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6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF 7 AT 8 WARDELL BENFORD, individually, and on behalf 9 of all others similarly situated, Civil Action No.

10 Plaintiff, CLASS ACTION COMPLAINT 11 v. JURY TRIAL DEMANDED 12 JONES SODA COMPANY, PETER M. VAN 13 STOLK, SCOTT BEDBURY, MICHAEL M. FLEMING, ALFRED W. ROSSOW, JR., JOHN J. 14 GALLAGHER, JR., STEPHEN C. JONES,, HASSAN N. NATHA and LARS P. NILSEN, 15

16 Defendants.

17 Plaintiff, Wardell Benford, on behalf of itself and a Class (defined below) comprised of 18 all other persons similarly situated, alleges upon the investigation made by and through its 19

20 counsel, which includes, inter alia, a review of relevant public filings made by Jones Soda

21 Company ("Jones Soda" or the "Company") with the Securities and Exchange Commission

22 ("SEC"), as well as teleconferences, press releases, news articles, analysts' reports, and media 23 reports concerning the Company. This Complaint is based upon plaintiff's personal knowledge 24 as to its own acts, and upon information and belief as to all other matters, based upon the 25 aforementioned investigation. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P. CLASS ACTION COMPLAINT 1 _ 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 NATURE OF THE CASE

2 1. This is a class action on behalf of all persons, other than defendants, who 3 purchased Jones Soda Corporation common stock between November 1, 2006, and August 2, 4 2007, inclusive (the "Class Period"), to recover damages caused by defendants' violations of the 5 federal securities law (the "Class"), as set forth below. 6 2. Jones Soda and its President, Chairman, and CEO Peter M. van Stolk achieved 7

8 near rock star status over the last few years. The Company's quirky sodas, including Turkey &

9 Gravy flavor and Bubble Gum flavors (as well as soda made with pure sugar cane as opposed to

10 high-fructose corn syrup), became the darling of Wall Street and Mr. Stolk was a frequent guest 11 on Jim Cramer's Mad Money show watched by millions each night on CNBC. 12 3. Mr. van Stolk is recognized as "marketing maverick" and during the Class Period 13 touted his Company's growth prospects and ability to penetrate new markets with unabashed 14

15 enthusiasm even though they were untrue.

16 4. He issued extremely positive statements about the Company's new distribution

17 and production agreement with National Beverage Corporation and agreements with numerous 18 major retailers to garner precious shelf space for the Company's products. 19 5. Mr. van Stolk stated that each of these agreements were cemented and that the 20 Company was soon to realize the financial benefits thereof. Moreover, he issued numerous 21 statements that led the market to believe that major retailers had stocked the Company's sodas on 22

23 their shelves for sale, or would be stocked on shelves for sale by a date certain. These

24 statements, however, were false or were issued with such a degree of severe recklessness to

25 render them actionable. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -2- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 1 6. For example, as detailed below, on May 3, 2007 Jones Soda barely posted a profit

2 and issued disappointing results for the quarter that ended March 31, 2007. Mr. van Stolk blamed 3 the weaker than expected earnings on problems converting bottled sodas from high-fructose corn 4 syrup to pure cane sugar, in addition to higher expenses. Nevertheless, he assured investors that 5 the Company was on track to be in 25 percent of the market with the new 12-ounce cans by 6 Memorial Day. He considered the shortfall an anomaly. 7

8 7. Though the weak earnings were well below Wall Street's estimates, and the stock

9 price fell 20 percent in after-hours trading before gaining back some ground, it rebounded on

10 news that the Company cut a deal to sell soda at football games (announced a 11 few weeks later), and the Company's price per share stabilized just above $21 a share. 12 8. On August 3, 2007, however, the Company announced that it barely scratched out 13 a profit when earnings for the quarter that ended June 30, 2007 were again well below Wall 14

15 Street's expectations. In connection with the release (despite his earlier promises), Mr. van Stolk

16 said this time that the Company's canned products were not on enough store shelves in time for

17 peak summer sales, which begin during the Memorial Day weekend. 18 9. He further stated that 15,200 stores had "basically committed or ordered" 19 products , compared with 1,440 stores six months earlier. He, however, declined to say how 20 many stores were carrying Jones Soda currently, even though in March on Cramer's Mad Money, 21 he listed 15 major chains that would be carrying the cans by Memorial Day. 22

23 10. This news caused the Company's stock to plummet nearly 23 percent in after-

24 hours trading to $11.70 a share, causing stockholders to suffer significant damages.

25 11. Mr. van Stolk and other members the Company's Board, however, fared far 26 better. Specifically, less than a week after the van Stolk's March 8, 2007 announcement of

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -3- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 1 strong fourth-quarter earnings and that the Company would be in 25 percent of the retail market

2 by selling at stores including Wal-Mart, Kroger, Safeway and , he and substantially all of 3 the members of the board began selling their stock en masse. 4 12. Mr. van Stolk, for example, sold 140,000 shares on March 14, 2007 for $2.53 5 million, which left him with 1.4 million shares. He subsequently exercised his options and 6 bought 250,000 more shares, bringing his total to 1.65 million. 7

8 13. Board member Scott Bedbury sold all 70,000 of his shares from March 13 to 16,

9 2007 for $1.3 million.

10 14. Board member Michael M. Fleming exercised options on a total of 55,000 shares 11 between March 13 and May 8, 2007, and then sold that many shares on those days for a $1 12 million profit. The options were to expire between 2009 and 2011. After the sale, Mr. Fleming 13 held only 5,000 shares in the Company. 14

15 15. Board member Alfred W. Rossow, Jr. exercised options on 30,000 shares on May

16 9, 2007 and sold all the shares the same day for a $600,719 profit. His options were set to expire

17 in 2009 and 2010. After the sale, Mr. Rossow held no direct ownership in the Company. 18 16. Board member John J. Gallagher, Jr. exercised options on 20,000 shares on May 19 7, 2007 and then sold all those shares for a $276,000 profit June 5, the day before van Stolk 20 disclosed at an investor conference that sales challenges were occurring. The options were set to 21 expire in 2010. After the sale, Mr. Gallagher held no direct ownership in the Company. 22

23 17. Board member Stephen C. Jones exercised options on 15,000 shares on May 24,

24 2007 and sold all the shares the same day for a $233,700 profit. The options would have expired

25 in 2011. After the sale, Mr. Jones held no direct ownership in the Company. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -4- 1201 THIRD AVENUE , SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : ( 206) 623-1900 FACSIMILE: (206) 623-3384 1 18. Lars Nilsen, the Executive Vice President of Sales at Jones Soda, exercised and

2 sold 3,000 shares March 15, 2007 for a $37,290 profit. The options were not set to expire until 3 2011. After the sale, Mr. Nilsen held no direct ownership in the Company. 4 19. The heavy exercising of Jones Soda options and sale of shares by the Company's 5 insiders has not gone unnoticed by industry observers and members of the legal community. 6 Michael Malloy, a former SEC enforcement official and a professor at the University of the 7

8 Pacific in Stockton, California, said the level of trades by insiders at Jones Soda would raise a

9 "red flag" for a regulator. According to Malloy, most directors of publicly held companies hold

10 at least some shares in the entity. "If they are punching the option button and dumping these 11 things, they are just turning on the spigot and going," Mr. Malloy said. "It's not someone who is 12 looking at a portfolio and looking to diversify. It's someone looking for a quick kill, and you 13 have to wonder what motivated that?" 14

15 20. Jill Fisch, a Fordham University Law School professor, who specializes in

16 securities, said options are a "potential payoff' and that "although the trades were made outside

