Jones Soda Co

Good afternoon, everyone. Thank you for participating in today's conference call to discuss Jones Soda's financial results for the fourth quarter and full year ended December 31st, 2023. Before we begin, let me remind everyone of the company's safe harbor disclaimer. Certain portions of our comments today will concern future expectations, plans, and prospects of the company that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements containing verbs such as aims, anticipates, estimates, expects, believes, intends, plans, predicts, will, may, continue, projects or targets, and negatives of these words and similar words or expressions. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Factors that could affect our actual results include, among others, those that are discussed under the heading risk factors in our most recently filed reports with the SEC, including our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K. In addition, this call includes discussions of certain non-GAAP financial measures, including adjusted EBITDA. The most directly comparable GAAP measures and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on the company's website under investor relations. This call will be available for telco replay through March 21st, starting at 7.30 p.m. Eastern time tonight. A webcast replay will also be available via the link provided in today's press release, as well as on the company's website. And now I would like to turn the call over to the president and CEO of Jones Soda, Mr. David Knight.

Hey, thanks, John. And thank you, everyone, for joining us. As I continue to become further ingrained in the operations of Jones Soda and see the opportunities at hand, I have become more and more confident in our ability to take this company to new heights. My main focus areas from day one have been delivering great taste and growth through both innovation and marketing. I strongly believe that we are setting the stage to do that on a larger scale than Jones Soda has ever achieved before. with unique and compelling product offerings across a multitude of channels and categories. As you have most likely read recently, there is a new buzz around the craft soda category with continued innovation and product news. Jones is well-primed to capture these opportunities and will be a leader in sodas and beyond. When looking at our fourth quarter results, we obviously didn't close out the year where we would have liked to. We were still dealing with headwinds in our grocery channel as a result of decreasing sales velocities, in addition to our food service channel still struggling during the quarter. We did, however, see some bright spots as our Mary Jones business continued its expansion and delivered strong results. In fact, looking at the entire year, our Mary Jones business delivered over a million dollars in revenue for 2023. And we are really only just getting started. We also maintained a strict cost discipline to make progress towards achieving bottom line profitability. And despite a one-time impact on our gross margins in the fourth quarter, we remain on track to achieve our goal of consistently reporting gross margins in the mid 30s. All this to be said, 2023 is behind us and I remain highly focused on the future. It's been encouraging to see many new initiatives take hold in early 2024, including a new food service division, further Mary Jones geographic expansion, the introduction of product lines in completely new categories, and much, much more. I firmly believe that these initiatives will set us up for improved results throughout the year and beyond, and I'm excited to share more details here today. But first, I'd like to pass the call over to Joe to discuss our fourth quarter and full year financial results in greater detail. Then I'll return to talk about the exciting growth opportunities that we're working on for 2024 and beyond. So Joe, over to you.

Thank you, David. And good afternoon, everyone. Net revenue in the fourth quarter was $3.5 million compared to $3.7 million in the fourth quarter of 2022. The decrease was primarily due to a decline in sales across our food service and grocery channels compared to the fourth quarter of last year. Our licensed cannabis business generated approximately $438,000 in the fourth quarter of 2023, which represents a 99% increase over the same quarter in 2022. Gross profit as a percentage of revenue was 19.5% compared to 24.8% in the prior year period. This decrease was primarily due to a one-time inventory write-off associated with our lemon cocoa product line. If we remove the one-time write-off of $212,000, our margin would be approximately 25.5% and above last year. Despite this, we continue to strive to hit our goal of consistently reporting margins in the mid-30s. Operating expenses in the fourth quarter improved to $2.2 million compared to $2.6 million in the same year-ago quarter. This decrease was due to lower marketing and G&A costs, mostly as a result of lower business startup costs associated with the development of the Mary Jones brand. Net loss in the fourth quarter improved to $1.5 million, or negative two cents per share, compared to a net loss of $1.6 million, or negative two cents per share, for the same quarter of 2022. Adjusted EBITDA in the fourth quarter was negative $1.4 million compared to negative $1.3 million in the same year ago quarter. Quickly running through our full year results, our revenue in 2023 was $16.7 million compared to $19.1 million in 2022. Our gross profit as a percentage of revenue increased 220 basis points to 29.1% in 2023 compared to 26.9% in 2022. Total operating expenses declined to $9.7 million in 2023 compared to $11.2 million in 2022. Net loss for 2023 improved to $4.9 million or negative 5 cents per share compared to a net loss of $6.4 million or negative 7 cents per share in 2022. And lastly, adjusted EBITDA improved to negative $4.1 million in 2023 compared to a negative $4.6 million in 2022. Now moving on to the balance sheet. As of December 31st, 2023, cash and cash equivalents were $3.9 million compared to $5.2 million at September 30th, 2023 and $8 million at December 31st, 2022. Working capital was $7.2 million at December 31st, 2023 compared to $11.6 million in December 31st, 2022. Now I'll turn the call back over to David, who will provide further insights into various growth initiatives we have planned and overall progress being made throughout the organization. David, back to you.

