10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

Commission file number: 001-34611

CELSIUS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Nevada	20-2745790
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

2424 N Federal Highway, Suite 208, Boca Raton, Florida 33431

(Address of Principal Executive Offices)

(561) 276-2239

(Registrant’s telephone number, including area code)

__________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $.001 par value	CELH	Nasdaq Capital Market

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, $0.001 par value, as of May 9, 2022 was 75,361,705 shares.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements.	1
	Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (unaudited)	1
	Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited)	2
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2022 (unaudited)	3
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2021 (unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative Disclosures About Market Risks.	21
Item 4.	Controls and Procedures.	21
PART II – OTHER INFORMATION		22
Item 1.	Legal Proceedings.	22
Item 1A.	Risk Factors.	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	23
Item 3.	Defaults Upon Senior Securities.	23
Item 4.	Mine Safety Disclosures.	23
Item 5.	Other Information.	23
Item 6.	Exhibits.	24
SIGNATURES		24

i

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Celsius Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except par value)

(Unaudited)

	March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash	$	25,532		$	16,255
Accounts receivable-net (note 2)		72,707			38,741
Note receivable-current (note 6)		5,833			2,588
Inventories-net (note 4)		184,094			191,222
Prepaid expenses and other current assets (note 5)		10,042			13,555
Total current assets		298,208			262,361
Note receivable (note 6)		3,888			7,117
Property and equipment-net (note 8)		3,702			3,180
Deferred tax asset (note 14)		6,396			9,019
Right of use assets-operating leases (note 7)		1,141			1,128
Right of use assets-finance leases (note 7)		220			86
Long term security deposits		293			300
Intangibles (note 9)		15,838			16,301
Goodwill (note 9)		14,238			14,527
Total Assets	$	343,924		$	314,019
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses (note 10)	$	109,307		$	91,479
Lease liability obligation-operating leases (note 7)		569			512
Lease liability obligation-finance leases (note 7)		141			157
Other current liabilities (note 11)		1,734			976
Total current liabilities		111,751			93,124
Long-term liabilities:
Lease liability obligation-operating leases (note 7)		597			658
Lease liability obligation-finance leases (note 7)		138			45
Deferred tax liability		3,084			3,146
Total Liabilities		115,570			96,973
Stockholders’ Equity:
Common stock, $0.001 par value; 100,000 shares authorized, 75,351 and 74,909 shares    issued and outstanding at March 31, 2022 and December 31, 2021, respectively (note 13)		75			75
Additional paid-in capital		272,967			267,847
Accumulated other comprehensive income		123			614
Accumulated deficit		(44,811	)		(51,490	)
Total Stockholders’ Equity		228,354			217,046
Total Liabilities and Stockholders’ Equity	$	343,924		$	314,019

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

1

Celsius Holdings, Inc.

Consolidated Statements of Operations and Comprehensive Income

(In thousands, except per share amounts)

(Unaudited)

	For the three months ended March 31,
	2022			2021
Revenue (note 3)	$	133,388		$	50,035
Cost of revenue (note 2)		79,494			29,456
Gross profit		53,894			20,579
Selling and marketing expenses		31,597			11,959
General and administrative expenses		12,181			7,807
Total operating expenses		43,778			19,766
Income from operations	$	10,116		$	813
Other income/(expense)
Interest income on note receivable (note 6)		78			87
Interest on other obligations		(2	)		(2	)
Other miscellaneous income/(expense)		—			(12	)
Foreign exchange gain/(loss)		(162	)		(301	)
Total other expense		(86	)		(228	)
Net income before income taxes	$	10,030		$	585
Income tax expense (Note 14)		3,351			—
Net income	$	6,679		$	585
Other comprehensive income:
Foreign currency translation gain/(loss)		(491	)		(193	)
Comprehensive Income	$	6,188		$	392
Income per share:
Basic	$	0.09		$	0.01
Diluted	$	0.09		$	0.01
Weighted average shares outstanding:
Basic		75,239			72,516
Diluted1		78,289			76,925

(1)Please refer to Earnings Per Share section for further details.

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

2

Celsius Holdings, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2022

(In thousands)

(Unaudited)

							Accumulated
	Common Stock				Additional Paid-In		Other Comprehensive			Accumulated
	Shares		Amount		Capital		Income (Loss)			Deficit			Total
Balance at December 31, 2021		74,909	$	75	$	267,847	$	614		$	(51,490	)	$	217,046
Share-based payment expense		—		—		4,310		—			—			4,310
Issuance of common stock pursuant to stock incentive plan - cashless		248		—		—		—			—			—
Issuance of common stock pursuant to stock incentive plan - cash		194		—		810		—			—			810
Foreign currency fluctuations		—		—		—		(491	)		—			(491	)
Net income		—		—		—		—			6,679			6,679
Balance at March 31, 2022		75,351	$	75	$	272,967	$	123		$	(44,811	)	$	228,354

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

3

Celsius Holdings, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2021

(In thousands)

(Unaudited)

							Accumulated
	Common Stock				Additional Paid-In		Other Comprehensive			Accumulated
	Shares		Amount		Capital		Income (Loss)			Deficit			Total
Balance at December 31, 2020		72,263	$	72	$	159,884	$	(202	)	$	(55,427	)	$	104,327
Share-based payment expense		—		—		3,575		—			—			3,575
Issuance of common stock pursuant to stock incentive plan - cashless		88		—		—		—			—			—
Issuance of common stock pursuant to stock incentive plan - cash		235		1		716		—			—			717
Foreign currency fluctuations		—		—		—		(193	)		—			(193	)
Net income		—		—		—		—			585			585
Balance at March 31, 2021		72,586	$	73	$	164,175	$	(395	)	$	(54,842	)	$	109,011

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

4

Celsius Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	For the three months ended
	March 31, 2022			March 31, 2021
Cash flows from operating activities:
Net income	$	6,679		$	585
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Depreciation		245			108
Amortization		141			188
Bad debt expense		455			223
Inventory excess and obsolescence		2,596			754
Stock-based compensation expense		4,310			3,575
Un-realized exchange loss		85			—
Changes in operating assets and liabilities:
Accounts receivable-net		(34,420	)		(9,234	)
Inventories-net		4,531			(19,242	)
Prepaid expenses and other current assets		3,513			(2,557	)
Accounts payable and accrued expenses		17,742			12,113
Deferred tax-net		2,561			—
Deposits and other current liabilities		765			174
Change in right of use assets and lease obligation-net		(78	)		(5	)
Net cash (used in)/provided by operating activities		9,125			(13,318	)
Cash flows from investing activities:
Proceeds from note receivable		—			1,876
Purchase of property and equipment		(742	)		(698	)
Net cash provided by/(used in) investing activities		(742	)		1,178
Cash flows from financing activities:
Principal payments on finance lease obligations		(20	)		(25	)
Proceeds from exercise of stock options		810			716
Net cash provided by financing activities		790			691
Effect on exchange rate changes on cash		104			(165	)
Net increase/(decrease) in cash		9,277			(11,614	)
Cash at beginning of the period		16,255			43,248
Cash at end of the period	$	25,532		$	31,634
Supplemental cash flow disclosures:
Cash paid during period for:
Interest	$	2		$	2

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

5

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

1.ORGANIZATION AND DESCRIPTION OF BUSINESS

Business —Celsius Holdings, Inc. (the “Company” or “Celsius Holdings”) was incorporated under the laws of the State of Nevada on April 26, 2005. On January 24, 2007, the Company entered into a merger agreement and plan of reorganization with Elite FX, Inc., a Florida corporation. Under the terms of the Merger Agreement, Elite FX, Inc. was merged into the Company’s subsidiary, Celsius, Inc. and became a wholly-owned subsidiary of the Company on January 26, 2007. In addition, on March 28, 2007 the Company established Celsius Netshipments, Inc. a Florida corporation as a subsidiary of the Company.

On February 7, 2018, the Company established Celsius Asia Holdings Limited, a Hong Kong corporation, as a wholly-owned subsidiary of the Company. On February 7, 2018 Celsius China Holdings Limited, a Hong Kong corporation, became a wholly-owned subsidiary of Celsius Asia Holdings Limited and on May 9, 2018, Celsius Asia Holdings Limited established Celsius (Beijing) Beverage Limited, a China corporation, as a wholly-owned subsidiary of Celsius Asia Holdings Limited.

On October 25, 2019, the Company acquired 100% of Func Food Group, Oyj (“Func Food”). The Acquisition was structured as a purchase of all of Func Food’s equity shares and a restructuring of Func Food’s pre-existing debt. Func Food was the Nordic distributor for the Company since 2015. Func Food is a marketer and distributor of nutritional supplements, health food products, and beverages.

The Company is engaged in the development, marketing, sale and distribution of “functional” calorie-burning functional energy drinks and liquid supplements under the Celsius® brand name.

2.BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation – The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These unaudited consolidated financial statements and the accompanying notes should be read in conjunction with the Form 10-K filed for December 31, 2021. The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated.

Consolidation Policy — The accompanying consolidated financial statements include the accounts of Celsius Holdings, Inc. and its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Significant Estimates — The preparation of consolidated financial statements and accompanying disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Significant estimates include the allowance for doubtful accounts, allowance for inventory obsolescence, the useful lives of property and equipment, impairment of intangible assets & goodwill, valuation of stock-based compensation, and deferred tax asset valuation allowance.

Segment Reporting — Operating segments are defined as components of an enterprise that engage in business activities, have discrete financial information, and whose operating results are regularly reviewed by the chief operating decision maker (CODM) to make decisions about allocating resources and to assess performance. Even though we have operations in several geographies, we operate as a single enterprise. Our operations and strategies are centrally designed and executed given that our geographical components are very similar. Our CODM, the CEO, reviews operating results primarily from a consolidated perspective, and makes decisions and allocates resources based on that review. The reason our CODM focuses on consolidated results in making decisions and allocating resources is because of the significant economic interdependencies between our geographical operations and the Company’s U.S. entity.

Concentrations of Risk — Substantially all of the Company’s revenue derives from the sale of Celsius® functional energy drinks and liquid supplements.

The Company uses single supplier relationships for its raw materials purchases and filling capacity, which potentially subjects the Company to a concentration of business risk. If a supplier had operational problems or ceased making product available to the Company, operations could be adversely affected.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit. At March 31, 2022, the Company had approximately $24.6 million in excess of the Federal Deposit Insurance Corporation limit.

6

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

For the three months ended March 31, 2022, the Company had two customers which accounted for revenue concentrations more than 10 percent. Amazon and Costco accounted for approximately 10.3% and 17.5% of our revenue, respectively, for the three months ended March 31, 2022. For the three months ended March 31, 2021, the company had one customer which accounted for a revenue concentration more than 10%. Amazon accounted for 15.8% of revenue for the three months ended March 31, 2021. At March 31, 2022, Publix represented the only customer with a 10 percent or greater concentration of accounts receivable representing 10.7% of the accounts receivable balance. At December 31, 2021, the company had two customers with a 10 percent or greater concentration of accounts receivable. Amazon and Publix accounted for approximately 22.7% and 10.3% of our accounts receivable balance, respectively, at March 31, 2021.

Cash Equivalents — The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. At March 31, 2022 and December 31, 2021, the Company did not have any investments with maturities of three months or less.

Accounts Receivable — Accounts receivable are reported at net realizable value. The Company establishes an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. At March 31, 2022 and December 31, 2021, there was an allowance for doubtful accounts of approximately $1.2 million and $0.8 million, respectively.

Inventories — Inventories include only the purchase cost and are stated at the lower of cost and net realizable value. Cost is determined using the FIFO method. Inventories consist of raw materials and finished products. The Company establishes an inventory allowance to reduce the value of the inventory during the period in which such materials and products are no longer usable or marketable. Specifically, the Company reviews inventory utilization during the past twelve months and also customer orders for subsequent months. If there has been no utilization during the last 12 months and there are no orders in-place in future months which will require the use of an inventory item, then the inventory item will be included as part of the allowance during the period being evaluated. Inventory allowance pertains to excess and obsolete products and certain quality control costs. Management will then specifically evaluate whether these items may be utilized within a reasonable time frame (e.g., 3 to 6 months). At March 31, 2022 and December 31, 2021, there was an inventory allowance for excess and obsolete products of $2.6 million and $2.6 million, respectively. The changes in the allowance are included in cost of revenue.

Property and Equipment — Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful life of the asset generally ranging from three to seven years.

Impairment of Long-Lived Assets — In accordance with ASC Topic 360, “Property, Plant, and Equipment” the Company reviews the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is determined regarding a long-lived asset if its carrying amount is not recoverable and exceeds its fair value. The carrying amount is not recoverable when it exceeds the sum of the undiscounted cash flows expected to result from use of the asset over its remaining useful life and final disposition. The Company did not record any impairment charges during the three months ended March 31, 2022 and 2021.

Long-lived Asset Geographic Data

The following table sets forth long-lived asset information, which includes property and equipment and right-of-use assets and excludes goodwill and intangibles, where individual countries represent a significant portion of the total:

	March 31,		December 31,
	2022		2021
United States	$	3,330	$	3,043
Sweden		1,314		1,050
Finland		419		301
Long-lived assets related to foreign operations		1,733		1,351
Total long-lived assets-net	$	5,063	$	4,394

Goodwill — The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired, including related tax effects. Goodwill is not amortized; instead, goodwill is tested for impairment on an annual basis as of October 1st, or more frequently if the Company believes indicators of impairment exist. The Company first assesses qualitative factors such as macro-economic conditions, industry and market conditions, cost factors as well as other relevant events, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. If the Company determines that the fair value is less than the carrying value, the Company will recognize an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. At March 31, 2022, there were no indicators of impairment.