17 the blackout periods, some appear `curiously timed' as they were done before the company 18 released bad news." She further noted that "[o]bviously, it's relatively unusual for a director to 19 sell all of the holdings, and the timing makes it look like it wasn't a coincidence." 20 21. As detailed below, Mr. van Stolk and five of the six member of the board during 21 an 85-day period this last spring sold huge amounts of their holdings of Jones Soda. During this 22

23 same time period, van Stolk was touting the Company's aggressive expansion plan and new

24 arrangements with major retailers. The truth of the matter was that the Company's plan was not

25 on pace as disclosed. The Company's beverages were not getting on shelves in time for the 26 summer sales bump. Costs associated with the Company' s new "can" were significantly

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -5- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 1 impacting earnings and Mr. van Stolk falsely portrayed the Company in an overly positive light

2 despite facts known to him to the contrary. Indeed, as detailed below, he stated during a 3 conference call with analysts that he saw major sales data from retailers on a daily basis. 4 Accordingly, he knew at all relevant times that the Company's products were not on the shelves 5 and thus not being sold at a pace that comported with his public statements concerning the 6 Company's penetration into the $66 billion carbonated market. 7

8 22. As a result of the false statements of Mr. van Stolk and others, Jones Soda shares

9 traded at artificially inflated prices during the Class period, reaching a high of $32.60 per share

10 on April 16, 2007. However, on August 3, 2007, the first trading day after the Company issued 11 the press release announcing its true financial condition, Jones Soda plummeted, closing at 12 $11.85 per share. 13 23. Notably, after the close of the Class Period, management of Jones Soda lowered 14

15 its revenue growth outlook to the range of 30% to 40% from the earlier estimate in the 50%

16 range "primarily due to the timing issues related to the late shelving of the CSD product and a

17 slower than planned launch of the concentrate products." Equally important, they disclosed that 18 the Company failed "to achieve the targeted 25% ACV ... by Memorial Day of 2007," contrary 19 to earlier disclosures. 20 JURISDICTION AND VENUE 21 24. This Court has subject-matter jurisdiction pursuant to Section 27 of the Securities 22

23 Exchange Act of 1934, 15 U.S.C. § 78aa, and 28 U.S.C. §§ 1331 and 1337.

24 25. Venue is proper in this District pursuant to Section 27 of the Exchange Act, 15

25 U.S.C. § 78aa, and 28 U.S.C. § 1391(b). Jones Soda maintains its corporate headquarters in this 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -6- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 judicial district at 234 Ninth Avenue North, Seattle, Washington. In addition, many of the acts

2 and practices complained of herein occurred in substantial part in this judicial district. 3 26. In connection with the acts alleged in this Complaint, defendants, directly or 4 indirectly, used the means and instrumentalities of interstate commerce, including, but not 5 limited to, the mails, interstate telephone communications and the facilities of the national 6 securities markets. 7

8 PARTIES

9 27. Plaintiff purchased the common stock of Jones Soda as set forth more fully in the

10 annexed certificate, and suffered economic damages. 11 28. Defendant Jones Soda is a Washington corporation with its principal place of 12 business at 234 Ninth Avenue North, Seattle, Washington. Jones Soda develops, produces, 13 markets, licenses and distributes premium soft drinks and related products. At all relevant times, 14

15 the Company's securities traded in an orderly and efficient market on the NASDAQ Stock

16 Market LLC ("NASDAQ").

17 29. Defendant Peter M. von Stolk ("von Stolk") has served as Founder, President, 18 Chief Executive Officer and a Director of Jones Soda since 1987. 19 30. Defendant Scott Bedbury ("Bedbury") has served as a Director of Jones Soda 20 since August 2003. 21 31. Defendant Michael M. Fleming ("Fleming") has served as a Director of Jones 22

23 Soda since April 1997.

24 32. Defendant Alfred W. Rossow, Jr. ("Rossow") has served as a Director of Jones

25 Soda since March 2004. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -7- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 33. Defendant John J. Gallagher, Jr. ("Gallagher") has served as a director of Jones

2 Soda since December 2003. 3 34. Defendant Stephen C. Jones ("Jones") has served as a Director of Jones Soda 4 since March 2006. 5 35. Defendant Hassan N. Natha ("Natha") has served as Chief Financial Officer of 6 Jones Soda since April 2006. 7

8 36. Defendant Lars P. Nilsen ("Nilsen") has served as Executive Vice President of

9 Sales of Jones Soda since February 2006.

10 37. Defendants von Stolk, Bedbury, Fleming, Rossow, Gallagher, Jones, Natha and 11 Nilsen are sometimes referred to herein as the "Individual Defendants." Because of the 12 Individual Defendants' positions as directors or senior officers of Jones Soda, each had access to 13 the material adverse undisclosed information about the Company's business, operations, 14

15 operational trends, financial statements, markets and present and future business prospects via

16 access to internal corporate documents (including the Company's operating plans, budgets and

17 forecasts and reports of actual operations compared thereto), conversations and connections with 18 other corporate officers and employees, attendance at management and/or Board of Directors 19 meetings and committees thereof and via reports and other information provided to them in 20 connection therewith. 21 38. It is appropriate to treat the Individual Defendants as a group for pleading 22

23 purposes and to presume that the false, misleading and incomplete information conveyed in the

24 Company's public filings, press releases and other publications as alleged herein are the

25 collective actions of the narrowly defined group of Defendants identified above. Each of them, 26 by virtue of their high-level positions with Jones Soda, directly participated in the management

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT - 8 - 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE : (206) 623-3384 1 of the Company, was directly involved in the day-to-day operations of the Company at the

2 highest levels and was privy to confidential proprietary information concerning the Company 3 and its business, operations, products, growth, financial statements, and financial condition, as 4 alleged herein. Each was involved in drafting, producing, reviewing and/or disseminating the 5 false and misleading statements and information alleged herein, was aware, or recklessly 6 disregarded, that the false and misleading statements were being issued regarding the Company, 7

8 and approved or ratified these statements, in violation of the federal securities laws.

9 39. As officers and controlling persons of a publicly held company whose common

10 stock was, and is, registered with the SEC pursuant to the Exchange Act, was traded on the 11 NASDAQ, and is governed by the provisions of the federal securities laws, each Defendant had a 12 duty to disseminate timely, accurate, and truthful information with respect to the Company's 13 financial condition and performance, growth, operations, financial statements, business, 14

15 products, markets, management, earnings, and present and future business prospects, and to

16 correct any previously issued statements that became materially misleading or untrue, so that the

17 market price of the Company's publicly-traded securities would be based upon truthful and 18 accurate information. The Individual Defendants misrepresentations and omissions during the 19 Class Period violated these specific requirements and obligations. 20 40. The Individual Defendants participated in the drafting, preparation, or approval of 21 the various public and shareholder and investor reports and other communications complained of 22

23 herein and were aware of, or recklessly disregarded, the misstatements contained therein and

24 omissions therefrom, and were aware of their materially false and misleading nature. Because of

25 their Board membership or executive and managerial positions with Jones Soda, each of the 26 Individual Defendants had access to the adverse undisclosed information about the Company's

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -9- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 1 business prospects and financial condition and performance as particularized herein and knew (or

2 recklessly disregarded) that these adverse facts rendered the positive representations, made by or 3 about Jones Soda and its business , issued or adopted by the Company, materially false and 4 misleading. 5 41. The Individual Defendants, because of their positions of control and authority as 6 officers or directors of the Company, were able to and did control the content of the various SEC 7

8 filings, press releases and other public statements pertaining to the Company during the Class

9 Period. Each Individual Defendant was provided with copies of the documents alleged herein to

10 be misleading prior to or shortly after their issuance or had the ability and/or opportunity to 11 prevent their issuance or cause them to be corrected. 12 42. Accordingly, each of the Individual Defendants is responsible for the accuracy of 13 the public reports and releases alleged herein, and are therefore primarily liable for the 14

15 representations contained therein.

