7) Consists of Messrs. Harvey, Goldner, Norman, Sirkin, Reichman Murray, Carimi, Dissinger, Goldner, and Meadows.

As of August 21, 2024, there were 115,168,173 shares of common stock issued and outstanding. Unless otherwise indicated, each person's address is c/o Jones Soda Co., 4786 1st Avenue South,3 Suite 103, Seattle, WA 98134.66

~~Beneficial~~DESCRIPTION OF ~~ownership~~CAPITAL is determined in accordance with SEC rules and includes shares over which the indicated beneficial owner exercises voting and/or investment power. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days of August 3, 2024, are deemed outstanding for computing the percentage ownership of the person holding the options or warrants, but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated and subject to community property laws where applicable, we believe the beneficial owners of the common stock listed below, based on information furnished by them, have sole voting and investment power with respect to the shares listed opposite their names.STOCK

	Beneficial Ownership of Common Stock (1)
Name and Address of Beneficial Owner	No. of Shares		Securities Currently Exercisable or Within 60 Days		Total Beneficial Ownership		Percent of Total
5% Owners
Heavenly Rx Ltd.	9,000,000		—		9,000,000		7.8%
SOL Verano Blocker 1 LLC	13,586,710	(2)	—		13,586,710		11.8 %
Executive Officers and Directors
Mark Murray, Director	1,796,191		718,096	(3)	2,521,287		2.2%
Joe Culp, Director of Finance, Interim Chief Financial Officer	—		150,625		150,625		*
Clive Sirkin, Director	2,290,908		877,721	(4)	3,168,629		2.7%
Paul Norman, Director	2,155,849		1,097,721	(5)	3,253,570	(6)	2.8%
Gregg Reichman, Director	1,125,968		295,683	(7)	1,421,651		1.2%
Ronald Dissinger, Director	290,697		145,349	(8)	436,046		*
David Knight, President and Chief Executive Officer	—		1,333,333	(9)	1,333,333		1.1%
All current directors and executive officers as a group (9 persons)(10)	7,659,613		4,618,528		12,278,141		10.3%

The following description of our capital stock and certain provisions of our Articles of Incorporation, as amended (“Articles of Incorporation”), and Amended and Restated Bylaws (“Bylaws”) are summaries and are qualified in their entirety by reference to our Articles of Incorporation and Bylaws which are filed as exhibits to the registration statement of which this prospectus is a part.

* Less than one percent (1) The table is based upon information supplied by such principal shareholders, executive officers and directors. (2) Includes 281,345 shares of the Company’s common stock held directly by SOL Global Investments Corp. (“SOL Global”) and 13,305,365 shares of common stock held by SOL Verano Blocker 1 LLC, a wholly-owned subsidiary of SOL Global. Based on a Form 4 filed with the SEC on March 21, 2024. (3) Consists of 100,000 stock options with an exercise price of $0.59 per share, 500,000 stock options with an exercise price of $0.165 per share, and 118,096 restricted stock units that vest on September 30, 2024 (4) Consists of 150,000 stock options with an exercise price of $0.209 per share, 360,000 stock options with an exercise price of $0.26 per share, 37,037 stock options with an exercise price of $0.675 per share, 104,690 stock options with an exercise price of $0.2388, per share, 80,645 stock options with an exercise price of $0.31 per share, and 145,349 restricted stock units that vest on September 30, 2024. (5) Consists of 150,000 stock options with an exercise price of $0.209 per share, 580,000 stock options with an exercise price of $0.26 per share, 37,037 stock options with an exercise price of $0.675 per share, 104,690 stock options with an exercise price of $0.2388, per share, 80,645 stock options with an exercise price of $0.31 per share, and 145,349 restricted stock units that vest on September 30, 2024. (6) The securities are owned by Paul Timothy Norman Trust. Paul Norman is the Trustee of Paul Timothy Norman Trust and in such capacity has the right to vote and dispose of the securities held by such trust. (7) Consists of 87,000 stock options with an exercise price of $0.236 per share, 63,334 stock options with an exercise price of $0.209, and 145,349 restricted stock units that vest on September 30, 2024. (8) Consists of 145,349 restricted stock units that vest on September 30, 2024. (9) Consists of 1,333,333 stock options with an exercise price of $0.2135 per share. (9) Consists of Messrs. Norman, Sirkin, Reichman, Murray, Dissinger, Bittner, Goldner, Knight, and Culp.General

~~-66-~~Our authorized capital stock consists of 800,000,000 shares of common stock, without par value.

