Good afternoon, everyone, and thank you for participating in today's conference call to discuss Jones Soda Financial results for the first quarter ended March 31, 2018. Today's conference is being recorded. At this time, I would like to turn the conference over to Max Schroedl, Chief Financial Officer. Please go ahead.

Thanks, Ebony, and good afternoon. Before we begin, let me remind everyone of the company's safe harbor disclaimer regarding forward-looking statements. Certain portions of our comments today will concern future expectations, plans and prospects of the company that constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements containing words, 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. I'd like to remind everyone that this call will be available for replay through May 10, 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. Now I would like to turn the call over to the CEO of Jones Soda, Jennifer Cue. Jennifer L. Cue: Thank you, Max, and good afternoon, everyone. It's a pleasure to be joining you. I'd like to kick off the call by providing a quick [sound bite ] on our first quarter before passing to Max to walk through the financial details. I will then return to discuss various operational initiatives and outlook. As expected, the first quarter sales decline was mostly impacted by the final full quarter comparison to last year's midyear delisting of our 12-ounce cans by a major retailer as well as strong pipeline fill following our late 2016 glass bottles launch at 7-Eleven U.S.A. Masked in our consolidated sales results was continued strong performance in our important Fountain and Lemoncocco initiatives, which grew 123% and 15%, respectively, in the first quarter. The close of convertible subordinate promissory note financing in March bringing in $2.8 million in proceeds that we expect to use among other things, to bolster our sales organization. After the initial closing in March, 5 additional accredited investors, 3 of which were company officers invested an additional $120,000 in the financing during April, bringing in total proceeds of $2.92 million. In fact, our entire management team participated in the financing. The capital is more than just money to our company. It signifies an important strategic shift for Jones Soda. For the first time in a long time it allows us to proactively accelerate our Fountain and Lemoncocco initiatives and capitalize on the promise shown by this product portfolio. I look forward to discussing these initiatives in more depth later. But first, I'd like to turn the call over to Max to discuss our first quarter financial results in more detail.