16 43. Each of the Individual Defendants is also liable as a participant in a fraudulent

17 scheme and course of business that operated as a fraud or deceit on purchasers of Jones Soda 18 securities by disseminating materially false and misleading statements and/or concealing material 19 adverse facts. The scheme (a) deceived the investing public regarding the Company's business, 20 operations, and the intrinsic value of Jones Soda's publicly traded securities; and (b) caused 21 plaintiff and other members of the Class to purchase Jones Soda's publicly traded securities and 22

23 to do so at artificially inflated prices.

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LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -10- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE : (206) 623-3384 1 PLAINTIFF'S CLASS ACTION ALLEGATIONS

2 44. Plaintiff brings this action as a class action pursuant to Federal Rules of Civil 3 Procedure 23(a) and (b)(3) on behalf the Class. Excluded from the Class are Defendants, the 4 officers and directors of the Company, members of their immediate families and their legal 5 representatives, heirs, successors, or assigns, and any entity in which defendants have or had a 6 controlling interest. 7

8 45. The members of the Class are so numerous that joinder of all members is

9 impracticable. According to the Company's most recent quarterly financial statement filed with

10 the SEC on Form 10-Q, on August 9, 2007, as of June 30, 2007, Jones Soda had 26,128,046 11 shares of common stock outstanding. While the exact number of Class members is unknown to 12 Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff believes 13 that there are hundreds or thousands of members in the proposed Class. Record owners and 14

15 other members of the Class may be identified from records maintained by the Company or its

16 transfer agent and may be notified of the pendency of this action by mail, using the form of

17 notice similar to that customarily used in securities class actions. 18 46. Plaintiff's claims are typical of the claims of the members of the Class as all 19 members of the Class are similarly affected by defendants' wrongful conduct in violation of 20 federal law that is complained of herein. 21 47. Plaintiff will fairly and adequately protect the interests of the members of the 22

23 Class and has retained counsel competent and experienced in class and securities litigation.

24 48. Common questions of law and fact exist as to all members of the Class and

25 predominate over any questions solely affecting individual members of the Class. Among the 26 questions of law and fact common to the Class are:

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT - 11 - 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE : (206) 623-3384 1 a. whether the federal securities laws were violated by Defendants'

2 acts as alleged herein; 3 b. whether statements made by defendants to the investing public 4 during the Class Period misrepresented material facts about the business, operations, and 5 financial condition of the Company; 6 c. whether Defendants acted knowingly or recklessly in making 7

8 materially false and misleading statements during the Class Period;

9 d. whether the market price of the Company's common stock was

10 artificially inflated or distorted during the Class Period because of Defendants' conduct 11 complained of herein; and 12 e. to what extent the members of the Class have sustained damages 13 and the proper measure of damages. 14

15 49. A class action is superior to all other available methods for the fair and

16 efficient adjudication of this controversy since joinder of all class members is impracticable.

17 Furthermore, as the damages suffered by individual Class members may be relatively small, the 18 expense and burden of individual litigation make it impossible for members of the Class to 19 individually redress the wrongs done to them. There will be no difficulty in the management of 20 this action as a class action. 21 SUBSTANTIVE ALLEGATIONS 22

23 50. The Class Period begins on November 1, 2006 with the issuance of the

24 Company's third quarter 2006 earnings release reporting that net income was down over the third

25 quarter 2005 by $0.04 per diluted share. Nevertheless, President, CEO and Chairman van Stolk 26 championed the Company's "top line performance" and said "earnings were impacted by our

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -12- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE: ( 206) 623-3384 1 strategic decision to focus on the launch of our new cans which is stated for the first quarter of

2 2007." 3 51. At the same time, he also touted the Company's plan to penetrate the $66 billion 4 carbonated soda market through a major distribution agreement with National Beverage 5 Corporation ("National Beverage"): 6

7 During the third quarter we announced a 5-year distribution and 8 manufacturing agreement with National Beverage Corporation for 12-ounce cans of Jones Soda and 16-ounce cans of Jones Energy 9 for the U.S. market beginning in 2007. After a successful 2-year licensing agreement with Target for Jones Soda cans, we now 10 believe it is in the best interests of our company to expand our presence in the $66 billion CSD category. In an effort to maximize 11 our opportunities with our large network of beverage retailers 12 across the country and best prepare for the upcoming launch we are hiring additional personnel, making upgrades to our 13 infrastructure, and increasing our sales and marketing expenditures. We believe these investments will well position us 14 to capitalize on the many prospects we believe exist for this business. 15

16 52. Later that same day, members of the Company's management, including van

17 Stolk convened an earnings conference call. During the call, van Stolk touted the arrangement

18 with National Beverage and that the Company was securing new retail customers for its projects. 19 The key strategic initiative in the quarter was securing the 20 production agreement with National Beverage. This agreement ensures that we have the ability to supply our new retail customers 21 in 2007. We cannot overstate the importance of a supply agreement when it comes to the 12-ounce can. Our retail 22 customers need to now they will have a consistent supply of product during the peak summer months. National Beverage has 23 assured us that we have access to over 35 million cases of 24 production annually.

25 Before I turn the call over to Hassan, I just want to reiterate how 26 pleased we are about the upcoming debut of our can business and the positive impact it will have on our future performance

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -13- 1201 THIRD AVENUE , SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : ( 206) 623-1900 FACSIMILE : ( 206) 623-3384 1 beginning in the fourth quarter. We are currently in discussion with several leading national retailers, and while it's still early, the 2 feedback has been extremely positive across the board. 3 53. On November 16, 2006, the Jones Soda issued a press release over Business Wire 4 announcing the launch of its 12-ounce canned soda sweetened with pure cane sugar as opposed 5 to high-fructose corn syrup. Van Stolk again touted the Company's efforts to penetrate the $66 6 billion soda market: 7

8 Our goal has been to differentiate Jones in the $66 billion CSD category, and the addition of Pure Cane Sugar helps achieve this 9 goal by providing our customers with an indulgence that has a better taste, perceived benefits, positive perceptions, and by 10 providing our retail partners with a clear reason to carry our products. 11 54. On January 11, 2007, several security industry analysts issued positive research 12 reports about the Company. In particular, Piper Jaffray reported: 13

14 Jones Soda Co. recently presented at the 9th Annual ICR XChange Conference, which is co-sponsored by Piper Jaffray. Below are the 15 presentation highlights:

16 • The company announced that it has secured 25% ACV (all commodity volume) penetration, likely to be on shelves by 17 Memorial Day, 2007. Going forward, we expect retailers to be announced at quarterly conference calls. 18 • The company also announced the launch of Jones Pure Cane 19 Sugar Soda, which is expected to ship on January 22, 2007, 20 with approximately 10 skus. Over time we believe that all Jones Soda are likely to be converted to pure cane sugar. The 21 launch of the campaign is expected to include slogans such as "Drink Less Soda .... Just Better Soda", and "Corn is for Cars 22 .... Sugar is for Soda". 23 • To complement its existing pipeline of organic products, the 24 company announced that two Jones Organic skus are expected to enter the market in 2007. 25

26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -14- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 55. Stifel Nicolaus issued a similar positive report:

2 Speaking at an industry conference after the close, Jones Soda Co. announced it has secured 25% ACV (share of retail outlet 3 availability) for the 2007 launch of Jones Soda in cans, to be called 4 Jones Pure Cane Soda. According to the company, the product is expected to be shipped beginning at the end of January. 5 As a result, we increase our 2007 and 2008 EPS estimates to $0.18 6 and $0.26, from $0.11 and $0.16 respectively. Additionally, the company announced that it would reformulate its 7 Jones Soda in bottles with cane sugar (it previously announced that 8 it would sweeten its new can product with cane sugar), a move that we believe will differentiate the Jones products from competitors 9 and benefit from the trend towards more healthful beverages.

