Jones Soda Co 10-K/A, filed May 1, 2025
Jones Soda Co. (JSDA)
About this 10-K/A
Jones Soda Co filed this 10-K/A on May 1, 2025, covering the fiscal year ended December 31, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
Indicate
by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate
by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
Indicate
by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 ☐ | 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 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. Yes ☐ No
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The
aggregate market value of the registrant’s common stock held by non-affiliates as of June 28, 2024, the last business day of the
registrant’s most recently completed second fiscal quarter, was approximately $
As of April 29, 2025, there were shares of the registrant’s common stock issued and outstanding.
EXPLANATORY NOTE
We are filing this Amendment No. 1 pursuant to General Instruction G(3) of Form 10-K, as we do not intend to file a definitive proxy statement for our 2025 annual meeting of shareholders within 120 days of the end of our fiscal year ended December 31, 2024. Accordingly, this Amendment No. 1 is being filed solely to:
| ● | amend and restate Part III, Items 10 (Directors, Executive Officers and Corporate Governance), 11 (Executive Compensation), 12 (Security Ownership of Certain Beneficial Owners and Management Related Stockholder Matters), 13 (Certain Relationships and Related Transactions, and Director Independence) and 14 (Principal Accountant Fees and Services) of our 2024 Annual Report, in their entirety as set forth herein; and | |
| ● | file new certifications of our principal executive officer and principal financial officer as exhibits to this Amendment No. 1 under Item 15 of Part IV hereof pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
Because no financial statements have been included in this Amendment No. 1, and because this Amendment No. 1 does not contain or amend any disclosure with respect Items 307 and 308 of Regulation S-K, the corresponding certifications have been omitted. We are not including the certifications under Section 906 of the Sarbanes-Oxley Act of 2002, as no financial statements are being filed with this Amendment No. 1.
Except as set forth above, no other Items of our 2024 Annual Report have been amended or revised in this Amendment No. 1, and all such other Items shall be as set forth in such 2024 Annual Report. Accordingly, this Amendment No. 1 should be read in conjunction with the 2024 Annual Report and our other filings with the SEC. Certain capitalized terms used and not otherwise defined in this Amendment No. 1 have the meanings given to them in the 2024 Annual Report.
| -1- |
JONES SODA CO.
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024
Table of Contents
| -2- |
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The following table and text set forth the names and ages of our directors and executive officers as of April 29, 2025. Our Board of Directors (the “Board” or “Board of Directors”) is comprised of only one class of directors. Also provided herein are brief descriptions of the business experience of each director and executive officer during the past five years (based on information supplied by them) and an indication of directorships held by each director in other public companies subject to the reporting requirements under United States federal securities laws.
| Name | Age | Title | ||
| Scott Harvey | 63 | Chief Executive Officer and President | ||
| Brian Meadows | 60 | Chief Financial Officer | ||
| Jerry Goldner | 57 | Chief Growth Officer | ||
| Gabe Carimi | 36 | Vice President of Operations | ||
| Paul Norman | 60 | Chairman of the Board of Directors | ||
| Ronald Dissinger | 66 | Director | ||
| Clive Sirkin | 62 | Director | ||
| Gregg Reichman | 64 | Director | ||
| Mark Murray | 66 | Director |
Executive Officers
Scott Harvey, Chief Executive Officer and President
Scott Harvey 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.
Brian Meadows, Chief Financial Officer
Brian Meadows 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 Financials Analyst (CFA) and a Certified Public Accountant (CPA) designations.
Jerry Goldner, Chief Growth Officer
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-based 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.
| -3- |
Gabe Carimi, Vice President of Operations
Gabe Carimi has served as our Vice President of Operations since March 4, 2024 and General Manager of Mary Jones since October 2024. Prior to that, in February 2017, Mr. Carimi Co-Founded and served as Co-Chief Executive Officer of Stryve Biltong, a healthy snack company, from February 2017 to December 2019. From 2011 until 2015, Mr. Carimi was a professional football player playing for the Atlanta Falcons, Tampa Bay Buccaneers and Chicago Bears. Mr. Carimi received his Bachelor of Science in engineering from University of Wisconsin-Madison.
Directors
Paul Norman, Chairman of the Board of Directors
Paul Norman 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. He currently serves as a director on the board of directors of Simply Better Brands Corp. (TSX: SBBC) (OTCQB: PKANF), a platform with diversified assets in the plant-based and wellness consumer product categories. 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 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 between the Company and Heavenly Rx (the “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 hjs extensive experience in the food and beverage industry as well as his experience holding senior executive positions in a Fortune 500 public company.
Ronald Dissinger, Director
Ronald Dissinger 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.
Clive Sirkin, 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-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., Fyllo Tech, UCAN and 70 Faces Media. 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.
Gregg Reichman, Director
Gregg Reichman has been a director of the Company since February 2023. Mr. Reichman has 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.
| -4- |
Mark Murray, Director
Mark Murray was our President and Chief Executive Officer from December 2020 through June 2023, and has been a director of the Company since May 2021. Prior to that, he was the President of JGC Food Company (“JGC”), a privately-owned food manufacturer specializing in fresh soups, sauces, sides, and entrées, 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. In addition, he was previously 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. Previous 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.
Committee of our Board of Directors
The Board has an Audit Committee, a Compensation and Governance Committee (the “Compensation Committee”), and a Mergers and Acquisitions and Investments Committee. Our entire Board 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 and approving director candidates for election to our Board. 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 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; reviewing the scope, fees and result of their audit; reviewing the independence of our auditors; reviewing and approving any non-audit services and related fees; being informed of the auditors significant audit findings and management’s responses; reviewing the adequacy of our accounting and financial personnel; reviewing our financial reporting processes and internal controls over financial reporting and disclosure controls and procedures; and overseeing legal and regulatory compliance matters, including reviewing and approving all significant related party transactions and potential conflict of interest situations. In addition, the Audit Committee reviews our quarterly and annual financial statements and recommends their acceptance to the Board. 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 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.”