Intangible assets — Intangible assets are comprised of customer relationships and brands acquired in a business combination. The Company amortizes intangible assets with a definitive life over their respective useful lives. Assets with indefinite lives are tested for impairment on an annual basis as of October 1st or more frequently if the Company believes indicators of impairment exist. At March 31, 2022, there were no indicators of impairment.

7

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

Revenue Recognition — The Company recognizes revenue in accordance with ASC Topic 606 “Revenue from Contracts with Customers.” The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control or title is transferred based on the commercial terms. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Product sales are recorded net of variable consideration, such as provisions for returns, discounts and allowances. Such provisions are calculated using historical averages and adjusted for any expected changes due to current business conditions. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service, in which case the expense is classified as selling or marketing expense. Provisions for customer volume rebates are based on achieving a certain level of purchases and other performance criteria that are established on a situation basis. These rebates are estimated based on the expected amount to be provided to the customers and are recognized as a reduction of revenue. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Additionally, for any agreements which are 1 year or less, the practical expedient under ASC 340-40-25-4 is applied to expense contract acquisition costs when incurred if the amortization period of the contract asset would have otherwise been recognized in one year or less. Sales taxes and other similar taxes are excluded from revenue.

Customer Advances — From time to time the Company requires deposits in advance of delivery of products and/or production runs. Such amounts are initially recorded as customer advances liability within other current liabilities. The Company recognizes such revenue as it is earned in accordance with revenue recognition policies. The Company had no customer advances as of March 31, 2022 or December 31, 2021, respectively.

Advertising Costs — Advertising costs are expensed as incurred. The Company uses mainly radio, local sampling events, sponsorships, endorsements, and digital advertising. The Company incurred marketing and advertising expenses of approximately $14.5 million and $5.3 million, during the three months ended March 31, 2022 and 2021, respectively.

Research and Development — Research and development costs are charged to general and administrative expenses as incurred and consist primarily of consulting fees, raw material usage and test productions of beverages. The Company incurred expenses of $0.1 million and $0.2 million during the three months ended March 31, 2022 and 2021, respectively.

Foreign Currency Gain/Losses — Foreign subsidiaries’ functional currency is the local currency of operations and the net assets of foreign operations are translated into U.S. dollars using current exchange rates. The foreign subsidiaries perform re-measurements of their assets and liabilities denominated in non-functional currencies on a periodic basis and the gain or losses from these adjustments are included in the Statement of Operations as foreign exchange gains or losses. For the three months ended March 31, 2022 exchange losses have amounted to approximately $0.2 million while during the three months ended March 31, 2021, we recognized foreign currency gains of approximately $0.3 million mainly related to fluctuations in exchange rates. Translation gain and losses that arise from the translation of net assets, as well as exchange gains and losses on intercompany balances of long-term investment nature, are included in Other Comprehensive Income. The Company incurred foreign currency translation net loss during the three months ended March 31, 2022 of approximately $0.5 million and a net loss of approximately $0.2 million during the three months ended March 31, 2021. Our operations in different countries required that we transact in the following currencies:

Chinese-Yuan

Norwegian-Krone

Swedish-Krona

Finland-Euro

Fair Value of Financial Instruments — The carrying value of cash, accounts receivable, accounts payable, other current liabilities and accrued expenses approximate fair value due to their relative short-term maturity and market interest rates.

Fair Value Measurements - ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Other than those noted previously, the Company did not have any other assets or liabilities measured at fair value at March 31, 2022 and December 31, 2021.

Income Taxes — The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts

8

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open.

The Company’s tax returns for tax years in 2018 through 2020 remain subject to potential examination by the taxing authorities.

Earnings per Share — Basic earnings per share are calculated by dividing net income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Refer to the below table for additional details (tabular dollars in thousands except per share amounts):

	For the three months ended March 31,
	2022		2021
Net income	$	6,679	$	585
Income per share:
Basic	$	0.09	$	0.01
Diluted	$	0.09	$	0.01
Weighted average shares outstanding:
Basic		75,239		72,516
Effect of dilutive shared based awards		3,050		4,409
Diluted		78,289		76,925

Share-Based Payments — The Company follows the provisions of ASC Topic 718 “Compensation — Stock Compensation” and related interpretations. As such, compensation cost is measured on the date of grant at the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the grants. On April 30, 2015, the Company adopted the 2015 Stock Incentive Plan. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2017 (note 15). As of March 31, 2022, total shares available are 4.6 million.

Cost of Sales — Cost of sales consists of the cost of concentrates and or liquid bases, the costs of raw materials utilized in the manufacture of products, co-packing fees, repacking fees, in-bound & out-bound freight charges, as well as certain internal transfer costs, warehouse expenses incurred prior to the manufacture of the Company’s finished products, inventory allowance for excess and obsolete products, and certain quality control costs. Raw materials account for the largest portion of the cost of sales. Raw materials include cans, bottles, other containers, flavors, ingredients and packaging materials.

Operating Expenses — Operating expenses include selling expenses such as warehousing expenses after manufacture, as well as expenses for advertising, samplings and in-store demonstrations costs, costs for merchandise displays, point-of-sale materials and premium items, sponsorship expenses, other marketing expenses and design expenses. Operating expenses also include such costs as payroll costs, travel costs, professional service fees (including legal fees), depreciation and other general and administrative costs.

9

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

Shipping and Handling Costs — Shipping and handling costs for freight expense on goods shipped are included in cost of sales. Freight expense on goods shipped for the three months ended March 31, 2022 and 2021 was approximately $3.2 million and $4.2 million, respectively.

Recent Accounting Pronouncements

The Company adopts all applicable, new accounting pronouncements as of the specified effective dates.

In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. In November 2018, the FASB issued ASU 2018-19, which makes certain improvements to Topic 326. In April and May 2019, the FASB issued ASUs 2019-04 and 2019-05, respectively, which adds codification improvements and transition relief for Topic 326. In November 2019, the FASB issued ASU 2019-10, which delays the effective date of Topic 326 for Smaller Reporting Companies to interim and annual periods beginning after December 15, 2022, with early adoption permitted. We have elected the relief provided. In November 2019, the FASB issued ASU 2019-11, which makes improvements to certain areas of Topic 326. In February 2020, the FASB issued ASU 2020-02, which adds an SEC paragraph, pursuant to the issuance of SEC Staff Accounting Bulletin No. 119, to Topic 326. Topic 326 is effective for the Company for fiscal years and interim reporting periods within those years beginning after December 15, 2022.

All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position except for the previously disclosed above, there have been no new accounting pronouncements not yet effective that have significance to our consolidated financial statements.

Liquidity — These financial statements have been prepared assuming the Company will be able to continue as a going concern. At March 31, 2022, the Company had an accumulated deficit of approximately $44.8 million which includes a net income available to common stockholders of approximately $6.7 million for three months ended March 31, 2022. During the three months ended March 31, 2022 the Company’s net cash provided by operating activities totaled approximately $9.1 million. As of March 31, 2021, the Company had an accumulated deficit of $54.8 million which includes a net income available to common stockholders of $0.6 million for the three months ended March 31, 2021. During the three months ended March 31, 2021 the Company’s net cash used in operating activities totaled approximately $13.3 million.

If our sales volumes do not meet our projections, expenses exceed our expectations, our plans change, we may be unable to generate enough cash flow from operations to cover our working capital requirements. In such case, we may be required to adjust our business plan, by reducing marketing, lower our working capital requirements and reduce other expenses or seek additional financing. Furthermore, our business and results of operations may be adversely affected by changes in the global macro-economic environment related to the pandemic and public health crises related to the COVID-19 outbreak.

Correction of Immaterial Errors — During the third quarter of 2021, the company performed immaterial corrections to the previously reported consolidated financial statements related to the Func Foods acquisition in 2019. Goodwill increased by $3.7 million and deferred tax liabilities increased by $3.5 million attributable to tax implications of acquired intangible assets that had not been recorded in the purchase accounting treatment acquisition. The impact on the consolidated statements of operations and comprehensive income for the year ended December 31, 2021, resulted in a $0.2 million deferred tax benefit.

Correction of previously issued financial statements — Subsequent to filing the Company’s Quarterly Reports on Form 10-Q for the periods ended June 30, 2021, and September 30, 2021, the Company determined that the calculation of expense of share based compensation related to grants of stock options and restricted stock units (“RSUs”) issued to former employees and retired directors was materially understated during the three-and six-month periods ended June 30, 2021 and three- and nine-month periods ended September 30, 2021 (the “Affected Periods”), based on the application of U.S. generally accepted accounting principles. During the Affected Periods, the stock options and RSUs were modified and the expense should have been calculated and recognized using the fair market value of the awards as of the date of modification and recognized over the remaining service period.

In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the misstatements and based on an analysis of quantitative and qualitative factors determined that the impact of the misstatement to its interim reporting periods ending June 30, 2021, and September 30, 2021, was material. Accordingly, the Company has restated its interim consolidated financial statements for the three- and six-months ended June 30, 2021, and three- and nine- months ended September 30, 2021, respectively, and included that restated financial information within our annual report for the period ending December 31, 2021.

3.REVENUE

The Company recognizes revenue in accordance with ASC Topic 606 “Revenue from Contracts with Customers.” The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred, based on the commercial terms. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Product sales are recorded net of variable consideration, such as provisions for returns, discounts and allowances. Such provisions are calculated using historical averages and adjusted for any expected changes due to current business conditions. Consideration given to customers

10

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service, in which case the expense is classified as selling or marketing expense. Provisions for customer volume rebates are based on achieving a certain level of purchases and other performance criteria that are established on a situation basis. These rebates are estimated based on the expected amount to be provided to the customers and are recognized as a reduction of revenue. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Additionally, for any agreements which are 1 year or less, the practical expedient under ASC 340-40-25-4 is applied to expense contract acquisition costs when incurred if the amortization period of the contract asset would have otherwise been recognized in one year or less.

Information about the Company’s net sales by geographical location for the three months ended March 31, 2022 and 2021 is as follows:

	For the three months ended
	March 31,		March 31,
	2022		2021
North America	$	123,473	$	39,003
Europe		8,495		10,368
Asia		966		536
Other		454		128
Net sales	$	133,388	$	50,035

All of the Company’s North America revenue is derived from the United States, which is the Company’s country of domicile. Of the Company’s total foreign revenues of approximately $9.9 million and $11.0 million for the three months ended March 31, 2022 and 2021, respectively, Sweden represented the largest foreign portion of total consolidated revenue of approximately $5.8 million and $6.5 million for the three months ended March 31, 2022 and 2021 respectively.

License Agreement

In January 2019, the Company entered into a license and repayment of investment agreement with Qifeng Food Technology (Beijing) Co., Ltd (“Qifeng”). Under the agreement, Qifeng was granted the exclusive license rights to manufacture, market and commercialize Celsius branded products in China. The term of the agreement is 50 years, with annual royalty fees due from Qifeng after the end of each calendar year. The royalty fees are based on a percentage of Qifeng’s sales of Celsius branded products; however, the fees are fixed for the first five years of the agreement, totaling approximately $6.9 million, and then are subject to annual guaranteed minimums over the remaining term of the agreement.

Under the agreement, the Company grants Qifeng exclusive license rights and provides ongoing support in product development, brand promotion and technical expertise. The ongoing support is integral to the exclusive license rights and, as such, both of these represent a combined, single performance obligation. The transaction price consists of the guaranteed minimums and the variable royalty fees, all of which are allocated to the single performance obligation.

The Company recognizes revenue from the agreement over time because the customer simultaneously receives and consumes the benefits from the services. The Company uses the passage of time to measure progress towards satisfying its performance obligation because of its ongoing efforts in providing the exclusive license rights including providing continuous access, updates and support. Total revenue recognized under the agreement was approximately $0.5 million for the three months ended March 31, 2022 and approximately $0.3 million for the three months ended March 31, 2021, which is reflected in the revenues from Asia.

4.INVENTORIES

Inventories consist of the following at:

	March 31,			December 31,
	2022			2021
Finished goods	$	106,380		$	123,594
Raw Materials		80,310			70,201
Less: Inventory allowance for excess and obsolete products		(2,596	)		(2,573	)
Inventories	$	184,094		$	191,222

5.PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets total approximately $10.0 million and $13.6 million at March 31, 2022 and December 31, 2021, respectively, consist mainly of prepaid advances to co-packers related to inventory production, advertising, prepaid insurance, prepaid slotting fees, value added tax payments and deposits on purchases.

6.NOTE RECEIVABLE

11

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

Note receivable consists of the following at:

	March 31,		December 31,
	2022		2021
Note receivable-current	$	5,833	$	2,588
Note receivable-non-current		3,888		7,117
Total Note receivable	$	9,721	$	9,705

Effective January 1, 2019, we restructured our China distribution efforts by entering into two separate economic agreements as it relates to the commercialization of our Celsius products (i.e., license agreement) and a repayment of investment agreement with Qifeng. Under the license agreement, Qifeng was granted the exclusive license rights to manufacture, market and commercialize Celsius® brand products in China. Qifeng will pay a minimum royalty fee of approximately $6.9 million for the five years of the term of the agreement, transitioning to a volume-based royalty fee, thereafter. Under a separate economic agreement, Qifeng Food will repay the marketing investments made by Celsius into the China market through 2018, over the same five-year period. The repayment, which was formalized via a Note Receivable from Qifeng, will need to be serviced even if the licensing agreement is cancelled or terminated. The note receivable is denominated in Chinese-Yuan.