10 We retain our constructive view of the company and its growth prospects. However, we also continue to believe valuation 11 anticipates significant future growth and that the announcement and our corresponding estimate increase is already reflected in the 12 current share price. For example, Jones trades at 47.5x our 2008 EPS estimate. 13 56. ThinkEquity Partners likewise raised its price target to $15 on the news of the 14 Company's expansion plans: 15

16 THINK ACTION: Jones Soda gave a very upbeat and well-attended presentation at 17 the 9t' Annual ICR XChange conference yesterday, where it 18 announced that 10 SKUs of Jones Pure Cane Soda in cans will begin shipping during the week of January 22. We have revised 19 our FY07 estimates accordingly. KEY POINTS: 20 Jones Soda prepared for the expiration on December 31 of its 21 exclusive licensing agreement with Target (NYSE: TGT, $58.31) by, "hiring additional personnel, making upgrades to our 22 infrastructure, and increasing our sales and marketing 23 expenditures." 12-ounce cans of Jones Soda and 16-ounce cans of Jones Energy will continue to be available at Target, but will also 24 be available to other retailers through National Beverage Corp., Jones Soda' s new distributor. Jones management estimated that 25 Target represents 2% of ACV (All Consumer Volume) for CSDs (carbonated soft drinks) and that they now have "secured at least 26 25% ACV" for Jones Soda in cans with the new retailers they have

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -15- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 1 signed. On its quarterly conference calls, Jones plans to announce the new retailers it has signed up. 2 Since retailers "reset" their shelves in phases, Jones will not be on 3 the shelf in all retailers in January, but management expects to have cans on the shelf for all retailers making up the 25% ACV by 4 Memorial Day, in time for the seasonally-strongest third quarter. 5 Jones provides concentrate to National Beverage, who makes the canned soda and delivers it to its retailers' distribution centers. 6 Jones management said that gross margins on concentrate could approach 45% compared to their current 35% gross margin for 7 bottled soda. We believe the higher gross margin on concentrate 8 can help increase total gross margins for years to come as canned soda gains as a share of Jones sales. 9 Jones Soda now uses only pure cane sugar as a sweetener, not 10 HFCS (high fructose corn syrup) and is changing the product name to Jones Pure Cane Soda to emphasize this difference from major 11 soda brands. Sugar may be perceived to be healthier, and management plans to promote this belief with a campaign using 12 the slogan, "Corn is for cars,.... Sugar is for soda." 13 We believe the greater distribution of Jones Pure Cane Soda in cans supports the company's strategy to, "stimulate strong demand 14 for our existing brands and products..." and believe the new retailers will help drive substantial profitable growth. 15 We rate JSDA shares Buy and our 12-month price target has been 16 raised to $15.

17 57. On March 8, 2007, Jones Soda announced financial results for the fourth quarter 18 and fiscal year ended December 31, 2006. The fourth quarter highlights from the announcement 19 included : an increase in revenues of 15 percent ; a 179 percent increase of earnings before interest 20 and taxes ; a 256 percent increase in net income; and an increase of earnings per share of 167 21 percent to $.08 compared to $.03 in the prior years. The fiscal year highlights included: an 22

23 increase in revenues of 16.5 percent; a 111 percent increase in earnings before interest and taxes;

24 a 257 percent increase in net income; and an increase of diluted earnings per share of 217 percent

25 to $.19 compared to $.06 in the prior year. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -16- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE: ( 206) 623-3384 1 58. In connection with the March 8, 2007 announcement, van Stolk stated:

2 Fiscal 2006 was marked by the execution of several important initiatives that have significantly enhanced our growth prospects, 3 further differentiated our brand from the competition, and set the 4 stage for an exciting 2007. Foremost, we signed a distribution and manufacturing agreement with National Beverage Corp. for 12 oz 5 Jones Soda and 16 oz Jones Energy cans for the U.S. marketplace. After the successful launch during 2005 and 2006 for our first ever 6 line of cans exclusively at Target, we are excited to go after a much larger piece of the $66 billion CSD category. Additionally, 7 we made the strategic decision to sweeten our new cans with pure 8 cane sugar rather than high fructose corn syrup, which is predominately used throughout the industry. Not only does this 9 provide our consumers a healthier alternative, its sets Jones Soda apart from the other beverage companies. We are optimistic about 10 the opportunities we believe our new Jones Pure Cane Soda will 11 provide, and we have already secured more than 25% ACV through shelf space at major retailers. 12 59. During the earnings conference call that same day, van Stolk offered additional 13 perspective as to the Company' s achieving of more than 25 percent ACV at major retailers by 14 disclosing that shelf space at Target, Winco, Southern California, all Safeway stores, all 15 K-Mart stores, all Wal-Mart Super Centers, all A&P, all Harris Teeter stores, all Shaw's, all 16

17 Pathmark, Shop Rite Supermarkets, all Albertson's intermountain division, all Albertson's

18 Florida divisions, all Albertson's Denver division, all Jewell's, all Railey's and Associated Food

19 stores, was in the process of being set and would be completed by Memorial Day. 20 60. On March 9, 2007, security industry analysts issued positive reports in connection 21 with the Company' s earnings announcement and conference call. 22 61. ThinkEquity Partners, for example, rated Jones Soda a "buy" and raised its 12- 23 month price target to $17.00 based upon, among other things, the Company's disclosure of the 24

25 "long-awaited list of retailers that will be stocking Jones Pure Cane Soda ... that are expected to

26 have [the cans] on the shelves by Memorial Day."

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -17- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE: ( 206) 623-3384 1 62. Piper Jaffray rated Jones Soda to "outperform," and raised its price target to

2 $18.00 related to the same disclosure of retailers constituting the Company's 25 percent ACV 3 penetration. 4 63. Stifel Nicolaus similarly upgraded its Jones Soda rating. The shares of Jones 5 Soda were rated "buy" and the 12-month price target was increased to $20.00. Among other 6 things, the basis for Stifel Nicolaus' upgrade included the following: 7

8 The company previously announced that it had secured a 25% share of ACV or outlet availability by mid-2007 but stated for the 9 first time yesterday which retailers are carrying Jones Pure Cane Soda. Jones said the product would be sold at Wal-Mart, Safeway, 10 Kroger, Harris Teeter, Winco, Pathmark, Shaw's, and selected 11 Albertson' s and Costco stores. This group, combined with the previously announced participation of Kmart and Target's 12 continued commitment, means Jones is lifting its can-related ACV from 2% in 2006 to the noted 25% in 2007. The company further 13 added that it expects to achieve a 30% share of ACV by the end of 2007 and 50% by the end of 2008. (ACV stands for all 14 Commodity Volume and refers to share of all U.S. retail stores 15 eligible to carry Jones soda or any other soft drink.) In light of the detail on which stores are carrying Jones Pure Cane 16 Soda - namely chains with relatively large average store sizes, 17 most especially Wal-Mart and Costco - we increase our expectations for case sales of concentrate to 15 million and 27 18 million from 11 million and 17 million in 2007 and 2008, respectively. We also increase our volume expectations for the 19 company's DSD (sales of Jones product through distributors) business. We do so because the company more emphatically 20 affirmed that sales of bottled soda sales are linked to the Jones 21 Pure Cane canned soda rollout. (Emphasis added.) 64. In the midst of the positive news being disseminated about Jones Soda in the 22

23 marketplace, Company insiders, however, began disposing of their shares at a rapid clip.