The Audit Committee is currently comprised of Messrs. Dissinger, (Chair), Sirkin, and Reichman. The Board 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 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 Mr. Sirkin (Chair), Mr. Reichman, and since November 12, 2024, Mr. Dissinger. Our Board has determined that, after consideration of all relevant factors, each of the directors who served on the Compensation Committee during the year ended 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 regarding our general compensation policies as well as the compensation plans and specific compensation levels for our executive officers.
| -5- |
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 as appropriate. A 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 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 in connection with our retirement, welfare and other benefit plans, (iii) develop, update, as necessary, and recommend to our Board corporate governance principles and policies applicable to us, and monitor compliance with such principles and policies and (iv) administer our Clawback Policy. 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 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 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 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 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 for approval. With respect to equity grants, the Compensation Committee has the authority, without approval from our Board, to approve all equity awards to employees and executive officers, although our general practice is to obtain approval from our Board 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 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 revisions to the Company’s director compensation program. In addition, the Compensation Committee develops, periodically reviews and recommends to our Board director and executive stock ownership guidelines, and provides oversight and recommendations to our Board regarding our tax-qualified and nonqualified benefit plans. In addition, the Compensation Committee develops and recommends to our Board procedures for selection of the Chairperson of the Board, and helps develop an annual meeting calendar for our Board. The Compensation Committee recommends to our Board, as appropriate, the number, type, functions and structure and independence of the committees of our Board, 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.
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.
| -6- |
Director Nominations Process
We do not have a separate nominating committee as our entire Board performs the functions of a nominating committee. Our independent directors are responsible for, among other things, identifying individuals qualified to become members of our Board and approving director candidates for election to our Board, 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, the independent members of our Board will initiate the effort to identify appropriate director candidates. The independent members of our Board will also periodically review the appropriate size of our Board, any appropriate restrictions on service on our Board, 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.
Code of Ethics and Code of Conduct
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
As part 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, 2024, none of our directors or executive officers had pledged any shares of our common stock.
Family Relationships and Other Arrangements
There are no family relationships among our directors and 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.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who own more than 10% of our common stock (collectively, “Reporting Persons”) to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Reporting Persons are also required by SEC regulations to furnish us with copies of all such ownership reports they file. SEC regulations also require the Company to identify any Reporting Person who failed to file any such report on a timely basis.
Based solely on our review of the copies of such reports received or written communications from certain Reporting Persons, we believe that all Reporting Persons filed all required Section 16(a) reports on a timely basis for fiscal year 2024, except as follows: Ronald Dissinger failed to file a Form 4 to report the vesting of 145,348 Restricted Stock Units (“RSUs”) into 145,348 shares of common stock on December 31, 2024, a late Form 4 on October 18, 2024 to report the vesting of 145,348 RSUs into 145,348 shares of common stock on September 30, 2024 and a late Form 4 on September 9, 2024 to report the vesting of 290,697 RSUs into 290,697 shares of common stock on June 30, 2024; Paul Norman failed to file a Form 4 to report the vesting of 145,348 RSUs into 145,348 shares of common stock on December 31, 2024, a late Form 4 on October 18, 2024 to report the vesting of 145,348 RSUs into 145,348 shares of common stock on September 30, 2024 and a late Form 4 on September 9, 2024 to report the vesting of 290,697 RSUs into 290,697 shares of common stock on June 30, 2024; Clive Sirkin failed to file a Form 4 to report the vesting of 145,348 RSUs into 145,348 shares of common stock on December 31, 2024, a late Form 4 on October 18, 2024 to report the vesting of 145,348 RSUs into 145,348 shares of common stock on September 30, 2024 and a late Form 4 on September 9, 2024 to report the vesting of 290,697 RSUs into 290,697 shares of common stock on June 30, 2024; Gregg Reichman failed to file a Form 4 to report the vesting of 145,348 RSUs into 145,348 shares of common stock on December 31, 2024, a late Form 4 on October 18, 2024 to report the vesting of 145,348 RSUs into 145,348 shares of common stock on September 30, 2024, and a late Form 4 on September 9, 2024 to report the vesting of 290,697 RSUs into 290,697 shares of common stock on June 30, 2024; Mark Murray failed to file a Form 4 to report the vesting of 118,097 RSUs into 118,097 shares of common stock on December 31, 2024, a late Form 4 on October 18, 2024 to report the vesting of 118,095 RSUs into 118,095 shares of common stock on September 30, 2024 and a late Form 4 on September 9, 2024 to report the vesting of 236,191 RSUs into 236,191 shares of common stock on June 30, 2024 and the vesting of 600,000 RSUs into 600,000 shares of common stock on August 15, 2024; SOL Global Investments Corp. filed a late Form 4 on March 25. 2024 in connection with the sale of an aggregate of 626,447 shares of common stock from March 5, 2024 to March 20, 2024 and a late Form 4 on March 25, 2024 in connection with the sale of an aggregate of 513,200 shares of common stock from February 2, 2024 to February 22, 2024.
| -7- |
Insider Trading Policy
We have adopted a formal insider trading policy that governs the purchase, sale, and/or disposition of our securities, by directors, officers, and employees, that is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable listing standards. A copy of our insider trading policy is filed as Exhibit 19.1 to this Amendment No. 1. This policy has been designed to prevent insider trading or even allegations of insider trading.
Shareholder Nominees for Director
There have been no material changes to the procedures by which shareholders may recommend nominees to the Board.
ITEM 11 . EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table shows, for the fiscal years ended December 31, 2024 and 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 (3) | 2024 | 323,078 | - | - | - | 36,176 | 359,254 | |||||||||||||||||||
| Former President and Chief Executive Officer | 2023 | 181,731 | - | - | 1,172,000 | - | 1,353,731 | |||||||||||||||||||
| Paul Norman (4) | 2024 | - | - | 80,000 | (5) | - | - | 80,000 | ||||||||||||||||||
| Former Interim Chief Executive Officer and Interim Chief Financial Officer | 2023 | - | - | - | - | - | - | |||||||||||||||||||
| Jerry Goldner | 2024 | 250,000 | - | - | 225,855 | - | 475,855 | |||||||||||||||||||
| Chief Growth Officer | 2023 | 48,397 | - | - | - | - | 48,397 | |||||||||||||||||||
| Gabe Carimi | 2024 | 168,525 | - | - | - | - | 168,525 | |||||||||||||||||||
| VP Operations and General Manager Mary Jones | 2023 | - | - | - | - | - | - | |||||||||||||||||||
| (1) | Stock awards awarded to NEOs consist primarily of 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 Accounting Standards Codification Topic 718 (“ASC Topic 718”). See Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K 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 ASC Topic 718. See Note 7 to our consolidated financial statements incorporated by reference in this Amendment No 1 regarding the assumptions underlying the valuation of equity awards. |
| (3) | Mr. Knight ceased to serve as President and Chief Executive Officer of the Company on October 25, 2024. |
(4)
(5) |
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. He did not receive any compensation for serving in these roles. Mr. Norman was granted restricted stock units in connection with his service on the Board and as chair of the Board. |
| -8- |
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 had an annual base salary of $350,000 as of June 23, 2023. Additionally, Mr. Knight was eligible to receive an annual cash bonus of $175,000 (the “Annual Bonus”) in the event that the Company achieved annual revenues in the applicable fiscal year of at least $23,452,000 (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 was to be adjusted upward by $2,500 for each 1% that the Company’s actual annual revenues and adjusted EBITDA 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 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-qualified 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.
