Seattle soda company lost $2 million in the second quarter.
Jones Soda’s financial predicament raises “substantial doubt about our ability to continue as a going concern,” the Seattle-based company said in a securities filing Monday.
The small soda maker said it has revised sales projections twice this year, most recently after disappointing sales during the first part of the historically strong April-to-September period.
It has enough cash, $7.1 million, to continue operating without additional funding if sales meet its new projections, it said.
Jones is slashing expenses again this quarter, after cutting its work force in half, to about 60 employees, over the past year.
- Donate to a charity? IRS sets rules for taking deductions
- 4 Mount Rainier High teens charged in alleged gang rape on field trip
- How opera, QVC and his ‘Dirty Jobs’ gig prepared Mike Rowe for the Seattle stage
- Justice Antonin Scalia dead at 79
- City brushed off feasibility of NHL, NBA at KeyArena
Most Read Stories
Many of those who lost jobs were hired in early 2008 to help market the national rollout of Jones cans, a project on which the company had stumbled in 2007 after years as a successful niche player. The new plan was to blitz markets already familiar with Jones products.
“In the end, the costs were too high to build the business,” said Chief Financial Officer Michael O’Brien. “It would have required even more money.”
Jones decided to make the going- concern statement after consulting its auditors, he said.
“We believe we have a sound operating structure moving forward, including enough cash to operate our business. However, it is dependent upon the company’s revenue levels,” O’Brien said.
He declined to disclose the new sales projections.
Last week, Jones posted a net loss of $2 million for the second quarter, an improvement of 28 percent from the same quarter a year ago. Its revenue decreased 36 percent to $7.5 million.
In Monday’s filing, the company said it’s difficult to forecast demand for its products.
Jones does not think more meaningful cost cuts are possible and has doubts about its ability to raise more debt or equity if that becomes necessary, the filing said.
Last November, Key Bank terminated Jones’ $15 million line of credit; the company has not found borrowing alternatives with acceptable terms.
In the interview, O’Brien said Jones has received several offers for financing but has not acted on them, also because the terms were unacceptable.
“They’re still an option for the company,” he said.
“If we get to the point where we need the financing, we have had several options presented to us.”
In the filing, Jones said it could pursue joint ventures and strategic partnerships, as well as debt and equity offerings.
Its stock gained 10 cents to close at 90 cents a share in regular trading Monday, then fell 14 cents to 76 cents in after-hours trading. Over the past year, the stock has traded between 26 cents and $2.58.
Melissa Allison: 206-464-3312 or firstname.lastname@example.org