24 65. On March, 13, 2007, for example, Bedbury sold 30,000 Jones Soda shares he held

25 at a price per share of $19.47. On March 16, 2007, Bedbury sold another 40,000 shares, in 5,000 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -18- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 and 10,000 share blocks, at prices per block between $18.46 and $18.78 per share. After his

2 sales, Bedbury held no direct ownership in the Company. 3 66. Likewise, on March 13, 2007, Fleming exercised options to purchase 20,000 4 Jones Soda shares and sold 15,000 on the same day at a price per share of $19.87. 5 67. On March 14, 2007, van Stolk sold 140,000 Jones Soda shares he held at a price 6 per share of $18.10. 7

8 68. On March 15, 2007, Nilsen exercised options to purchase 3,000 Jones Soda shares

9 only to sell them all on the same day at a price per share of $18.90 . After his sale, Nilsen held no

10 direct ownership in the Company. 11 69. Despite this disposition of Jones Soda shares by insiders, on March 14, 2007, the 12 Company had filed with the SEC its Form 10-K for the fourth quarter and year ending December 13 31, 2006, which included the financial results previously reported. The Form 10-K also 14

15 included a certification from van Stolk, as the Company's CEO, that provided:

16 I, Peter M. van Stolk, certify that:

17 1. I have reviewed this annual report on Form 10-K of Jones Soda Co.

18 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the 19 statements made, in light of the circumstances under which such 20 statements were made, not misleading with respect to the period covered by this report. 21 3. Based on my knowledge, the financial statements, and other financial 22 information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the 23 registrant as of, and for, the periods presented in this report. 24 4. The registrant's other certifying officers and I are responsible for 25 establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal 26 controls over financial reporting (as defined in Exchange Act Rules 13a- 15(f)) for the registrant and have:

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -19- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our 2 supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known 3 to us by others within those entities, particularly during the period 4 in which this report is being prepared;

5 b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under 6 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial 7 statements for external purposes in accordance with generally 8 accepted accounting principles;

9 c. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about 10 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such 11 evaluation; and 12 d. disclosed in this report any change in the registrant's internal 13 control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, 14 or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 15 5. The registrant's other certifying officers and I have disclosed, based on 16 our most recent evaluation of internal control over financial reporting, to 17 the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): 18 a. all significant deficiencies and material weaknesses in the design 19 or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to 20 record, process, summarize and report financial information; and 21 b. any fraud, whether or not material, that involves management or 22 other employees who have a significant role in the registrant's internal control over financial reporting. 23 70. Natha, as the Company's CFO, executed an identical certification that was also 24 included in the Form 10-K. 25

26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -2 0- 1201 THIRD AVENUE, SUITE 3200 SEATTLE , WASHINGTON 98101-3052 TELEPHONE: (206) 623-1900 FACSIMILE : ( 206) 623-3384 1 71. On March 16, 2007, von Stolk was interviewed on CNBC's Mad Money by Jim

2 Cramer. During the interview, in addition to touting the Company's great sales related to the 3 introduction of their product in 12-ounce cans, van Stolk specifically noted the expanded list of 4 major retailers that would have the Jones Soda product on their shelves starting Memorial Day. 5 72. On April 5, 2007, security industry analyst Piper Jaffray reiterated its 6 "outperform" rating and increased the share price target to $31.00 premised on a meeting with 7

8 management of Jones Soda in New York. Interestingly, the meeting with management gave

9 Piper Jaffray sufficient confidence to "believe that the initial pipeline fill is shipping and being

10 shelved (target goal of Memorial Day) as expected." 11 73. On April 12, 2007, Investor's Business Daily reported: 12 Jones-branded canned carbonated drinks are now being placed on 13 store shelves of 25 major retail chains, including Wal-Mart Supercenters, Safeway, Kroger, K-Mart, a unit of Sears Holdings, 14 Costco in Southern California and ' Intermountain, 15 Florida and Denver divisions.

16 It's a major shift meant to put the $40 million drink firm into a much larger market. From the $500 million premium beverage 17 category, it'll now play in the $66 billion soft-drink market.

18 74. On May 3, 2007, Jones Soda announced its first quarter results for 2007. In 19 connection with the announcement, van Stolk confirmed that the Company was "very pleased to 20 achieve more than 25% ACV in such a short period of time and ... committed to expanding our 21 national presence throughout the remainder of this year and beyond." He continued: 22

23 Jones Soda 12-ounce cans are now available across the country at major retailers including Wal-Mart, Sam's Clubs, Albertsons, 24 Safeway and Target to name a few. Importantly, we have successfully leveraged our relationships to secure additional 25 distribution for our bottles with many of the aforementioned accounts and we will continue to focus on executing similar 26 agreements for our entire portfolio of products.

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -21- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE : (206) 623-3384 1 75. He also confirmed that pre-store volume turnover at major retailers was exceeding

2 Company expectations: stating further that "[t]he reason I know that its going through is that we 3 see the scan data and the retail link in the data that we see on the sales data by major retailers 4 daily." (Emphasis added.) 5 76. On May 4, 2007, securities industry analysts responded to the first quarter results 6 of Jones Soda. 7

8 77. ThinkEquity Partners, for example, upgraded Jones Soda to "accumulate" and

9 stated its 12-month price target to be $26 based upon, among other things, the reassurances that

10 "Jones Pure Cane Soda in cans is now on track to be on the shelves by Memorial Day at the long 11 list of retail locations the [C]ompany announced in March." 12 78. Piper Jaffray maintained its rating on Jones Soda to "outperform" and price target 13 of $31 based upon, among other things, guidance that "the initial pipeline fill is shipping and 14

15 being shelved (targeted goal of Memorial Day) as expected, with a majority of the pipeline fill

16 occurring in the second quarter."

17 79. Again, despite positive analysts' coverage of Jones Soda, Company insiders 18 continued to dispose of their shares. 19 80. On May 8, 2007, Fleming exercised options to purchase 35,000 Jones Soda shares 20 only to sell sold them all on the same day at a price per share of $23.78. He sold an additional 21 5,000 of the Jones Soda shares he held at the same price per share of $23.78. At the end of the 22

23 day, Fleming held only 5000 Jones Soda shares for his account.

24 81. On May 15, 2007, Rossow exercised options to purchase 30,000 Jones Soda

25 shares only to sell them all on the same day at a price per share of $23.15. After his sale, 26 Rossow held no direct ownership in the Company.

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -22- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE: ( 206) 623-3384 1 82. Despite this disposition of Jones Soda shares by insiders, on May 10, 2007, the

2 Company had filed with the SEC its Form 10-Q for the first quarter ending March 31, 2007, 3 which included the financial results previously reported. The Form 10-Q also included a 4 certification from van Stolk, as the Company's CEO, that provided: 5 I, Peter M. van Stolk, certify that: 6 1. I have reviewed this annual report on Form 10-Q of Jones Soda Co. 7 2. Based on my knowledge, this report does not contain any untrue statement 8 of a material fact or omit to state a material fact necessary to make the 9 statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered 10 by this report.