~~Table~~As of ~~Contents~~June 30, 2025, there were 243 holders of record, although there are a much larger number of beneficial owners. As of June 30, 2025, there were 116,564,720 shares of common stock issued and outstanding.

Common Stock

Options

As of June 30, 2025, the Company had 12,528,243 shares of common stock issuable pursuant to outstanding stock options at a weighted average exercise price of $0.26 per share and an additional 4,626,158 shares of common stock available for future grants of awards under the Company’s 2022 Plan.

Warrants

As of June 30, 2025, warrants to purchase up to 6,695,400 shares of our common stock at a weighted average exercise price of $0.49 per share were outstanding.

Registration Rights

On July 26, 2024, July 31, 2024 and August 21, 2024, we issued 7,535,000, 1,600,000 and 1,875,000 units, respectively, at $0.40 per unit, for aggregate net proceeds of $3,601,487. Each unit consists of (i) one share of common stock and (ii) one half of one share purchase warrant. Each whole warrant is exercisable into one share of our common stock at a price of $0.50 share for a period of 24 months from the date of issuance, subject to certain conditions. In connection with the issuance of the units, we entered into registration rights agreements with each of the purchasers of the units pursuant to which we filed a registration statement with the SEC registering for resale 17,155,400 shares of our common stock, including 5,945,400 shares of common stock subject to outstanding warrants. Pursuant to the registration rights agreement, we are required to use our best efforts to keep the registration statement continuously effective under the Securities Act until the date that all securities covered by such registration statement (i) have been sold thereunder, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.

Anti-Takeover Provisions

Shareholder Meetings; Quorum. Our Bylaws provide that our shareholders may call a special meeting upon the request of holders of at least 10% of the votes entitled to be cast on any matter proposed for consideration at such special meeting. Additionally, our president or our Board of Directors may call special meetings of shareholders. Except as required by law, a quorum at any annual or special meeting of shareholders consists of the presence of at least 33 1/3% of the shares entitled to be cast by each voting group.

Unanimous Written Consent of Shareholders. Washington law limits the ability of shareholders to act by written consent by requiring unanimous written consent for shareholder action to be effective. This limit may lengthen the amount of time required to take shareholder actions and would effectively prevent the amendment of our Articles of Incorporation and Bylaws and the removal of directors by our shareholders without holding a meeting of shareholders.

Requirements for Advance Notification of Shareholder Nominations. Our Bylaws contain advance notice procedures with respect to the nomination of candidates for election as directors, other than nominations made by or at the direction of our Board of Directors or a committee thereof. The existence of these advance notification provisions may make it more difficult for a third party to acquire, or may discourage a third party from acquiring, control of our Board of Directors.

Washington Anti-Takeover Statute. Washington law imposes restrictions on certain transactions between a corporation and certain significant shareholders. Chapter 23B.19 of the RCW generally prohibits a “target corporation” from engaging in certain significant business transactions with an “acquiring person,” which is defined as a person or group of persons that beneficially owns 10% or more of the voting securities of the target corporation, for a period of five years after the date the acquiring person first became a 10% beneficial owner of the voting securities of the target corporation, unless the business transaction or the acquisition of shares is approved by a majority of the members of the target corporation’s board of directors prior to the time the acquiring person first became a 10% beneficial owner of the target corporation’s voting securities. Such prohibited transactions include, among other things:

	●	a merger or consolidation with disposition of assets to, or issuance or redemption of stock to or from, the acquiring person;

	●	termination of 5% or more of the employees of the target corporation as a result of the acquiring person’s acquisition of 10% or more of the shares; or

	●	receipt by the acquiring person of any disproportionate benefit as a shareholder.

