Operator: Thank you sir. We will now be conducting a question-and-answer session. [Operator Instructions] Daniel Thiel [ph], a private investor. Please proceed with your question.
Unidentified Analyst: Hey, David as always thank you for taking our call. I have about seven questions here. So I’ll take a break and let some other folks take a turn. So kick us off, can you update us on what happened in Michigan in Nevada with the Mary Jones launches that we thought were coming there?
David Knight: Yeah, I think we all recognize. And Daniel, it’s a great question. I think we all recognize that, it’s key that we have the right partners in place. Our plants in Michigan we had to rethink those. So we’re working on a new plan that should get us in that marketplace in the second half. So disappointing, but we will be in a better place. And on Nevada, we’re still assessing we know who the right partner is, and so again, weighing up what the size of the prize, and the cost of inventories. So you’ll hear more news on that, but Michigan is back to the second half unfortunately.
Unidentified Analyst: Okay. Understood. We appreciate the transparency there and obviously, cheering for you guys to find something right there. And congrats on the fallout launch. That seems like a huge hit just Joan’s plan to pursue similar special releases in the future. So, that this doesn’t just be a one-hit wonder?
David Knight: Absolutely. And as you’re probably aware, our special releases happen three times a year. We’re balancing that between flavor news, and really exciting partnerships. I can’t give you the details yet, but there is a third partners special release coming out in the back half. We do think though that Nuka-Cola and Jones right now is probably the hottest meals and beverages to hit the market in the last couple of years.
Unidentified Analyst: Okay. Great. That’s good to hear that we’re targeting some additional partnerships that seems like a great opportunity for exposure. Switching to another topic here David, and then I’ll let some other folks take a turn, as far as financing in our runway, as far as your cash burn here and what it’s looking like we’re spending are there any plans for financing needs to raise money or to find financing?
David Knight: Yeah. So, it’s something that we as a team, our finance team and the Board focuses on a lot in terms of what’s out cash position and what is our runway. We’re considering a number of options, and we should be exploring those pretty aggressively over the next couple of months, as they include a line of credit, they includes some options to go back to the market and secure more investment. I think as you see our strategy, we’re doing a lot of things on once we identify, which ones that deserve the highest investment we’re going to need more capital. So we’re planning for that. We’re underway in terms of consideration set and more news to come.
Unidentified Analyst: Okay. Thanks, David. And then I guess just more on the topic, I saw in one interview, I know, you’ve been transparent have done a number of interviews which we appreciate. Are you are anticipating or at least hopeful of profitability in Q3 or Q4 of 2024 here? Are you still anticipating that?
David Knight: Yeah. Look, I think we’re all pushing for that number and we’re ready to pop some champagne cokes when we achieve it. I am confident, we will have one or two profitable quarter this year. Again, it comes down to how quickly, we can expand Mary Jones HD9, and then how some of these other initiatives are performing, including Spiked Jones, but certainly, on my radar, and again, something where we’re really pushing hard to achieve this year.
Unidentified Analyst: Great. Thanks, David. I’ll step aside here for some other folks.
David Knight: Great. Thanks, Daniel. Appreciate you as always.
Operator: [Operator Instructions] And the next question is a follow-up from Daniel Thiel. Please proceed with your question.
Unidentified Analyst: It looks like it’s me I say…
David Knight: That’s so quickly, Daniel. Its okay.
Unidentified Analyst: So three more questions for you, along the line of product expansion, which love your vision that you’ve laid out in your energy that you’re bringing to moving Jones to be a beverage company as opposed to a 12 ounce glass bottle Soda Company? I know, Jones Energy Drink, Jones Plus and then the flavored water or two things that have been teased or mentioned in the past. Can you give us an update on where those stand in development and potential launch?
David Knight: Sure. Jones Plus we produce the end of last year. We got it out into the marketplace. We’ve learned a few things. We’ve pivoted slightly. It’s ready for a prime time. In fact, I’ll be sharing some news shortly on getting distribution in a large format convenience chain. But that is looking great. It’s — we call it Jones Soda, sorry Jones Plus and it’s 160 milligrams of caffeine plus our natural cane sugar, taste great, delivers the amount of caffeine that you need and opens up both the convenience channel as well as the morning daypart where people are looking for a caffeine — caffeinated beverage in the morning. So that’s John’s Plus. Still we went a lot. We’re ready to take that to a bigger deal this year and into 2025.
On the flavored soda water side, super excited at what we’re developing here, where it’s on our innovation charter for test and learn this year. And our expectations will be out in a market test, I would say Q2, Q4. And I think that’s going to be our biggest kind of news for 2025.
