OTC: JSDA

Products

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

Jones
Soda

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

Pop
Jones (Modern Soda market segment)

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

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

Jones
started offering its hemp-derived Delta-9 THC products in 2024 through the Mary Jones brand, including with a line of four flavors of
Mary Jones hemp-derived sodas. Since that time, Mary Jones has expanded its portfolio to include three flavors of 10mg Mary Jones shooters,
four flavors of Mary Jones gummies, and a line of Mary Jones zero sugar sodas. We further believe Mary Jones is uniquely positioned to
lead in this emerging category. Backed by over two decades of brand equity from Jones Soda, we believe we offer an instantly recognizable
name, a loyal consumer base, and a proven reputation for flavor innovation and quality. Although we believe there is currently a growing
market for these products as consumers continue to migrate away from traditional beer and wine products, on November 12, 2025, the federal
spending legislation passed to reopen the U.S. federal government contained a provision, which when implemented, would materially alter
the federal treatment of hemp-derived products by prohibiting the unregulated sale of intoxicating hemp-based or hemp-derived products
(including HD9 products), while also capping legal hemp products at 0.4 milligrams of total THC (and similar-effect cannabinoids) per
product. The Company believes that when implemented, this legislation would likely require the Company to significantly reformulate or
ultimately discontinue the Company’s current hemp-derived HD9 product lines. Additionally, in the third quarter of 2025 we launched
our line of hard craft sodas “spiked” with alcohol under the brand name “Spiked Jones”. This brand trust allows
us to enter the alcohol market with a built-in advantage, one that we believe most new and existing competitors cannot replicate.

Fountain
(food services market segment)

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

continue to see opportunities in this market segment for customers looking for differentiated offerings in their fountain soda. While
appealing to a broad demographic, we feel that Jones on fountain enhances the consumer experience. We believe our national brand awareness
and customer-centric approach make us unique compared to other craft soda competitors within this category.

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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 2025.

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 brand;

●
Expand
our business in the alternative adult beverage market

Sales

In
2025, sales in the United States represented approximately 88% of total sales, while sales in Canada represented approximately 12%. Our
premium beverage products are sold 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.

Mary
Jones (HD9) Branded Products

Company sold our Mary Jones Brand cannabis-infused (THC) business in June 2025. We now license the Mary Jones brand and product formulations
to MJ Disruptors, the purchaser of this business. The Company retained the Mary Jones beverage business where the product is derived
from hemp (HD9 products). While we continue to sell HD9 products, Congress passed legislation late in 2025 which significantly restricts
the amount of THC that can be included in hemp derived HD9 products effectively significantly reducing the market for these products.

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 DSD channel (sales and distribution through our network of independent distributors) and our 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 years ended December 31, 2025, and 2024 one customer accounted for approximately 31% and nil% of total revenues. Revenues from this
customer were generated within the Company’s beverage segment.

For
the years ended December 31, 2025, and 2024 a second customer accounted for approximately 4% and 13% of total revenues. Revenues from
this customer were generated within the Company’s beverage segment.

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)

maintain a network of independent distributors across the United States and Canada that sell our portfolio of branded 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. Unless the termination
is for “cause”, we are also obligated to pay termination fees for cancellations of most of these written distributor agreements.

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.

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 Distribution

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

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.

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Building
Our Brand

Premium
Soda Brands

Jones
Soda has built its brand around distinctive flavors, consumer-generated packaging, and a positioning as an alternative to large mainstream
carbonated soft drink brands. Our products are designed to appeal to consumers seeking premium beverages with differentiated flavors
and ingredients.

A
distinctive feature of the Jones Soda brand is the use of consumer-submitted photography on product labels. We encourage consumers to
submit photographs for use on Jones Soda bottles and cans we distribute in retail channels. Our marketing and brand teams then select
the photographs they find are best suited for our brand ethos. In addition, consumers and businesses may create personalized labels through
the Company’s myJones platform, which allows customers to design custom labeled products using their own photos and messages.

These
brand elements are intended to differentiate Jones Soda products within the premium craft soda category and support consumer engagement
with the brand.

Company also periodically introduces limited-edition products tied to entertainment properties and cultural collaborations as part of
its broader brand and product strategy.

Marketing
and Consumer Engagement

Company also supports its brand through a combination of digital engagement, retail marketing programs, and participation in community
and industry events.

Jones
Soda maintains marketing channels across multiple social media platforms and uses these channels to communicate with consumers, gather
feedback, and promote new products and initiatives. These platforms provide opportunities for the Company to interact directly with consumers
and monitor emerging consumer preferences and trends.