Hey, thanks, Joe. So let's jump back into it. I have now been at Jones Soda for eight months. And as we talked about on our last call, I am focusing on innovation that will drive both Jones Soda and Mary Jones and highlighting our significant taste advantage. The team has been hard at work developing new initiatives in marketing and product development. And if you've been tracking our press releases, we are bringing to market a significant amount of new news and revenue opportunities for 2024. As I'm sure many of you have seen, we have introduced a new food service division. I believe this channel within our core soda business hasn't had the proper resources allocated to capture the growth opportunities at hand. So we've changed that. We're expanding our sales efforts beyond being so highly focused on the traditional grocery channel to bars, restaurants, hotels, and other quick service eating and drinking organizations. We brought on an industry veteran in Victor Petrone to lead this division, as well as signing partnerships with Dot Foods, Green Nature Marketing, Ignite Brand Advisors, and more recently, adding Dot Foods Canada and north-south management to ensure we have the necessary resources and foundation to make inroads in this channel in both the US and now in Canada. This initiative has already paid off as we announced in February that we are now on the menu nationwide at both STK Steakhouse and Kona Grill. The initial feedback from our partners has been excellent with the one owner of both restaurant brands stating that Jones Soda has been one of the top product integrations that they have launched. We're not stopping there and have plenty of more food service customers to announce in the coming months. We're attending the Pizza Expo next week and we'll put Jones Food Service on the map with all pizza operators nationally. Nothing pairs better with a fine pizza than Jones Soda, especially our root beer. Now let's move to our core soda marketing efforts. In the first quarter of 2024, we began to implement our 2024 innovation and channel development plan. During the quarter, we launched Nuka-Cola Victory, a collaboration with Amazon Prime Video, Kilter Films, and Bethesda Game Studio. Nuka-Cola Victory is from the universe of the video game Fallout, and the product supports the streaming series launching in early April on Prime Video. Bottle caps are the currency in the post-apocalyptic wasteland, and our unique bottle caps on Nuka-Cola Victory can be traded for gear in our Caps for Gear website. The product sold out at both Amazon and our company's e-com platform within 15 minutes of its initial release, and a restock also sold out immediately. As this is one of our rotational flavors in our special release program, we are focusing on distributing this product in our key retailers around the country. As we look for other growth categories where the Jones brand can compete, we're excited to announce our launch of Spiked Jones. We have partnered with Locust Cider and developed a great tasting product in our core flavors with a fermented apple malt alcohol. There's been an exciting response to this new launch and we have secured distribution with key retailers in Washington. The first production is expected to roll off the line next week in 12-ounce and 19 2.0-ounce cans with a variety pack as well. The product certainly delivers on the company's promise of great taste. Our launch will provide us with key data as we expand the footprint across the country. In Canada, we have restructured our go-to-market strategy that has the potential to both double our revenue and double our margins. Loic Tamai has been promoted to General Manager Canada and is leading our new growth strategy in that country. We have transitioned into a new broker system with NorthSouth and DOT Foods Canada as our product delivery pipeline. We're also focusing on food service and replicating the model we have kicked off in the U.S. More to come on that. Now moving to operations. In recent news, Eric Chastain, our veteran COO, with 22 years of service, has decided to step aside and take a well-deserved break. We would like to thank Eric for his commitment to the company and the legacy that he's built over this long tenure. That said, we welcome Eric Bittner to the team as our new COO. He is a seasoned beverage operator with time at PepsiCo, Keurig Dr. Pepper, Niagara Bottling, and Fever Tree. I am excited to have him on board to help drive growth into new categories, gain scale, and improve margins. Mary Money has also joined the team as the Director of New Product Development and Commercialization. Both are seasoned executives with deep beverage and consumer packaged goods experience. With that, let's now turn to Mary Jones. I'm very proud to say