Scheduled principal payments plus accrued interest are due annually on March 31 of each year starting in 2020. The note receivable is recorded at amortized cost and accrues interest at a rate per annum equal to the weighted average of 5% of the outstanding principal up to $5 million and 2% of the outstanding principal above $5 million. On June 12, 2020, it was agreed to fix the interest rate at 3.21% which reflected the weighted average interest rate for the 5-year period of the Note. For the three months ended March 31, 2022 and 2021, interest income was approximately $0.1 million and $0.1 million, respectively.

The Company assesses the note receivable for impairment at each reporting period, by evaluating whether it is probable that the Company will be unable to collect all the contractual principal and interest payments as scheduled in the Note agreement, based on historical experience of Qifeng’s ability to pay, the current economic environment and other factors. If the Note is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows under the Note, discounted at the Note’s effective interest rate. At March 31, 2022, the Note was not deemed to be impaired. Payment in-full has been received in April 2022 pertaining to the amounts due on March 31, 2022.

As collateral for the Note, a stock certificate in Celsius Holdings, Inc., which amounts to 97,830 of shares owned by an affiliate under common control with Qifeng is being held at a brokerage account. These shares were originally issued on April 20, 2015 via a private transaction which involved Risejoy Services Limited an affiliate under the common control of Qifeng, our Chinese licensee. Furthermore, a letter of guarantee was executed with several restrictions regarding these shares. These shares serve only as collateral and is a component of management’s consideration when evaluating impairment indicators.
 

7.LEASES

The Company’s leasing activities include an operating lease of its corporate office space from a related party (see note 12) and other operating and finance leases of vehicles and office space for the Company’s European operations.

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. The Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately.

Leases are classified as either finance leases or operating leases based on criteria in ASC Topic 842, “Leases”. The Company’s operating leases are generally comprised of real estate and vehicles, and the Company’s finance leases are generally comprised of vehicles.

At lease commencement, the Company records a lease liability equal to the present value of the remaining lease payments, discounted using the rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. A corresponding right-of-use asset (“ROU asset”) is recorded, measured based on the initial measurement of the lease liability. ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the shorter of the useful life of the asset or the lease term, and interest expense is calculated using the effective interest rate method.

12

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

The future annual minimum lease payments required under the Company’s operating and finance lease liabilities as of March 31, 2022 are as follows:

	Operating			Finance
Future minimum lease payments	Leases			Leases			Total
2022	$	461		$	117		$	578
2023		570			67			637
2024		190			22			212
2025		10			83			93
2026		—			5			5
Total future minimum lease payments		1,231			294			1,525
Less: Amount representing interest		(65	)		(15	)		(80	)
Present value of lease liabilities		1,166			279			1,445
Less: current portion		(569	)		(141	)		(710	)
Long-term portion	$	597		$	138		$	735

8.PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:

	March 31,			December 31,
	2022			2021
Merchandising equipment - coolers	$	3,561		$	3,052
Office Equipment		968			891
Vehicles		456			304
Less: accumulated depreciation		(1,283	)		(1,067	)
Total	$	3,702		$	3,180

Depreciation expense amounted to $0.2 million and $0.1 million for the three months ended March 30, 2022 and 2021, respectively.

9.GOODWILL AND INTANGIBLES

At March 31, 2022 and December 31, 2021, goodwill consists of approximately $14.2 million and $14.5 million, respectively resulting from the excess of the consideration paid over the fair value of net tangible and intangible assets acquired from the Func Food Acquisition.

Intangible assets consist of acquired customer relationships and brands from the Func Food Acquisition. The gross carrying amount and accumulated amortization of intangible assets as of March 31, 2022 and December 31, 2021, respectively, were as follows:

	March 31,			December 31,
	2022			2021
Definite-lived intangible assets
Customer relationships	$	13,965		$	14,248
Less: accumulated amortization		(1,257	)		(1,140	)
Definite-lived intangible assets, net	$	12,708		$	13,108
Indefinite-lived intangible assets
Brands	$	3,130		$	3,193
Total Intangibles	$	15,838		$	16,301

Customer relationships are amortized over an estimated useful life of 25 years and brands have an indefinite life. Amortization expense for the three months ended March 31, 2022 and 2021 was approximately $0.1 million and $0.2 million, respectively, and is reflected in general and administrative expenses.

Other fluctuations in the amounts of goodwill and intangible assets are due to currency translation adjustments.

13

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

The following is the future estimated annualized amortization expense related to customer relationships:

As of March 31, 2022:
2022	$	417
2023		559
2024		559
2025		559
2026		559
Thereafter		10,055
Total	$	12,708

10.ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following at:

	March 31,		December 31,
	2022		2021
Accounts payable	$	50,541	$	35,821
Promotional allowances		31,227		19,037
Freight		12,512		15,872
Accrued expenses		12,769		15,311
Unbilled purchases		2,258		5,438
Total	$	109,307	$	91,479

11.OTHER CURRENT LIABILITIES

Other current liabilities consist of the following at:

	March 31,		December 31,
	2022		2021
Other Liabilities-State Beverage Container Deposit	$	1,734	$	976
Total	$	1,734	$	976

12.RELATED PARTY TRANSACTIONS

The Company’s office is rented from a company affiliated with CD Financial, LLC which is controlled by one of our major shareholders. The current lease expires on January 2024 with monthly base rent of $24,494.

13.STOCKHOLDERS’ EQUITY

Issuance of common stock pursuant to exercise of stock options and other awards

During the three months ended March 31, 2022, the Company issued an aggregate of 442,694 shares of its common stock pursuant to the exercise of grants under the Company’s Stock Incentive Plans. The Company received aggregate proceeds of $0.8 million for 194,338 options exercised for cash, with the balance of the options having been exercised on a “cashless” basis.

During the three months ended March 31, 2021, the Company issued an aggregate of 322,858 shares of its common stock pursuant to the exercise of grants under the Company’s Stock Incentive Plans. The Company received aggregate proceeds of approximately $0.7 million for 234,546 options exercised for cash, with the balance of the options having been exercised on a “cashless” basis.

June 2021 Public Offering

On June 9, 2021, the Company and certain selling stockholders (the "Selling Stockholders”) entered into an underwriting agreement (the "Underwriting Agreement”) with UBS Securities LLC and Jefferies LLC, as representatives (the "Representatives”) of the several underwriters (the "Underwriters”), relating to the sale of 6,518,267 shares of common stock, par value $0.001 per share, of the Company at a public offering price of $62.50 per share less underwriting discounts and commissions in a registered public offering (the "Offering”). The Company and certain Selling Stockholders also granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 977,740 shares of its Common Stock. The Underwriters partially exercised their option to purchase 873,141 shares of the Company’s Common Stock on June 11, 2021; 1,133,953 of which were sold by the Company and 739,188 of which were sold by certain of the Selling Stockholders. The Offering closed on June 14, 2021. The Company issued and sold 1,133,953 shares of Common Stock, and the Selling Stockholders sold 6,257,455 shares, in the aggregate, of Common Stock in the Offering. The Offering generated net proceeds for the Company of $67,769,386 and net proceeds for the Selling Stockholders

14

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

of $375,447,300. The Company intends to use the proceeds for general corporate purposes. The Company did not receive any proceeds from the sale of shares by the Selling Stockholders.

The Underwriting Agreement contains customary representations and warranties of the parties, and indemnification and contribution provisions under which the Company and the Selling Stockholders have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act”). Pursuant to the Underwriting Agreement, the Company has agreed, subject to certain exceptions, not to sell or transfer any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock for 90 days after June 9, 2021 without first obtaining the written consent of the Representatives.

14.INCOME TAXES

The effective income tax rate was 33.6% for the three months ended March 31, 2022. The effective income tax rate differed from the statutory federal income tax rate of 21% primarily due to the impact of disallowed stock-based compensation expense and state income tax expense.

15.STOCK-BASED COMPENSATION

The Company adopted an Incentive Stock Plan on January 18, 2007. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock. While the plan terminates 10 years after the adoption date, issued options have their own schedule of termination. During 2013, the majority of the stockholders approved to increase the total available shares in the plan from 2.5 million to 3.5 million shares of common stock. During May 2014, the majority of the stockholders approved to increase the total available shares in the plan from 3.5 million to 4.25 million shares of common stock, during February 2015, the majority of the stockholders approved to increase the total available shares in the plan from 4.25 million to 4.6 million shares of common stock and during April 2015, the majority of the stockholders approved to increase the total available shares in the plan from 4.6 million to 5.1 million shares of common stock. Upon exercise, shares of new common stock are issued by the Company.

The Company adopted the 2015 Stock Incentive Plan on April 30, 2015. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% of the shares pertaining to the 2015 plan that are outstanding as of the last day of the prior year. As of March 31, 2022, approximately 4.6 million shares are available.

Under the 2015 Stock Incentive Plan, the Company has issued options to purchase approximately 3.4 million shares at an average price of $7.68 with a fair value of $161.0 million. For the three months ended March 31, 2022 and 2021, the Company issued options to purchase nil and 303,750 shares, respectively. Upon exercise, shares of new common stock are issued by the Company.

For the three months ended March 31, 2022 and 2021, the Company recognized an expense of approximately $4.3 million and $3.6 million, respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by the fair value of the restricted stock unit price on the day of issuance or through application of a Black-Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of March 31, 2022 the Company had approximately $6.6 million of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.7 years. The Company used straight-line amortization of compensation expense over the two to three-year requisite service or vesting period of the grant. The maximum contractual term of the Company's stock options is 10 years. The Company recognizes forfeitures as they occur. There are options to purchase approximately 3.4 million shares that have vested as of March 31, 2022.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black-Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:

	Three months ended March 31,
	2022	2021
Expected volatility	69.2% - 81.1%	69.18%-81.11%
Expected term	4.5 - 5.0 Years	4.49-5.00 Years
Risk-free interest rate	0.3% - 1.4%	0.32% - 1.39%
Forfeiture Rate	0.0%	0.0%

The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time

15

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.

A summary of the status of the Company’s outstanding stock options as of March 31, 2022 and changes during the periods ending on that date is as follows:

				Weighted Average						Weighted
	Shares			Exercise		Grant Date Fair		Aggregate Intrinsic		Average Remaining
	(000’s)			Price		Value		Value (000’s)		Term (Yrs)
Options
At December 31, 2021		3,600		$	7.47			$	241,515		6.37
Granted		—		$	—	$	—
Exercised		(209	)	$	4.02	$	48.44	$	80,500
Forfeiture and cancelled		(1	)	$	4.66
At March 31, 2022		3,390		$	7.68				161,015		6.26
Exercisable at March 31, 2022		2,560		$	5.59			$	126,964		5.78

The following table summarizes information about employee stock options outstanding at March 31, 2022:

	Outstanding Options						Vested Options
	Number						Number
	Outstanding		Weighted		Weighted		Exercisable		Weighted		Weighted
Range of	at		Averaged		Averaged		at		Averaged		Averaged
Exercise	March 31,		Remaining		Exercise		March 31,		Exercise		Remaining
Price	2022 (000’s)		Life		Price		2022 (000’s)		Price		Life
$0.20 - $0.53		20		1.84	$	0.34		20	$	0.34		1.84
$0.65 - $1.80		100		2.91	$	1.05		100	$	1.05		2.91
$1.83 - $2.84		107		3.78	$	1.97		107	$	1.97		3.78
$3.20 - $6.20		2,783		6.18	$	4.16		2,208	$	4.21		5.87
$7.20-$60.00		380		8.68	$	37.15		125	$	37.33		8.69
Outstanding options		3,390		6.26	$	7.68		2,560	$	5.59		5.78

As of March 31, 2022, the Company had approximately $6.6 million of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.7 years.

Restricted Stock Awards

Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. The holders of a restricted stock award are generally entitled after the release to transact and obtain the same rights as rights of a shareholder of the Company, including the right to vote the shares. The holders of unvested restricted stock awards do not have the same rights as shareholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The value of restricted stock awards that vest over time is established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022				March 31, 2021
			Weighted					Weighted
			Average					Average
			Grant Date					Grant Date
	Shares (000's)		Fair Value		Shares (000's)			Fair Value
Unvested at beginning of period		0.2	$	14.72		66		$	28.11
Transfers to restricted stock units		—		—		(46	)		34.02
Granted		—		—		—			—
Vested		—		—		—			22.30
Forfeiture and cancelled		—		—		—			—
Unvested at end of period		0.2	$	14.72		20		$	14.72

The total fair value of shares vested during the three months ended March 31, 2022 and 2021 was immaterial. Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2022 was approximately $0.0 million and is expected to

16

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

be expensed over the next 0.3 years. Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2021 was $0.2 million.

