CORRESP 1 filename1.htm Document


VIA EDGAR                                        August 9, 2024

United States Securities and Exchange Commission
Division of Corporation Finance
Office of Manufacturing
100 F Street, N.E.
Washington, D.C. 20549
Attention: SiSi Cheng and Anne McConnell

Re: Celsius Holdings, Inc.
Form 10-K for the Year Ended December 31, 2023
File No. 001-34611

Dear Ms. Cheng and Ms. McConnell,

We respectfully submit this letter in response to the comment from the staff of the Division of Corporation Finance (the “Staff”), received by a letter dated July 22, 2024, relating to the above-mentioned Annual Report on Form 10-K for the Year ended December 31, 2023 (the “Form 10-K”).

We appreciate the opportunity to address the Staff’s comment with respect to our Form 10-K. The Staff’s comment has been reproduced below in italicized text. Our response thereto is set forth immediately following the reproduced comment. In the responses below, references to the “Company”, “we”, and “our” refer to Celsius Holdings, Inc.

Form 10-K for the Year Ended December 31, 2023

Consolidated Financial Statements
13. Related Party Transactions, page F-22

1.We have considered your response to prior comment 1; however, Rule 4-08(k)(1), Rule 5-02 and Rule 5-03 of Regulation S-X require related party transactions to be stated on the face of balance sheets, statements of operations, and statements of cash flows, in addition to related party and concentration of risk disclosures required to be provided in the notes to the financial statements under GAAP. It is not clear to us that stating amounts from related party transactions on the face of your financial statements would cause competitive harm and we do not believe the potential of competitive harm is sufficient to allow non-compliance with disclosure requirements in Regulation S-X. Please revise your financial statements in future annual and quarterly filings to comply with the above referenced disclosure requirements.

Response: We respectfully acknowledge the Staff’s comment and the provisions of Rule 4-08(k)(1), Rule 5-02 and Rule 5-03 of Regulation S-X to present related party transactions on the face of the balance sheets, statements of operations and comprehensive income, and statements of cash flows. Accordingly, beginning with our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, we will prepare our financial statements in future annual and quarterly filings to provide this information on the face of our financial statements.

Set forth below for the Staff’s consideration is a draft of the Company’s proposed presentation of related party transactions on the face of our consolidated balance sheets, consolidated statements of operations and comprehensive income, and consolidated statements of cash flows:



Celsius Holdings, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts) (Unaudited)
March 31, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$879,498 $755,981 
Accounts receivable-net[1]
200,117 183,703 
Note receivable-current-net2,259 2,318 
Inventories-net197,504 229,275 
Prepaid expenses and other current assets21,523 19,503 
Deferred other costs-current[2]
14,124 14,124 
Total current assets1,315,025 1,204,904 
Property and equipment-net28,350 24,868 
Deferred tax assets22,437 29,518 
Right of use assets-operating leases1,688 1,957 
Right of use assets-finance leases263 208 
Other long-term assets7,963 291 
Deferred other costs-non-current[2]
244,807 248,338 
Intangibles-net11,741 12,139 
Goodwill13,866 14,173 
Total Assets$1,646,140 $1,536,396 
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable40,196 $42,840 
Accrued expenses63,871 62,120 
Income taxes payable58,619 50,424 
Accrued promotional allowance[3]
129,201 99,787 
Lease liability obligation-operating leases821 980 
Lease liability obligation-finance leases61 59 
Deferred revenue-current[2]
9,513 9,513 
Other current liabilities12,987 10,890 
Total current liabilities315,269 276,613 
Lease liability obligation-operating leases850 955 
Lease liability obligation-finance leases245 193 
Deferred tax liability2,248 2,880 
Deferred revenue-non-current[2]
164,849 167,227 
Total Liabilities483,461 447,868 
Commitments and contingencies (Note 15)
Mezzanine Equity[2]:
Series A convertible preferred stock, $0.001 par value, 5% cumulative dividends; 1,466,666 shares issued and outstanding at each of March 31, 2024 and December 31, 2023, aggregate liquidation preference of $550,000 as of March 31, 2024 and December 31, 2023824,488 824,488 
Stockholders’ Equity:
Common stock, $0.001 par value; 300,000,000 shares authorized, 233,070,146 and 231,787,482 shares
issued and outstanding at March 31, 2024 and December 31, 2023, respectively		78 77 
Additional paid-in capital281,247 276,717 
Accumulated other comprehensive loss(2,055)(701)
Retained earnings (accumulated deficit)58,921 (12,053)
Total Stockholders’ Equity338,191 264,040 
Total Liabilities, Mezzanine Equity and Stockholders’ Equity$1,646,140 $1,536,396 
The accompanying notes are an integral part of these unaudited consolidated financial statements

[1] Includes $xxx and $xxx from a related party as of March 31, 2024 and December 31, 2023, respectively.
[2] Amounts in this line item are associated with a related party for all periods presented.
[3] Includes $xxx and $xxx from a related party as of March 31, 2024 and December 31, 2023, respectively.