that as of February, we've officially launched our 10 milligram THC sodas in Ontario, Canada, meeting our promise of launching into the Canadian market by Q1 this year. As previously discussed, we are using Tilray Brands, one of the leading cannabis companies worldwide, as our manufacturing and distribution partner for the Canadian market. We also partnered with Green Hedge, a leading cannabis sales and distribution company based in Canada, to further support our sales and field marketing for Mary Jones. THC infused beverages are growing at a rapid pace in Canada and around the world as more and more consumers are shifting over from alcohol. We believe this creates a highly lucrative opportunity for our Mary Jones craft sodas and syrups, especially given Jones was originally founded in Canada and has significant brand power in this geography. We've received positive initial feedback and look forward to expanding our product offerings and provinces in this international market. To recap where Mary Jones sits today from a geographic perspective, we are currently the number one ranked seller in the cannabis-infused carbonated beverage format in California, where our products are carried in more than 350 dispensaries, with many more on slate for 2024. We launched this week our line of Mary Jones fizzy tabs that are hitting the shelves in dispensaries with three of our core flavors. a great brand representation with 40 fizzy tabs of 2.5 milligram THC in a childproof container. We also recently launched in the state of Washington, and within five months, our berry lemonade and root beer beverage are ranked number one and number two in beverage sales. We continually assess the next horizons for the regulated market, and we'll continue to expand as we find the right partners. In addition to our geographic expansion, we're also very excited about our expansion into hemp-derived craft sodas with our new Hemp Delta 9, or as we call it, HD9. The new Mary Jones HD9-infused craft sodas are created with the exact same formulation of Jones Soda adapted for HD9 with high-quality lab-tested THC derived from hemp. The sodas are sold in 12-inch cans with either 2.5, 5, or 10 milligrams of low-dose hemp THC. We're starting off in four classic Jones flavors, including root beer, orange and cream, green apple, and Mary Jones award-winning berry lemonade. We also plan on introducing new and special release flavors in 24, as well as other HD9-infused edibles and shots. Additionally, we launched a direct-to-consumer e-commerce store for Mary Jones HD9 products, shipping to all states with the exception of Alaska, Hawaii, Colorado, Idaho, and Oregon due to state regulations. HD9 for Mary Jones is also currently available in six retail markets, including Massachusetts, Florida, Ohio, Minnesota, Alabama, and Southern California, with many more to come. We believe there's a great evolution happening among today's consumers and retailers as we're seeing more people adapt to legal cannabis and THC products, whether low-dose hemp-derived Delta 9 or traditionally higher-dose THC options via state-regulated markets. Mary Jones now sits squarely in this trajectory with low-dose HD9 and traditional cannabis products that meet the demand. Overall, I continue to be very excited about Mary Jones. In Q4, we grew our cannabis-related revenue 99% year-over-year and 100% sequentially, but we are still just getting started. To give a better perspective on the success our brand is having, as we continue to scale our operations, our agreements are set up for us to get a bigger piece of the pie as our system-wide sales numbers continue to grow. Overall, Mary Jones remains our top priority within the growth opportunities we've identified. We're still in the early days, given it's only been less than a year and a half since launching in California, and we've already managed to become a leading brand in the industry. With this momentum and proper strategy in place to scale the business, we remain highly confident that Mary Jones will be a major contributor to the overall revenue growth of the company. So in summary, This is an exciting time at Jones and the team is delivering unprecedented innovation across Jones Soda and Mary Jones. I am personally excited at the opportunity ahead and the team I am building. We are evolving rapidly from a 12 ounce glass bottle soda line to a multi-format beverage company. 2024 is off to a great start and the fun is just beginning. Delivering shareholder value is our number one corporate objective. And I look forward to engaging with our shareholders to get their feedback and answer any questions they may have. With that, I'll pass the call back over to John to see if there are any questions from our listeners today. John, over to you.