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 $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 of the Goldner Employment Agreement, on October 23, 2023, the Board granted Mr. Goldner non-qualified stock options to purchase 1.200,000 shares of common stock of the Company pursuant to the 2022 Plan. The options are subject to time-based vesting as follows, in each case subject to Mr. Goldner’s continued service through the applicable time vesting date: (1) 400,000 of the options vested October 24, 2024, (2) an additional 400,000 of the options shall vest on October 24, 2025, and (3) the remaining 400,000 of the options shall vest on October 24, 2026.
Gabe Carimi. Mr. Carimi has served as our Vice President of Operations since March 4, 2024 and the General Manager of Mary Jones since October 2024. Pursuant to an offer letter dated February 27, 2024 (the “Carimi Offer Letter”), Mr. Carimi is entitled to a base salary of $200,000 per year, and is eligible for an annual cash bonus of 30% of his base salary in the event that the Company achieves annual revenues in the applicable fiscal year of an amount established annually by the Compensation Committee and in an amount in annual adjusted EBITDA (as calculated in a manner consistent with the calculation of adjusted EBITDA in the previous fiscal year) as established annually by the Compensation Committee. Mr. Carimi did not receive an annual bonus in 2024.
The Company also agreed in the Carimi Offer Letter to grant to Mr. Carimi non-qualified stock options to purchase 500,000 shares of common stock of the Company pursuant to the 2022 Plan, to vest annually in equal installments over a three-year period from the date of grant. These stock options have yet to be granted as of the date of this Amendment No 1.
Outstanding Equity Awards at Fiscal Year-End
The following table presents information about outstanding equity awards held by each of our Named Executive Officers as of December 31, 2024.
| Option Awards | ||||||||||||||||||||
| Number of Securities Underlying Unexercised Options (#) | ||||||||||||||||||||
| Name | Grant Date | Exercisable | Unexercisable | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||
| David Knight (1) | 6/8/2023 | 1,333,333 | - | $ | 0.21 | 1/25/2025 | ||||||||||||||
| Paul Norman (2) | - | - | - | - | - | |||||||||||||||
| Jerry Goldner(3) | 10/24/2023 | 400,000 | 800,000 | $ | 0.21 | 10/24/2033 | ||||||||||||||
| Gabe Carimi | - | - | - | - | ||||||||||||||||
| -9- |
| (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 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. He did not receive any compensation for this role. Mr. Norman’s stock compensation is presented under the Board of Directors Compensation information. |
| (3) | Mr. Goldner was granted stock options in October 2023 which vest over a period of 36 months, with 33% vesting after one year (in each case, subject to Mr. Goldner’s continued service with the Company).
|
Additional Narrative Disclosure
On March 15, 2022, our Board adopted the 2022 Plan, which became effective upon approval by our shareholders on May 16, 2022. Under the 2022 Plan, the sum of (i) 10,000,000 shares of the Company’s common stock, plus (ii) the number of shares of common stock reserved, but unissued under the 2011 Plan, plus (iii) the number of shares of common stock underlying forfeited awards under the 2011 Plan are initially available for issuance of awards under the 2022 Plan. Additionally, the number of shares of the Company’s common stock available reserved under the 2022 Plan is subject to an annual increase on the first day of each calendar year beginning with the first January 1 following the effective date of the 2022 Plan and ending with the last January 1 during the initial ten-year term of the 2022 Plan, equal to the lesser of (A) 4% of the shares of the Company’s common stock outstanding (which shall include shares issuable upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable for shares, including without limitation, preferred stock, warrants and employee options to purchase any shares) on the final day of the immediately preceding calendar year and (B) such lesser number of shares of common stock as determined by our Board. The Company may grant incentive stock options, non-statutory stock options, stock appreciation rights, RSUs, 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.
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 are discretionary and are not governed by a fixed formula; and | |
| ● | Sales commissions are not an element of our compensation practices for our Named Executive Officers or other senior management. |
Director Compensation
The following table sets forth information with respect to compensation paid by us to our non-employee directors during the last completed fiscal year ended December 31, 2024:
| Change in | ||||||||||||||||||||||||||||
| Fees | Pension Value & | |||||||||||||||||||||||||||
| Earned or | Non-Equity | Nonqualified Deferred | ||||||||||||||||||||||||||
| Paid in | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||
| Cash | Awards(1) | Awards(2) | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||
| Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
| Paul Norman(3) | - | (3) | - | - | - | - | (3) | |||||||||||||||||||||
| Clive Sirkin | - | 80,000 | - | - | - | - | 80,000 | |||||||||||||||||||||
| Ronald Dissinger(4) | - | 80,000 | - | - | - | - | 80,000 | |||||||||||||||||||||
| Gregg Reichman | - | 80,000 | - | - | - | - | 80,000 | |||||||||||||||||||||
| Mark Murray | - | 65,000 | - | - | - | - | 65,000 | |||||||||||||||||||||
| Chad Bronstein(5) | - | - | - | - | - | - | - | |||||||||||||||||||||
| -10- |
(1)
|
The amounts in this column represent the aggregate grant date fair values for stock 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 included in our 2024 Annual Report. | |
| (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 included in our 2024 Annual Report. | |
| (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. |
In February 2023, the Board 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 the Board in 2024. Such RSUs vested according to the following vesting schedule: 50% on June 30, 2024, 25% on September 30, 2024 and the remaining 25% on December 31, 2025.
We also maintain liability insurance for all of our directors and executive officers.
Company Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
The Compensation Committee last granted a stock option in February, 2025. The Company does not (i) grant stock options or similar awards to directors, officers and significant shareholder who file reports with the SEC under Section 16 (a) under 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.
