Carrie L. Traner – Principal Financial Officer and Vice President of Finance Jennifer L. Cue – Chief Executive Officer

Kevin Sakser – KJS Investment Corporation

Good afternoon. Ladies and gentlemen and thank you for standing by. Welcome to the Jones Soda Company’s Second Quarter 2013 Earnings Release Conference Call. At this time all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. (Operator Instructions). I would like to remind everyone that this conference is being recorded. I will now like to turn the call over to Carrie L. Traner, Principal Financial Officer and Vice President of Finance. Please go ahead. Carrie L. Traner: Thank you, and good afternoon, ladies and gentlemen. 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 passages containing verbs such as aims, anticipates, estimates, expects, believes, intends, plans, predicts, will, may, continue, project 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 statement. 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 current reports on Form 8-K. Listeners are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this earnings call. Except as required by law, we do not assume any obligation to update the forward-looking statements we make today. I will now turn the call over to Jennifer L. Cue, Chief Executive Officer of Jones Soda. Jennifer L. Cue: Good afternoon, everyone, and thank you for joining us today. I am pleased to report today that we continue to make progress on our turnaround plan now 12 months since we changed this path of this Company one to a towards financial stability, and sustainability. For the second quarter, we delivered profit of EBITDA and a breakeven earnings per share, while there are still works to be done cultivating our top line potential and growing our case volume, we believe that with our reduced overhead structure in place we are even closer to being able to do this in a profitable way. From past experience, experience from my earlier years at the Company, when I did to turnaround very similar to the one we are currently undertaking, it did take time before the Company had reached profitable growth and during that time revenues dropped by the 20%. The revenue erosion we had experienced now over the last 12 months in an expected result of the turnaround and is going to happen anytime you pull back as much as we did on operating expenses. To put it is perspective, we went from an annual SG&A spend of $11 million a year to $5 million a year, and took this Company from a breakeven of approximately $50 million in revenue to approximately $20 million at current SG&A level. We are very pleased with the milestones we’ve achieved as a Company over the last four quarters. I know for some of you this sound familiar, but I would like to report our progress again on the component of the turnaround strategy and 2013 operating plan before Carrie gets into the results for the second quarter. First, we reduced our overhead to a level commensurate with our Company’s size and aligned our operating expenses to for the Company’s capital resources. During the second quarter of 2013, we began adding back, selling and marketing expenses that we believe will help us achieve top line future growth, while holding General and Administrative expenses at the (inaudible) structure. Secondly, we have retained a team of employees who are entrepreneurial and aligned with our turnaround plan and long-term growth strategy. By the start of the second quarter, we had hired three new junior sales positions and in addition to this we hired a full-time summer sale team to promote both our Natural Jones soda line and our core Pure Cane Jones soda. Third, we are focusing our effort on certain core geographic markets, distributor partners and product lines where we believe we can achieve profitable long-term growth while maintaining a streamlined operating structure. This entails we will be focusing on our core geographic market including the West coast, Mid-West and Canada. We have and will continue to redirect resource to support our distributor networks through increased promotional allowances at retail. The fourth pillar of our strategy is redeploying our marketing resource to initiatives that are in alignment with our brand. And finally we launched Natural Jones Soda our lower calorie yet full flavor and good tasting soda in response to the growing consumer demand from more healthful beverage options. Our overall mission remains sustain but same but first to arrive back to be highly innovative company that celebrates the engaging, distinctive character of the Jones Soda brand with profitable operation and setting the a stage for profitable future growth. I will now turn the call over to Carrie to review the second quarter results and then I will follow this with an update on the business and the closing remarks. Carrie L. Traner: Thanks Jenifer. Revenue in the second quarter decreased 19% to $4.3 million from $5.3 million in the prior year period. Primarily, due to the implementation of our turnaround plan and a reduction of case volume of 18%. Additionally in the prior year international sales were higher due to the initial load and to supporting new distributor. During the second quarter we invest in promotion allowances and slotting fees on a per case basis. So on in overall basis promotional allowances plan for $14,000 to $472,000 for quarter. Partially offsetting the decrease in case sales with an August 2012 price increase. Gross profit margin in the second quarter decreased to 29% from 30% in the second quarter of 2012 and was affected by the decline in international revenues. Operating expenses in the second quarter decreased 34% to $1.3 million from $2.0 million in the prior year period, reflecting a 32% decrease in promotional selling expenses and 36% decrease in general and administrative expenses. This improvement was due to our turnaround plan and realigned cost structure, which included personal deductions and more variable compensation. Operating expenses as a percentage of revenue decreased to 31% for the quarter from 38% in 2012. Since the beginning of the year we increased our employees from 26 to 30 by the end of the second quarter plus five seasonal employees. This compares to 50 employees at the end of the 2011 and 28 at the end of the second quarter a year ago. Net loss for the quarter ended June 30, 2013 improved 79% to a loss of $95,000 or breakeven earnings per share, from a loss of $459,000 or a loss of $0.01 per share a year ago. This included EBITDA reconciling items depreciation and amortization, stock-based