11 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects 12 the financial condition, results of operations and cash flows of the 13 registrant as of, and for, the periods presented in this report.

14 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as 15 defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a- 16 15(f)) for the registrant and have: 17 a. designed such disclosure controls and procedures, or caused such 18 disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the 19 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period 20 in which this report is being prepared; 21 b. designed such internal control over financial reporting, or caused 22 such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the 23 reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 24 accepted accounting principles;

25 c. evaluated the effectiveness of the registrant's disclosure controls 26 and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -23- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 the end of the period covered by this report based on such evaluation; and 2 d. disclosed in this report any change in the registrant's internal 3 control over financial reporting that occurred during the 4 registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal 5 control over financial reporting.

6 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to 7 the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions): 8

9 a. all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are 10 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and 11 b. any fraud, whether or not material, that involves management or 12 other employees who have a significant role in the registrant's 13 internal control over financial reporting.

14 83. Natha, as the Company's CFO, executed an identical certification that was also

15 included in the Form 10-K.

16 84. On May 24, 2007, the Associated Press reported news of a five-year deal between 17 Seattle Seahawks Qwest Field and Jones Soda. Pursuant to the terms of the deal, Jones Soda 18 became the sole provider of non-alcoholic beverages and the NFL team's stadium. On the same 19 day, The Seattle Post-Intelligencer reported similar news noting: "It is the first time a small 20 private label has knocked off a large soft-drink company to win a major pouring contract ... 21

22 becom[ing] the only label outside of Coke and to have an exclusive deal with an NFL

23 team." The Seattle Post-Intelligencer also reported that news of the deal "helped push shares of

24 Jones Soda up 8 percent to a close at $21.64." 25 85. Again, despite positive news coverage of Jones Soda, Company insiders 26 continued to dispose of their shares.

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -24- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 86. On the same day as news of the Seattle Seahawks Qwest Field contract was

2 released, Jones exercised options to purchase 15,000 Jones Soda shares only to sell them all on 3 the same day at a price per share of $22.05. After his sale, Jones held no direct ownership in the 4 Company. 5 87. On May 29, 2007, based upon, among other things, news of the Seattle Seahawks 6 Qwest Field contract, security industry analyst Piper Jaffray reiterated its "outperform" rating 7

8 and $31 share price target for Jones Soda.

9 88. On June 1, 2007, The Seattle Times reported that van Stolk disclosed to

10 shareholders at the Company's 2007 annual meeting that the contract between Seattle Seahawks 11 Qwest Field and Jones Soda "generated interest from another team in the NFL, two in the NBA 12 and four in major-league baseball," among others. 13 89. Again, despite positive news coverage of Jones Soda, Company insiders 14

15 continued to dispose of their shares.

16 90. On June 5, 2007, Gallagher sold 20,000 Jones Soda shares he held at a price per

17 share of $17.80. After his sale, Gallagher held no direct ownership in the Company. 18 91. On June 18, 2007, securities industry analyst ThinkEquity Partners upgraded its 19 rating on Jones Soda from "accumulate" to "buy," however, lowered its price target to $20. 20 Among other things, this analyst's report noted that the Company's pipeline fill did not progress 21 as projected: 22

23 Jones Pure Cane Soda in cans is now on track to be on shelves by the Fourth of July at the long list of retail locations the [C]ompany 24 announced last March. Kroger stores were delayed in offering Jones Soda and missed the Memorial Day target, but management 25 indicated plans to have the soda available at Kroger soon. (Emphasis added.) 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -25- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE: ( 206) 623-3384 1 92. Only July 9, 2007, securities industry analyst Stifel Nicolaus similarly reduced its

2 estimates for Jones Soda. Among other things, the Stifel Nicolaus report stated that Jones Soda 3 missed the 25 percent ACV penetration that the Company said it more than achieved at the 4 beginning of May: 5 In June, the [C]ompany said that it achieved ACV (or outlet 6 availability) of 21 % by Memorial Day, below its initial expectation of 25%. The [C]ompany blamed the decrement on Kroger, which 7 had not shelved the product as had been expected. The [C]ompany 8 said that it expected to achieve 25% by the end of the 2Q, or no later than July 4. 9 93. Commenting on the performance of Jones Soda stock, Stifel Nicolaus stated the 10 following: 11

12 We believe the selloff in JSDA shares since April is attributable to three things (i) reports of a slower rollout of the can product, 13 including the [C]ompany' s admission it was only able to achieve a 21% share of ACV by Memorial versus an expected 25%, (ii) 14 weak 1Q results, where concentrate case shipments declined 41% sequentially, and (iii) selling by momentum investors who bought 15 shares in April and May. 16 94. On July 10, 2007, Piper Jaffray maintained its rating and price target for Jones 17 Soda. Piper Jaffray also noted similar discrepancies in the Company's public disclosures. In 18 particular regard to the statements from Jones Soda as to ACV: 19

20 The [C]ompany had previously announced 25% ACV penetration, with the intended goal of reaching 30% ACV by the end of this 21 year and at least 50% by the end of next year, ultimately to as much as 75 % penetration of the ACV market. In terms of 22 launching the Pure Cane CSD product, the [C]ompany realized 21% of the 25 % ACV goal. The remaining 4% relates to the delay 23 at Kroger, which has begun shelving. 24 95. On August 2, 2007, Jones Soda announced its second quarter results for 2007. 25 The Company's second quarter results were disappointing across the board, to say the least. In 26 connection with the release, van Stolk disclosed that "concentrate sales were below plan due to

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -26- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE : (206) 623-3384 1 some delays in the launch of our CSD product which negatively impacted our gross margin and

2 profitability." 3 96. At the earnings conference call on the same day, van Stolk admitted: 4 Sales fell below expectation due mainly to the slower than 5 expected CSD rollout ....

6 We have been targeting Memorial Day as the date of achieving 25% ACV from our Jones Soda cans; however, we didn't reach our 7 targeted penetration until July. As a result, we did not experience a 8 level of fill in business we were originally modeling in the second quarter. 9 97. As expressed in the announcement, second quarter profit dropped 98 percent due 10 to higher costs and delays in the rollout of the Company's canned soft drinks. Analysts polled by 11

12 Thomson Financial expected earnings of 4 cents per share.

13 98. Also stinging the bottom line of the soda-maker was a 74% rise to $3.5 million in

14 promotion and selling expenses in the quarter. General and administrative costs climbed 36% to 15 $1.5 million. 16 99. This completely unexpected news concerning the Company's failure to move 17 product onto shelves in time for the summer season and other organic problems with its earnings, 18 including skyrocketing expenses, caused the Company stock to drop precipitously on August 3, 19

20 2007 by nearly 25% on heavy volume. The Company's per share price has not recovered.

21 100. On August 3, 2007, industry analysts who had been the Company's biggest fans

22 uniformly reduced price targets on the stock citing the unexpected results and problems with the 23 Company. 24 101. For example, Think Equity expressed surprise that the canned soda rollout was 25 delayed and that gross margins ramped up a slower than expected pace. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -27- 1201 THIRD AVENUE , SUITE 3200 SEATTLE , WASHINGTON 98101-3052 TELEPHONE : ( 206) 623-1900 FACSIMILE : ( 206) 623-3384 1 UNDISCLOSED MATERIAL, ADVERSE FACTS

2 102. The market for the common stock of Jones Soda was open, well-developed, and 3 efficient at all relevant times. 4 103. As a result of these materially false and misleading statements and failures to 5 disclose, the Company' s common stock traded at artificially inflated prices during the Class 6 Period. Plaintiff and other members of the Class purchased or otherwise acquired Jones Soda 7

8 common stock relying upon the integrity of the market price of the Company's common stock

9 and market information relating to Jones Soda, and have been damaged thereby.