Transfer Agent and Registrar

Trading Symbols and Markets

Our common stock is quoted on the OTCQB under the symbol “JSDA”, and on the CSE under the symbol “JSDA”. We intend to apply to list our common stock on The Nasdaq Capital Market under the symbol “JBEV”.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO
HOLDERS OF OUR COMMON STOCK

The following is a summary of the material U.S. federal income tax consequences of the ownership and disposition of our common stock but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions of the Internal Revenue Code Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed, possibly retroactively, so as to result in U.S. federal income tax consequences different from those set forth below. No ruling on the U.S. federal, state, or local tax considerations relevant to our operations or to the purchase, ownership or disposition of our shares, has been requested from the IRS or other tax authority. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below.

This summary also does not address the tax considerations arising under the laws of any non-U.S., state or local jurisdiction, under any applicable tax treaty, or under U.S. federal gift and estate tax laws. In addition, this discussion does not address tax considerations applicable to an investor’s particular circumstances or to investors that may be subject to special tax rules, including, without limitation:

	●	banks, insurance companies or other financial institutions, regulated investment companies or real estate investment trusts;

	●	persons subject to the alternative minimum tax or Medicare contribution tax on net investment income;

	●	tax-exempt organizations or governmental organizations;

	●	controlled foreign corporations, passive foreign investment companies and corporations that accumulate earnings to avoid U.S. federal income tax;

	●	brokers or dealers in securities or currencies;

	●	traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

	●	persons that own, or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth below);

	●	U.S. expatriates and certain former citizens or long-term residents of the U.S.;

	●	partnerships or entities classified as partnerships for U.S. federal income tax purposes or other pass-through entities (and investors therein);

	●	persons who hold our common stock as a position in a hedging transaction, “straddle,” “conversion transaction” or other risk reduction transaction or integrated investment;

	●	persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;

	●	persons who do not hold our common stock as a capital asset within the meaning of Section 1221 of the Internal Revenue Code (generally, property held for investment);

	●	U.S. Holders (as defined below) whose functional currency is not the U.S. dollar;

	●	“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds; or

	●	persons deemed to sell our common stock under the constructive sale provisions of the Internal Revenue Code.

In addition, if a partnership or other pass-through entity (including an entity or arrangement treated as a partnership or other type of pass-through entity for U.S. federal income tax purposes) holds our common stock, the U.S. federal income tax treatment of a partner or beneficial owner generally will depend on the status of such partner or beneficial owner, certain determinations made at the partner level and the activities of the partnership or other pass-through entity. Accordingly, partnerships (or other pass-through entities) that hold our common stock, and partners or beneficial owners in such partnerships, should consult their tax advisors regarding the U.S. federal income tax consequences to them.

You are urged to consult your tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences of the purchase, ownership and disposition of our common stock arising under the U.S. federal estate or gift tax rules or under the laws of any state, local, non-U.S., or other taxing jurisdiction or under any applicable tax treaty.

Non-U.S. Holder Defined

For purposes of this discussion, a U.S. holder is any beneficial owner of our common stock that, for U.S. federal income tax purposes, is:

	●	an individual citizen or resident of the U.S.;

	●	a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in the U.S. or under the laws of the U.S., any state thereof, or the District of Columbia;

	●	an estate whose income is subject to U.S. federal income tax regardless of its source; or

	●	a trust (x) whose administration is subject to the primary supervision of a U.S. court, and which has one or more “U.S. persons” (within the meaning of Section 7701(a)(30) of the Code) who have the authority to control all substantial decisions of the trust or (y) which has made a valid election to be treated as a U.S. person.

As used herein, the term non-U.S. holder means a beneficial owner, other than an entity treated as a partnership for U.S. federal income tax purposes, of our common stock that is for U.S. federal income tax purposes not a U.S. holder.