Restricted Stock Units

Restricted stock units are awards that give the holder the right to receive one share of common stock for each restricted stock unit upon meeting service-based vesting conditions (typically annual vesting in three equal annual installments, with a requirement that the holder remains in the continuous employment of the Company). The holders of unvested units do not have the same rights as stockholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The value of restricted stock units that vest over time is established by the market price on the date of its grant. A summary of the Company’s restricted stock unit activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022					March 31, 2021
				Weighted					Weighted
				Average					Average
				Grant Date					Grant Date
	Shares (000's)			Fair Value		Shares (000's)			Fair Value
Unvested at beginning of period		566		$	52.66		—		$	—
Transfers from restricted stock awards		—			—		46			34.02
Granted		189			74.57		468			50.56
Vested		(111	)		51.10		—			—
Forfeited and cancelled		(18	)		54.88		(10	)		50.31
Unvested at end of period		626		$	59.50	$	504		$	49.06

The total fair value of shares vested during the three months ended March 31, 2022 was $5.6 million, respectively. Unrecognized compensation expense related to outstanding restricted stock units to employees and directors as of March 31, 2022 and 2021 was $29.7 million and $22.8 million, respectively, and is expected to be expensed over the next 2.4 years.

Stock-based Awards Issued to Non-employee Consultants

The Company issues stock-based awards to third-party consultants for providing marketing, sales, and general business development services related to Celsius products. The stock-based awards are in the form of restricted stock units with performance vesting conditions (“performance stock units” or “PSUs”). The holders of unvested PSUs do not have the same rights as stockholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The PSU performance vesting conditions are linked to the consultants obtaining specified incremental earnings for the Company in a given year over the performance vesting period, typically five years. The fair value of PSUs is based on the market price of the underlying stock on the grant date. The Company recognizes compensation cost for performance stock awards issued to non-employees in the same manner and periods as though cash had been paid for services received. A summary of the Company’s PSU activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022				March 31, 2021
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares (000's)		Fair Value		Shares (000's)		Fair Value
Unvested at beginning of period		15	$	64.65		—	$	—
Granted		—		—		—		—
Vested		—		—		—		—
Forfeited and cancelled		—		—		—		—
Unvested at end of period		15	$	64.65	$	—	$	—

The total fair value of shares vested during the three months ended March 31, 2022 was $0.1 million. Unrecognized compensation expense related to outstanding PSUs issued to non-employee consultants as of March 31, 2022 was approximately $0.9 million and is expected to be expensed over the next 4.3 years.

Modifications

17

Celsius Holdings, Inc.

Notes to Consolidated Financial Statements (unaudited)

March 31, 2022

(Tabular dollars in thousands, except per share amounts)

There were certain Board of Directors members and employees whose service was terminated during 2021. In connection with their terminations, the vesting conditions of the previously granted awards were modified to accelerate the vesting of specified un-vested awards pursuant to Board resolutions or severance agreements. Pursuant ASC 718, these were Type III modifications requiring re-valuation of un-vested awards to modification date fair value with recognition of compensation expense over the remaining service period. There were no modifications for the three month periods ending March 31, 2022 and March 31, 2021.

16.COMMITMENTS AND CONTINGENCIES

In November of 2020, McGovern Capital, Inc. and Kevin McGovern (collectively “McGovern”) filed a claim in arbitration related to its Representative Agreement with Celsius Holdings, Inc. as amended by the first amendment dated August 6, 2016. Pursuant to the Representative Agreement, McGovern is entitled to receive a fee of three percent (3%) of “Net Revenues” received by the Company from sales of the Company’s Products in the People’s Republic of China for a period of four years from Initial Commercial Sale (which was September 1, 2017). “Net Revenues” are defined in the Representative Agreement as “the Company’s revenues net of actual discounts applied, credits and returns.” Effective January 1, 2019, the Company restructured its China operations from a distribution arrangement with Qifeng Food Technology (Beijing) Co. Ltd. (“Qifeng”), to a license and royalty arrangement and a loan, pursuant to which Qifeng will market and distribute the Company’s products in China, and Celsius will receive an annual royalty payment. The Company intends to pay McGovern its percentage of the annual royalty payment, but McGovern has objected claiming that McGovern is entitled to be paid commissions on the entire royalty payment and the amount of the loan to Qifeng. The Company intends to defend against McGovern’s claims vigorously and has filed a counterclaim related to McGovern’s failure to comply with the covenant of good faith and fair dealing in the Representative Agreement. This matter is still in its early stages and the Company is unable to predict the outcome at this time.

In March of 2019, Daniel Prescod filed a putative class action lawsuit against the Company in the Superior Court for the State of California, County of Los Angeles, Case Number 19STCV09321, filed on March 19, 2019, (the “Prescod Litigation”). Daniel Prescod asserts that the Company’s use of citric acid in its products while simultaneously claiming “no preservatives” violates California Consumer Legal Remedies Act, California Business and Professions Code Section 17200, et seq., and California Business and Professions Code Section 17500, et seq., because citric acid acts as a preservative. The Company does not use citric acid as a preservative in its products, but rather as a flavoring, and therefore it believes that its “no preservatives” claim is fair and not deceptive. A motion to certify the case as a class action was filed and on August 2, 2021, that motion was granted. However, the Company also has a motion for summary adjudication pending and that motion would be dispositive of plaintiff’s claims if granted. No fact discovery has been conducted on the merits and this matter is still in its initial stages. The Company intends to contest the claims vigorously on the merits. Since merits discovery is still in its initial stages, we are unable to predict the outcome at this time.

On January 8, 2021, we received a letter from the SEC Division of Enforcement seeking the production of documents in connection with a non-public fact-finding inquiry by the SEC to determine whether violations of the federal securities laws have occurred. On August 20, 2021, the SEC issued a subpoena for production of documents in connection with the matter. Neither the January 8, 2021 SEC letter nor the August 20, 2021 subpoena means that the SEC has concluded that the Company or anyone else has violated the federal securities laws. We have cooperated and will continue to cooperate with the SEC staff in its investigation and requests. At this time, however, we cannot predict the length, scope, or results of the investigation or the impact, if any, of the investigation on our results of operations.

On March 12, 2022, Christian McCallion filed a putative class action lawsuit against the Company in the United States District Court for the Southern District of Florida. Plaintiff McCallion asserts that because of Celsius’ delay in filing its Annual Report on Form 10-K for the year ended December 31, 2021, there was a decline in the market value of the Company’s securities Plaintiff and as a result, Class members have suffered significant losses and damages. As the Company has previously disclosed in its periodic reports filed with the SEC, prior to filing an application for an automatic fifteen (15) day extension of the original filing date, the Company experienced staffing limitations, unanticipated delays and identified material errors in previous filings. Celsius has not committed any federal securities violations or made false and/or misleading statements and/or material omissions as alleged in the complaint. The Company intends to contest the claims vigorously on the merits.

In addition to the foregoing, from time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business.

The Company has entered into distribution agreements with liquidated damages in case the Company cancels the distribution agreements without Cause. Cause has been defined in various ways. It is management’s belief that no such agreement has created any liability as of March 31, 2022.

Additionally, our business and results of operations may be adversely affected by the pandemic and public health crises related to the COVID-19 outbreak which is affecting the macro-economic environment.

17.SUBSEQUENT EVENTS

None

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

When used in this report, unless otherwise indicated, the terms “the Company,” “Celsius,” “we,” “us” and “our” refer to Celsius Holdings, Inc. and its subsidiaries.

Note Regarding Forward Looking Statements

This report contains forward-looking statements that reflect our current views about future events. We use the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “will,” “intend,” “may,” “plan,” “project,” “should,” “could,” “seek,” “designed,” “potential,” “forecast,” “target,” “objective,” “goal,” or the negatives of such terms or other similar expressions. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Business Overview

Celsius Holdings is a fast-growing company in the functional energy drink and liquid supplement categories in the United States and internationally. We engage in the development, processing, marketing, sale, and distribution of functional drinks and liquid supplements to a broad range of consumers. We believe that we provide differentiated products that offer clinically proven and innovative formulas meant to change the lives of our consumers for the better. We also believe that our brand is attractive to a broad range of customers including fitness enthusiasts.

Our core offerings include pre- and post-workout functional energy drinks, as well as protein bars. Our flagship functional energy drink and liquid supplement brands are backed by science, being clinically proven to deliver health benefits by six self-funded studies published in various journals including the Journal of the International Society of Sports Nutrition, the Journal of the American College of Nutrition, and the Journal of Strength and Conditioning Research. These studies have concluded that a single serving of Celsius burns 100-140 calories (by increasing a consumer’s resting metabolism an average of 12%, while providing sustained energy for up to three hours).

Our flagship asset, Celsius, is a fitness supplement drink which accelerates metabolism and burns calories and body fat while providing energy. This product line comes in two versions, a ready-to-drink supplement format and an on-the-go powder form. We also offer a Celsius Heat and a Branch Chain Amino Acids line, catered to both pre- and post-workout consumer needs. Our products are currently offered in major retail channels in the US including conventional grocery, natural, convenience, fitness, mass market, vitamin specialty and e-commerce.

An integral part of our value proposition is our focus on the functional energy drink and liquid supplement category, ensuring our products have clear and proven benefits. This is why we invest in research and development from the start and utilize our proprietary MetaPlus formulation in our portfolio, a blend of ginger root, guarana seed extract, chromium, vitamins, and green tea extract.

Corporate Information

We were incorporated in the State of Nevada in April 2005. Our principal executive offices are located at 2424 North Federal Highway, Suite 208, Boca Raton, Florida 33431, and our telephone number is (561) 276-2239. Our website is www.celsiusholdingsinc.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this Quarterly Report on Form 10-Q.

Celsius® and MetaPlus® are registered trademarks of the Company in the United States. This Quarterly Report on Form 10-Q also contains other registered and unregistered trademarks of the Company.

Results of Operations

Three months ended March 31, 2022 compared to three months ended March 31, 2021

Revenue

For the three months ended March 31, 2022, revenue was approximately $133.4 million, an increase of $83.4 million or 167% from $50.0 million for the three months ended March 31, 2021. Approximately 101% of this growth was as a result of increased revenues from North America, where first quarter 2022 revenues were $123.5 million, an increase of $84.5 million or 217% from the 2021 quarter. The balance of the revenues for the 2022 quarter were mainly attributable to European revenues of $8.5 million, which were slightly below the prior year quarter primarily due to foreign exchange rates and timing. Asian revenues (which include royalty revenues from our China licensee) contributed an additional approximately $1.0 million, an increase of 80% from approximately $0.5 million for the prior year quarter, which include increases in royalties payable under our licensing agreement. Other international markets generated approximately $0.5 million in revenues during the three months ended March 31, 2022, an increase of $0.3 million or 255% from $0.1 million for the prior year quarter.

The total increase in revenue was largely attributable to increases in sales volume, as opposed to increases in product pricing. The primary factors behind the increase in North American sales volume were related to continued strong triple-digit growth in traditional distribution channels, combined with an increase in and optimization of our products’ presence in world class retailers (e.g., additional SKUs). Additionally, the continued expansion of our Direct Store Delivery (“DSD”) network resulted in significant growth in distributor revenues when compared to the prior year quarter.

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The following table sets forth the amount of revenues by category and changes therein for the three months ended March 31, 2022 and March 31, 2021 (dollars in thousands):

	Three months ended March 31,
Revenue Source	2022		2021		Change
Total Revenue	$	133,388	$	50,035		166.6	%
North American Revenue	$	123,473	$	39,003		216.6	%
European Revenue	$	8,495	$	10,368		(18.1	)%
Asian Revenue	$	966	$	536		80.2	%
Other	$	454	$	128		254.7	%

Gross profit

For the three months ended March 31, 2022, gross profit increased by approximately $33.3 million or 162% to $53.9 million, from $20.6 million for the three months ended March 31, 2021. Gross profit margins reflected a decrease to 40.4% for the three months ended March 31, 2022 from 41.1% for the 2021 quarter. The increase in gross profit dollars is related to increases in volume, while the decrease in gross profit margins is mainly related to higher raw material costs (particularly aluminum cans), ocean freight costs, transportation costs and repackaging costs.

We estimate that the increase in gross profit dollars of approximately $33.3 million from the 2021 quarter to the 2022 quarter, included $34.3 million related to volume increases, as well as an unfavorable cost impact of approximately $0.9 million and unfavorable currency impact of $0.1 million.

Sales and marketing expenses

Sales and marketing expenses for the three months ended March 31, 2022 were approximately $31.6 million, an increase of approximately $19.6 million or 164% from approximately $12.0 million for the three months ended March 31, 2021. This increase was primarily attributable to higher marketing investment activities, which resulted in an increase of $9.1 million when compared to the prior year quarter. Additionally, employee costs increased by approximately $1.4 million from the year ago quarter as we continue to invest in this area in order to have the proper infrastructure to support our growth. Lastly, storage and distribution expenses as well as broker costs accounted for the remainder of the increase in this area in the amount of $9.1 million from the 2021 quarter to the 2022 quarter.