In
addition to its social media platforms, the Company supports its retail partners through point-of-sale materials and promotional programs
designed to increase product visibility and consumer awareness. In addition, Jones Soda participates in selected events and sponsorships
aligned with its brand identity and target customers. These activities may include product sampling and promotional activations designed
to increase brand awareness and support retail distribution.

Product
Development

Company continually develops new beverages and flavor variations in response to evolving consumer preferences and market trends. Product
development activities are conducted primarily in-house and involve collaboration with external flavor houses and manufacturing partners.

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product development process typically includes the following steps:

●
Market
Evaluation – Identification of potential product opportunities and consumer trends.

●
Financial
Evaluation – Analysis of pricing, margins, and commercial viability.

●
Distribution
Evaluation – Assessment of available distribution channels and retail opportunities.

●
Production
Evaluation – Review of manufacturing capabilities, contract packing capacity, and quality control requirements.

Brand
and Design Development – Creation of product concepts, packaging design, and flavor selection.

Limited-Edition
Product Launches and Strategic Partnerships

Company periodically develops limited-edition beverage products tied to entertainment properties, cultural collaborations, and consumer
communities. These programs are designed to generate consumer engagement, test new product concepts, and drive demand through specific
distribution channels.

For
example, in 2025 the Company entered into a merchandise license agreement with ZeniMax Media Inc., a Delaware corporation. ZeniMax owns
the “Fallout” name and all names, art, characters, weapons and audio/visual elements from the Fallout franchise which includes
the video game and related television series. This license agreement expires on December 31, 2028.

Relying
on this merchandise license agreement, the Company introduced a series of beverages inspired by the Fallout video game franchise and
television series. The product line included a limited-edition in-game soda, collectible four-packs sold through the Company’s
direct-to-consumer website, and a specialty glass bottle format.

Company also introduced a limited-edition 12-pack format for select club-store retailers. These initial retail allocations sold quickly
which led to additional national shipments to club-store partners. While initially the ZeniMax agreement had a nominal impact on our
revenue, we experienced a dramatic revenue increase in the fourth quarter resulting from the Fallout video game and television series
enthusiasts.

Through
these programs, the Company has been exploring a product launch model that includes:

●
Limited
edition product releases targeted to specific retail channels, including direct-to-consumer and club-store formats

●
partnerships
with entertainment brands and community-focused creators

●
digital
promotion and social media engagement to build anticipation prior to launch

●
time-limited
product availability designed to concentrate consumer demand

Company believes this approach can provide an efficient method for testing new products, increasing brand visibility, and supporting
retail sell-through in targeted channels.

Mary
Jones and Spike Jones Product Lines

Company has expanded its product portfolio to include the Mary Jones brand, which offers hemp-derived beverages inspired by the original
Jones Soda flavors. The Company differentiates the Mary Jones brand from its traditional soda products in order to comply with regulatory
requirements and to clearly distinguish between product categories.

Jones
Soda leverages its existing brand recognition and flavor portfolio to support the development and marketing of Mary Jones products while
continuing to expand product offerings and flavors within this category.

-9-

Competition

beverage industry is highly competitive. The Company competes with large global beverage manufacturers, regional beverage companies,
specialty beverage producers, and private label suppliers across several product categories. Significant competitors include, but are
not limited to, the Coca-Cola Company, PepsiCo, Inc., Nestlé S.A., Keurig Dr Pepper Inc., Danone S.A., Suntory Beverage &
Food Limited, Anheuser-Busch InBev, Kirin Holdings, Heineken N.V., Diageo plc, and Red Bull GmbH. Competitive products include numerous
nonalcoholic sparkling soft drinks; water products, including flavored and enhanced waters; juices, juice drinks and nectars; dilutable
(including syrups and powders); coffees; teas; energy drinks; sports drinks; milk and other dairy-based drinks; plant-based beverages;
functional beverages, including vitamin-based products and relaxation beverages; and various other nonalcoholic beverages. These competitive
products are sold to consumers in both ready-to-drink and non-ready-to-drink form.

Competitive
factors impacting our business include, but are not limited to, pricing, advertising, sales promotion programs, in-store displays and
point-of-sale marketing, digital marketing, product and ingredient innovation, availability, increased efficiency in production techniques,
the introduction of new packaging as well as new vending and dispensing equipment, contracting with marketing assets (theaters, sports
arenas, universities, etc.), and brand and trademark development and protection. Jones Soda competes not only for consumer demand but
also for retail shelf space and distributor attention. The Company seeks to differentiate its products through flavor innovation, brand
identity, and consumer engagement.