compensation, income taxes and other expense totaling $149,000 compared to $147,000 last year. EBITDA for the quarter was positive $54,000 compared to a negative EBITDA of $312,000 in the same period a year ago. For the first six months of 2013 revenues decreased 19% to $7.4 million from $9.1 million the prior year period. During the first half of the year we invest more in promotional allowances and slotting fees on a per case basis, so overall promotional allowances declined $38,000 to $866,000 from the period. Partially offsetting the decrease in case sales was August 2012 price increase. Whereas profit margins for the period decreased to 27% from 29%. The prior year margin was benefited by the international revenue I mentioned earlier. Operating expenses decreased 47% to $2.5 million from $4.7 billion in the prior year period reflecting a 52% decrease in promotional selling expenses and a 43% decrease in general and administrative expenses. This improvement was due to our turnaround plan and realigned cost structure which included personnel reductions and more variable compensations. Operating expenses as a percentage of revenue decreased to 33% for the period from 51% in 2012. Net loss for the first six months of the year improved 77% to a loss of $494,000, or a loss of $0.01 per share from the loss of $2.1 million, or a loss of $0.06 per share a year ago. This included EBITDA reconciling items totaling $290,000, compared to $351,000 last year. EBITDA for the first six months was negative $204,000 compared to a negative EBITDA of $1.8 million in the same period a year ago. Turning to our balance sheet. As of June 30, 2013 we had working capital of $3.8 million and cash and cash equivalents of approximately $1.3 million. At this time, we believe that our current cash and cash equivalent will be sufficient, near our anticipated cash needs through the end of the year, given our progress made and reduced in operating expenses and following our cash burns in conjunction with our turnaround plan. Cash provided by operations during the three months ended June 30, 2013 was $94,000, compared to $811,000 used by operations in the prior year. Cash used by operations during the six months ended June 30, 2013 was $321,000 compared to $2.1 million in the prior year. We also have our asset based credit facility available for working capital needs. To-date, we have not drawn down and we do not currently anticipate needing to draw down on this credit facility during 2013. Subsequent to quarter end, we had our first warrant exercise from February 2012 equity financing which brought it $105,000 in cash proceeds. Our earnings release is posted on our website at jonessoda.com and included a non-GAAP reconciliation for EBITDA. I’ll now turn the call back to Jennifer to give an overview of some of our sales and marketing initiatives for 2013. Jennifer L. Cue: Thanks, Carrie. On the sales and marketing side our expanded sales team including our temporary seasonal employees that I mentioned earlier have been busy promoting in opening up new accounts for Jones Soda and our newly launched Natural Jones Soda, which is initially targeted only in the state of California. We are building the Natural Jones Soda brand slowly with this focused and disciplined approach to the launch and in a smart way, but as consistently first number of distributor partners. We look forward to rolling out Natural Jones Soda in other select markets in 2014, this spring we partner with Fiat a Fortune 500 company on a large integrated marketing campaign to jointly celebrate our Natural Jones Soda and Fiat’s new Fiat 500e which is their 100% all electric vehicle. This relationship with Fiat is an example of a great partnership with another company and brand that has a similar DNA to that of Jones, young, fun, independent and colorful. As one part of this campaign we are promoting our (inaudible) our Fiat 500e summer photo contest which opened June 1st and runs through October 31st and we have received thousands of entry to-date. At the completing of the contest the grand prize winner will receive a Fiat (Inaudible) one of our sponsors of athletes and a winning photo on a run of Natural Jones Soda. In addition to the photo contest, we have partnered with FIAT USA to sample at various state events to sell Natural Jones Soda in participating FIAT USA dealership or studios that they called them throughout California this summer, and to promote and sample Natural Jones Soda at the U.S. Open Of Surf which just concluded last month as well as numerous other events throughout the summer. Moving to the mid-west, we are pleased with some of the initiatives that we are bringing back to Jones Soda, inline with honoring one of Jones Soda’s truly great start up market, we are in the process of launching an unique product for the state of Michigan. Beginning this March, all Jones Soda product to be sold in Michigan, will exclusively feature Michigan only stand label representative of images throughout the state and sent in to us by our fans and consumers in Michigan. In addition, we are proud that all of these made in Michigan products are being bottled and produced in the city of Detroit, and a way to say thank you to the great state of Michigan and in conjunction with building our brands back up in these states, we wanted to create a very unique program for a state that was integral in the building of the Jones brand in its early days. We’ve done with what’s Made in Michigan Jones Soda products and look forward to getting these in the hands of our loyal Michigan fans through the balance of this summer. Our programming calendar continues to operate at full capacity as we move from summer to fall. We have maintained our renewed vigor and dedication to bringing the focus back to our independent base of accounts for Jones Soda, in addition to the promotion offered at our grocery and convenience chain. Our Caps for Gear program which runs the entire year has already generated 1000 of bottle caps sent in by fans, to these [dream fun] Jones prizes. With the unique POS and exciting program in 2013 we have had a response of more than doubly the entire previous year’s redemption. In conclusion we are very confident in the path that we’ve taken this Company and believe that our efforts will continue to show improved metrics overtime. Now is the time to continue to exercise discipline and focusing stay in the course. We thank you for your continued support and look forward to updating you on our progress in our upcoming call. I will now open the call up to questions.

