Answer questions on the document attached that refers to the case (also attached). I also added some slides that might offer some helpful context and definitions to the questions asked
1_marketing_framework_exercise__1_.docx

jones_soda_10_k.pdf

marketing_framework_handout.pdf

5cs_handout.pdf

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Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
TRANSITION
REPORT
PURSUANT
TO
SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to
Commission File Number: 000-28820
_____________________________________________
JONES SODA CO.
(Exact name of registrant as specified in its charter)
Washington
(State or other jurisdiction of
incorporation or organization)
52-2336602
(I.R.S. Employer
Identification No.)
66 South Hanford Street, Suite 150
Seattle, WA 98134
(Address of principal executive offices)
(206) 624-3357
(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:
Common Stock, no par value
Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 
Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  No 
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes  No 
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes 
No 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer 
Accelerated filer 
Non-accelerated filer 
Smaller reporting company 
(Do not check if a smaller reporting company)
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 30, 2014, the last business day of the registrant’s
most recently completed second fiscal quarter, was approximately $15,876,976 using the closing price on that day of $ 0.42.
As of March 20, 2015, there were 40,972,394 shares of the registrant’s common stock issued and outstanding.
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Documents Incorporated By Reference:
The information required by Part III of this Report, to the extent not set forth herein, is incorporated in this Report by reference to the registrant’s
definitive proxy statement relating to its 2015 annual meeting of shareholders. The definitive proxy statement will be filed with the Securities and
Exchange Commission within 120 days after the end of the 2014 fiscal year.
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EXPLANATORY NOTE
Unless otherwise indicated or the context otherwise requires, all references in this Annual Report on Form 10-K to “we,”
“us,” “our,” “Jones,” “Jones Soda,” and the “Company” are to Jones Soda Co., a Washington corporation, and our whollyowned subsidiaries Jones Soda Co. (USA) Inc. and Jones Soda (Canada) Inc.
In addition, unless otherwise indicated or the context otherwise requires, all references in this Annual Report to “Jones
Soda” refer to our premium beverages, including Jones® Soda, Jones Zilch®, and Jones Stripped™ sold under the trademarked
brand name “Jones Soda Co.®”
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. This
Annual Report on Form 10-K (Report) contains a number of forward-looking statements that reflect management’s current
views and expectations with respect to our business, strategies, products, future results and events, and financial performance.
All statements made in this Report other than statements of historical fact, including statements that address operating
performance, the economy, events or developments that management expects or anticipates will or may occur in the future,
including statements related to case sales, revenues, profitability, distributor channels, new products, adequacy of funds from
operations, cash flows and financing, our ability to continue as a going concern, potential strategic transactions, statements
regarding future operating results and non-historical information, are forward-looking statements. In particular, the words such
as “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” “will,” “can,” “plan,” “predict,” “could,” “future,”
“continue,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive
means of identifying such statements and their absence does not mean that the statement is not forward-looking.
Readers should not place undue reliance on these forward-looking statements, which are based on management’s current
expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties
and assumptions and apply only as of the date of this Report. Our actual results, performance or achievements could differ
materially from historical results as well as from the results expressed in, anticipated or implied by these forward-looking
statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
In particular, our business, including our financial condition and results of operations and our ability to continue as a
going concern may be impacted by a number of factors, including, but not limited to, the following:

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

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

Our ability to successfully develop and launch new products that match consumer beverage trends;

Our ability to increase revenues and achieve case sales goals;

Our ability to manage our operating expenses and generate cash flow from operations, or our ability to secure
additional financing if our case sales goals take longer to achieve under our operating plan;

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

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

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

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

High or rising fuel and freight costs may have an adverse impact on our results of operations;

Fluctuations in currency exchange rates, particularly between the U.S. and Canadian dollars, can adversely impact
our results of operations;

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

Our ability to attract and retain key personnel, including retaining the services of our CEO, each of which would
directly affect our efficiency and operations and could materially impair our ability to execute our growth strategy;
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Our inability to protect our trademarks and trade secrets, which may prevent us from successfully marketing our
products and competing effectively;