Tax Considerations Applicable to U.S. Holders

Distributions

As described in “Dividend Policy,” we have never declared or paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future. However, if we do make distributions on our common stock, those payments will generally constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits, they will constitute a non-taxable return of capital and will first reduce a U.S. holder’s basis in our common stock, but not below zero, and then any additional excess will be treated as gain from the sale of stock as described below under “—Gain or Loss on Disposition of Common Stock.” Dividends received by a corporate U.S. holder may be eligible for a dividends received deduction, subject to applicable limitations. Dividends received by certain non-corporate U.S. holders, including individuals, are generally taxed at the lower applicable capital gains rate provided certain holding period and other requirements are satisfied.

Gain or Loss on Disposition of Common Stock

Upon the sale, exchange or other taxable disposition of our common stock, a U.S. holder will generally recognize capital gain or loss equal to the difference between the amount of cash and the fair market value of any property received upon the sale, exchange or other taxable disposition and such U.S. holder’s adjusted tax basis in such common stock. This capital gain or loss will be long term capital gain or loss if the U.S. holder’s holding period in such common stock is more than one year at the time of the sale, exchange or other taxable disposition. Long-term capital gains recognized by certain non-corporate U.S. holders, including individuals, generally will be subject to reduced rates of U.S. federal income tax. The deductibility of capital losses is subject to certain limitations.

Backup Withholding and Information Reporting

In general, backup withholding and information reporting requirements may apply to payments on our common stock and to the receipt of proceeds on the sale, exchange or other taxable disposition of the common stock. Backup withholding (currently at a rate of 24%) may apply if a U.S. holder fails to furnish its taxpayer identification number, a U.S. holder fails to certify under penalties of perjury that such taxpayer identification number is correct and that such U.S. holder is not subject to backup withholding (generally on a properly completed and duly executed IRS Form W-9), the applicable withholding agent is notified by the IRS that the holder previously failed to properly report payments of interest or dividends, or such U.S. holder otherwise fails to comply with the applicable requirements of the backup withholding rules.

Certain U.S. holders generally are not subject to backup withholding and information reporting requirements, provided that their exemptions from backup withholding and information reporting are properly established. Backup withholding is not an additional tax. Any amounts withheld from a payment to a U.S. holder under the backup withholding rules generally will be allowed as a credit against such U.S. holder’s U.S. federal income tax liability and may entitle such U.S. holder to a refund, provided the required information is furnished to the IRS in a timely manner. U.S. holders should consult their tax advisors regarding the application of backup withholding, the availability of an exemption from backup withholding, and the procedure for obtaining such an exemption, if available.

Tax Considerations Applicable to Non-U.S. Holders

Distributions

As described in “Dividend Policy,” we have never declared or paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future. However, if we do make distributions on our common stock, those payments will generally constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits, they will constitute a non-taxable return of capital and will first reduce a non-U.S. holder’s basis in our common stock, but not below zero, and then any excess will be treated as gain from the sale of stock as described below under “—Gain or Loss on Disposition of Common Stock.”

Subject to the discussion below on effectively connected income, backup withholding and foreign accounts, any dividend paid to a non-U.S. holder generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or at such lower rate as may be specified by an applicable income tax treaty. In order to receive a reduced treaty rate, a non-U.S. holder must provide us (or the applicable withholding agent) with an IRS Form W-8BEN, IRS Form W-8BEN-E or other appropriate version of IRS Form W-8 certifying under penalties of perjury that the non-U.S. holder is not a United States person and qualifies for the reduced rate. These forms may need to be periodically updated. A non-U.S. holder of shares of our common stock eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. If the non-U.S. holder holds the stock through a financial institution or other agent acting on the non-U.S. holder’s behalf, the non-U.S. holder will be required to provide appropriate documentation to the agent, which then will be required to provide certification to us or our paying agent, either directly or through other intermediaries.