General and administrative expenses

General and administrative expenses for the three months ended March 31, 2022 were approximately $12.2 million, an increase of $4.4 million or 56%, from $7.8 million for the three months ended March 31, 2021. This increase was primarily attributable to stock option expense which amounted to $4.3 million for the three months ended March 31, 2022, an increase of $0.7 million which accounts for 17.8% of the total increase in this area when compared to the prior year quarter. Management deems it very important to motivate employees by providing them ownership in the business in order to promote over performance which translates into the continued success of our business based on key performance attributes. Additionally, employee costs for the three months ended March 31, 2022 reflect an increase of $1.2 million or 76.2%, as investments in this area are also required to properly support our higher business volume and the commercial and operational areas of the business, as well as travel expenses are now being incurred. Administrative expenses amounted to $4.5 million or an increase of $2.4 million or 116%, when compared to the prior year quarter. The additional administrative expenses are mainly related to an increase in bad debt reserve of $0.2 million and increases in audit costs, legal expenses, insurance costs and office rent account for the majority of the remaining fluctuation of $2.2 million. Depreciation and amortization increased by approximately $0.1 million when compared to the prior year quarter. Lastly, all other administrative expenses which were mainly composed of research, development and quality control testing, decreased by approximately $0.1 million from to the first quarter of 2021.

Other income/(expense)

Total net other expense for the three months ended March 31, 2022 is mainly related to foreign currency exchange which is offset by interest and non-operating income.

Net Income

Net income for the three months ended March 31, 2022 was $6.7 million or $0.09 per share based on a weighted average of 75,239,292 shares outstanding and dilutive earnings per share of $0.09 based on a fully-dilutive weighted average of 78,289,228 shares outstanding, which includes the dilutive impact share-based awards of 3,049,936 shares. In comparison, for the three months ended March 31, 2021, the Company had net income of approximately $0.6 million or $0.01 per share, based on a weighted average of 72,516,296 shares outstanding and a dilutive earnings per share of $0.01 based on a fully-dilutive weighted average of 76,925,484 shares outstanding.

Liquidity and Capital Resources

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As of March 31, 2022, and December 31, 2021, we had cash of approximately $25.5 million and $16.3 million, respectively, and working capital of approximately $186.5 million and $169.2 million, respectively.

In addition to cash flow from operations, our primary sources of working capital have been private placements and public offerings of our securities, including an underwritten public offering of 1,133,953 shares at an offering price of $62.50 per share completed on June 14, 2021 and a private placement of 1,437,909 shares at a price of $15.30 completed on August 25, 2020.

Our current operating plan for the next twelve (12) months reflects sufficient financial resources, notwithstanding the potential effects of the COVID-19 pandemic.

Cash flows used in operating activities

Cash flows provided by operating activities totaled approximately $9.1 million for the three months ended March 31, 2022, which compares to $13.3 million net cash used in operating activities for the three months ended March 31, 2021. The approximately $22 million increase in cash generation was driven by an increase in net income and improvements in working capital. Working capital improvements were driven primarily by the stabilization of our inventory as we have established optimal levels to service the demand of our product as well as timing of accounts payable, offset in part by increases of accounts receivable driven by the significant growth in our business.

Cash flows used in investing activities

Cash flows used in investing activities totaled approximately $0.7 million for the three months ended March 31, 2022, which compares to cash provided by investing activities of $1.2 million for the three months ended March 31, 2021. The decrease in the cash provided by investing activities when compared to the 2021 period was primarily due to the timing of payment on our note receivable, as we received payment on our note receivable of approximately $2.6 million in April 2022.

Cash flows provided by financing activities

Cash flows provided by financing activities totaled approximately $0.8 million for the three months ended March 31, 2022, which compares to cash provided by financing activities of $0.7 million for the three months ended March 31, 2021. The increase of cash provided by financing activities is mainly related to the net proceeds of $0.8 million from stock exercises.

Off Balance Sheet Arrangements

As of March 31, 2022 and December 31, 2021, we had no off-balance sheet arrangements.

Item 3. Quantitative Disclosures About Market Risks.

In the normal course of business our financial position is routinely subject to a variety of risks. The principal market risks (i.e., the risk of loss arising from adverse changes in market rates and prices) to which we are exposed are fluctuations in commodity and other input prices affecting the costs of our raw materials (including, but not limited to, increases in the costs of the price of aluminum cans, sucralose and other sweeteners, as well as other raw materials contained within our products). We generally do not use hedging agreements or alternative instruments to manage the risks associated with securing sufficient ingredients or raw materials. We are also subject to market risks with respect to the cost of commodities and other inputs because our ability to recover increased costs through higher pricing is limited by the competitive environment in which we operate.

We do not use derivative financial instruments to protect ourselves from fluctuations in interest rates and generally do not hedge against fluctuations in commodity prices.

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

Our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial and accounting officer), conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2022, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and our Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and our Chief Financial Officer have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in

21

decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

We identified material weaknesses as of December 31, 2021 in our internal controls over financial reporting, which were not fully remedied as of March 31, 2022. A material weakness is a deficiency or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. As a result of these material weaknesses, we concluded that internal controls over the following areas were not effective as of December 31, 2021 and were not fully remedied as of March 31, 2022.

a)Management failed to design effective controls related to the application of U.S. GAAP guidance in their evaluation of modifications to share-based payment arrangements, resulting in the correction of errors in previously issued interim financial statements relating to the recognition of compensation expense described above;

b)For a substantial portion of the year, management did not design and maintain effective controls over information technology general controls (ITGCs) for information systems and applications that are relevant to the preparation of the consolidated financial statements. Specifically, management did not design and maintain: sufficient user access controls to ensure appropriate segregation of duties and adequately restrict user and privileged access to financial applications, programs and data to appropriate Company personnel; program change management controls to ensure that information technology (IT) program and data changes affecting financial information technology applications and underlying accounting records are authorized, tested, and implemented appropriately. As a result, business process controls (automated and it-dependent manual controls) that are dependent on the ineffective ITGCs, or that use data produced from systems impacted by the ineffective ITGCs were deemed ineffective at December 31 2021; and

c)Management did not have an adequate process in place to monitor and provide oversight over the completion of its testing and assessment of the design and operating effectiveness of internal control over financial reporting in a timely manner. As such, we determined that management failed to fully implement components of the COSO framework, including elements of the control environment, information and communication, control activities and monitoring activities components, relating to: (i) providing sufficient and timely management oversight and ownership over the internal control evaluation process; (ii) hiring and training sufficient personnel to timely support the Company’s internal control objectives; (iii) performing timely monitoring and oversight to ascertain whether the components of internal control are present and functioning effectively.

To address the issues associated with our material weaknesses as described above, management is re-assessing the design of controls and modifying processes designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weaknesses, including but not limited to, (a) enhancing monitoring and oversight controls in the application of U.S. GAAP guidance pertaining to modifications of share-based payments, (b) hiring additional accounting and IT personnel with appropriate technical skillsets, (c) improving consistency in change management supported by standard operating procedures to govern the authorization, testing and approval of changes to information technology systems supporting all of the Company’s internal control processes, (d) enhancing design and implementation of our control environment, including the expansion of formal accounting and IT policies and procedures and financial reporting controls, and (e) implementing appropriate timely review and oversight responsibilities within the accounting and financial reporting functions. However, as of March 31, 2022, the identified material weaknesses were not fully remedied.

Changes in Internal Controls Over Financial Reporting

During the first quarter of 2022, we have been implementing and will aggressively continue to implement changes that are both organizational and process-focused to improve the control environment. We anticipate the actions to be taken, and resulting process improvements, to generally strengthen our internal controls over financial reporting, information technology general controls as well as our controls around share-based payments, and over time, will address the material weakness noted as of December 31, 2021. These remedial measures were considered changes to our internal control environment which had a material effect on internal control over financial reporting. However, because certain of the remedial actions have only recently been undertaken and others will occur over the next several months, we have concluded that our controls and procedures in the areas listed above were not effective as of March 31, 2022. We will not be able to conclude that the material weaknesses have been eliminated until the completion of the December 31, 2022 annual report on form 10-K.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On March 12, 2022, Christian McCallion filed a putative class action lawsuit against the Company in the United States District Court for the Southern District of Florida. Plaintiff McCallion asserts that because of Celsius’ delay in filing its Annual Report on Form 10-K for the year ended December 31, 2021, there was a decline in the market value of the Company’s securities Plaintiff and as a result, Class members have suffered significant losses and damages. As the Company has previously disclosed in its periodic reports filed with the SEC, prior to filing an application for an automatic fifteen (15) day extension of the original filing date, the Company experienced staffing limitations, unanticipated delays and identified material errors in previous filings. Celsius has not committed any federal securities violations or made false and/or misleading statements and/or material omissions as alleged in the complaint. The Company intends to contest the claims vigorously on the merits.

In addition to other matters previously reported in our periodic reports filed under the Securities Exchange Act of 1934, as amended, from time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business.

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Item 1.A. Risk Factors

See “Item 1.A. Risk Factors.” in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibit No.	Description of Exhibit
31.1	Section 302 Certification of Chief Executive Officer
31.2	Section 302 Certification of Chief Financial Officer
32.1	Section 906 Certification of Chief Executive Officer
32.2	Section 906 Certification of Chief Financial Officer
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CELSIUS HOLDINGS, INC.
Dated: May 10, 2022	By:	/s/ John Fieldly
		John Fieldly, Chief Executive Officer (Principal Executive Officer)
Dated: May 10, 2022	By:	/s/ Jarrod Langhans
		Jarrod Langhans, Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Fieldly, the Chief Executive Officer of Celsius Holdings, Inc., a Nevada corporation (the “Registrant”), certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of the Registrant;

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 statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

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

4. I, as the Registrant’s Chief Executive Officer and together with Registrant’s Chief Financial Officer, am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. I, as the Registrant’s Chief Executive Officer, have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 10, 2022	CELSIUS HOLDINGS, INC.
	By:	/s/ John Fieldly
		John Fieldly, Chief Executive Officer; (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jarrod Langhans, the Chief Financial Officer of Celsius Holdings, Inc., a Nevada corporation (the “Registrant”), certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of the Registrant;

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 statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

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

4. I, as the Registrant’s Chief Financial Officer, and together with the Registrant’s Chief Executive Officer, am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. I, as the Registrant’s Chief Financial Officer, have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 10, 2022	CELSIUS HOLDINGS, INC.
	By:	/s/ Jarrod Langhans
		Jarrod Langhans, Chief Financial Officer; (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Celsius Holdings, Inc., a Nevada corporation (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Fieldly, the Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2022	CELSIUS HOLDINGS, INC.
	By:	/s/ John Fieldly
		John Fieldly, Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Celsius Holdings, Inc., a Nevada corporation (the “Company”) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jarrod Langhans, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2022	CELSIUS HOLDINGS, INC.
	By:	/s/ Jarrod Langhans
		Jarrod Langhans, Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Cover - shares	3 Months Ended
	Mar. 31, 2022	May 09, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	001-34611
Entity Registrant Name	CELSIUS HOLDINGS, INC.
Entity Central Index Key	0001341766
Entity Tax Identification Number	20-2745790
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	2424 N Federal Highway
Entity Address, Address Line Two	Suite 208
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	561
Local Phone Number	276-2239
Title of 12(b) Security	Common Stock, $.001 par value
Trading Symbol	CELH
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		75,361,705

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash	$ 25,532	$ 16,255
Accounts receivable-net (note 2)	72,707	38,741
Note receivable-current (note 6)	5,833	2,588
Inventories-net (note 4)	184,094	191,222
Prepaid expenses and other current assets (note 5)	10,042	13,555
Total current assets	298,208	262,361
Note receivable (note 6)	3,888	7,117
Property and equipment-net (note 8)	3,702	3,180
Deferred tax asset (note 14)	6,396	9,019
Right of use assets-operating leases (note 7)	1,141	1,128
Right of use assets-finance leases (note 7)	220	86
Long-term security deposits	293	300
Intangibles (note 9)	15,838	16,301
Goodwill (note 9)	14,238	14,527
Total Assets	343,924	314,019
Current liabilities:
Accounts payable and accrued expenses (note 10)	109,307	91,479
Lease liability obligation-operating leases (note 7)	569	512
Lease liability obligation-finance leases (note 7)	141	157
Other current liabilities (note 11)	1,734	976
Total current liabilities	111,751	93,124
Long-term liabilities:
Lease liability obligation-operating leases (note 7)	597	658
Lease liability obligation-finance leases (note 7)	138	45
Deferred tax liability	3,084	3,146
Total Liabilities	115,570	96,973
Stockholders’ Equity:
Common stock, $0.001 par value; 100,000 shares authorized, 75,351 and 74,909 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively (note 13)	75	75
Additional paid-in capital	272,967	267,847
Accumulated other comprehensive income	123	614
Accumulated deficit	(44,811)	(51,490)
Total Stockholders’ Equity	228,354	217,046
Total Liabilities and Stockholders’ Equity	$ 343,924	$ 314,019

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Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	100,000,000	100,000,000
Common stock, issued	75,351,000	74,909,000
Common stock, outstanding	75,351,000	74,909,000

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Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenue (note 3)		$ 133,388	$ 50,035
Cost of revenue (note 2)		79,494	29,456
Gross profit		53,894	20,579
Selling and marketing expenses		31,597	11,959
General and administrative expenses		12,181	7,807
Total operating expenses		43,778	19,766
Income from operations		10,116	813
Other income/(expense)
Interest income on note receivable (note 6)		78	87
Interest on other obligations		(2)	(2)
Other miscellaneous income/(expense)		0	(12)
Foreign exchange gain/(loss)		(162)	(301)
Total other expense		(86)	(228)
Net income before income taxes		10,030	585
Income tax expense (Note 14)		(3,351)	0
Net income		6,679	585
Other comprehensive income:
Foreign currency translation gain/(loss)		(491)	(193)
Comprehensive Income		$ 6,188	$ 392
Income per share:
Basic		$ 0.09	$ 0.01
Diluted		$ 0.09	$ 0.01
Weighted average shares outstanding:
Basic		75,239	72,516
Diluted	[1]	78,289	76,925

[1] Please refer to Earnings Per Share section for further details.