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

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

Our ability to compete successfully against much larger, well-funded, established companies currently operating in
the beverage industry;

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

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

Our ability to maintain an effective information technology infrastructure;

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

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

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

Our ability to comply with the many regulations to which our business is subject.
For a discussion of some of the factors that may affect our business, results and prospects, see “Item 1A. Risk Factors.”
Readers are also urged to carefully review and consider the various disclosures made by us in this Report and in our other
reports we file with the Securities and Exchange Commission, including our periodic reports on Forms 10-Q and current
reports on Form 8-K, and those described from time to time in our press releases and other communications, which attempt to
advise interested parties of the risks and factors that may affect our business, prospects and results of operations.
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JONES SODA CO.
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
Table of Contents
Page
PART I
Item 1.
Business
1
Item 1A.
Risk Factors
8
Item 1B.
Unresolved Staff Comments
16
Item 2.
Properties
16
Item 3.
Legal Proceedings
16
Item 4.
Mine Safety Disclosures
16
PART II
Item 5.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases
of Equity Securities
17
Item 6.
Selected Financial Data
18
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
19
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
22
Item 8.
Financial Statements and Supplementary Data
23
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
41
Item 9A.
Controls and Procedures
41
Item 9B.
Other Information
41
PART III**
Item 10.
Directors, Executive Officers and Corporate Governance
42
Item 11.
Executive Compensation
42
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Shareholder Matters
42
Item 13.
Certain Relationships and Related Transactions, and Director Independence
43
Item 14.
Principal Accounting Fees and Services
43
PART IV
Item 15.
Exhibits and Financial Statement Schedules
SIGNATURES
** The information required by Part III of this Report, to the extent not set forth herein, is
incorporated in this Report by reference to the registrant’s definitive proxy statement
relating to its 2015 annual meeting of shareholders. The definitive proxy statement will be
filed with the Securities and Exchange Commission within 120 days after the end of the
2014 fiscal year.
43
44
Table of Contents
PART I
ITEM 1.
BUSINESS.
Overview
We develop, produce, market and distribute premium beverages which we sell and distribute primarily in the United
States and Canada through our network of independent distributors and directly to our national and regional retail accounts. We
also sell products in select international markets. Our products are sold primarily in grocery stores, convenience and gas stores,
“up and down the street” in independent accounts such as delicatessens and sandwich shops, as well as through our national
accounts with several large retailers. We refer to our network of independent distributors as our direct store delivery (DSD)
channel, and we refer to our national and regional accounts who receive shipments directly from us as our direct to retail (DTR)
channel. We do not directly manufacture our products, but instead outsource the manufacturing process to third-party contract
manufacturers. We also sell various products online, including soda with customized labels, wearables, candy and other items,
and we license our trademarks for use on products sold by other manufacturers.
Our company is a Washington corporation formed in 2000 as a successor to Urban Juice and Soda Company Ltd., a
Canadian company formed in 1986. We moved our offices on March 1, 2015, and our principal place of business is now
located at 66 South Hanford Street, Suite 150, Seattle, Washington 98134. Our telephone number is (206) 624-3357.
Jones Products
Our strategy is to focus on our core brand, Jones Soda, within the sparkling beverage category. Our product line-up
currently consists of the following:
Jones Soda
Jones Soda is our premium carbonated soft drink. We sell Jones Soda in glass bottles and cans, with every label featuring
a photo sent to us by our consumers. We also sell Jones Soda on fountain, utilizing customer photos on the fountain equipment
and cups. Over 1 million photos have been submitted to us. We believe this unique interaction with our consumers
distinguishes our brand and offers a strong competitive advantage for Jones Soda. Equally differentiating is the bright, colorful
look of our drinks, which have distinctive names such as FuFu Berry and Berry Lemonade. We also sell Jones Soda in more
traditional flavors such as Cream Soda, Root Beer, Orange & Cream. Jones Soda is made with high quality ingredients,
including pure cane sugar. We currently sell Jones Soda in ten flavors in the United States with additional flavors offered
seasonally or in certain markets.
Jones Zilch
Jones Zilch is a sugar-free version of our Jones Soda line providing an alternative for consumers. Jones Zilch, sweetened
with Splenda® and has zero calories, is an important product extension, especially in light of the increasing consumer
preferences for zero and lower-calorie options. Jones Zilch is also sold in glass bottles, cans and on fountain. We currently have
four flavors of Jones Zilch: Black Cherry, Pomegranate, Vanilla Bean and Cola.
Jones Stripped
Jones Stripped is our natural ingredient and low-calorie premium carbonated soft drink. Jones Stripped is lightly
sweetened with a unique blend of natural sweeteners and contains 30 calories and is packaged in the classic Jones Soda
presentation in a clear, long-neck, glass bottle, with every bottle label featuring a photo sent to us by our consumers. With no
artificial colors, the soda is clear, but the packaging features a burst of color on the label. We currently have six flavors of
Jones Stripped: Cherry, Lemon Lime, Orange Mango, Green Apple, Huckleberry and Chipotle Pineapple.
Sparkling Beverage Industry
Our beverages are classified in the sparkling beverage category, which encompasses the carbonated soft drinks (CSD)
segment (our Jones Soda and Jones Zilch lines) and the natural carbonated drinks (natural sparkling) segment (for our Jones
Stripped line). The CSD segment is the largest segment in the sparkling beverage category, and in the U.S., is a $77 billion
industry (according to the March 25, 2013 issue of Beverage Digest). During 2013, the CSD segment had a volume decline of
2% (according to the March 14, 2014 issue of Beverage Digest). Within the CSD segment are craft and premium sodas, which
provide consumers with an alternative to the large corporate brands and is where our Jones Soda line competes. In the U.S., the
craft and premium sodas are typically distributed through the grocery, drug, mass, club, convenience, independent account and
online sales channels.
1
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Our Focus for Fiscal 2015: Sales Growth
Our focus for fiscal 2015 is on revenue, case sales growth and driving to profitability. Over the past two and a half years,
we implemented substantial internal changes to our organization, and have achieved significant reductions in our operating
expenses and efficiencies in our operations.
The following are key components of this focus for 2015:

Utilize the strategic distribution improvements implemented across the United States and Canada to grow national
and independent account sales of our core Jones Soda lines;

Expand the distribution of Jones Stripped in the United States and Canada, which previously was launched in select
regions in the United States;

Increase the focus on international expansion;

Expand our newly launched fountain program of our core product lines in the United States and Canadian
marketplaces;

Build upon partnerships with major retail chains in innovative ways, while continuing to build our base of
independent accounts;
Product Distribution and Sales Strategy
Our products are distributed and sold throughout the U.S. and Canada and in select international markets. Our primary
distribution channels are our direct store delivery (DSD) channel (sales and distribution through our network of independent
distributors) and our direct to retail (DTR) channel (sales directly to national and regional retail accounts). We also have our
online channel for internet sales of various products. We strategically build our national and regional retailer network by
focusing on distribution systems that we believe will provide top-line drivers for our products and increased availability and
visibility of our products in our core markets. In building and expanding our DSD channel, we also consider international
markets and look for regions that data suggests have a high affinity for the Jones brand and can be pursued within our financial
resources. For 2015, we are focusing our efforts internationally on Ireland, the United Kingdom and Costa Rica.
Part of our strategy in building our distribution system is to blend our DSD and DTR distribution channels, delivering
different offerings through alternate channels. In determining the most advantageous distribution channel, we also consider
what works best for the customer, allowing for better retail activation and in-store presence, including seeking placement on
shelves that are normally restricted to national mainstream brands and placement in the cold-aisle, thus providing us access to
the important “take home …
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