Jones Soda Co. (PNK:JSDA) Q3 2023 Earnings Call Transcript

Joe Culp: Yeah, yeah, for sure. Yeah. Thanks for the question. That is absolutely constantly on our minds as balancing working capital. We — and our cash balance. We are evaluating everything right now as we put together the growth plan for 2024 and that does include discussions with possible line of credit or any other sort of raise that maybe needs to happen. But at this point, there’s no further information that we’re ready to give, but it is certainly top of mind as we’re putting together our plans for the future.

David Knight: Yeah. I would just add on to that. I mean, the cash position that we have is probably the number one priority and the number one discussion we have with the Board. So we’re confident where we’re at today. We do feel that there may be an opportunity in the future as we understand the opportunity behind Mary Jones and maybe some other kind of new categories that we enter into. As we test and learn, our ideal scenario would be as we see progress and excitement and profitability and revenue growth that we may come back to the market with a requirement for investments. So again, from my standpoint, it’s a very disciplined approach to innovation, understanding what the opportunity is and then scoping out what do we need to be super successful in those categories. So as Joe said, no plans yet, but it’s on our radar screen to see if we’ve got a tiger by the tail. So Oleg, thank you for the question. Any more?

Unidentified Analyst: Awesome. Thank you. That’s pretty straightforward. And looking forward to what’s coming up in the next quarter. It sounds very exciting.

David Knight: Thanks [indiscernible].

Operator: Thank you. Next question comes from the line of [Daniel Keel] (ph), a private investor. Please go ahead.

Unidentified Analyst: David, I’m back. Sorry, I lied to you about my previous question being the last. I know Jones previously accepted a merger with Simply Better Brands, probably over a year ago at this point. Is any sort of merger sale or acquisition something that Jones is currently exploring?

David Knight: Daniel, nothing on the horizon. I was aware of the Simply Best Brands discussions. But right now nothing on the radar. What we are focusing on is innovation to find channel segments and opportunities in different categories that the brand can resonate in, but no merger acquisitions on the radar right now.

Unidentified Analyst: Okay. I’m glad to hear that. I feel like the Jones Soda brands stands alone very well. In the past, Jones has…

David Knight: Yes, I agree.

Unidentified Analyst: Yes, apologies. In the past, Jones hasn’t provided forward-looking forecast at all. Is there anything you guys are looking to share as far as forecasts or goals looking towards Q4 or 2024?

David Knight: I wrestle with this every day, Dan. It’s a great question and it gives me the opportunity to discuss it. I’m not a believer in forward projections. They are precarious in terms of setting a commitment on a destiny. We are walking into categories that have high potential and moderate risk. So I think what we’re best to do is share what we’re looking at in terms of innovation, channels, ideas, but not prepared as a leader of the organization to get into forward-looking statements. I don’t think it sets us up for a good conversation and certainly doesn’t set us up for success.

Unidentified Analyst: Understood. Well, I appreciate the thought. My last question for real this time. You mentioned that a large core bottle customer in Q1 and Q3 have fallen off. Would you be able to share who that is?

David Knight: Unfortunately not. It was a large foodservice account. We’re under nondisclosure agreements with that team. But I would say we’re aggressively trying to get that business back.

Unidentified Analyst: Well, thank you again David. I appreciate the time.

David Knight: Thanks, Daniel. Appreciate you.

Operator: Thank you. Next question comes from the line of [Oleg Gal] (ph), a private investor. Please go ahead.

Unidentified Analyst: Yeah, David. Similar to Daniel, I also lied. It’s just how excited we are to have this platform being live. Just a very — if you don’t mind sharing your brief thoughts on your U.S. legalization with cannabis and the there has been some movement recently with the suggestions coming out of HSS. And just your thoughts overall in the market, if you could comment on that? And if it does go to a nice global descheduling level 3, is there kind of a plan to speed up across state, I guess, expansion of Mary Jones? I’m assuming that’s where you guys are kind of being a little bit more cautious right now because the climate is not very stable, Canada specifically.