10 104. During the Class Period, Defendants materially misled the investing public, 11 thereby inflating the price of the Company's common stock, by publicly issuing false and 12 misleading statements and omitting to disclose material facts necessary to make Defendants' 13 statements, as set forth herein, not false and misleading. Said statements and omissions were 14

15 materially false and misleading in that they failed to disclose material adverse information and

16 misrepresented the truth about the Company, its business and operations, as alleged herein.

17 105. At all relevant times, the material misrepresentations and omissions particularized 18 in this Complaint directly or proximately caused or were a substantial contributing cause of the 19 stock purchases by Plaintiff and other members of the Class. 20 106. Each Defendant is liable for (a) making false statements, or (b) failing to disclose 21 adverse facts known to him about Jones Soda. Defendants' fraudulent scheme and course of 22

23 business that operated as a fraud or deceit on purchasers of Jones Soda common stock was a

24 success, as it (a) deceived the investing public regarding the Company's prospects and business;

25 (b) artificially inflated the prices of Jones Soda common stock; and (c) caused Plaintiff and other 26 members of the Class to purchase Jones Soda common stock at inflated prices.

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -2 8- 1201 THIRD AVENUE, SUITE 3200 SEATTLE , WASHINGTON 98101-3052 TELEPHONE: (206) 623-1900 FACSIMILE: (206) 623-3384 1 SCIENTER ALLEGATIONS

2 107. As alleged herein, Defendants acted with scienter, in that they knew the 3 Company's public documents and statements issued or disseminated by or in the name of the 4 Company were materially false and misleading; they knew or recklessly disregarded that such 5 statements or documents would be issued or disseminated to the investing public; and they 6 knowingly and substantially participated or acquiesced in the issuance or dissemination of such 7

8 statements or documents as primary violators of the federal securities laws.

9 108. As alleged herein in detail, by virtue of their receipt of information reflecting the

10 true facts regarding Jones Soda and its business practices , their control over or receipt of the 11 Company's materially false and misleading statements, or their associations with the Company 12 which made them privy to confidential proprietary information concerning Jones Soda, 13 Defendants were active and culpable participants in the fraudulent scheme alleged herein. 14

15 109. Defendants knew or recklessly disregarded the falsity and misleading nature of

16 the information which they caused to be disseminated to the investing public.

17 110. The ongoing fraudulent scheme described in this complaint could not have been 18 perpetrated over a substantial period of time, as has occurred, without the knowledge and 19 complicity of the personnel at the highest level of the Company, including the Individual 20 Defendants. 21 111. In particular, Defendant van Stolk engaged in such a scheme to inflate the price of 22

23 Jones Soda securities in order to enhance his executive positions, his own personal wealth in

24 accumulated holdings of Jones Soda stock, and the substantial compensation and prestige they

25 obtained thereby, as evidenced by, among other things, his own admission. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -29- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : ( 206) 623-1900 FACSIMILE : ( 206) 623-3384 1 112. Individual Defendants Bedbury, Fleming, Rossow, Gallagher, Jones and Nilsen

2 engaged in such a scheme to inflate the price of Jones Soda securities to likewise enhance their 3 own personal wealth, as demonstrated by the liquidation of practically the entirety of all their 4 individually held shares in the Company during the Class Period, at a substantial premium to 5 those held by the Company's shareholders. 6 APPLICABILITY OF PRESUMPTION OF RELIANCE 7 UNDER THE FRAUD-ON-THE-MARKET DOCTRINE 8 113. At all relevant times, the market for Jones Soda securities was efficient for the 9 following reasons, among others: 10

11 a. The Company's stock met the requirements for listing, and was listed and

12 actively traded on the NASDAQ, a highly efficient and automated market;

13 b. As a regulated issuer, Jones Soda filed periodic public reports with the 14 SEC; and 15 c. Jones Soda regularly communicated with public investors via established 16 market communication mechanisms, including through regular disseminations of press releases 17 on the national circuits of major newswire services and through other wide-ranging public 18

19 disclosures, such as communications with the financial press and other similar reporting services.

20 114. As a result of the foregoing, the market for the Company's securities promptly

21 digested current information regarding Jones Soda from all publicly available sources and 22 reflected such information in the Company's stock price. Under these circumstances, all 23 purchasers of Jones Soda securities during the Class Period suffered similar injury through their 24 purchase of Jones Soda securities at artificially inflated prices and a presumption of reliance 25 applies. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -30- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 NO SAFE HARBOR

2 115. The statutory safe harbor provided for forward-looking statements under certain 3 circumstances does not apply to any of the allegedly false statements pleaded in this complaint. 4 Many of the specific statements pleaded herein were not identified as "forward-looking 5 statements" when made. To the extent there were any forward-looking statements, there were no 6 meaningful cautionary statements identifying important factors that could cause actual results to 7

8 differ materially from those in the purportedly forward-looking statements. Alternatively, to the

9 extent that the statutory safe harbor does apply to any forward-looking statements pleaded

10 herein, Defendants are liable for those false forward-looking statements because at the time each 11 of those forward-looking statements was made, the particular speaker knew that the particular 12 forward-looking statement was false, and/or the forward-looking statement was authorized 13 and/or approved by an executive officer of Jones Soda who knew that those statements were 14

15 false when made.

16 COUNT ONE

17 Violation of Section 10(b) of The Exchange Act And Rule 10b-5 Promulgated Thereunder Against All Defendants 18 116. Plaintiff incorporates by reference the preceding paragraphs as if set forth herein. 19 117. During the Class Period, Defendants carried out a plan, scheme and course of 20

21 conduct which was intended to and, throughout the Class Period, did: (a) deceive the investing

22 public, including Plaintiff and other Class members, as alleged herein; and (b) cause Plaintiff and

23 other members of the Class to purchase Jones Soda securities at artificially inflated prices. In 24 furtherance of this unlawful scheme, plan and course of conduct, Defendants, and each of them, 25 took the actions set forth herein. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -31- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE: ( 206) 623-3384 1 118. Defendants: (a) employed devices, schemes, and artifices to defraud; (b) made

2 untrue statements of material fact and/or omitted to state material facts necessary to make the 3 statements not misleading; and (c) engaged in acts, practices, and a course of business which 4 operated as a fraud and deceit upon the purchasers of the Company's securities in an effort to 5 maintain artificially high market prices for Jones Soda securities in violation of Section 10(b) of 6 the Exchange Act and Rule lOb-5 promulgated thereunder. All Defendants are sued either as 7

8 primary participants in the wrongful and illegal conduct charged herein or as controlling persons

9 as alleged below.