Celsius Holdings, Inc.
Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)

For The Three Months Ended March 31,
20242023
Revenue[1]
$355,708 $259,939 
Cost of revenue173,501 146,121 
Gross profit182,207 113,818 
Selling, general and administrative expenses99,017 68,905 
Income from operations83,190 44,913 
Other income (expense):
Interest income on note receivable28 45 
Interest income, net9,612 4,924 
Foreign exchange loss(369)(118)
Total other income9,271 4,851 
Net income before income taxes92,461 49,764 
Income tax expense(14,650)(8,537)
Net income$77,811 $41,227 
Dividends on Series A preferred shares[2]
(6,837)(6,781)
Income allocated to participating preferred shares[2]
(6,128)(2,934)
Net income attributable to common stockholders$64,846 $31,512 
Other comprehensive (loss) income:
Foreign currency translation (loss) gain, net of income tax(1,354)594 
Comprehensive income$63,492 $32,106 
Earnings per share:[3]
Basic$0.28 $0.14 
Diluted$0.27 $0.13 
Weighted average shares outstanding[3]:
Basic232,780 230,019 
Diluted237,523 236,277 

The accompanying notes are an integral part of these unaudited consolidated financial statements




[1] Includes $xxx and $xxx from a related party for the three months ended March 31, 2024 and 2023, respectively.
[2] Amounts in this line item are associated with a related party for all periods presented.
[3] Forward Stock Split - The accompanying consolidated financial statements and notes thereto have been retrospectively adjusted to reflect the three-for- one stock split that became effective on November 13, 2023. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies for more information.







Celsius Holdings, Inc.
Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
For The Three Months Ended March 31,
20242023
Cash flows from operating activities:
Net income$77,811 $41,227 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization1,229 549 
Allowance for expected credit losses[1]
2,250 837 
Amortization of deferred other costs[2]
3,531 3,531 
Inventory excess and obsolescence2,386 1,672 
Gain on disposal of property and equipment(8)— 
Stock-based compensation expense3,563 5,507 
Deferred income taxes-net6,450 2,873 
Foreign exchange loss369 69 
Changes in operating assets and liabilities:
Accounts receivable-net[3]
(18,664)(109,639)
Inventories-net29,386 17,338 
Prepaid expenses and other current assets(2,076)(4,166)
Accounts payable(3,013)(19,712)
Accrued expenses1,998 12,643 
Income taxes payable8,250 7,251 
Accrued promotional allowance[4]
29,414 32,248 
Accrued distributor termination fees(248)(2,923)
Other current liabilities2,094 1,508 
Change in right of use and lease obligation-net(23)(15)
Deferred revenue[2]
(2,378)(4,625)
Other assets(7,672)(4)
Net cash provided by (used in) operating activities134,649 (13,831)
Cash flows from investing activities:
Collections from note receivable— 3,233 
Purchase of property and equipment[5]
(4,525)(2,253)
Net cash (used in) provided by investing activities(4,525)980 
Cash flows from financing activities:
Principal payments on finance lease obligations(15)(11)
Proceeds from exercise of stock options967 478 
Dividends on Series A preferred shares[2]
(6,837)(6,781)
Net cash used in financing activities(5,885)(6,314)
Effect of exchange rate changes on cash and cash equivalents(722)(181)
Net increase (decrease) in cash and cash equivalents123,517 (19,346)
Cash and cash equivalents at beginning of the period755,981 652,927 
Cash and cash equivalents at end of the period$879,498 $633,581 
Supplemental disclosures:
Cash paid for:
Taxes$320 $408 
The accompanying notes are an integral part of these unaudited consolidated financial statements

[1] Includes $xxx and $xxx associated with a related party for the three months ended March 31, 2024 and 2023, respectively.
[2] Amounts in this line item are associated with a related party for all periods presented.
[3] Includes $xxx and $xxx associated with a related party for the three months ended March 31, 2024 and 2023, respectively.
[4] Includes $xxx and $xxx associated with a related party for the three months ended March 31, 2024 and 2023, respectively.
[5] Includes $xxx and $xxx associated with a related party for the three months ended March 31, 2024 and 2023, respectively.






We appreciate the SEC’s ongoing commitment to promoting transparent financial reporting practices and the opportunity to address your comments. If you or any other member of the Staff should have any further comments or questions regarding this response, please do not hesitate to contact the undersigned at 561-289-2088.



Sincerely,
Celsius Holdings, Inc.
By: /s/ Jarrod Langhans
Jarrod Langhans
Chief Financial Office

cc: Drew M. Altman, Esq., Greenberg Traurig