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Production

Contract
Packing Arrangements

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 the United States and Canada. 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 subject to the terms of their agreements
with us, in which case we could experience disruptions in our ability to supply products to our customers. We continually review our
contract packing needs in light of regulatory compliance, capacity, and logistical requirements and may add or change co-packers based
on those needs. We also maintain ongoing operational oversight of our co-packers to support product quality, service levels, and supply
continuity.

Raw
Materials

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 bottled and canned products are purchased either directly by us or by our contract manufacturers in accordance with
our specifications. These raw materials are sourced from suppliers selected by us or approved by our contract manufacturers. We believe
we have adequate sources of raw materials, which are available from multiple suppliers.

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.

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 2028. The price of glass continues to increase due to industry
capacity constraints and natural gas cost fluctuations; however, our supply agreement provides us with price protection through 2028.

cost of cane sugar is subject to market volatility driven by global supply and demand dynamics, weather conditions, and energy costs.
Rather than entering into long-term fixed price contracts, we actively manage this exposure by periodically layering in purchase positions
to maintain forward coverage at competitive market prices. This procurement approach allows us to secure supply and manage cost risk
while maintaining flexibility to benefit from favorable market conditions.

actively monitor commodity markets and supplier capacity in an effort to maintain continuity of supply and manage input cost volatility.

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. 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. Our internal quality control specialist selects the flavors we ultimately determine to use.

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.

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Regulation

Premium
Beverage Business

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 the United States Food and Drug Administration (the “FDA”) and Health
Canada, Agriculture and Agri-Food Canada (the “AAFC”). 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.

Under
the Safe Drinking Water and Toxic Enforcement Act of 1986 (“Proposition 65”) of the state of California, if the state has
determined that a substance causes cancer or harms human reproduction or development, a warning must be provided for any product sold
in the state that exposes consumers to that substance, unless the conditions of an exemption (described below) can be met. The state
maintains lists of these substances and periodically adds other substances to these lists. The detection of even a trace amount of a
listed substance can subject an affected product to the requirement of a warning label. However, Proposition 65 exempts a product from
a warning if the manufacturer can demonstrate that the use of that product exposes consumers to a daily quantity of a listed substance
that is:

●
below
a “safe harbor” threshold that may be established;

●
naturally
occurring;

●
the
result of necessary cooking; or

●
subject
to another applicable exemption.

One
or more substances that are currently on the Proposition 65 list can be detected in certain Company products at low levels that are safe.
The Company maintains that the presence of each such substance in Company products is subject to an applicable exemption from the warning
requirement or that the product is otherwise in compliance with Proposition 65. However, the state of California and other parties have
in the past taken a contrary position and may do so in the future. Additionally, the state of California may include other substances
on the Proposition 65 list in the future. We expect continued scrutiny of ingredients or substances present in certain of our products
and/or their packaging, as well as processes used to make them, and it is possible that similar or more restrictive requirements may
be proposed or enacted in the future.

Hemp
Derived Beverage Business

Hemp-derived
Delta-9 tetrahydrocannabinol (“HD9”) products operate within a complex regulatory environment shaped by federal hemp legislation,
federal agency oversight, and evolving state laws. The legal framework governing HD9 products primarily stems from the Agriculture Improvement
Act of 2018 (the “2018 Farm Bill”), which created a legal distinction between hemp and marijuana based on Delta-9 THC concentration.
Under federal law, hemp and hemp-derived cannabinoids—including Delta-9 THC—are lawful provided the product contains no more
than 0.3% Delta-9 THC on a dry-weight basis.

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This
regulatory structure has allowed the development of a national market for intoxicating hemp products, including HD9 beverages, edibles,
tinctures, and other consumer goods. However, regulatory oversight is divided among several federal agencies and further complicated
by differing state regulations.

Federal
Legal Framework

Controlled
Substances Act

Under
the Controlled Substances Act, marijuana and tetrahydrocannabinols derived from marijuana are classified as Schedule I controlled substances.

Schedule
I substances are defined as drugs with:

●
a
high potential for abuse

●
no
currently accepted medical use under federal law.

Prior
to 2018, most cannabis extracts containing THC were illegal at the federal level.

Hemp
Legalization Under the 2018 Farm Bill

2018 Farm Bill fundamentally changed U.S. cannabis policy by removing hemp from the Controlled Substances Act. The law defines hemp as:
Cannabis sativa L. and any part of that plant containing no more than 0.3 percent Delta-9 THC on a dry-weight basis.

Cannabis
sativa L. and any part of that plant containing no more than 0.3 percent Delta-9 THC on a dry-weight basis.

legislation also legalized: hemp extracts; cannabinoids; derivatives; isomers and salts and salts of isomers; provided they meet the
Delta-9 THC concentration threshold.