Thank you, sir. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please, while we poll for any questions. As a reminder, if you'd like to ask a question, please press star one.

The first question comes from the line of Daniel Thiel with A Private Investor. Please proceed with your question.

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. But to kick us off, can you update us on what happened in Michigan and Nevada with the Mary Jones launches that we thought were coming there?

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 plans for 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 then Nevada, we're still assessing who the right partner is. So again, weighing up with the size of the prize and the cost of the entry. So you'll hear more news on that, but Michigan is

back to the second half, unfortunately. Okay, understood.

We appreciate the transparency there. Obviously cheering for you guys to find something right there. Congrats on the Fallout launch. That seems like a huge hit. Does Jones plan to pursue similar special releases in the future so that this doesn't just be a one-hit wonder?

Absolutely. 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 partner special release coming out in the back half. We do think, though, that Nuka-Cola and Jones right now is probably the hottest news in beverages to hit the market in the last couple of years.

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 cash to 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?

Yeah, so it's something that we as a team, finance team and the board, focus on a lot in terms of what's our 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. They include a line of credit. They include 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, and once we identify which ones deserve the highest investment, we're going to need more capital. So we're planning for that. We're underway in terms of our consideration set and more news to come.

Okay, thanks, David.

And I guess just while we're on the topic, I saw in one interview, I know you've been transparent and have done a number of interviews, which we appreciate. you were anticipating or at least hopeful of profitability in Q3 or Q4 of 2024 here. Are you still anticipating that?

Yeah, look, I think we're all pushing for that number and we're ready to pop some champagne corks when we achieve it. I am confident we'll have one or two profitable quarters this year. Again, it comes down to how quickly we can expand Mary Jones HD9 and then how some of these other initiatives perform, including spike churns. But certainly on my radar and, again, something we're really pushing hard to achieve this year.

Great. Thanks, David. I'll step aside here for some other folks. Great. Thanks, Daniel. Appreciate you, as always.

Ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star one. The confirmation tone will indicate that your line is in the queue. You may press star two to remove a question from the queue. For anyone using speaker equipment, we ask that you please pick up your handset before pressing the star keys.

One moment while we poll for additional questions. And the next question is a follow-up from Daniel Thiel.

Please proceed with your question.

Looks like it's me and you.

So three more questions for you. Along the line of product expansion, which love your vision that you've laid out and 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 are 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?

Sure. Jones Plus we produced the end of last year. We got it out into the marketplace. We 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. We call it Jones Plus, and it's 160 milligrams of caffeine plus our natural cane sugar. Tastes great, delivers the amount of caffeine that you need, and opens up both the convenience channel as well as that morning day part where people are looking for a caffeinated beverage in the morning. So that's Jones Plus. Still, we learn a lot. We're ready to take that to a bigger deal this year and into 25. On the flavored soda water side, super excited at what we're developing here. We're, you know, it's on our innovation charter for test and learn this year. And so our expectations will be out in a market test, I would say Q3, Q4.

and i think that's going to be our biggest kind of news for 2025. okay good to hear thank you um as far as the spike jones goes i know we're launching in washington rainmaker who makes locust cider is the partner one thing that struck me about rainmaker is that you know 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 yeah, if so, do you think Rainmaker is the right partner?

Look, I think they're the exact partner that we needed to start with. Great group, similar philosophies, Seattle-based, and committed to delivering great tasting 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 opportunity 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 if we max out their capacity, then we're open to take the formulations to other commands. So You know, we're geared up for success. It's a great partnership. Jason and the team at Locust are amazing. And, you know, we look forward to, you know, 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.

Yeah, perfect. That's the answer I was looking for, 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, similar to the HD9 product, or will this only be available via retailers in Washington?

It won't be able to be shipped or made available through our e-commerce platform. As it is alcohol, it has to go through kind of licensed premises. Now, we will stream it into some of the the spirit and alcohol online distributions where they've got the licenses to do that. But our play right now is more retail-based through traditional liquor and beer formats.