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.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.
The following table sets forth as of the date of this Amendment No. 1 certain information regarding the beneficial ownership of our outstanding common stock by the following persons or groups:
| ● | each person who is known by us to own beneficially more than 5% of the outstanding shares of common stock; | |
| ● | the Named Executive Officers identified in the Summary Compensation Table above; | |
| ● | each of our directors; and | |
| ● | all of our directors and executive officers as a group. |
Beneficial ownership is determined in accordance with the rules of the 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 this Amendment No. 1, 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. Percentage of ownership is based on 115,867,659 shares of common stock outstanding as of this Amendment No. 1.
| -11- |
Except as 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 common 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.
| 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 | ||||||||||||||||
| 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 | (3) | 2,632,382 | 2.3 | % | ||||||||||
| Jerry Goldner Chief Growth Officer | 400,000 | - | 400,000 | * | ||||||||||||
| Gabe Carimi, General Manager of Mary Jones | - | - | - | * | ||||||||||||
| Clive Sirkin, Director | 2,581,604 | 922,372 | (4) | 3,503,976 | 3.0 | % | ||||||||||
| Paul Norman, Director | 2,486,545 | 1,102,372 | (5) | 2,817,524 | (6) | 2.4 | % | |||||||||
| Gregg Reichman, Director | 1,416,664 | 299,6677 | (7) | 1,716,331 | 1.5 | % | ||||||||||
| Ronald Dissinger, Director | 581,393 | - | 581,393 | * | ||||||||||||
| All current directors and executive officers as a group (9) persons)(10) | 9,498,588 | 2,924,411 | 11,651,606 | 10.0 | % | |||||||||||
| * Less than one percent | ||||||||||||||||
| (1) The table is based upon information supplied by such principal shareholders, executive officers and directors. |
| (3) 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. |
| (4) 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. |
| (5) 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. |
(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 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 |
| (8) Consists of Messrs. Harvey, Goldner, Norman, Sirkin, Reichman Murray, Carimi, Dissinger, Goldner, and Meadows. |
| -12- |
Equity Compensation Plan Information
The following table provides information as of December 31, 2024, the end of the most recently completed fiscal year, about shares of common stock that may be issued pursuant to currently outstanding stock options granted under Jones Soda Co. 2011 Incentive Plan, as well as shares of common stock issuable pursuant to awards granted under the. 2022 Plan.
| Plan Category | (a) No. of Shares to be Issued Upon Exercise or Vesting of Outstanding Stock Options, RSUs | (b) Weighted Average Exercise Price of Outstanding Stock Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities (a)) | |||||||||
| Equity Compensation Plans Approved by Shareholders | 11,407,772 | $ | 0.26 | 6,330,250 | ||||||||
| Equity Compensation Plans Not Approved by Shareholders | N/A | N/A | N/A | |||||||||
| TOTAL | 11,407,772 | $ | 0.26 | 6,330,250 | ||||||||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain relationships and related transactions
We are not a party to any transactions and no transactions are currently proposed, in which the amount involved 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 of our 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 equity and other compensation, termination, change in control and other arrangements, which are described elsewhere in this Annual Report on Form 10-K.
The Board, 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 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 at its next regularly scheduled meeting. In addition, the Audit Committee will conduct a regular review and assessment of the policy.
Director Independence
Our Board of Directors has determined that four of our directors, Messrs. Reichman, Norman, Dissinger, and Sirkin, are “independent directors” within the meaning of the listing standards of Nasdaq. In making its independence determinations, our Board of Directors considered all relationships between any of the directors and our Company.
| -13- |
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Accountant Fees and Services
The following table sets forth the aggregate fees billed by our current independent accountants, Berkowitz Pollack Brant, for professional services rendered in the fiscal years ended December 31, 2024 and 2023.
| 2024 | 2023 | |||||||
| 33Audit Fees (1) | $ | 215,000 | $ | 64,000 | ||||
| Audit-Related Fees (2) | 80,000 | __ | ||||||
| Tax fees (3) | __ | — | ||||||
| All Other Fees (4) | __ | — | ||||||
The following table sets forth the aggregate fees billed by our former independent accountants, Armanino LLP, for professional services rendered in the fiscal years ended December 31, 2024 and 2023.
| 2024 | 2023 | |||||||
| Audit Fees (1) | $ | __ | $ | 163,138 | ||||
| Audit-Related Fees (2) | __ | — | ||||||
| Tax fees (3) | 127,284 | 60,625 | ||||||
| All Other Fees (4) | __ | — | ||||||
| (1) | “Audit Fees” represent fees for professional services provided in connection with the audit of our annual financial statements and review of our quarterly financial statements included in our reports on Form 10-Q, and audit services provided in connection with other statutory or regulatory filings, including without limitation, our Registration Statements on Form S-1. |
| (2) | “Audit-Related Fees” generally represent fees for assurance and related services reasonably related to the performance of the audit or review of our financial statements. |
| (3) | “Tax Fees” generally represent fees for tax compliance, tax advice and tax planning. |
| (4) | “All Other Fees” generally represents fees for products and services provided to the Company that are not otherwise reported in the table. |
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
| (a) | Documents filed as part of this Annual Report on Form 10-K/Amendment No.1 are as follows: |
| 1) | Financial Statements: Incorporated by reference to the consolidated financial statements, related notes and report of independent registered public accounting firm are included in Item 8 of Part II of the 2024 Annual Report. | |
| 2) | Financial Statement Schedules: All schedules have been omitted because they are not applicable or not required, or the required information is included in the financial statements or notes thereto. | |
| 3) | Exhibits: The required exhibits are included at the end of this Annual Report on Form 10-K and are described in the exhibit index. |
| -14- |
EXHIBIT INDEX
The following exhibits are filed as part of this Annual Report on Form 10-K/Amendment No. 1 or are incorporated herein by reference. Where an exhibit is incorporated by reference, the document to which it is cross referenced is made.
| -15- |
| * | Management contract or compensatory plan or arrangement. | |
| ** | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability. |
| -16- |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| April 30, 2025 | JONES SODA CO. | |
| By: | /s/ Brian Meadows | |
| Chief Financial Officer | ||
| -17- |
Exhibit 10.10
 |
4786 1st Avenue South, Suite 103 T 206-436-8760 Seattle, WA 98134
www.jonessoda.com |
February 27, 2024
Gabe Carimi
Dallas, TX
| Re: | Employment Offer – Chief Operating Officer |
Dear Gabe:
On behalf of Jones Soda Co. (“Jones Soda”), we are very pleased to offer you to the position of VP of Operations reporting to Jerry Goldner, Chief Growth Officer. This letter establishes the initial terms of your employment with Jones Soda should you accept this offer.