This
statutory language created the legal basis for hemp-derived intoxicating cannabinoids, including HD9 products.

Federal
Agency Oversight

Multiple
federal agencies exercise jurisdiction over hemp-derived cannabinoids.

USDA

United States Department of Agriculture (“USDA”) regulates hemp cultivation through the federal hemp production program.
Responsibilities include: licensing hemp producers; approving state hemp plans; establishing THC testing protocols; and overseeing interstate
hemp transport.

USDA
authority applies primarily to agricultural production rather than finished consumer products.

FDA

U.S. Food and Drug Administration regulates hemp-derived products that are marketed as: foods; beverages; dietary supplements; cosmetics;
and drugs.

FDA has repeatedly stated that cannabinoids marketed with therapeutic claims require formal drug approval.

agency has also raised safety concerns regarding: inconsistent potency levels; youth access; contamination risks; and lack of clinical
safety data.

As
of March 2026, the FDA has not established a comprehensive regulatory pathway for intoxicating hemp products such as HD9.

DEA

Drug Enforcement Administration retains authority over controlled substances.

DEA has indicated that: cannabinoids derived directly from hemp may fall outside the Controlled Substances Act; and synthetically produced
THC may remain a controlled substance.

distinction between natural extraction and chemical conversion remains an area of regulatory interpretation.

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Judicial
Developments

Federal
courts have increasingly interpreted the 2018 Farm Bill broadly. Several appellate rulings have affirmed that hemp-derived cannabinoids
are lawful if they meet the 0.3% Delta-9 THC threshold, even if the resulting products produce intoxicating effects.

These
rulings have contributed to the expansion of the hemp cannabinoid industry but have also prompted calls from regulators and lawmakers
for legislative clarification.

State-Level
Regulatory Framework

While
federal law allows hemp-derived cannabinoids, individual states maintain authority to regulate hemp products sold within their borders.
State approaches generally fall into three categories:

1.
Permissive
States: some states allow HD9 products with relatively limited additional restrictions beyond federal law. Products may be sold through
convenience stores, specialty hemp retailers, and online platforms. Examples include Florida, Texas, Indiana, Wisconsin, and Georgia.
These states allow hemp-derived Delta-9 products if compliant with the federal THC threshold.

2.
Regulated
States: other states have created regulatory frameworks for intoxicating hemp products similar to alcohol or cannabis regulation.
Typical requirements include age restrictions (usually 21+), maximum THC dosage per serving, product testing and labeling, and retail
licensing. Examples include: Minnesota; Alabama; Kentucky; Tennessee; and North Carolina. These states impose dosage limits and licensing
requirements.

3.
Restrictive
States: some states have banned intoxicating hemp cannabinoids entirely or require such products to be sold exclusively through licensed
cannabis dispensaries. These jurisdictions treat intoxicating hemp products as functionally equivalent to marijuana. Examples include:
Idaho; Utah; Alaska; Montana; and Nevada. These jurisdictions restrict or prohibit intoxicating hemp-derived THC products.

Companies
operating in the HD9 industry face several regulatory risks. See ITEM 1A RISK FACTORS; Risks Regulatory Uncertainty for Hemp Derived
Beverage Business.

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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.

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.

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For
additional information, refer to Part I, “Item 1A. Risk Factors” of this Annual Report.

Human
Capital

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 the date of this Report, we have 27 employees, all of which are full-time, and with the exception of two employees located in Canada
are all located in the United States. Of our 27 employees, 15 are employed in sales and marketing capacities, 4 are employed in 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.

Securities
Exchange Act Reports and other Available Information

As
a public company, we are required to file our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,
proxy statements on Schedule 14A and other information (including any amendments) with the Securities and Exchange Commission (the “SEC”).
You can find our SEC filings at the SEC’s website at www.sec.gov.

Our
Internet address is www.jonessoda.com. Certain information contained on our website is not part of this annual report on Form 10-K.

make available on or through our website at www.jonessoda.com our SEC filings free of charge as soon as reasonably practicable after
we electronically file the information with, or furnish it to, the SEC. In addition, the following corporate governance materials are
also available on our website under “Investor Relations — Corporate Governance:”

●
Audit
Committee Charter

●
Compensation
and Governance Committee Charter

●
Code
of Conduct applicable to all directors, officers and employees of Jones Soda Co.

●
Code
of Ethics for our CEO and senior financial officers.

A
copy of any of the materials filed with or furnished to the SEC or copies of the corporate governance materials described above are available
free of charge and can be mailed to you upon request to Jones Soda Co., 1522 Western Ave, STE 24150, Seattle, WA 98101.

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