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 cost. I know our operating expenses, I'm looking at the release here. I'm 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 cost to increase or decrease moving forward?

I think it'll remain static as a percentage of total revenue. And as we grow the company, that will go up in 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. So we have laser focus on SG&A, but we're planning for growth, right? And to grow the company, we need key players that are aligned with what we're doing.

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. Hey, Daniel, sorry, I lost service, so I'm back. No worries. We hear you loud and clear.

Yeah, 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, you know, if we're going to grow this thing, then 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 facilities, etc. So we're very conscious of it.

We appreciate that question and it's our focus. Sounds good. Well, David, I appreciate the time.

I appreciate you taking our questions or my questions and looking forward to what's to come at Jones.

Perfect. Thanks, Daniel. Thanks for your support. You know, 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. Thanks, David. And the next question comes from the line of Oleg Gal, a private investor.

Please proceed with your question.

Thank you. My question is more for the Canadian market. Of course, the partnership with Pillray 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 launching with Ontario? How many stores do you think are possibly going to carry the Mary Jones product line? and just kind of what's coming in the future for Canada.

Yeah, so it is a licensing deal with Tilray. We're fortunately partnered with one of the best in class across the globe. So we're excited about that. The launch in Ontario has done well. In fact, we're 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's next. We've got conversations with those bodies, and I'm pretty confident we'll be probably nationwide in Canada by the end of this year. We're also bringing 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?

No, that's great. Yeah, Tilray is a very exciting name. So very excited for the potential of this.

Well, hopefully if you're in Canada, you've gone to one of the dispensaries and picked up some products. So go try it out.

That's what's happening after the call.

Great. Thanks, Oleg. And the next question comes to the line of Steve Kanzer with Private Investor.

Please proceed with your question.

David, thank you for taking calls from us. It's a welcome change from the past and being able to have direct dialogue with the company and the team. So thank you very much. I wanted to better understand the food services division and make sure I'm thinking about this correctly. In the alcohol industry, you have on-prem and off-prem, two different sales channels being retail stores and then the bars and restaurants. In the craft soda business, do you see the benefit or essentially the hand-selling of the product, a more personalized engagement with the consumer to where it assists with the pull-through going into grocery stores and what, which is a very competitive industry? and very difficult sales channel.

Yeah, look, we're super excited about food service, especially now that we're producing broader formats and variety specifically for food service. You know, the 12-ounce glass bottle offering has been somewhat a stumbling block for food service as their preference is really cans and, you know, food fountain slush, et cetera. So we've now got a comprehensive range of products across all flavors that suit food service. What we've built with Doc Foods and Green Nature has really opened up and will open up Jones in numerous accounts that I've never really considered Jones either because of the format or the lack of a delivery system. So DOT has 4,000 customers in the U.S. and they're distributors and retailers and food operators. So now they can order through DOT as little as just one case of Jones where previously they had to step up and buy a pallet load. You know, we're going to see a significant explosion in food service. Victor, who is our GM, has got such deep experience and great relationships. So he's the right guy. And now that we've armed him with the right product range and the go-to-market strategy and infrastructure that supports that, we're expecting, you know, significant growth there. So we're excited about that. As I said, we go to the Pizza Expo next week. I'm sure we'll secure increasing excitement and orders at the show that will be delivered through DOT. And just by way of example, Green Nature took Olipop and Liquid Death from zero to over $20 million in revenue through food service. So We know we have the right food service broker. They've got 18 sales folks that are around the country that all they do is speak to food service operators. So that's restaurants, colleges, you know, hospitals, you know, wherever, wherever cafeterias and canteens are. And so we're going to see a significant growth through that channel. And then again, Dot Foods is having their expo here in Denver in April, and so Jones will be there again to secure new business at that expo. So food service you're going to see a lot of buzz and activity about, and Jones Soda tastes amazing in a frozen slush or off the fountain as well as now being available through cans. So exciting stuff. So hopefully, Steve, that answers your question.

It does. Thanks. And I appreciate the kind of follow on related to food services and the sales process of it. The fact that they've got their own salespeople is really helpful because it goes back to, I guess, Daniel's question around the additional SG&A relative to the sales. So partner with the right folks that have their own sales team. And that's super helpful. I've got two more questions, if that's OK. Yeah, sure.