(Operator Instructions). And your first question will come from Kevin Sakser with KJS Investment Corporation Kevin Sakser – KJS Investment Corporation: Good afternoon ladies. Congratulations on a excellent quarter. Jennifer L. Cue: Thank you. Carrie L. Traner: Yeah. Kevin Sakser – KJS Investment Corporation: I just wanted to question with regards to going forward, when I was comparing and I know there is some seasonality with regards to the first quarter to the second quarter to the third quarter. But I noticed that there was 38% increase in the revenue over the first quarter, in this quarter. Do you continue to see that type of growth continuing or would you attribute majority of that to the seasonality of your revenue stream? Jennifer L. Cue: At this stage, in our turnaround time we are starting to invest a bit more in sales and marketing expenses so we obviously want to see that continuing to improve. However, the beverages are seasonal; the majority of our sales are in the period of April through end of September. So there is always a rise from the second quarter, from the first quarter. Kevin Sakser – KJS Investment Corporation: Now I’m glad to see you guys actually earn some cash this quarter and need to not burning anything that’s got to be a relief. Carrie L. Traner: Definitely. Kevin Sakser – KJS Investment Corporation: I also had a question here with regards to the losses going forward. And obviously with regard to your seasonality you probably are looking at your earnings pulling back a little bit, but do you see yourself being cash flow positive again for the third quarter? Jennifer L. Cue: I mean not as the goal of ours, but again it’s too early to say and we don’t – really we can’t give guidance, anything can happen. Again, our overriding goal for this Company is to get to a sustainability, as well as balanced investing back in sales and marketing initiatives in our core markets where we can continue to build the brand. So again that is a goal of ours, but I can’t give any specific guidance on that. Kevin Sakser – KJS Investment Corporation: That’s okay well with that in mind with you just said and keeping that in mind, you were saying earlier that the $20 million range is kind of your breakeven number for a full-year number. And for this year obviously it looks like you’re going to fall short of that $20 million, but it seems like on your cash management side you guys are definitely being able to hold that. So do you see the burn consistently staying, which looks like it’s no longer the burn, do you see the consistent throughout the next two quarters? Jennifer L. Cue: Again we’re evaluating as we move forward, we are constantly presented with new opportunities. So it’s not something we can confirm, it’s a delicate balance of want to make sure we are positive EBITDA plus investing for the future in a disciplined way. So again we’re very pleased with the results so far, we do – we put a forecast out there of breakeven about $20 million, but we always are trying to improve upon that Without sacrificing too much our future growth. Kevin Sakser – KJS Investment Corporation: Absolutely. Okay well, that's the only question I had. Congratulations continue on the path you are going. And I think our stock will be just fine. Carrie L. Traner: Okay. Thanks a lot, Kevin. Kevin Sakser – KJS Investment Corporation: All Right. You girls have a great day. Jennifer L. Cue: Okay, thank you. Carrie L. Traner: Thank you.

(Operator Instructions). Next we’ll go to a Private Investor, [Brett Moore].

Yes, how are you? I would like to startup by congratulating you guys on the solid quarter you had, clearly the result of the turnaround are paying off. I was just wondering if you could provide some color when you plan re-growing that revenue or how you will go about doing that. Jennifer L. Cue: Yeah, I mean we are extremely pleased with where we sit today after 12 months, 12 moths ago we really came out and said we need to get (inaudible) which we feel comfortable, we are very close to it. Now we are moving forward in investing again into sales and marketing initiatives, mostly sales initiatives and sales initiatives that are really about brining on sales people to build our brand in the right way I feel. So again that’s the next stage of our plan and we will be working towards on creating 2014 plan over the next several months and again I think all of us here are glad to have achieved what we have achieve in the last 12 months and all of us here believe that the Jones Soda brand has huge potential and we will now be looking towards investing back into the brand in a disciplined way that we believe will achieve long-term revenue and profitable growth.