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance, value at Dec. 31, 2020	$ 104,327	$ 72	$ 159,884	$ (202)	$ (55,427)
Balance at beginning, shares at Dec. 31, 2020		72,263,000
Share-based payment expense	3,575		3,575
Issuance of common stock pursuant to stock incentive plan - cashless, shares		88,000
Issuance of common stock pursuant to stock incentive plan - cash	717	$ 1	716
Issuance of common stock pursuant to stock incentive plan - cash, shares		235,000
Foreign currency fluctuations	(193)			(193)
Net income	585				585
Ending balance, value at Mar. 31, 2021	109,011	$ 73	164,175	(395)	(54,842)
Ending balance, shares at Mar. 31, 2021		72,586,000
Beginning balance, value at Dec. 31, 2021	217,046	$ 75	267,847	614	(51,490)
Balance at beginning, shares at Dec. 31, 2021		74,909,000
Share-based payment expense	4,310		4,310
Issuance of common stock pursuant to stock incentive plan - cashless, shares		248,000
Issuance of common stock pursuant to stock incentive plan - cash	810		810
Issuance of common stock pursuant to stock incentive plan - cash, shares		194,000
Foreign currency fluctuations	(491)			(491)
Net income	6,679				6,679
Ending balance, value at Mar. 31, 2022	$ 228,354	$ 75	$ 272,967	$ 123	$ (44,811)
Ending balance, shares at Mar. 31, 2022		75,351,000

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 6,679	$ 585
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Depreciation	245	108
Amortization	141	188
Bad debt expense	455	223
Inventory excess and obsolescence	2,596	754
Stock-based compensation expense	4,310	3,575
Un-realized exchange loss	85	0
Changes in operating assets and liabilities:
Accounts receivable-net	(34,420)	(9,234)
Inventory-net	4,531	(19,242)
Prepaid expenses and other current assets	3,513	(2,557)
Accounts payable and accrued expenses	17,742	12,113
Deferred tax-net	2,561
Deposits and other current liabilities	765	174
Change in right of use assets and lease obligation-net	(78)	(5)
Net cash (used in)/provided by operating activities	9,125	(13,318)
Cash flows from investing activities:
Proceeds from note receivable		1,876
Purchase of property and equipment	(742)	(698)
Net cash provided by/(used in) investing activities	(742)	1,178
Cash flows from financing activities:
Principal payments on finance lease obligations	(20)	(25)
Proceeds from exercise of stock options	810	716
Net cash provided by financing activities	790	691
Effect on exchange rate changes on cash	104	(165)
Net increase/(decrease) in cash	9,277	(11,614)
Cash at beginning of the period	16,255	43,248
Cash at end of the period	25,532	31,634
Supplemental cash flow disclosures:
Interest	$ 2	$ 2

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ORGANIZATION AND DESCRIPTION OF BUSINESS

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

1.ORGANIZATION AND DESCRIPTION OF BUSINESS

Business —Celsius Holdings, Inc. (the “Company” or “Celsius Holdings”) was incorporated under the laws of the State of Nevada on April 26, 2005. On January 24, 2007, the Company entered into a merger agreement and plan of reorganization with Elite FX, Inc., a Florida corporation. Under the terms of the Merger Agreement, Elite FX, Inc. was merged into the Company’s subsidiary, Celsius, Inc. and became a wholly-owned subsidiary of the Company on January 26, 2007. In addition, on March 28, 2007 the Company established Celsius Netshipments, Inc. a Florida corporation as a subsidiary of the Company.

On February 7, 2018, the Company established Celsius Asia Holdings Limited, a Hong Kong corporation, as a wholly-owned subsidiary of the Company. On February 7, 2018 Celsius China Holdings Limited, a Hong Kong corporation, became a wholly-owned subsidiary of Celsius Asia Holdings Limited and on May 9, 2018, Celsius Asia Holdings Limited established Celsius (Beijing) Beverage Limited, a China corporation, as a wholly-owned subsidiary of Celsius Asia Holdings Limited.

On October 25, 2019, the Company acquired 100% of Func Food Group, Oyj (“Func Food”). The Acquisition was structured as a purchase of all of Func Food’s equity shares and a restructuring of Func Food’s pre-existing debt. Func Food was the Nordic distributor for the Company since 2015. Func Food is a marketer and distributor of nutritional supplements, health food products, and beverages.

The Company is engaged in the development, marketing, sale and distribution of “functional” calorie-burning functional energy drinks and liquid supplements under the Celsius® brand name.

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation – The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These unaudited consolidated financial statements and the accompanying notes should be read in conjunction with the Form 10-K filed for December 31, 2021. The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated.

Consolidation Policy — The accompanying consolidated financial statements include the accounts of Celsius Holdings, Inc. and its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Significant Estimates — The preparation of consolidated financial statements and accompanying disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Significant estimates include the allowance for doubtful accounts, allowance for inventory obsolescence, the useful lives of property and equipment, impairment of intangible assets & goodwill, valuation of stock-based compensation, and deferred tax asset valuation allowance.

Segment Reporting — Operating segments are defined as components of an enterprise that engage in business activities, have discrete financial information, and whose operating results are regularly reviewed by the chief operating decision maker (CODM) to make decisions about allocating resources and to assess performance. Even though we have operations in several geographies, we operate as a single enterprise. Our operations and strategies are centrally designed and executed given that our geographical components are very similar. Our CODM, the CEO, reviews operating results primarily from a consolidated perspective, and makes decisions and allocates resources based on that review. The reason our CODM focuses on consolidated results in making decisions and allocating resources is because of the significant economic interdependencies between our geographical operations and the Company’s U.S. entity.

Concentrations of Risk — Substantially all of the Company’s revenue derives from the sale of Celsius® functional energy drinks and liquid supplements.

The Company uses single supplier relationships for its raw materials purchases and filling capacity, which potentially subjects the Company to a concentration of business risk. If a supplier had operational problems or ceased making product available to the Company, operations could be adversely affected.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit. At March 31, 2022, the Company had approximately $24.6 million in excess of the Federal Deposit Insurance Corporation limit.

For the three months ended March 31, 2022, the Company had two customers which accounted for revenue concentrations more than 10 percent. Amazon and Costco accounted for approximately 10.3% and 17.5% of our revenue, respectively, for the three months ended March 31, 2022. For the three months ended March 31, 2021, the company had one customer which accounted for a revenue concentration more than 10%. Amazon accounted for 15.8% of revenue for the three months ended March 31, 2021. At March 31, 2022, Publix represented the only customer with a 10 percent or greater concentration of accounts receivable representing 10.7% of the accounts receivable balance. At December 31, 2021, the company had two customers with a 10 percent or greater concentration of accounts receivable. Amazon and Publix accounted for approximately 22.7% and 10.3% of our accounts receivable balance, respectively, at March 31, 2021.

Cash Equivalents — The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. At March 31, 2022 and December 31, 2021, the Company did not have any investments with maturities of three months or less.

Accounts Receivable — Accounts receivable are reported at net realizable value. The Company establishes an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. At March 31, 2022 and December 31, 2021, there was an allowance for doubtful accounts of approximately $1.2 million and $0.8 million, respectively.

Inventories — Inventories include only the purchase cost and are stated at the lower of cost and net realizable value. Cost is determined using the FIFO method. Inventories consist of raw materials and finished products. The Company establishes an inventory allowance to reduce the value of the inventory during the period in which such materials and products are no longer usable or marketable. Specifically, the Company reviews inventory utilization during the past twelve months and also customer orders for subsequent months. If there has been no utilization during the last 12 months and there are no orders in-place in future months which will require the use of an inventory item, then the inventory item will be included as part of the allowance during the period being evaluated. Inventory allowance pertains to excess and obsolete products and certain quality control costs. Management will then specifically evaluate whether these items may be utilized within a reasonable time frame (e.g., 3 to 6 months). At March 31, 2022 and December 31, 2021, there was an inventory allowance for excess and obsolete products of $2.6 million and $2.6 million, respectively. The changes in the allowance are included in cost of revenue.

Property and Equipment — Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful life of the asset generally ranging from three to seven years.

Impairment of Long-Lived Assets — In accordance with ASC Topic 360, “Property, Plant, and Equipment” the Company reviews the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is determined regarding a long-lived asset if its carrying amount is not recoverable and exceeds its fair value. The carrying amount is not recoverable when it exceeds the sum of the undiscounted cash flows expected to result from use of the asset over its remaining useful life and final disposition. The Company did not record any impairment charges during the three months ended March 31, 2022 and 2021.

Long-lived Asset Geographic Data

The following table sets forth long-lived asset information, which includes property and equipment and right-of-use assets and excludes goodwill and intangibles, where individual countries represent a significant portion of the total:

	March 31,		December 31,
	2022		2021
United States	$	3,330	$	3,043
Sweden		1,314		1,050
Finland		419		301
Long-lived assets related to foreign operations		1,733		1,351
Total long-lived assets-net	$	5,063	$	4,394

Goodwill — The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired, including related tax effects. Goodwill is not amortized; instead, goodwill is tested for impairment on an annual basis as of October 1st, or more frequently if the Company believes indicators of impairment exist. The Company first assesses qualitative factors such as macro-economic conditions, industry and market conditions, cost factors as well as other relevant events, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. If the Company determines that the fair value is less than the carrying value, the Company will recognize an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. At March 31, 2022, there were no indicators of impairment.

Intangible assets — Intangible assets are comprised of customer relationships and brands acquired in a business combination. The Company amortizes intangible assets with a definitive life over their respective useful lives. Assets with indefinite lives are tested for impairment on an annual basis as of October 1st or more frequently if the Company believes indicators of impairment exist. At March 31, 2022, there were no indicators of impairment.

Revenue Recognition — The Company recognizes revenue in accordance with ASC Topic 606 “Revenue from Contracts with Customers.” The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control or title is transferred based on the commercial terms. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Product sales are recorded net of variable consideration, such as provisions for returns, discounts and allowances. Such provisions are calculated using historical averages and adjusted for any expected changes due to current business conditions. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service, in which case the expense is classified as selling or marketing expense. Provisions for customer volume rebates are based on achieving a certain level of purchases and other performance criteria that are established on a situation basis. These rebates are estimated based on the expected amount to be provided to the customers and are recognized as a reduction of revenue. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Additionally, for any agreements which are 1 year or less, the practical expedient under ASC 340-40-25-4 is applied to expense contract acquisition costs when incurred if the amortization period of the contract asset would have otherwise been recognized in one year or less. Sales taxes and other similar taxes are excluded from revenue.

Customer Advances — From time to time the Company requires deposits in advance of delivery of products and/or production runs. Such amounts are initially recorded as customer advances liability within other current liabilities. The Company recognizes such revenue as it is earned in accordance with revenue recognition policies. The Company had no customer advances as of March 31, 2022 or December 31, 2021, respectively.

Advertising Costs — Advertising costs are expensed as incurred. The Company uses mainly radio, local sampling events, sponsorships, endorsements, and digital advertising. The Company incurred marketing and advertising expenses of approximately $14.5 million and $5.3 million, during the three months ended March 31, 2022 and 2021, respectively.

Research and Development — Research and development costs are charged to general and administrative expenses as incurred and consist primarily of consulting fees, raw material usage and test productions of beverages. The Company incurred expenses of $0.1 million and $0.2 million during the three months ended March 31, 2022 and 2021, respectively.

Foreign Currency Gain/Losses — Foreign subsidiaries’ functional currency is the local currency of operations and the net assets of foreign operations are translated into U.S. dollars using current exchange rates. The foreign subsidiaries perform re-measurements of their assets and liabilities denominated in non-functional currencies on a periodic basis and the gain or losses from these adjustments are included in the Statement of Operations as foreign exchange gains or losses. For the three months ended March 31, 2022 exchange losses have amounted to approximately $0.2 million while during the three months ended March 31, 2021, we recognized foreign currency gains of approximately $0.3 million mainly related to fluctuations in exchange rates. Translation gain and losses that arise from the translation of net assets, as well as exchange gains and losses on intercompany balances of long-term investment nature, are included in Other Comprehensive Income. The Company incurred foreign currency translation net loss during the three months ended March 31, 2022 of approximately $0.5 million and a net loss of approximately $0.2 million during the three months ended March 31, 2021. Our operations in different countries required that we transact in the following currencies:

Chinese-Yuan

Norwegian-Krone

Swedish-Krona

Finland-Euro

Fair Value of Financial Instruments — The carrying value of cash, accounts receivable, accounts payable, other current liabilities and accrued expenses approximate fair value due to their relative short-term maturity and market interest rates.

Fair Value Measurements - ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Other than those noted previously, the Company did not have any other assets or liabilities measured at fair value at March 31, 2022 and December 31, 2021.

Income Taxes — The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts

and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open.

The Company’s tax returns for tax years in 2018 through 2020 remain subject to potential examination by the taxing authorities.