Go ahead.

In 10K and 10Q you referenced that there's I think 27 million warrants that are set to expire I want to say mid-March with a 65 cent conversion price will those be expiring and going away and removing that overhang or do you know if they'll be converting those at the 65 cents I'm going to hand that over to Joe

Joe, do you want to answer that?

Yeah, yeah, good question. At this point, no plans for any changes, but we'll certainly let you know if anything changes. And we know that's just coming up in a couple weeks, but no plans to do anything with those.

Okay, but they expire. I was trying to count the days and figure it out, but it is in March of this year that they expire, this month. Correct. Okay, great. Thank you. My last question, and I'm really happy to hear the number one corporate objective is shareholder value. As we think about how that shareholder value is created through the different verticals that you've now introduced, the broadening of the product base, growing top-line revenue, paying real close attention to both gross and net margins, watching that growth in EBITDA even though it may be negative quarter to quarter but seeing it all moving in the right direction as you guys build out back into the business share prices is obviously another indicator of growing shareholder value and one of the challenges or two of the challenges that we face as a company being on the current exchange that we're on presents a liquidity challenge for current shareholders and it also kind of inhibits the broader investor support as there's a lot of brokerage firms that are not permitted to buy for their clients any penny stocks or anything on an over-the-counter. As you think forward growing shareholder value with all these other channels and very important pieces of it, how do you think about uplisting the stock or reversing the share price and maybe tying it with something like a rights offering to get capital in the company and allow current shareholders to maintain their percentage or increase ownership through that rights offering going forward. Your thoughts around that?

Yeah, look, it's something that is on one of my, you know, we call it big rocks. You know, what are the things that am I focused on every day? And, you know, the share structure, the boards that we're on, opportunities ahead to up list is certainly, you know, one of my top priorities. So, you know, I'm privileged to have some great board members. So we've set up a small team of myself and several of our board teams to really go through what are the opportunities that What's the best way to raise capital? What's the best way to make our shares more, you know, available? Certainly being a penny stock is not where we want to be. And yeah, you'll hear more on that this year. But just to show you, it's on my kind of top three objectives for the first half of

Well, that's great to hear. I've been a shareholder for a very long time and wasn't sure what I was going to do and then saw the transition begin to happen and thought I'd just stick it and watch for a little while. And you guys have been quarter over quarter and year over year executing and doing what you've indicated publicly what you were going to be doing and executing on the plan. So thanks for that. And good luck for the rest of 24. We're watching closely.

Yeah, Steve, look, I mean, we have a large group of really loyal shareholders, right? And one of the things I noticed when I came into the company was, gosh, people are still hanging in and still supporting, and we need to get growth behind the company. We need to do what we say and say what we do, right? Trust and execution is key. in any company, but beverages, it's paramount. And so I'm glad that we're now in this cycle of, hey, we're looking at opportunities, we're identifying growth verticals, and we're going hard at it, right? I think we've delivered more innovation at Jones Soda in the last six months than we probably ever had before. So we're hard at it, right? And I would encourage you guys to hang in You know, we're excited at the plans that we have. And, you know, that's going to reflect in shareholder values. So, you know, thank you for your patience and commitment. And, you know, I'm looking forward to, you know, delivering Q1 and giving you insight into what we're doing Q2. And just as that momentum builds, I think we're going to have a very exciting year.

Great. Thank you very much. Thanks, Steve.

And at this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Knight for any closing remarks.

Yeah, thanks a lot, John. You know, I'll be brief. I think I've said exactly what I needed to say. I appreciate the support that we're getting across the company, you know, from our board, from our shareholders. Thank you, everyone, for taking the time to listen today. And we look forward to coming back with you and reporting on our first quarter results in May. And, you know, I'm enjoying some of the calls I'm getting from my shareholders, right? They're calling me up and asking questions and supporting what we're doing and noticing a difference. So that transition from a soda company to a total beverage place is really key to our success and getting into new formats and New verticals, new sub-brands is going to be priority one for us as we drive both Jones Soda and Mary Jones. So thanks, everyone. Have a great day. Appreciate you all.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.