UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
December 28, 2010
Date of Report (Date of earliest event reported)
Jones Soda Co.
(Exact Name of Registrant as Specified in Charter)
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| Washington
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000-28820 |
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52-2336602 |
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(State or Other Jurisdiction
of Incorporation)
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(Commission File No.) |
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(IRS Employer
Identification No.) |
234 Ninth Avenue North, Seattle, Washington 98109
(Address of principal executive offices) (Zip Code)
(206) 624-3357
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Section 8 — Other Events
Pursuant to the Common Stock Purchase Agreement dated as of June 11, 2010 (the “Purchase
Agreement”), by and between Jones Soda Co. (the “Company”) and Glengrove Small Cap Value, Ltd.
(“Glengrove”), the Company maintains a $10,000,000 equity line of credit arrangement. The Purchase
Agreement provides that from time to time over the term of the Purchase Agreement, and at the
Company’s discretion, the Company may present Glengrove with draw down notices to purchase the
Company’s common stock over ten consecutive trading days or such other period mutually agreed upon
by the Company and Glengrove (a “Draw Down Period”), with each draw down subject to limitations set
forth in the Purchase Agreement based on the price of the Company’s common stock and a limit of
2.5% of the Company’s market capitalization at the time of such draw down (which limitations the parties are expressly permitted under the Purchase Agreement to modify or waive by mutual agreement). Once presented with a
draw down notice, Glengrove is required to purchase a pro-rata portion of the shares on each
trading day during the Draw Down Period on which the daily volume weighted average price for the
Company’s common stock exceeds a threshold price determined by the Company for such draw down. The
per share purchase price for these shares will equal the daily volume weighted average price of the
Company’s common stock on each date during the Draw Down Period on which shares are purchased, less
a discount of 6.0%.
The Purchase Agreement also provides that, from time to time and at the Company’s sole
discretion, the Company may grant Glengrove the right to exercise one or more options to purchase
up to an aggregate dollar amount of additional shares of its common stock during each Draw Down
Period based on the trading price of the common stock. Upon Glengrove’s exercise of an option, the
Company will sell to Glengrove the shares of the Company’s common stock subject to the option at a
price equal to the greater of the volume weighted average price of the common stock on the day
Glengrove notifies the Company of its election to exercise the option or the threshold price for
the option determined by the Company, less a discount of 6.0%.
The aggregate number of shares that the Company can sell to Glengrove under the Purchase
Agreement may in no case exceed 5,228,893 shares of the Company’s common stock (which is equal to
one share less than 20% of the Company’s common shares outstanding on the date of the closing of
the Purchase Agreement, less 70,053 common shares issued to Glengrove as its commitment fee) (the
“Trading Market Limit”). In addition, in no event may Glengrove purchase under the Purchase
Agreement any shares of Company common stock which (i) when aggregated with all other shares of
Company common stock beneficially owned by Glengrove, would result in beneficial ownership by
Glengrove of more than 9.9% of the Company’s then outstanding common shares (the “Ownership
Limitation”), or (ii) when aggregated with all other shares of the Company’s common stock offered
pursuant to the Company’s Registration Statement on Form S-3 (No. 333-166556) would exceed the
maximum amount permissible under General Instruction I.B.6. of Form S-3 (the “Registration
Limitation”).
The
Company presented Glengrove with a draw down notice dated December
12, 2010, as amended: (i) to
purchase a fixed amount of $1,500,000 of the Company’s common
stock (the “Fixed Amount”) and (ii) granting Glengrove the
right to exercise an option to purchase during the Draw Down Period
up to $500,000 of additional shares of the Company’s common
stock, subject in all cases to the Trading Market Limit, the Beneficial
Ownership Limitation and the Registration Limitation. The threshold price set for the Fixed Amount
and the Optional Amount was $1.10. As provided in the Purchase Agreement,
the Draw Down Period was ten consecutive trading days.
The
Company expects to settle with Glengrove on the purchase of 1,783,481 shares of the
Company’s common stock under the terms of the draw down notice and the Purchase Agreement at an
aggregate purchase price of
$2,000,000, or
approximately
$1.12 per
share, no later than December 29,
2010,
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subject to satisfaction of applicable closing conditions.
The Company will receive estimated
net proceeds from the sale of these shares of approximately $1,962,000, after deducting its
estimated offering expenses. In connection with the sale of the Company’s common stock described
herein, the Company is filing, as Exhibit 5.1 hereto, an opinion of its counsel, Perkins Coie LLP.
The foregoing description is qualified in its entirety by reference to the Purchase Agreement
dated as of June 11, 2010, between the Company and Glengrove, included as Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 14,
2010, and incorporated by reference in this report.
Forward-Looking Statements
Certain statements in this Form 8-K are forward-looking statements that involve a number of
risks and uncertainties. Such forward-looking statements include statements about the expected
settlement of the sale and purchase of the Company’s common stock described herein and the
Company’s receipt of net proceeds therefrom. For such statements, the Company claims the
protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may
differ materially from the Company’s expectations. Factors that could cause actual results to
differ materially from the forward-looking statements include, but are not limited to, the
Company’s ability to satisfy applicable closing conditions under the Purchase Agreement and
Glengrove’s compliance with its obligations to purchase the shares of common stock. Additional
factors that could cause actual results to differ materially from those stated or implied by the
Company’s forward-looking statements are disclosed in the Company’s other reports filed with the
Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year
ended December 31, 2009 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010.
Readers are cautioned not to place undue reliance upon these forward-looking statements, which
speak only as to the date of this report. Except as required by law, the Company undertakes no
obligation to update any forward-looking or other statements in this report, whether as a result of
new information, future events or otherwise.
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| Item 9.01. |
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Financial Statements and Exhibits. |
(d) Exhibits
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| Exhibit 5.1
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Opinion of Perkins Coie LLP |
| Exhibit 10.1
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Common Stock Purchase Agreement between the Company and Glengrove Small Cap
Value, Ltd. dated as of June 11, 2010 (incorporated herein by reference to Exhibit
10.1 to the Company’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on June 14, 2010) |
| Exhibit 99.1
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Information Relating to Item 14 — Other Expenses of Issuance and Distribution |
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