Effective Date.
Your target start date with Jones Soda will be approximately March 4, 2024.
Compensation.
The Company shall pay you an annualized base salary in the gross amount of $200,000 per annum (“Base Salary), subject to applicable withholding, deductions and other taxes, and payable in accordance with the Company’s ordinary payroll practices. During the term of employment hereunder, your salary shall be reviewed from time to time (but no less than annually) to determine whether an increase in your base salary is appropriate. Any such increase shall be at the sole discretion the CEO. The base salary will be prorated for partial years worked.
Additionally, for each fiscal year during the term of employment, you will be eligible for an annual bonus of 30% of your Base Salary (the “Annual Bonus”) in the event that the Company achieves annual revenues in the applicable fiscal year of an amount established annually by the Company’s Compensation and Governance Committee (the “Compensation Committee”), and calculated in accordance with Generally Accepted Accounting Principles in the United states (the “Revenue Target”) and 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 “EBITDA Target”).
Subject to the Board Of Director’s approval and the pending approval for an increased share pool for the Company’s 2022 Omnibus Equity Incentive Plan at the Company’s Annual Shareholder Meeting Scheduled in May of 2024, the Company shall grant you non-qualified stock options to purchase five hundred thousand (500,000) 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 “Plan”). The Stock Options shall vest as follows with a March 4, 2024 vesting commencement date (the Vesting Commencement Date”), in each case subject to Executive’s continued service through the applicable time vesting date: (1) 166,666 of the Stock Options shall vest on the date that is the one year anniversary of the Vesting Commencement Date, (2) an additional 166,66 of the Stock Options shall vest on the date that is the two year anniversary of the Vesting Commencement Date, and (3) the remaining 166,667 of the Stock Options shall vest on the date that is the three-year anniversary of the Vesting Commencement Date.
| -1- |
| Page 2 |
Benefits.
You will be eligible for the same benefits as similarly-situated employees receive, on the first of the month following your start date, so April 1st, 2024. Presently, those benefits include Medical, Dental, Vision, Life, Short-Term Disability, Long-Term Disability, and 401K. Additionally, you will receive 5 weeks’ vacation per annum that begins accruing on your start date, 5 sick days, and paid holidays.
Termination.
If you accept our offer of employment, you will be an employee at will, meaning that either you or Jones Soda may terminate our employment relationship at any time for any reason, with or without cause. Any statements to the contrary that may have been made to you are unauthorized and are superseded and cancelled by this offer letter. Please also remember that initial employment terms like your position, hours of work, work location, compensation, employee benefits, and the Employee Handbook may change over the course of employment at Jones Soda’s discretion.
Confidentiality/Non-Disclosure Agreement.
As a condition of your employment, you will be required to sign the enclosed Confidentiality/Non-Disclosure Agreement (“Agreement”). Jones Soda’s willingness to employ you is based in significant part on your commitment to fulfill the obligation specified in this Agreement. Please review the agreement carefully and, if you have any questions let us know.
Other Conditions.
This offer is further conditioned upon successful completion of a reference/background check. Additionally, on your start date, you will be required to complete INS Form I-9. Completion of this form requires you to present documentation confirming your identity and eligibility to work in the United states by your third day of employment. A list of acceptable documents is attached. Please note that the documents you present must be originals or you must provide a receipt evidencing that replacement documents have been requested. You will be required, as a condition of your employment with the Jones Soda, to sign the company’s Confidentiality Agreement. By signing this letter, you represent that you are under no contractual commitments inconsistent with your obligations to Jones Soda. You will also be required to sign, promote and enforce our Code of Conduct. You are expected to abide by the Jones Soda employee handbook and policies during your term of employment with Jones Soda.
Steps to Take to Accept Employment.
This offer will remain open through March 1, 2024. If you wish to accept employment with Jones Soda, please do the following:
| ● | Sign two copies of this letter. |
| -2- |
| Page 3 |
| ● | Sign 2 copies of the Confidentiality Agreement. |
| ● | Retain for your files one copy of each of the documents you signed; and |
| ● | Return the other signed copy of each document to Human Resources. |
Summary.
If you accept employment with Jones Soda by performing all the above steps, this offer letter will document your initial employment terms. This letter supersedes any previous discussions or offers, no matter what their source. Any future modifications of or additions to the terms set forth in this letter will be of no affect unless in writing and signed by you and an officer of Jones Soda.
We are very excited about the possibility of your joining us. We hope that you will accept this offer and look forward to a productive and mutually beneficial working relationship. Please let me know if I can answer any questions for you about any of the matters outlined in this letter.
Sincerely,
/s/ David Knight
David Knight
Chief Executive Officer
Acceptance.
I accept employment with Jones Soda under the initial terms set forth in this letter:
| /s/ Gabe Carimi | (signature line) | |
| 2/27/24 | (date) | |
| Gabe Carimi | (printed name of employment applicant) |
Enclosures/attachments: 1 copy of Offer Letter; 2 copies of Confidentiality/Nondisclosure Agreement.
| -3- |
Exhibit 19.1
INSIDER TRADING COMPLIANCE PROGRAM
In order to take an active role in the prevention of insider trading violations by its officers, directors, employees and other related individuals, Jones Soda Co. (the “Company”) has adopted the following policies and procedures:
Section 1.02 I. Adoption of Insider Trading Policy
The Company has adopted the Insider Trading Policy attached as Exhibit A (the “Policy”), which prohibits trading based on material, non-public information regarding the Company (“Inside Information”). The Policy covers officers, directors and all other employees of, or consultants to, the Company, as well as family members of such persons, and others, in each case where such persons have or may have access to Inside Information. The Policy (and/or a summary thereof) is to be delivered to all new employees and consultants on the commencement of their relationships with the Company, and is to be circulated to all employees at least annually.
Section 1.03 II. Designation of Certain Persons
A. The Company has determined that those persons listed on Exhibit B, as may be amended from time to time by the Company, are the directors and officers who are subject to the reporting and penalty provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder (“Section 16 Individuals”).