Earnings per Share — Basic earnings per share are calculated by dividing net income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Refer to the below table for additional details (tabular dollars in thousands except per share amounts):

	For the three months ended March 31,
	2022		2021
Net income	$	6,679	$	585
Income per share:
Basic	$	0.09	$	0.01
Diluted	$	0.09	$	0.01
Weighted average shares outstanding:
Basic		75,239		72,516
Effect of dilutive shared based awards		3,050		4,409
Diluted		78,289		76,925

Share-Based Payments — The Company follows the provisions of ASC Topic 718 “Compensation — Stock Compensation” and related interpretations. As such, compensation cost is measured on the date of grant at the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the grants. On April 30, 2015, the Company adopted the 2015 Stock Incentive Plan. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2017 (note 15). As of March 31, 2022, total shares available are 4.6 million.

Cost of Sales — Cost of sales consists of the cost of concentrates and or liquid bases, the costs of raw materials utilized in the manufacture of products, co-packing fees, repacking fees, in-bound & out-bound freight charges, as well as certain internal transfer costs, warehouse expenses incurred prior to the manufacture of the Company’s finished products, inventory allowance for excess and obsolete products, and certain quality control costs. Raw materials account for the largest portion of the cost of sales. Raw materials include cans, bottles, other containers, flavors, ingredients and packaging materials.

Operating Expenses — Operating expenses include selling expenses such as warehousing expenses after manufacture, as well as expenses for advertising, samplings and in-store demonstrations costs, costs for merchandise displays, point-of-sale materials and premium items, sponsorship expenses, other marketing expenses and design expenses. Operating expenses also include such costs as payroll costs, travel costs, professional service fees (including legal fees), depreciation and other general and administrative costs.

Shipping and Handling Costs — Shipping and handling costs for freight expense on goods shipped are included in cost of sales. Freight expense on goods shipped for the three months ended March 31, 2022 and 2021 was approximately $3.2 million and $4.2 million, respectively.

Recent Accounting Pronouncements

The Company adopts all applicable, new accounting pronouncements as of the specified effective dates.

In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. In November 2018, the FASB issued ASU 2018-19, which makes certain improvements to Topic 326. In April and May 2019, the FASB issued ASUs 2019-04 and 2019-05, respectively, which adds codification improvements and transition relief for Topic 326. In November 2019, the FASB issued ASU 2019-10, which delays the effective date of Topic 326 for Smaller Reporting Companies to interim and annual periods beginning after December 15, 2022, with early adoption permitted. We have elected the relief provided. In November 2019, the FASB issued ASU 2019-11, which makes improvements to certain areas of Topic 326. In February 2020, the FASB issued ASU 2020-02, which adds an SEC paragraph, pursuant to the issuance of SEC Staff Accounting Bulletin No. 119, to Topic 326. Topic 326 is effective for the Company for fiscal years and interim reporting periods within those years beginning after December 15, 2022.

All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position except for the previously disclosed above, there have been no new accounting pronouncements not yet effective that have significance to our consolidated financial statements.

Liquidity — These financial statements have been prepared assuming the Company will be able to continue as a going concern. At March 31, 2022, the Company had an accumulated deficit of approximately $44.8 million which includes a net income available to common stockholders of approximately $6.7 million for three months ended March 31, 2022. During the three months ended March 31, 2022 the Company’s net cash provided by operating activities totaled approximately $9.1 million. As of March 31, 2021, the Company had an accumulated deficit of $54.8 million which includes a net income available to common stockholders of $0.6 million for the three months ended March 31, 2021. During the three months ended March 31, 2021 the Company’s net cash used in operating activities totaled approximately $13.3 million.

If our sales volumes do not meet our projections, expenses exceed our expectations, our plans change, we may be unable to generate enough cash flow from operations to cover our working capital requirements. In such case, we may be required to adjust our business plan, by reducing marketing, lower our working capital requirements and reduce other expenses or seek additional financing. Furthermore, our business and results of operations may be adversely affected by changes in the global macro-economic environment related to the pandemic and public health crises related to the COVID-19 outbreak.

Correction of Immaterial Errors — During the third quarter of 2021, the company performed immaterial corrections to the previously reported consolidated financial statements related to the Func Foods acquisition in 2019. Goodwill increased by $3.7 million and deferred tax liabilities increased by $3.5 million attributable to tax implications of acquired intangible assets that had not been recorded in the purchase accounting treatment acquisition. The impact on the consolidated statements of operations and comprehensive income for the year ended December 31, 2021, resulted in a $0.2 million deferred tax benefit.

Correction of previously issued financial statements — Subsequent to filing the Company’s Quarterly Reports on Form 10-Q for the periods ended June 30, 2021, and September 30, 2021, the Company determined that the calculation of expense of share based compensation related to grants of stock options and restricted stock units (“RSUs”) issued to former employees and retired directors was materially understated during the three-and six-month periods ended June 30, 2021 and three- and nine-month periods ended September 30, 2021 (the “Affected Periods”), based on the application of U.S. generally accepted accounting principles. During the Affected Periods, the stock options and RSUs were modified and the expense should have been calculated and recognized using the fair market value of the awards as of the date of modification and recognized over the remaining service period.

In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the misstatements and based on an analysis of quantitative and qualitative factors determined that the impact of the misstatement to its interim reporting periods ending June 30, 2021, and September 30, 2021, was material. Accordingly, the Company has restated its interim consolidated financial statements for the three- and six-months ended June 30, 2021, and three- and nine- months ended September 30, 2021, respectively, and included that restated financial information within our annual report for the period ending December 31, 2021.

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REVENUE

3 Months Ended

Mar. 31, 2022

Revenue

REVENUE

3.REVENUE

The Company recognizes revenue in accordance with ASC Topic 606 “Revenue from Contracts with Customers.” The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred, based on the commercial terms. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Product sales are recorded net of variable consideration, such as provisions for returns, discounts and allowances. Such provisions are calculated using historical averages and adjusted for any expected changes due to current business conditions. Consideration given to customers

for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service, in which case the expense is classified as selling or marketing expense. Provisions for customer volume rebates are based on achieving a certain level of purchases and other performance criteria that are established on a situation basis. These rebates are estimated based on the expected amount to be provided to the customers and are recognized as a reduction of revenue. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Additionally, for any agreements which are 1 year or less, the practical expedient under ASC 340-40-25-4 is applied to expense contract acquisition costs when incurred if the amortization period of the contract asset would have otherwise been recognized in one year or less.

Information about the Company’s net sales by geographical location for the three months ended March 31, 2022 and 2021 is as follows:

	For the three months ended
	March 31,		March 31,
	2022		2021
North America	$	123,473	$	39,003
Europe		8,495		10,368
Asia		966		536
Other		454		128
Net sales	$	133,388	$	50,035

All of the Company’s North America revenue is derived from the United States, which is the Company’s country of domicile. Of the Company’s total foreign revenues of approximately $9.9 million and $11.0 million for the three months ended March 31, 2022 and 2021, respectively, Sweden represented the largest foreign portion of total consolidated revenue of approximately $5.8 million and $6.5 million for the three months ended March 31, 2022 and 2021 respectively.

License Agreement

In January 2019, the Company entered into a license and repayment of investment agreement with Qifeng Food Technology (Beijing) Co., Ltd (“Qifeng”). Under the agreement, Qifeng was granted the exclusive license rights to manufacture, market and commercialize Celsius branded products in China. The term of the agreement is 50 years, with annual royalty fees due from Qifeng after the end of each calendar year. The royalty fees are based on a percentage of Qifeng’s sales of Celsius branded products; however, the fees are fixed for the first five years of the agreement, totaling approximately $6.9 million, and then are subject to annual guaranteed minimums over the remaining term of the agreement.

Under the agreement, the Company grants Qifeng exclusive license rights and provides ongoing support in product development, brand promotion and technical expertise. The ongoing support is integral to the exclusive license rights and, as such, both of these represent a combined, single performance obligation. The transaction price consists of the guaranteed minimums and the variable royalty fees, all of which are allocated to the single performance obligation.

The Company recognizes revenue from the agreement over time because the customer simultaneously receives and consumes the benefits from the services. The Company uses the passage of time to measure progress towards satisfying its performance obligation because of its ongoing efforts in providing the exclusive license rights including providing continuous access, updates and support. Total revenue recognized under the agreement was approximately $0.5 million for the three months ended March 31, 2022 and approximately $0.3 million for the three months ended March 31, 2021, which is reflected in the revenues from Asia.

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INVENTORIES

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

INVENTORIES

4.INVENTORIES

Inventories consist of the following at:

	March 31,			December 31,
	2022			2021
Finished goods	$	106,380		$	123,594
Raw Materials		80,310			70,201
Less: Inventory allowance for excess and obsolete products		(2,596	)		(2,573	)
Inventories	$	184,094		$	191,222

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PREPAID EXPENSES AND OTHER CURRENT ASSETS

3 Months Ended

Mar. 31, 2022

Prepaid Expenses And Other Current Assets

PREPAID EXPENSES AND OTHER CURRENT ASSETS

5.PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets total approximately $10.0 million and $13.6 million at March 31, 2022 and December 31, 2021, respectively, consist mainly of prepaid advances to co-packers related to inventory production, advertising, prepaid insurance, prepaid slotting fees, value added tax payments and deposits on purchases.

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NOTE RECEIVABLE

3 Months Ended

Mar. 31, 2022

Note Receivable

NOTE RECEIVABLE

6.NOTE RECEIVABLE

Note receivable consists of the following at:

	March 31,		December 31,
	2022		2021
Note receivable-current	$	5,833	$	2,588
Note receivable-non-current		3,888		7,117
Total Note receivable	$	9,721	$	9,705

Effective January 1, 2019, we restructured our China distribution efforts by entering into two separate economic agreements as it relates to the commercialization of our Celsius products (i.e., license agreement) and a repayment of investment agreement with Qifeng. Under the license agreement, Qifeng was granted the exclusive license rights to manufacture, market and commercialize Celsius® brand products in China. Qifeng will pay a minimum royalty fee of approximately $6.9 million for the five years of the term of the agreement, transitioning to a volume-based royalty fee, thereafter. Under a separate economic agreement, Qifeng Food will repay the marketing investments made by Celsius into the China market through 2018, over the same five-year period. The repayment, which was formalized via a Note Receivable from Qifeng, will need to be serviced even if the licensing agreement is cancelled or terminated. The note receivable is denominated in Chinese-Yuan.

Scheduled principal payments plus accrued interest are due annually on March 31 of each year starting in 2020. The note receivable is recorded at amortized cost and accrues interest at a rate per annum equal to the weighted average of 5% of the outstanding principal up to $5 million and 2% of the outstanding principal above $5 million. On June 12, 2020, it was agreed to fix the interest rate at 3.21% which reflected the weighted average interest rate for the 5-year period of the Note. For the three months ended March 31, 2022 and 2021, interest income was approximately $0.1 million and $0.1 million, respectively.

The Company assesses the note receivable for impairment at each reporting period, by evaluating whether it is probable that the Company will be unable to collect all the contractual principal and interest payments as scheduled in the Note agreement, based on historical experience of Qifeng’s ability to pay, the current economic environment and other factors. If the Note is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows under the Note, discounted at the Note’s effective interest rate. At March 31, 2022, the Note was not deemed to be impaired. Payment in-full has been received in April 2022 pertaining to the amounts due on March 31, 2022.

As collateral for the Note, a stock certificate in Celsius Holdings, Inc., which amounts to 97,830 of shares owned by an affiliate under common control with Qifeng is being held at a brokerage account. These shares were originally issued on April 20, 2015 via a private transaction which involved Risejoy Services Limited an affiliate under the common control of Qifeng, our Chinese licensee. Furthermore, a letter of guarantee was executed with several restrictions regarding these shares. These shares serve only as collateral and is a component of management’s consideration when evaluating impairment indicators.
 

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LEASES

3 Months Ended

Mar. 31, 2022

Leases

LEASES

7.LEASES

The Company’s leasing activities include an operating lease of its corporate office space from a related party (see note 12) and other operating and finance leases of vehicles and office space for the Company’s European operations.

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. The Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately.

Leases are classified as either finance leases or operating leases based on criteria in ASC Topic 842, “Leases”. The Company’s operating leases are generally comprised of real estate and vehicles, and the Company’s finance leases are generally comprised of vehicles.

At lease commencement, the Company records a lease liability equal to the present value of the remaining lease payments, discounted using the rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. A corresponding right-of-use asset (“ROU asset”) is recorded, measured based on the initial measurement of the lease liability. ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the shorter of the useful life of the asset or the lease term, and interest expense is calculated using the effective interest rate method.

The future annual minimum lease payments required under the Company’s operating and finance lease liabilities as of March 31, 2022 are as follows:

	Operating			Finance
Future minimum lease payments	Leases			Leases			Total
2022	$	461		$	117		$	578
2023		570			67			637
2024		190			22			212
2025		10			83			93
2026		—			5			5
Total future minimum lease payments		1,231			294			1,525
Less: Amount representing interest		(65	)		(15	)		(80	)
Present value of lease liabilities		1,166			279			1,445
Less: current portion		(569	)		(141	)		(710	)
Long-term portion	$	597		$	138		$	735

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

8.PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:

	March 31,			December 31,
	2022			2021
Merchandising equipment - coolers	$	3,561		$	3,052
Office Equipment		968			891
Vehicles		456			304
Less: accumulated depreciation		(1,283	)		(1,067	)
Total	$	3,702		$	3,180

Depreciation expense amounted to $0.2 million and $0.1 million for the three months ended March 30, 2022 and 2021, respectively.