Thank you, Jennifer, and good afternoon, everyone. Total revenue in the first quarter of 2018 was approximately $2.8 million compared to $3.5 million in the first quarter of 2017. As Jennifer mentioned, decrease was primarily attributable to the delisting of Jones cans by a major retailer in mid 2017 and the difficult comparisons created by the large load-in early last year of Jones 7-Select glass bottles at 7-Eleven U.S.A. In addition, we had lower volume in Canada due to the timing of promotional programs last quarter that did not recur this quarter. For reference, during the comparable quarters, Canada represented approximately 21% of our sales in Q1 '18 and 19% in Q1 '17. As Jennifer mentioned, these factors more than offset continued growth in our important initiatives of Lemoncocco and Fountain. It's worth noting that we will anniversary the delisting of Jones cans halfway through our second quarter reducing the sales comp headwind. Promotional allowances decreased $50,000 or 16% to $259,000 from $309,000 for the first quarter of 2018, due to timing of programs. The accounting impact of these promotional allowances is a direct offset to revenues. Now I'll break our revenue further by our product lines. Due to the pipeline fill timing in the prior period, 7-Select net revenue was down 52% in Q1 '18 and was 13.5% of our revenue during the quarter, down from 22.8% in the first quarter of 2017. Fountain net revenue more than doubled during the quarter. It was approximately 5% of our overall business as compared to 1.8% in first quarter of 2017. We continue to expand our reach with 7-Eleven and are seeing interest from increasingly larger regional QSR chains which Jennifer will speak to you shortly. During the normal course of business, we've [ not tested for ] various opportunities, which could result in material future revenues. Lemoncocco was approximately 3% of our business for Q1 '18, up 15% from prior year period, when it made up 1.9% of our business. During Q4, '17 we began to broaden our distribution strategy and geographic areas for our Lemoncocco product. Gross profit was 21.7% of revenue compared to 24.1% last year. Freight costs were impacted in the first quarter by a price increase from one of our vendors and general transportation cost increases, which rose across the country in the beginning of 2018. We found alternate carrier solutions by the end of the quarter to ensure that we mitigated some of the freight cost issues in the balance of 2018. As such, we wouldn't expect this headwind to persist with the magnitude experienced in Q1. Had freight cost remained in line with 2017 levels, we would've seen margin improvements that better reflect our change in product mix. Operating expenses in the first quarter increased slightly to $1.1 million compared to $1 million in same quarter a year ago. The increase was primarily due to the staggered hiring of resources as we begin to invest in our growth initiatives and sales force. These operating expenses also included noncash expenses, depreciation, amortization and stock-based compensation totaling $53,000 compared to $44,000 last year. Our net loss was $469,000 or $0.01 per share compared to a net loss of $197,000 or $0.00 per share last year. Adjusted EBITDA in the first quarter was negative $0.4 million compared to negative $0.1 million in the quarter a year ago. These declines were primarily driven by the aforementioned decline in revenue and gross profit. Moving on now to the balance sheet. At March 31, 2018, cash and cash equivalents totaled approximately $3 million compared to $0.4 million at December 31, 2017, reflecting the $2.8 million financing initially completed in March. Working capital stood at $3.2 million compared to just under $1 million at the end of 2017. There are no payments on principal or interest due on our recently issued convertible subordinate promissory notes until March 2022, which results in these notes being accounted for as long-term debt and excluded from the working capital calculation. We also have a loan facility available for our working capital needs, which allows us to borrow up to approximately $3.2 million. Our eligible borrowing base as of March 31, 2018, was approximately $1.6 million of which we had drawn down $759,000 compared to line balance of approximately $858,000 at December 31, 2017. We believe that our current cash and cash equivalents, combined with our loan facility and anticipated cash from operations will be sufficient to meet our anticipated cash needs through the end of 2019. And now, I'll turn the call back over to Jennifer. Jennifer L. Cue: Thanks, Max. I'd like to expand upon our improved cash position as we believe it will help us execute our strategic plan for the next 2 years. We now have the resources to drive our higher margin initiatives of Jones Fountain and Lemoncocco as well as further invest in expanding our large retail partnerships. Our use of proceeds will be primarily focused on adding sales people in select markets, but also grassroot marketing supporting our newly acquired grocery chains with sampling and demos as well as investing in business development resources for our promising premium Fountain program. With growth capital in the bank, I will now walk through each opportunity. First, our Fountain initiative is experiencing the transition from independent account interest to small regional and larger national chain. Beginning in April, we increased our Fountain business with 7-Eleven expanding from the existing Pacific Northwest region of 400 locations by adding 425 locations in Northern California as well as 550 locations across Canada. These new regions began coming online in April and into May. All totaled, we were at approximately 1,500 7-Eleven stores with our Berry Lemonade flavor and we're really excited about all the planned marketing surrounding the launch. In addition to the Big Gulp Fountain offering at 7-Eleven there will also be another Slurpee offering in our 400 locations in the Pacific Northwest with our fun, very unique and Jones exclusive Blue Bubble Gum flavor. This will roll out in May and June with a different Slurpee flavor coming on later in the year in regions yet to be determined. Our core branded bottle line up currently consists of 4 flavors with an additional fun limited time offering flavor planned for the summer of 2018. We are currently working with 7-Eleven towards finalizing our 2019 lineup. As a reminder, our Jones Fountain program offers food service account the same, if not higher profitability as the large national brand, but with better ingredients with pure cane sugar. We have seen data from our retail partners that shows our Fountain sales match if not exceed other national mainstream brands on the same fountain machine. Now on to Lemoncocco. Today, Lemoncocco is offered an approximately 2,000 chain doors, up significantly from 400 chain doors in 2016. These include both grocery and QSR chains, which have been our launch strategy to ensure the right placement of the brand. The proceeds of our financing are already allowing us to support these locations with samplings, demos and promotions, which is a strategy that has been working on a small scale. Based on retailer and distributors request, we will also be adding Lemoncocco 4-pack this month for retailers to sell the product in quantity, create unique in-store displays and gain entry into more chain stores that demand a multipack. And with almost 2 quarters behind him, our EVP of sales, Steve Gress, continues to manage the buildout of our new brand, Lemoncocco, while reinvigorating our Jones independent account base in our existing Jones Soda distributor network. Additionally, we continue to see strong performance of Jones Soda in the right kind of environment, such as Kroger classic single sets. So in summary, our strategic plan is well underway with a new infusion of capital funded by institutional and individual accredited investors, including every member of our executive team. We now have the resources to proactively execute on our higher-margin initiatives of Lemoncocco and Jones Fountain. We have great story to tell and a portfolio of on-trend beverages. To date, we have operated with a very small team in place, but will be adding to this team to execute fully on initiatives that are already proven out on a small scale. Given our product portfolio that is showing significant promise, along with our improved liquidity, we expect 2018 to be a significant step forward for our company. And finally, I would like to thank 2 of our Directors who has served our company for several years, but are retiring from the Board at the end of their term next week. Matt Kellogg and Susan Schreter have both served over 10 years as board members and I would like thank them for their valuable contributions and service. As discussed last month, Christopher Beach, became a member of our board in conjunction with the financing. I will now open the call out for questions.