B. The Company has determined that those persons listed on Exhibit C, as may be amended from time to time by the Company, together with the Section 16 Individuals listed on Exhibit B, are subject to the pre-clearance requirement described in Section IV.A. below, in that the Company believes such persons have, or are likely to have, access to Inside Information on a more frequent basis than other employees. Under special circumstances, certain persons not listed on Exhibit C may come to have access to Inside Information for a period of time. During such period, such persons should also be subject to the pre-clearance procedure described in Section IV.A. below.
Section 1.04 III. Appointment of Compliance Person
The Company has appointed the Chief Financial Officer or Vice President of Finance (or his or her successor in office), or such other person reporting to the Chief Financial Officer or Vice President of Finance as he or she shall designate and oversee, as the Company’s Insider Trading Compliance Officer (the “Compliance Officer”).
Section 1.05 IV. Duties of Compliance Officer
The duties of the Compliance Officer shall include, but not be limited to, the following:
A. Pre-clearance of all transactions involving Company Securities (as defined in Exhibit A) by those individuals listed on Exhibits B and C, in order to determine compliance with the Policy, insider trading laws, Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended.
B. Assistance in the preparation of Section 16 reports (Forms 3, 4 and 5) for all Section 16 Individuals.
C. Pre-approval of trading plans adopted pursuant to Rule 10b5-1 under the Exchange Act (a “Rule 10b5-1 Plan”).
D. Performance of cross-checks of available materials, which may include Forms 3, 4 and 5, Form 144, officers and directors questionnaires, and reports received from the Company’s stock administrator and transfer agent, to determine trading activity by officers, directors and others who have, or may have, access to Inside Information.
E. Circulation of the Policy (and/or a summary thereof) to all employees, including Section 16 Individuals, on an annual basis, and provision of the Policy and other appropriate materials to new officers, directors and others (including consultants and contractors to the Company and its subsidiaries) who have, or may have, access to Inside Information.
F. Assisting the Company’s Board of Directors in implementation of Sections I and II of this Program.
| - 1 - |
EXHIBIT A
Jones
Soda Co. Insider Trading Policy
and Guidelines with Respect to Certain Transactions in Company Securities
This Policy provides guidelines to employees, officers and directors of Jones Soda Co. (the “Company”) with respect to transactions in the Company’s securities.
Applicability of Policy
Transactions Subject to the Policy
This Policy applies to all transactions in the Company’s securities, including common stock, options for common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock (such as stock options and restricted stock units), whether or not issued by the Company, such as exchange-traded options (collectively, “Company Securities”).
Persons Subject to the Policy
This Policy applies to all officers of the Company, all members of the Company’s Board of Directors, and all employees of the Company and its subsidiaries. This group of people is sometimes referred to in this Policy as “Insiders.”
This Policy also applies to any person who receives Material Nonpublic Information (as defined below) from any Insider, and any consultant and contractor to the Company and its subsidiaries who receive or have access to Material Nonpublic Information. Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as the information is not publicly known. Any employee can be an Insider from time to time, and would at those times be subject to this Policy.
This Policy applies to all family members who reside with Insiders (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in the household, and any family members who do not live in the Insider’s household but whose transactions in Company Securities are directed by the Insider or are subject to the Insider’s influence or control, such as parents or children who consult with the Insider before they trade in Company Securities (collectively referred to as “Family Members”). The Insider is responsible for the transactions of these other persons and therefore should make them aware of the need to confer with the Insider before they trade in Company Securities, and the Insider should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for such Insider’s own account. This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related the Insider or Family Members.
This Policy applies to any entities that an Insider influences or controls, including any corporations, partnerships or trusts (collectively referred to as “Controlled Entities”), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the Insider’s account.
| - 2 - |
Statement of Policy
Section 1.06 General Policy:
It is the policy of the Company to oppose the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of Material Nonpublic Information in securities trading.
Section 1.07 Specific Policies:
A. Trading on Material Nonpublic Information. No Insider, or consultant or contractor to the Company, and Family Members of any such person, shall engage in any transaction involving a purchase or sale of the Company Securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Material Nonpublic Information concerning the Company, and ending at the close of business on the second Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material. As used herein, the term “Trading Day” shall mean a day on which national stock exchanges and the National Association of Securities Dealers, Inc. Automated Quotation System (NASDAQ) are open for trading.
B. Tipping. No Insider shall disclose (“tip”) Material Nonpublic Information to any other person (including Family Members) where such information may be used by such person to his or her profit by trading in the Company Securities, nor shall such Insider or related person make recommendations or express opinions on the basis of Material Nonpublic Information as to trading in the Company Securities.
C. Confidentiality of Nonpublic Information. Nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden.
D. Rule 10b5-1 Plans. An Insider may enter into a Rule 10b5-1 Plan to trade in the Company Securities without many of the restrictions contained in this Policy. In connection with Rule 10b5-1, the Company has adopted the following guidelines:
(1) Adoption. A Rule 10b5-1 Plan may be adopted only during an open Trading Window (defined below) when the Insider does not possess any Material Nonpublic Information. Any Rule 10b5-1 Plan must be pre-approved in writing by the Compliance Officer a minimum of 30 days in advance of the any trades made by the Insider pursuant to the Rule 10b5-1 Plan. In the case of Section 16 Individuals, reasonably prompt disclosure regarding a Rule 10b5-1 Plan’s adoption must be made through a press release or Current Report on Form 8-K. Insiders are not permitted to have more than one Rule 10b5-1 Plan in operation at a time.
(2) Trading. It is recommended that any Rule 10b5-1 Plan be designed such that that it (i) causes a number of smaller sales over a long period of time versus a large number of sales over a short period of time, and (ii) is consistent, to the extent applicable, with the Insider’s prior trading history to minimize the appearance of sales timed with Material Nonpublic Information. Insiders are discouraged from engaging in securities transactions outside Rule 10b5-1 Plans once they are established.