Dividends received by a non-U.S. holder that are effectively connected with a non-U.S. holder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the U.S.) are generally taxed in the same manner as dividends received by a U.S. holder (meaning such dividends will generally be exempt from the withholding tax described in the previous paragraph). In order to obtain this exemption, a non-U.S. holder must provide us with an IRS Form W-8ECI or other applicable IRS Form W-8 properly certifying such exemption. Such effectively connected dividends, although not subject to withholding tax, are taxed at the same graduated rates applicable to U.S. persons, net of certain deductions and credits. In addition, dividends received by a non-U.S. holder that is a corporation that are effectively connected with such non-U.S. holder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States) may also be subject to an additional branch profits tax at a rate of 30% or at such lower rate as may be specified by an applicable income tax treaty. Non-U.S. holders should consult their own tax advisors regarding other U.S. tax consequences of the acquisition, ownership and disposition of our common stock, including the possible imposition of the branch profits tax.

Gain or Loss on Disposition of Common Stock

Subject to the discussion below regarding backup withholding and foreign accounts, a non-U.S. holder generally will not be required to pay U.S. federal income tax on any gain realized upon the sale or other disposition of our common stock unless:

	●	the gain is effectively connected with the non-U.S. holder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, the gain is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the U.S.);

	●	the non-U.S. holder is a non-resident alien individual who is present in the U.S. for a period or periods aggregating 183 days or more during the taxable year in which the sale or disposition occurs and certain other conditions are met; or

	●	we are or have been a “United States real property holding corporation,” as defined in the Code, at any time within the five-year period ending on the date of disposition or the non-U.S. holder’s holding period, whichever period is shorter, and the non-U.S. holder is not eligible for an exemption under an applicable income tax treaty.

Generally, a corporation is a “U.S. real property holding corporation” (“USRPHC”) if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business. We believe that we are not currently and will not become a USRPHC for U.S. federal income tax purposes, and the remainder of this discussion so assumes. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we were or become a USRPHC, however, a non-U.S. holder would not be subject to U.S. federal income tax on a sale, exchange or other taxable disposition of shares of our common stock by reason of our status as a USRPHC so long as (i) our common stock is regularly traded on an established securities market during the calendar year in which such sale, exchange or other tax disposition of shares of our common stock occurs and (ii) such non-U.S. holder does not own and is not deemed to own (directly, indirectly or constructively) more than 5% of our common stock at any time during the relevant period. No assurance can be provided that our common stock will be regularly traded on an established securities market for purposes of the rules described above. Prospective investors are encouraged to consult their tax advisors regarding the possible consequences to them if we are, or were to become, a USRPHC.

Non-U.S. holders described in the first bullet above will be required to pay tax on the net gain derived from the sale or other disposition under regular graduated U.S. federal income tax rates generally applicable to a United States person, and a corporate non-U.S. holder described in the first bullet above also may be subject to the branch profits tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty. Non-U.S. holders described in the second bullet above will be required to pay a flat 30% tax (or such lower rate specified by an applicable income tax treaty) on the gain derived from the sale or other disposition, which gain may generally be offset by U.S. source capital losses for the year (provided such non-U.S. holders have timely filed U.S. federal income tax returns with respect to such losses). Non-U.S. holders should consult their own tax advisors with respect to the application of the foregoing rules to their ownership and disposition of our common stock.

Backup Withholding and Information Reporting

Generally, we must report annually to the IRS the amount of distributions (including constructive distributions) on our common stock paid to non-U.S. holders, their names and addresses and the amount of tax withheld, if any. A similar report will be sent to non-U.S. holders. Pursuant to applicable income tax treaties or other agreements, the IRS may make these reports available to tax authorities in a non-U.S. holder’s country of residence. Unless a non-U.S. holder complies with certification procedures to establish that the non-U.S. holder is not a United States person, information returns may also be filed with the IRS in connection with the proceeds from a sale, exchange or other disposition of our common stock to or through the U.S. office (and, in certain cases, the foreign office) of a broker.

Payments of dividends (including constructive dividends) or of proceeds on the disposition of our common stock made to non-U.S. holders may be subject to information reporting and backup withholding at a current rate of 24% unless such non-U.S. holders establish an exemption, for example, by properly certifying their non-U.S. status on an IRS Form W-8BEN, IRS Form W-8BEN-E or another appropriate version of IRS Form W-8. Notwithstanding the foregoing, backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that a holder is a U.S. person.