[Operator Instructions] And we will take our first question from [ Gary Getz ], a private investor.

I have 2 questions, Jennifer and Max. Max, first question is for you. You had mentioned that Lemoncocco is now about roughly [indiscernible] percent of sales. Do you have similar numbers on the Fountain business, what percent of sales that is?

Yes, absolutely, [ Gary. ] I may have sped through that piece too fast. Let me go back to my notes here. Fountain was approximately 5% of our overall business in Q1, up from about 1.8% in the prior year quarter.

Okay. So roughly you're talking maybe 150,000 for Fountain and maybe about 70,000 Lemoncocco roughly. So we got a long way to go if we're going to count on those brands. I recognize that they're growing quickly, but they're starting at a very small percentage, okay. Jennifer L. Cue: Yes, they are [ Gary. ] And I just wanted to reiterate that right now how we've been operating. We've been doing everything on a small scale and really acting defensively the last 5.5 years. Now we have some capital in the bank and we can act a little bit more on the offense and invest in initiatives that we have seen be very resonate with the consumer very well. So we are excited to do that now.

Okay. I'm glad to hear that. Okay, Jennifer, could you expand on exactly what you meant by we expect 2018 to be a significant step forward for our company? Jennifer L. Cue: Yes actually, we're in the process right now of hiring additional sales force and investing in these initiatives. And we're in the process of also looking at a number of retail chains and then testing on some of those. So we believe that this buildup in the investment of sales and marketing as well as some existing business that we are testing, will begin to grow -- we'll start to see the benefits of this in 2018, and see a much more significant growth in the following year as well.

And [ Gary, ] just adding on to that, I believe your question, last quarter or one of the questions was sort of ROI on this investment. And there is an upfront investment in marketing and brand awareness that we think will start to pay off this year and into next.

Okay. Well, I'm glad to hear here that. Jennifer or Max, let me ask you a question that's on investors' minds who maybe are reluctant to ask, but I'll ask it. Okay, looking at the first quarter, it's comparable to 2015, the numbers. The sales are comparable, the margins actually a little less than 2015. When do you expect that we could see positive year-over-year quarterly comparisons? Jennifer L. Cue: Well, we mentioned that we will be finishing the cycling through [ of the cans ] halfway through the second quarter. And we don't have the pipeline still in the second quarter that we're cycling against as well, so we believe we will start to see the benefits of this beginning in the second quarter and be after that.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Ms. Cue for closing remarks. Jennifer L. Cue: We would like to thank, everyone, for listening today's call. And we look forward to speaking with you either at our -- as a reminder, at our annual shareholder meeting, which is next week, May 10th or when we report our second quarter results, which will be in August of this year. Thanks, again, for joining us.

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