Unidentified Analyst: Okay. Good to hear. Thank you. As far as the Spiked Jones goes and we’re launching in Washington, Rainmaker who makes Locust Cider as the partner. One thing that struck me about Rainmaker is that they seemed a little bit on the smaller side themselves. Do you think they’re an appropriate partner to take this beyond Washington and nationwide? Is that what Jones is looking to do and if so, do you think Rainmaker’s the right partner?
David Knight: Look, I think they are the exact partner that we needed to start with, a great group of similar philosophies, Seattle-based and committed to delivering great taste in beverages. They also have a go-to-market strategy that we can jump into immediately. So, they’re able to get us in front of some major retailers and get the order for May. So, more news coming on, who that will be. But we’re excited about the opportunities here. We’ve had great conversations like what happens if this is a complete rocket ship. And the agreement that we have with them is that we — if we max out the capacity then we’re open to take the formulations to other commands. And so, we geared up for success. It’s a great partnership Jason and the team at Locust, they are amazing. And we look forward to seeing how big this can be with the expectation and the Plan B that if we need to scale we can. It’s a good problem to have.
Unidentified Analyst: Yes, perfect. That’s the answer I was looking forward to make sure that we have options to accommodate more scale in this area. Kind of follow-up question on that note, is this something that can be shipped direct to consumer somewhere like to the HD9 product or will this only be available via retailers in Washington?
David Knight: It won’t be able to be shipped or made available through our e-commerce platform as it is alcohol and has to go through kind of licensed premises now. We will stream it into some of the spirit and alcohol online distributions where they’ve got the licenses to do that, right? But our play right now is more retail based through traditional liquor and beer formats.
Unidentified Analyst: Makes sense. And then, last question I have for you, so excited about the team that you’re bringing together. It seems like there’s some new fresh energy with some new vision at Jones. With that I’m sure comes some costs. I know our operating expenses. I’m looking at the release here. Not finding the exact number. I think it was around $8.1 million or so this year. Is that your expectation for approximate overhead costs moving forward? Do you expect that the cost increase or decrease moving forward?
David Knight: I think it’ll remain static as a percentage of total revenue. And as we grow the company, that will go up and commensurate with one the quality of the players that we’re bringing on as well as the number of people that we need to run the business. And so, we are laser focus on SG&A, but we’re planning for growth rate and to grow the Company. We need some key players that are aligned with what we’re doing. And [Technical Difficulty]
Operator: Ladies and gentlemen, please stay on the line. Apologies for the, quick technical difficulty. Please stay on the line. Ladies and gentlemen, thank you for remaining on the line.
David Knight: Hey, Daniel, sorry, I lost service. So I’m on back.
Unidentified Analyst: No worries. We hear you loud and clear.
David Knight: Yeah. Did I — did you catch me at the end of that. So we’re going to hold SG&A flat as a percentage of revenue grow the Company. But we are bringing on more talented folks. And as we scale, we will need to enhance the team, not dramatically but there’s more work to be done. And we’re going to grow this thing. And we’re going to need people that can handle that growth as well as get us into channels, get us into better cost of goods — good — cost of goods facilities et cetera. So we’re very conscious of it. We appreciate that question. And it’s our focus.
Unidentified Analyst: Good. Well, David, I appreciate the time. Appreciate you taking our questions or my questions, and looking forward to looking forward to what’s come at Jones.
David Knight: Perfect. Thanks Daniel. Thanks for your support. And we can’t do this alone. And I appreciate everybody for their questions and support. And I’m excited about, what we’re doing this year.
Unidentified Analyst: Thanks David.
Operator: And the next question comes from the line of Oleg Gredel [ph], a Private Investor. Please proceed with your question.
Unidentified Analyst: Thank you. My question is more for the Canadian market. Of course, the partnership with Tilray is exciting. Just what’s the breakdown of the business structure there, as a kind of like a licensing model? And the whole overall thought process in Canada launch in Ontario? How many stores you think are possibly going to carry the Mary Jones product lines? And then just kind of what’s coming in the future for Canada?
David Knight: Yeah. So it is a licensing deal with Tilray. We’ve fortunately partnered with one of the best-in-class across the globe. So we’re excited about that. And the launch in Ontario has done well. In fact we are accelerating production ahead of where we thought we needed and Tilray have stepped up. And that’s ready to go. In terms of next provinces, I think Alberta, is next. We’ve got conversations and with that — with those parties. And I’m pretty confident we’ll be probably nationwide in Canada by the end of this year. We will also bring in some other lines, beyond just our 10 milligram THC beverage. In terms of specific numbers, I don’t have those at hand, but we will get them and shine a light on Canada in the next earnings call in May. And I appreciate that question, Oleg, anything further on Canada?
Unidentified Analyst: No. That’s great. Yeah Tilray is very exciting name, so, very excited for the potential of this.
David Knight: Well, hopefully, if you’re in Canada, you have gone to one of the dispensaries and picked up some products. So go try it out.