(3) Plan Alterations or Suspensions. An Insider may not deviate from his or her Rule 10b5-1 Plan; however, an Insider may modify a Rule 10b5-1 Plan in compliance with Rule 10b5-1, provided that any such modification may only be made during a Trading Window when the Insider does not possess Material Nonpublic Information. Insiders are discouraged from making frequent modifications. The Company may suspend trading under a Rule 10b5-1 Plan at such times and for such periods as may be advisable to ensure compliance with, among other things, applicable securities laws and regulations, rules of any applicable stock exchange, or contractual or accounting requirements in connection with acquisitions or dispositions by the Company or the Company’s purchases or sales of Company Securities.
| - 3 - |
(4) Early Termination. If a Rule 10b5-1 Plan is terminated early, prompt disclosure regarding such termination must be made through a press release or Current Report on Form 8-K. An Insider’s Rule 10b5-1 Plan may include the following types of provisions for early termination: (a) a provision expressly stating that the Insider reserves the right to terminate the Rule 10b5-1 Plan under certain specified conditions (in order to demonstrate that any termination is not inconsistent with the plan’s original terms); (b) a provision specifying that if the Insider terminates the Rule 10b5-1 Plan and subsequently adopts a new Rule 10b5-1 Plan, that new Rule 10b5-1 Plan will not take effect for a period of at least 60 days after its adoption; or (c) a provision automatically terminating the plan at some future date, such as one year after adoption. An Insider may not adopt a new Rule 10b5-1 Plan or engage in new trades within 180 days following the early termination of a prior Rule 10b5-1 Plan.
Each Insider understands that the approval or adoption of a pre-planned selling program in no way reduces or eliminates such person’s obligations under Section 16 of the Exchange Act, including such person’s disclosure and short-swing trading liabilities thereunder. If any questions arise, such person should consult with their own counsel in implementing a Rule 10b5-1 Plan.
Prohibited Transactions
The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. It therefore is the Company’s policy that any persons covered by this Policy may not engage in any of the following transactions:
Short-Term Trading. Short-term trading of Company Securities may be distracting to the person and may unduly focus the person on the Company’s short-term stock market performance instead of the Company’s long-term business objectives. For these reasons, any director, officer or other employee of the Company who purchases Company Securities in the open market may not sell any Company Securities of the same class during the six months following the purchase (or vice versa).
Short Sales. Short sales of Company Securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company’s prospects. In addition, short sales may reduce a seller’s incentive to seek to improve the Company’s performance. For these reasons, short sales of Company Securities are prohibited. In addition, Section 16(c) of the Exchange Act prohibits officers and directors from engaging in short sales. (Short sales arising from certain types of hedging transactions are governed by the paragraph below captioned “Hedging Transactions.”)
Publicly Traded Options. Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a director, officer or employee is trading based on material nonpublic information and focus a director’s, officer’s or other employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the next paragraph below.)
| - 4 - |
Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such transactions may permit a director, officer or employee to continue to own Company Securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have ·the same objectives as the Company’s other shareholders. Therefore, directors, officers and employees are prohibited from engaging in any such transactions.
Margin Accounts and Pledged Securities. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, directors, officers and other employees are prohibited from holding Company Securities in a margin account or otherwise pledging Company Securities as collateral for a loan. (Pledges of Company Securities arising from certain types of hedging transactions are governed by the paragraph above captioned “Hedging Transactions.”)
Standing and Limit Orders. Standing and limit orders (except standing and limit orders under approved Rule 1Ob5-1 Plans, as described below) create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer or other employee is in possession of material nonpublic information.
Potential Criminal and Civil Liability and/or Disciplinary Action
Section 1.08 Liability for Insider Trading.
Insiders may be subject to penalties of up to $1,000,000 and up to ten years in jail for engaging in transactions in the Company Securities at a time when they have knowledge of nonpublic information regarding the Company.
Section 1.09 Liability for Tipping.
Insiders may also be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed nonpublic information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company Securities. The Securities and Exchange Commission (the “SEC”) has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the NASDAQ use sophisticated electronic surveillance techniques to uncover insider trading.
Section 1.10 Possible Disciplinary Actions.
Employees of the Company who violate this Policy shall also be subject to disciplinary action by the Company, which may include ineligibility for future participation in the Company’s equity incentive plans or termination of employment.
| - 5 - |
Recommended Guidelines
Section 1.11 Recommended Trading Window.
To ensure compliance with this Policy and applicable federal and state securities laws, the Company strongly recommends that all directors, officers and employees having access to the Company’s internal financial statements or other Material Nonpublic Information refrain from conducting transactions involving the purchase or sale of the Company Securities other than during the following period (the “Trading Window”):
The period in any fiscal quarter commencing after the close of business on the second (2nd) Trading Day following the date of public disclosure of the financial results for the prior fiscal quarter or year and ending on the fifteenth (15th) calendar day prior to the end of the fiscal quarter. If such public disclosure occurs on a Trading Day before the markets close, then such date of disclosure shall be considered the first Trading Day following such public disclosure. If such public disclosure occurs after the markets close on a Trading Day, then the date of public disclosure shall not be considered the first Trading Day following the date of public disclosure.
Summary of Trading Window:
| Start of trading window: | Two (2) trading days after public disclosure of financial results. | |
| End of trading window: | Fifteenth (15th) day prior to the end of the fiscal quarter. |
The safest period for trading in the Company Securities, assuming the absence of Material Nonpublic Information, is generally the first ten (10) days of the Trading Window. Periods other than the Trading Window are more highly sensitive for transactions in the Company’s stock from the perspective of compliance with applicable securities laws. This is due to the fact that officers, directors and certain other employees will, as any quarter progresses, be increasingly likely to possess Material Nonpublic Information about the expected financial results for the quarter.
Event-Specific Trading Restriction Periods. From time to time, an event may occur that is material to the Company and is known by only a few directors, officers and/or employees. So long as the event remains material and nonpublic, the persons designated by the Compliance Officer may not trade Company Securities. In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated persons should refrain from trading in Company Securities even during the Trading Window described above. In that situation, the Compliance Officer may notify these persons that they should not trade in the Company Securities, without disclosing the reason for the restriction. The existence of an event-specific trading restriction period or closing of the Trading Window may or may not be announced to the Company as a whole, and, if announced to only specific individuals, should not be communicated to any other person. Even if the Compliance Officer has not designated you as a person who should not trade due to an event-specific restriction, you should not trade while aware of material nonpublic information. Exceptions will not be granted during an event- specific trading restriction period.
Purpose of Trading Window. The purpose behind the recommended Trading Window is to help establish a diligent effort to avoid any improper transaction. An Insider may choose not to follow this suggestion, but he or she should be particularly careful with respect to trading outside the Trading Window, since the Insider may, at such time, have access to (or later be deemed to have had access to) Material Nonpublic Information regarding, among other things, the Company’s anticipated financial performance for the quarter.
