Sec Form 13D Filing - CUE JENNIFER filing for JONES SODA CO (JSDA) - 2019-07-22

The Reporting Person is a United States citizen.

Schedule A attached hereto sets forth certain information regarding the Separately Filing Group Members as required by Item 2 of Schedule 13D.

Item 4.    Purpose of Transaction.

Item 4 of the Original Schedule 13D is hereby supplemented by adding the following disclosure:

Purchase of Shares and Warrant

On July 11, 2019,  Heavenly entered into a securities purchase agreement (the “Purchase Agreement”) with the Issuer, pursuant to which Heavenly purchased 15,000,000 shares of the Issuer’s Common Stock (the “Shares”)

and a warrant to purchase up to an additional 15,000,000 shares of the Issuer’s Common Stock (the “Warrant”).  The aggregate purchase price for the Shares and the Warrant was $9,000,000 in cash, which was paid to the Issuer at the closing of the purchase and sale on July 11, 2019 (the “Closing”).

Investor Rights Agreement

On July 11, 2019, in connection with the Purchase Agreement, the Separately Filing Group Members, the Issuer and the Reporting Person entered into an Investor Rights Agreement (the “IRA”).  Pursuant to the IRA, the Issuer, the Separately Filing Group Members and the Reporting Person agreed to cause the Issuer’s board of directors (the “Board”) to be set at seven directors.  Heavenly has the right to designate two members of the Board (the “Investor Designees”), and the Reporting Person and the other Separately Filing Group Members have agreed to vote their shares of Common Stock in favor of the election of the Investor Designees.  For so long as any Investor Designees serve on the Board, the Issuer must obtain the approval of the Board, including all of the Investor Designees, before taking certain actions, such as amending the Issuer’s charter documents, offering to sell any new securities, creating any debt security, approving a change of control, changing the strategy or principal lines of business of the Issuer, liquidating or dissolving the Issuer or agreeing to make expenditures in excess of $1,000,000.  In addition, in the event that the Issuer proposes to offer any new securities (subject to certain standard exceptions), Heavenly has a right of first offer to purchase such securities. Under the IRA, Heavenly, the Separately Filing Group Members and the Reporting Person have agreed for a period of one year following the closing of the transaction that they will not sell or otherwise transfer any shares of Common Stock or other securities of the Issuer, subject to certain standard exceptions.  In addition, pursuant to the IRA, the Issuer has granted Heavenly certain demand registration rights (after the expiration of the lock-up described in the preceding sentence) and piggyback registration rights with respect to the Shares and the Warrant Shares.

Item 5.                 Interest in Securities of the Issuer.

Item 5 of the Original Schedule 13D is hereby supplemented by adding the following disclosure:

(a)          As of March 14, 2019, as reported on the Definitive Proxy Statement on Schedule 14-A of the Issuer filed with the Securities and Exchange Commission on March 26, 2019, the Reporting Person may be deemed to beneficially own 3,069,648 shares of Common Stock, representing 5.37% of the outstanding Common Stock.  Such percentage ownership is based on (i) 42,210,985 shares of Common Stock outstanding as of May 1, 2019, as reported on the Issuer’s Quarterly Report on 10-Q filed with the Securities and Exchange Commission (the “SEC”) on May 13, 2019 and (ii) 15,000,000 shares of Common Stock issued to Heavenly on July 11, 2019.    

As a result of entering into the IRA with the Reporting Person and the other Separately Filing Group Members,  Heavenly may be deemed to share beneficial ownership of all 3,852,879 shares of Common Stock held by the Reporting Person and the other Separately Filing Group Members.

The Separately Filing Group Members have disclaimed any beneficial ownership of the shares of Common Stock beneficially owned by the Reporting Person.

Based on information provided by the Separately Filing Group Members, the Reporting Person believes that she and the Separately Filing Group Members together as a “group” may be deemed to collectively beneficially own in the aggregate 33,852,879 shares of Common Stock, or 46.88% of the outstanding shares of Common Stock as of the date of this Schedule 13D. The Reporting Person expressly disclaims beneficial ownership of any securities beneficially owned or acquired by the Separately Filing Group Members.    

(b)         The Reporting Person has (i) the sole power to vote none of the shares of Common Stock and (ii) the sole power to dispose of all of the shares of Common Stock that the Reporting Person beneficially own, as described in Item 5(a), above.

(c)          Except as described in this Schedule 13D, the Reporting Person has not effected a ny transaction in the Common Stock during the past 60 days.

To the knowledge of the Reporting Person, the Separately Filing Group Members have not effected any transaction in the Common Stock during the past 60 days, other than (i) the purchase of the Shares and the Warrant pursuant to the Purchase Agreement (as described in Item 4) and (ii) entry into the IRA (as described in Item 4).

(d)    Not applicable.

(e)    Not applicable.

Item 6.                Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Item 6 of the Original Schedule 13D is hereby supplemented by incorporating by reference the disclosure under Item 4 with respect to the IRA:

Item 7.                Materials to be Filed as Exhibits.

Exhibit No.         Description

1.                          Securities Purchase Agreement, dated as of July 11, 2019, between Heavenly and the Issuer (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Issuer with the SEC on July 12, 2019)



2.                         Warrant, dated as of July 11, 2019, between Heavenly and the Issuer (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Issuer with the SEC on July 12, 2019)



3.                          Investor Rights Agreement, dated as of July 11, 2019, among the Separately Filing Group Members, the Issuer and the Reporting Person (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Issuer with the SEC on July 12, 2019)

SIGNATURE

After reasonable inquiry and to the best of the undersigned’s knowledge and believe, the undersigned certifies that the information set forth in this statement is true, complete and correct.



SCHEDULE A

Separately Filing Group Members

The information contained in this Schedule A is based solely on information contained in statements on Schedule 13D previously filed by the Separately Filing Group Members or on information provided separately to the Reporting Person by the Separately Filing Group Members.

Principal Office and Principal Business or Principal Occupation

The principal office of each of the Separately Filing Group Members are as follows:

Heavenly RX Ltd.

Attn: Mike Beedles; Steve Avalon

1112 North Flagler Drive

Fort Lauderdale, FL 33304

Eric Chastain

66 S Hanford St., Suite 150

Seattle, WA 98134

Michael Fleming

66 S Hanford St., Suite 150

Seattle, WA 98134

The principal business or occupation, as applicable, of each of the Separately Filing Group Members are as follows:

Heavenly is a hemp portfolio company.

Eric Chastain is the Chief Operating Officer and Corporate Secretary of the Issuer.

Michael Fleming is an attorney at Ryan, Swanson & Cleveland, PLLC and chairman of the board of directors of the Issuer.

Executive Officers and Directors

Certain information regarding the executive officers and directors of Heavenly is set forth below.