1083522--3/16/2009--JONES_SODA

related topics

{product, market, service}

{customer, product, revenue}

{product, liability, claim}

{acquisition, growth, future}

{cost, regulation, environmental}

{condition, economic, financial}

{regulation, change, law}

{product, candidate, development}

{financial, litigation, operation}

{operation, international, foreign}

{personnel, key, retain}

{property, intellectual, protect}

{stock, price, operating}

{system, service, information}

{capital, credit, financial}

We rely on our distributors, retailers and brokers, and this could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expand our business into other geographic markets. We generally do not have long-term agreements with our distributors, and we incur significant time and expense in attracting and maintaining key distributors. Because our distributors are not required to place minimum orders with us, we need to carefully manage our inventory levels, and it is difficult to predict the timing and amount of our sales. Our business plan and future growth is dependent in part on our distribution arrangements directly with retailers and national retail accounts. If we are unable to establish and maintain these arrangements, our results of operations and financial condition could be adversely affected. Our business plan and future growth depend in part on our launch of Jones GABA. If we are unable to successfully implement this strategy, our results of operations and financial condition could be adversely affected. We are dependent on National Beverage s production capacity and capabilities to meet the demand for Jones products in the grocery and mass merchant channel in the U.S. We have dedicated, and will continue to dedicate, significant resources to our sponsorship agreements and may not realize the benefits expected from those agreements. We rely on third-party packers of our products, and this dependence could make management of our marketing and distribution efforts inefficient or unprofitable. Our business and financial results depend on the continuous supply and availability of raw materials. Disruption of our supply chain could have an adverse effect on our business, financial condition and results of operations. We rely upon our ongoing relationships with our key flavor suppliers. If we are unable to source our flavors on acceptable terms from our key suppliers, we could suffer disruptions in our business. If we are unable to maintain brand image and product quality, or if we encounter other product issues such as product recalls, our business may suffer. The inability to attract and retain key personnel would directly affect our efficiency and results of operations. Our inability to protect our trademarks, patents and trade secrets may prevent us from successfully marketing our products and competing effectively. Litigation or legal proceedings (including pending securities class actions) could expose us to significant liabilities and damage our reputation. Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results. If we are unable to build and sustain proper information technology infrastructure, our business could suffer. We face currency risks associated with fluctuating foreign currency valuations. Risk Factors Relating to Our Industry We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success. Competition from traditional non-alcoholic beverage manufacturers may adversely affect our distribution relationships and may hinder development of our existing markets, as well as prevent us from expanding our markets. We compete in an industry characterized by rapid changes in consumer preferences and public perception, so our ability to continue developing new products to satisfy our consumers changing preferences will determine our long-term success. Our results of operations may fluctuate from quarter to quarter for many reasons, including seasonality. The global economic crisis may adversely impact our business and results of operations. We could be exposed to product liability claims for personal injury or possibly death. Our business is subject to many regulations and noncompliance is costly. Significant additional labeling or warning requirements may inhibit sales of affected products.

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1083522--3/16/2009--JONES_SODA_CO