It should be noted that even during the Trading Window any person possessing Material Nonpublic Information concerning the Company should not engage in any transactions in Company Securities until such information has been known publicly for at least two (2) Trading Days. Although the Company may from time to time recommend during a Trading Window that directors, officers, selected employees and others suspend trading because of developments known to the Company and not yet disclosed to the public, each person is individually responsible at all times for compliance with the prohibitions against insider trading. Trading in Company Securities during the Trading Window should not be considered a “safe harbor”, and all directors, officers and other persons should use good judgment at all times.
| - 6 - |
Section 1.12 Preclearance of Trades.
The Company has determined that all officers, directors and employees listed below in Exhibits B and C of the Company should refrain from trading in Company Securities, even during the Trading Window, without first complying with the Company’s “pre-clearance” procedures. Each officer, director and employees listed below in Exhibits B and C should contact the Compliance Officer prior to commencing any trade in the Company Securities.
The Company may also find it necessary, from time to time, to require compliance with the pre-clearance procedures from certain other employees, consultants and contractors other than and in addition to officers and directors.
Section 1.13 Individual Responsibility.
Each officer, director and employee has the individual responsibility to comply with this Policy against insider trading, regardless of whether the Company has recommended a trading window to that Insider or any other Insiders of the Company. The guidelines set forth in this Policy are guidelines only, and appropriate judgment should be exercised in connection with any trade in Company Securities.
An Insider may, from time to time, have to forego a proposed transaction in Company Securities even if he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.
Applicability of Policy to Inside Information Regarding Other Companies
This Policy and the guidelines described herein also apply to Material Nonpublic Information relating to other companies, including the Company’s customers, vendors or suppliers (“business partners”), when that information is obtained in the course of employment with, or other services performed on behalf of, the Company. Civil and criminal penalties, and termination of employment, may result from trading on inside information regarding the Company’s business partners. All employees should treat Material Nonpublic Information about the Company’s business partners with the same care required with respect to information related directly to the Company.
Definition of Material Nonpublic Information
It is not possible to define all categories of material information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of Company Securities.
While it may be difficult under this standard to determine whether particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information may include:
| - 7 - |
Financial results
| ● | Projections of future earnings or losses | |
| ● | News of a pending or proposed merger | |
| ● | News of the disposition of a subsidiary | |
| ● | Impending bankruptcy or financial liquidity problems | |
| ● | Gain or loss of a substantial customer or supplier | |
| ● | Changes in dividend policy | |
| ● | New product announcements of a significant nature | |
| ● | Significant product defects or modifications | |
| ● | Significant pricing changes | |
| ● | Stock splits | |
| ● | New equity or debt offerings | |
| ● | Acquisitions | |
| ● | Significant litigation exposure due to actual or threatened litigation | |
| ● | Major changes in senior management. |
Either positive or negative information may be material.
Nonpublic information is information that has not been previously disclosed to the general public and is otherwise not available to the general public.
Certain Exceptions
Stock Options. For purposes of this Policy, the exercise of stock options for cash under the Company’s stock option plans or the purchase of shares under the Company’s employee stock purchase plan (but not the sale of any such shares) is exempt from this Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, any other market sale for the purpose of generating the cash needed to pay the exercise price of an option, or any other market sale of the stock received upon exercise of stock options.
Restricted Stock and RSUs. This Policy does not apply to the vesting of restricted stock or restricted stock units, or the exercise of a tax withholding right pursuant to which an Insider elects to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock or restricted stock units. The Policy does apply, however, to any market sale of restricted stock and any sale of stock acquired upon the vesting of restricted stock units.
401(k) Plan. This Policy does not apply to purchases of Company Securities in the Company’s 401 (k) plan resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election. This Policy does apply, however, to certain elections you may make under the 401(k) plan, including: (a) an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company stock fund; (b) an election to make an intra-plan transfer of an existing account balance into or out of the Company stock fund; (c) an election to borrow money against your 401(k) plan account if the loan will result in a liquidation of some or all of your Company stock fund balance; and (d) an election to pre-pay a plan loan if the pre-payment will result in allocation of loan proceeds to the Company stock fund. It should be noted that sales of Company Securities from a 401(k) account is also subject to Rule 144, and therefore affiliates should ensure that a Form 144 is filed when required.
The restrictions on trading on the basis Material Nonpublic Information, the Trading Window, and the Company’s pre-clearance procedures do not apply to transactions made in accordance with a Rule 10b5-1 Plan in compliance with this Policy.
Additional Information - - Directors and Officers
Directors and officers of the Company must also comply with the reporting obligations and limitations on short-swing transactions set forth in Section 16 of the Securities Exchange Act of 1934, as amended. The practical effect of these provisions is that officers and directors who purchase and sell Company Securities within a six-month period must disgorge all profits to the Company whether or not they had knowledge of any Material Nonpublic Information. Under these provisions, and so long as certain other criteria are met, neither the receipt of an option under the Company’s option plans, nor the exercise of that option nor the receipt of stock under the Company’s employee stock purchase plan is deemed a purchase under Section 16; however, the sale of any such shares is a sale under Section 16. Moreover, no officer or director may ever make a short sale of the Company’s stock. The Company has provided, or will provide, separate memoranda and other appropriate materials to its officers and directors regarding compliance with Section 16 and its related rules.
Inquiries
Please direct your questions as to any of the matters discussed in this Policy to the Compliance Officer.
| - 8 - |
EXHIBIT B
Officers and Directors Subject to Section 16
Directors:
|
|
Officers:
Name: |
Office: |
| - 9 - |
EXHIBIT C
Additional
Persons Subject to Pre-Clearance
|
|
| - 10 - |
Exhibit 31.3
CERTIFICATION PURSUANT TO
RULE 13a-14(a) or RULE 13d-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
I, Scott Harvey, certify that:
| 1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Jones Soda Co.; and |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: April 30, 2025
| /s/ Scott Harvey | |
| Scott Harvey | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.4
CERTIFICATION PURSUANT TO
RULE 13a-14(a) or RULE 13d-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
I, Brian Meadows, certify that:
| 1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Jones Soda Co.; and |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
Date: April 30, 2025
/s/ Brian Meadows |
|
| Brian Meadows | |
| Chief Financial Officer | |
| (Principal Financial Officer) |