10 119. Defendants, individually and in concert, directly and indirectly, by the use, means 11 or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a 12 continuous course of conduct to conceal adverse material information about the business, 13 operations and future prospects of Jones Soda as specified herein. 14

15 120. These Defendants employed devices, schemes and artifices to defraud, while in

16 possession of material adverse non-public information and engaged in acts, practices, and a

17 course of conduct as alleged herein in an effort to assure investors of Jones Soda value and 18 performance and continued substantial growth, which included the making of, or the 19 participation in the making of, untrue statements of material facts and omitting to state material 20 facts necessary to make the statements made about Jones Soda and its business operations and 21 future prospects in the light of the circumstances under which they were made, not misleading, 22

23 as set forth more particularly herein, and engaged in transactions, practices and a course of

24 business which operated as a fraud and deceit upon the purchasers of Jones Soda securities

25 during the Class Period. 26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -32- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE: ( 206) 623-3384 1 121. Each of the Individual Defendants' primary liability, and controlling person

2 liability, arises from the following facts: (a) the Individual Defendants were high-level 3 executives and/or directors at the Company during the Class Period and members of the 4 Company's management team or had control thereof; (b) each of these Defendants, by virtue of 5 their responsibilities and activities as a senior officer and/or director of the Company was privy 6 to and participated in the creation, development and reporting of the Company's internal 7

8 budgets, plans, projections and/or reports; (c) each of these Defendants enjoyed significant

9 personal contact and familiarity with the other Defendants and was advised of and had access to

10 other members of the Company's management team, internal reports and other data and 11 information about the Company's finances, operations, and sales at all relevant times; and (iv) 12 each of these Defendants was aware of the Company's dissemination of information to the 13 investing public which they knew or recklessly disregarded was materially false and misleading. 14

15 122. The Defendants had actual knowledge of the misrepresentations and omissions of

16 I material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

17 ascertain and to disclose such facts, even though such facts were available to them. Such 18 Defendants' material misrepresentations and/or omissions were done knowingly or recklessly 19 and for the purpose and effect of concealing the Company's operating condition and future 20 business prospects from the investing public and supporting the artificially inflated price of its 21 securities. As demonstrated by Defendants' misstatements of the Company's business, 22

23 operations and earnings throughout the Class Period, defendants, if they did not have actual

24 knowledge of the misrepresentations and omissions alleged, were reckless in failing to obtain

25 such knowledge by deliberately refraining from taking those steps necessary to discover whether 26 those statements were false or misleading.

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -33- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384 1 123. As a result of the dissemination of the materially false and misleading information

2 and failure to disclose material facts, as set forth above, the market price of Jones Soda securities 3 was artificially inflated during the Class Period. In ignorance of the fact that the market prices of 4 Jones Soda publicly-traded securities were artificially inflated, and relying directly or indirectly 5 on the false and misleading statements made by Defendants, or upon the integrity of the market 6 in which the securities trade, and/or on the absence of material adverse information that was 7

8 known to or recklessly disregarded by Defendants but not disclosed in public statements by

9 Defendants during the Class Period, Plaintiff and the other members of the Class acquired Jones

10 Soda securities during the Class Period at artificially high prices and were damaged thereby. 11 124. At the time of said misrepresentations and omissions, Plaintiff and other members 12 of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the 13 other members of the Class and the marketplace known the truth regarding the actual financial 14

15 position and conditions under which Jones Soda was operating its business, which were not

16 disclosed by Defendants, Plaintiff and other members of the Class would not have purchased or

17 otherwise acquired their Jones Soda securities, or, if they had acquired such securities during the 18 Class Period, they would not have done so at the artificially inflated prices which they paid. 19 125. By virtue of the foregoing, Defendants have violated Section 10(b) of the 20 Exchange Act, and Rule lOb-5 promulgated thereunder. 21 126. As a direct and proximate result of Defendants ' wrongful conduct, Plaintiff and 22

23 the other members of the Class suffered damages in connection with their respective purchases

24 and sales of the Company's securities during the Class Period.

25

26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -34- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE : (206) 623-1900 FACSIMILE : (206) 623-3384 1 COUNT TWO

2 Violation of Section 20(a) of The Exchange Act Against Defendants van Stolk and Natha 3 127. Plaintiff incorporates by reference the preceding paragraphs as if set forth herein. 4 128. Defendants van Stolk and Natha acted as controlling persons of Jones Soda within 5

6 the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

7 positions, ownership and contractual rights, participation in or awareness of the Company's

8 operations or intimate knowledge of the false financial statements filed by the Company with the 9 SEC and disseminated to the investing public, Defendants van Stolk and Natha had the power to 10 influence and control and did influence and control, directly or indirectly, the decision-making of 11 the Company, including the content and dissemination of the various statements which Plaintiff 12

13 contends are false and misleading.

14 129. Defendants van Stolk and Natha were provided with or had unlimited access to

15 copies of the Company's reports, press releases, public filings and other statements alleged by 16 Plaintiff to be misleading prior to or shortly after these statements were issued and had the ability 17 to prevent the issuance of the statements or cause the statements to be corrected. 18 130. In particular, Defendants van Stolk and Natha had direct and supervisory 19 involvement in the day-to-day operations of the Company and, therefore, are presumed to have 20

21 had the power to control or influence the particular transactions giving rise to the securities

22 violations as alleged herein, and exercised the same.

23

24

25

26

LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -35- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 1 131. As set forth above, Jones Soda and Defendants van Stolk and Natha violated

2 Section 10(b) and Rule lOb-5 by their acts and omissions as alleged in this Complaint. By virtue 3 of their positions as controlling persons, Defendant van Stolk and Natha are liable pursuant to 4 Section 20(a) of the Exchange Act. 5 132. As a direct and proximate result of Defendants ' wrongful conduct, Plaintiff and 6 other members of the Class suffered damages in connection with their purchases of the 7

8 Company' s securities during the Class Period.

9 PRAYER FOR RELIEF

10 WHEREFORE, plaintiff prays for relief and judgment, as follows: 11 A. Determining that this action is a proper class action, designating plaintiff as Lead 12 Plaintiff and certifying Plaintiff as Class Representative under Rule 23 of the Federal Rules of 13 Civil Procedure and Plaintiff's counsel as Lead Counsel; 14

15 B. Awarding compensatory damages in favor of plaintiff and the other Class

16 members against all defendants, jointly and severally, for all damages sustained as a result of

17 Defendants' wrongdoing, in an amount to be proven at trial, including interest thereon; 18 C. Awarding plaintiff and the Class their reasonable costs and expenses incurred in 19 this action, including counsel fees and expert fees; and 20 D. Such other and further relief as the Court may deem just and proper. 21

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LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -36- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE : (206) 623-3384 1 JURY TRIAL DEMANDED

2 Pursuant to Federal Rule of Civil Procedure 38(a), Plaintiff hereby demands a trial by

3 jury of all issues so triable.

4 Dated: September 5, 2007

5 KELLER ROHRBACK L.L.P. Lynn Lincoln Sarko 6 Juli E. Farris 7 Elizabeth A. Leland 1201 Third Avenue, Suite 3200 8 Seattle, WA 98101 Phone: (206) 623-1900 9 Facsimile : (206) 623-3384 10 WOLF HALDENSTEIN ADLER 11 FREEMAN & HERZ LLP Gregory M. Nespole 12 Gustavo Bruckner Malcolm T. Brown 13 270 Madison Avenue 14 New York, NY 10016 Telephone : (212) 545-4600 15 Facsimile : (212) 545-4653 [email protected] 16 LAW OFFICES OF BRUCE MURPHY 17 Bruce G. Murphy, Esq. 18 265 Llwyds Lane Vero Beach, Florida 32963 19 Attorneys for Plaintiff and the Class 20

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22 1 487545 23

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LAW OFFICES OF KELLER ROHRBACK L.L.P.

CLASS ACTION COMPLAINT -37- 1201 THIRD AVENUE, SUITE 3200 SEATTLE, WASHINGTON 98101-3052 TELEPHONE: ( 206) 623-1900 FACSIMILE: ( 206) 623-3384