Backup withholding is not an additional tax. Any amounts withheld from a payment to a non-U.S. holder under the backup withholding rules generally will be allowed as a credit against such non-U.S. holder’s U.S. federal income tax liability and may entitle such non-U.S. holder to a refund, provided the required information is furnished to the IRS in a timely manner. Non-U.S. holders are urged to consult their tax advisors regarding the application of backup withholding and the availability of and procedure for obtaining an exemption from backup withholding in their particular circumstances.

Foreign Account Tax Compliance

Subject to the following paragraph, the Foreign Account Tax Compliance Act and the rules and regulations promulgated thereunder (collectively “FATCA”) imposes withholding tax at a rate of 30% on dividends (including constructive dividends) on and gross proceeds from the sale or other disposition of our common stock paid to “foreign financial institutions” (as specially defined under these rules), unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding the U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) or otherwise establishes an exemption. Subject to the following paragraph, FATCA also generally imposes a U.S. federal withholding tax of 30% on dividends on and gross proceeds from the sale or other disposition of our common stock paid to a “non-financial foreign entity” (as specially defined for purposes of these rules) unless such entity provides the withholding agent with a certification identifying certain substantial direct and indirect U.S. owners of the entity, certifies that there are none or otherwise establishes an exemption. The withholding tax will apply regardless of whether the payment otherwise would be exempt from U.S. nonresident and backup withholding tax, including under the other exemptions described above. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes. An intergovernmental agreement between the U.S. and an applicable foreign country may modify the requirements described in this paragraph. Non-U.S. holders should consult their tax advisors regarding the possible implications of this legislation on their investment in our common stock.

The U.S. Treasury Department has issued proposed Treasury Regulations that, if finalized in their present form, would eliminate withholding under FATCA with respect to payments of gross proceeds from a sale or other disposition of our common stock. In the preamble to such proposed Treasury Regulations, the Treasury Secretary stated that taxpayers may generally rely on the proposed Treasury Regulations until final regulations are issued.

THE PRECEDING DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. Each prospective investor should consult its tax advisor regarding the particular U.S. federal, state and local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences of any proposed change in applicable laws.

UNDERWRITING

Joseph Gunnar & Co., LLC is acting as sole book-running manager for this offering and as representative of the underwriters named below (“Joseph Gunnar” or the “Representative”). Subject to the terms and conditions of the underwriting agreement dated the date of this prospectus between us and the Representative, the underwriters named below, through the Representative, have severally agreed to purchase, and we have agreed to sell to the underwriters, the following respective number of shares set forth opposite the underwriter’s name in the following table:

Name of underwriter		Number of shares
Joseph Gunnar & Co., LLC

The underwriting agreement provides that the obligation of the underwriters to purchase all of the shares being offered to the public, other than those covered by the over-allotment option, is subject to certain conditions, and the underwriters are obligated to purchase all of the shares of common stock offered hereby if any of the shares are purchased.

Underwriting Discounts, Commissions and Expenses

The common stock sold by the underwriters to the public will be offered at the offering price set forth on the cover of this prospectus. Any shares of common stock sold by the underwriters to securities dealers may be sold at a discount of up to $ per share from the public offering price of the common stock. The underwriters may offer the common stock through one or more of their affiliates or selling agents. If all the shares of common stock are not sold at the public offering price, the Representative may change the offering price and the other selling terms. Upon execution of the underwriting agreement, the underwriters will be obligated to purchase the shares common stock at the price and upon the terms stated therein.

The underwriting discount is equal to the public offering price per share, less the amount paid by the underwriters to us per share. The underwriting discount was determined through an arms’ length negotiation between us and the underwriters. We have agreed to sell the shares of our common stock to the underwriters at the offering price of $ per share.

The following table shows the per share and total underwriting discount we will pay to the underwriters assuming both no exercise and full exercise of the underwriters’ over-allotment option that we granted to the Representative.

		Per Share				Total
Public offering price		$				$	<

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