All right, awesome, thank you guys. Carrie L. Traner: Okay, you're welcome.

Next we’ll go to [Garry Goods] also a Private Investor.

Jennifer and Carrie again I want to add my congratulations to the quarter. It’s good to see the breakeven I guess now the challenge and I would urge you to continue challenging yourself to grow sales. I think that’s on the mind of every investors in Jones right now, and to do with… Carrie L. Traner: Okay.

And to do with in a disciplined way as you say you will. The other things I wanted to add is I think it’s great, what you’re doing in Detroit I think that deserves a [shout off] and really think you deserve a lot of credit for that. Detroit is an underserved area that’s been forgotten and I really think Jones’ corporate responsibility really get a shout out as a result of that. Jennifer L. Cue: Thank you, Gary. I really – you know what I know you probably know about our history in the state of Michigan and one of the things that I first did when I came back about two months after I started, I went travelled and drove around the state of Michigan, because that was – so many people think Jones Soda was launched and created in Michigan, simply because of the success and enthusiasm of our network of about six distributors in the state of Michigan. So we went around and we saw the – Michigan distributors saw their continued enthusiasm for the brand that need to be disciplined and (inaudible) over a long way and we wanted to come back do something which really thank them and then did something really unique for the state of Michigan and the City of Detroit and so we put together starting in like November, we started to create a whole program where we are going to do something unique and actually do the manufacturing in our – with one of our distributors in the City of Detroit is also a bottler so we have been able to figure out a way to bottle our Jones Michigan product in Detroit and again you know we partnered with Interstate distributing to bottler, with some of the images on the bottles are going be with the Made in Detroit brand which is the great brand from Detroit and then mostly all of our fans and consumers from the state of Michigan. So again we’ve just finished bottling this product, just now getting on to shelves in Michigan and we are starting to – everyone in Michigan was getting excited about it. So yeah I can’t be more excited about that program. I can tell you how excited I am about the program.

Great. Thank you very much. Jennifer L. Cue: Okay thank you.

And next we will got to [Allen Zakoni] with EMC

Congratulation on a great quarter as everyone else mentioned. My question is more in alliance with sales strategy you guys see a more fitting to push the product through distributors have distributors pushed into shop or do you think that’s done in contract. But either region wide or national wide chain or shop would be a better vehicle to sell Jones product going forward. Carrie L. Traner: I think its – we’ve – like in Jones Soda as a company like Coca-Cola and our distributor network like the (inaudible) we use our DSD partners as partner true partner. Our DSD partners put the product on shelves of independent stores, grocery stores and convenience store. There are opportunities along the way where we may go direct where it just not possible to use our DSD partners and we will consider that for certain types of product that we launch, so it’s a combination of both, but always recognizing that our DSD partners are critical in this whole process then there is certain channels that we definitely have to go to direct, so we just balance it all the time.

Okay, all right, that’s pretty much answered my question. Thank you guys. Jennifer L. Cue: Okay you’re welcome.

(Operator Instructions). And we’ll hear from [Ryan Mink] private investor. Ryan your line is open you may want to check your mute button.

Thank you, apologies. You had mentioned earlier the move towards variable compensation in your pay practices. To the extent that you can, can you speak a bit more to that and specifically in line with the entrepreneurial movement that you’re making and is it more of a use of pushing options and equity down to staff and especially the sales staff, or is it more of a use of incentive compensation or again to the extent that you can speak to that, can you give us some color on that? Thank you. Jennifer L. Cue: Yeah definitely, I mean that’s one of the things that we had used in the early days of Jones, very successfully we – its cash compensation, as well as stock options. And what we did when we embarked on the turnaround program, we gave everybody in the company the same number options to do this turnaround and everyone on the same team. And then also too in terms of our sales team we have started to implement the variable compensation, which ties in compensation – cash compensation with a base plus new accounts and case commissions. This is the way we used to do in the past and some of our salespeople were the highest paid people in the Company and we were excited when a junior sales person was the highest paid person in the Company. So again it’s a combination of cash compensation with our sales team… {***Epart-14***} of cash compensation with our sales team and the stock options with the sales team as well as being for our Company, because I want to also mention that everyone in our companies are all being sales initiative and then building this as well. So it’s every single person in this Company is part of this whole program.

Great, thank you very much. Carrie L. Traner: Okay. You’re welcome.

And there are no further questions. Jennifer L. Cue: Greta. Thank you Rebecca and thank you everyone again to your interest in Jones Soda. We will speak with you next when we report our third quarter results in the first week of November.

Ladies and gentlemen that does conclude today’s presentation. We do thank everyone for your participation.