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GOODWILL AND INTANGIBLES

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLES

9.GOODWILL AND INTANGIBLES

At March 31, 2022 and December 31, 2021, goodwill consists of approximately $14.2 million and $14.5 million, respectively resulting from the excess of the consideration paid over the fair value of net tangible and intangible assets acquired from the Func Food Acquisition.

Intangible assets consist of acquired customer relationships and brands from the Func Food Acquisition. The gross carrying amount and accumulated amortization of intangible assets as of March 31, 2022 and December 31, 2021, respectively, were as follows:

	March 31,			December 31,
	2022			2021
Definite-lived intangible assets
Customer relationships	$	13,965		$	14,248
Less: accumulated amortization		(1,257	)		(1,140	)
Definite-lived intangible assets, net	$	12,708		$	13,108
Indefinite-lived intangible assets
Brands	$	3,130		$	3,193
Total Intangibles	$	15,838		$	16,301

Customer relationships are amortized over an estimated useful life of 25 years and brands have an indefinite life. Amortization expense for the three months ended March 31, 2022 and 2021 was approximately $0.1 million and $0.2 million, respectively, and is reflected in general and administrative expenses.

Other fluctuations in the amounts of goodwill and intangible assets are due to currency translation adjustments.

The following is the future estimated annualized amortization expense related to customer relationships:

As of March 31, 2022:
2022	$	417
2023		559
2024		559
2025		559
2026		559
Thereafter		10,055
Total	$	12,708

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

10.ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following at:

	March 31,		December 31,
	2022		2021
Accounts payable	$	50,541	$	35,821
Promotional allowances		31,227		19,037
Freight		12,512		15,872
Accrued expenses		12,769		15,311
Unbilled purchases		2,258		5,438
Total	$	109,307	$	91,479

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OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

OTHER CURRENT LIABILITIES

11.OTHER CURRENT LIABILITIES

Other current liabilities consist of the following at:

	March 31,		December 31,
	2022		2021
Other Liabilities-State Beverage Container Deposit	$	1,734	$	976
Total	$	1,734	$	976

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

12.RELATED PARTY TRANSACTIONS

The Company’s office is rented from a company affiliated with CD Financial, LLC which is controlled by one of our major shareholders. The current lease expires on January 2024 with monthly base rent of $24,494.

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STOCKHOLDERS’ EQUITY

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

STOCKHOLDERS’ EQUITY

13.STOCKHOLDERS’ EQUITY

Issuance of common stock pursuant to exercise of stock options and other awards

During the three months ended March 31, 2022, the Company issued an aggregate of 442,694 shares of its common stock pursuant to the exercise of grants under the Company’s Stock Incentive Plans. The Company received aggregate proceeds of $0.8 million for 194,338 options exercised for cash, with the balance of the options having been exercised on a “cashless” basis.

During the three months ended March 31, 2021, the Company issued an aggregate of 322,858 shares of its common stock pursuant to the exercise of grants under the Company’s Stock Incentive Plans. The Company received aggregate proceeds of approximately $0.7 million for 234,546 options exercised for cash, with the balance of the options having been exercised on a “cashless” basis.

June 2021 Public Offering

On June 9, 2021, the Company and certain selling stockholders (the "Selling Stockholders”) entered into an underwriting agreement (the "Underwriting Agreement”) with UBS Securities LLC and Jefferies LLC, as representatives (the "Representatives”) of the several underwriters (the "Underwriters”), relating to the sale of 6,518,267 shares of common stock, par value $0.001 per share, of the Company at a public offering price of $62.50 per share less underwriting discounts and commissions in a registered public offering (the "Offering”). The Company and certain Selling Stockholders also granted the Underwriters an option, exercisable for 30 days, to purchase up to an additional 977,740 shares of its Common Stock. The Underwriters partially exercised their option to purchase 873,141 shares of the Company’s Common Stock on June 11, 2021; 1,133,953 of which were sold by the Company and 739,188 of which were sold by certain of the Selling Stockholders. The Offering closed on June 14, 2021. The Company issued and sold 1,133,953 shares of Common Stock, and the Selling Stockholders sold 6,257,455 shares, in the aggregate, of Common Stock in the Offering. The Offering generated net proceeds for the Company of $67,769,386 and net proceeds for the Selling Stockholders

of $375,447,300. The Company intends to use the proceeds for general corporate purposes. The Company did not receive any proceeds from the sale of shares by the Selling Stockholders.

The Underwriting Agreement contains customary representations and warranties of the parties, and indemnification and contribution provisions under which the Company and the Selling Stockholders have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act”). Pursuant to the Underwriting Agreement, the Company has agreed, subject to certain exceptions, not to sell or transfer any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock for 90 days after June 9, 2021 without first obtaining the written consent of the Representatives.

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INCOME TAXES

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

14.INCOME TAXES

The effective income tax rate was 33.6% for the three months ended March 31, 2022. The effective income tax rate differed from the statutory federal income tax rate of 21% primarily due to the impact of disallowed stock-based compensation expense and state income tax expense.

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

15.STOCK-BASED COMPENSATION

The Company adopted an Incentive Stock Plan on January 18, 2007. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock. While the plan terminates 10 years after the adoption date, issued options have their own schedule of termination. During 2013, the majority of the stockholders approved to increase the total available shares in the plan from 2.5 million to 3.5 million shares of common stock. During May 2014, the majority of the stockholders approved to increase the total available shares in the plan from 3.5 million to 4.25 million shares of common stock, during February 2015, the majority of the stockholders approved to increase the total available shares in the plan from 4.25 million to 4.6 million shares of common stock and during April 2015, the majority of the stockholders approved to increase the total available shares in the plan from 4.6 million to 5.1 million shares of common stock. Upon exercise, shares of new common stock are issued by the Company.

The Company adopted the 2015 Stock Incentive Plan on April 30, 2015. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% of the shares pertaining to the 2015 plan that are outstanding as of the last day of the prior year. As of March 31, 2022, approximately 4.6 million shares are available.

Under the 2015 Stock Incentive Plan, the Company has issued options to purchase approximately 3.4 million shares at an average price of $7.68 with a fair value of $161.0 million. For the three months ended March 31, 2022 and 2021, the Company issued options to purchase nil and 303,750 shares, respectively. Upon exercise, shares of new common stock are issued by the Company.

For the three months ended March 31, 2022 and 2021, the Company recognized an expense of approximately $4.3 million and $3.6 million, respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by the fair value of the restricted stock unit price on the day of issuance or through application of a Black-Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of March 31, 2022 the Company had approximately $6.6 million of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.7 years. The Company used straight-line amortization of compensation expense over the two to three-year requisite service or vesting period of the grant. The maximum contractual term of the Company's stock options is 10 years. The Company recognizes forfeitures as they occur. There are options to purchase approximately 3.4 million shares that have vested as of March 31, 2022.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black-Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:

	Three months ended March 31,
	2022	2021
Expected volatility	69.2% - 81.1%	69.18%-81.11%
Expected term	4.5 - 5.0 Years	4.49-5.00 Years
Risk-free interest rate	0.3% - 1.4%	0.32% - 1.39%
Forfeiture Rate	0.0%	0.0%

The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time

that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.

A summary of the status of the Company’s outstanding stock options as of March 31, 2022 and changes during the periods ending on that date is as follows:

				Weighted Average						Weighted
	Shares			Exercise		Grant Date Fair		Aggregate Intrinsic		Average Remaining
	(000’s)			Price		Value		Value (000’s)		Term (Yrs)
Options
At December 31, 2021		3,600		$	7.47			$	241,515		6.37
Granted		—		$	—	$	—
Exercised		(209	)	$	4.02	$	48.44	$	80,500
Forfeiture and cancelled		(1	)	$	4.66
At March 31, 2022		3,390		$	7.68				161,015		6.26
Exercisable at March 31, 2022		2,560		$	5.59			$	126,964		5.78

The following table summarizes information about employee stock options outstanding at March 31, 2022:

	Outstanding Options						Vested Options
	Number						Number
	Outstanding		Weighted		Weighted		Exercisable		Weighted		Weighted
Range of	at		Averaged		Averaged		at		Averaged		Averaged
Exercise	March 31,		Remaining		Exercise		March 31,		Exercise		Remaining
Price	2022 (000’s)		Life		Price		2022 (000’s)		Price		Life
$0.20 - $0.53		20		1.84	$	0.34		20	$	0.34		1.84
$0.65 - $1.80		100		2.91	$	1.05		100	$	1.05		2.91
$1.83 - $2.84		107		3.78	$	1.97		107	$	1.97		3.78
$3.20 - $6.20		2,783		6.18	$	4.16		2,208	$	4.21		5.87
$7.20-$60.00		380		8.68	$	37.15		125	$	37.33		8.69
Outstanding options		3,390		6.26	$	7.68		2,560	$	5.59		5.78

As of March 31, 2022, the Company had approximately $6.6 million of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.7 years.

Restricted Stock Awards

Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. The holders of a restricted stock award are generally entitled after the release to transact and obtain the same rights as rights of a shareholder of the Company, including the right to vote the shares. The holders of unvested restricted stock awards do not have the same rights as shareholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The value of restricted stock awards that vest over time is established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022				March 31, 2021
			Weighted					Weighted
			Average					Average
			Grant Date					Grant Date
	Shares (000's)		Fair Value		Shares (000's)			Fair Value
Unvested at beginning of period		0.2	$	14.72		66		$	28.11
Transfers to restricted stock units		—		—		(46	)		34.02
Granted		—		—		—			—
Vested		—		—		—			22.30
Forfeiture and cancelled		—		—		—			—
Unvested at end of period		0.2	$	14.72		20		$	14.72

The total fair value of shares vested during the three months ended March 31, 2022 and 2021 was immaterial. Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2022 was approximately $0.0 million and is expected to

be expensed over the next 0.3 years. Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2021 was $0.2 million.

Restricted Stock Units

Restricted stock units are awards that give the holder the right to receive one share of common stock for each restricted stock unit upon meeting service-based vesting conditions (typically annual vesting in three equal annual installments, with a requirement that the holder remains in the continuous employment of the Company). The holders of unvested units do not have the same rights as stockholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The value of restricted stock units that vest over time is established by the market price on the date of its grant. A summary of the Company’s restricted stock unit activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022					March 31, 2021
				Weighted					Weighted
				Average					Average
				Grant Date					Grant Date
	Shares (000's)			Fair Value		Shares (000's)			Fair Value
Unvested at beginning of period		566		$	52.66		—		$	—
Transfers from restricted stock awards		—			—		46			34.02
Granted		189			74.57		468			50.56
Vested		(111	)		51.10		—			—
Forfeited and cancelled		(18	)		54.88		(10	)		50.31
Unvested at end of period		626		$	59.50	$	504		$	49.06

The total fair value of shares vested during the three months ended March 31, 2022 was $5.6 million, respectively. Unrecognized compensation expense related to outstanding restricted stock units to employees and directors as of March 31, 2022 and 2021 was $29.7 million and $22.8 million, respectively, and is expected to be expensed over the next 2.4 years.

Stock-based Awards Issued to Non-employee Consultants

The Company issues stock-based awards to third-party consultants for providing marketing, sales, and general business development services related to Celsius products. The stock-based awards are in the form of restricted stock units with performance vesting conditions (“performance stock units” or “PSUs”). The holders of unvested PSUs do not have the same rights as stockholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The PSU performance vesting conditions are linked to the consultants obtaining specified incremental earnings for the Company in a given year over the performance vesting period, typically five years. The fair value of PSUs is based on the market price of the underlying stock on the grant date. The Company recognizes compensation cost for performance stock awards issued to non-employees in the same manner and periods as though cash had been paid for services received. A summary of the Company’s PSU activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022				March 31, 2021
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares (000's)		Fair Value		Shares (000's)		Fair Value
Unvested at beginning of period		15	$	64.65		—	$	—
Granted		—		—		—		—
Vested		—		—		—		—
Forfeited and cancelled		—		—		—		—
Unvested at end of period		15	$	64.65	$	—	$	—

The total fair value of shares vested during the three months ended March 31, 2022 was $0.1 million. Unrecognized compensation expense related to outstanding PSUs issued to non-employee consultants as of March 31, 2022 was approximately $0.9 million and is expected to be expensed over the next 4.3 years.

Modifications

There were certain Board of Directors members and employees whose service was terminated during 2021. In connection with their terminations, the vesting conditions of the previously granted awards were modified to accelerate the vesting of specified un-vested awards pursuant to Board resolutions or severance agreements. Pursuant ASC 718, these were Type III modifications requiring re-valuation of un-vested awards to modification date fair value with recognition of compensation expense over the remaining service period. There were no modifications for the three month periods ending March 31, 2022 and March 31, 2021.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

16.COMMITMENTS AND CONTINGENCIES

In November of 2020, McGovern Capital, Inc. and Kevin McGovern (collectively “McGovern”) filed a claim in arbitration related to its Representative Agreement with Celsius Holdings, Inc. as amended by the first amendment dated August 6, 2016. Pursuant to the Representative Agreement, McGovern is entitled to receive a fee of three percent (3%) of “Net Revenues” received by the Company from sales of the Company’s Products in the People’s Republic of China for a period of four years from Initial Commercial Sale (which was September 1, 2017). “Net Revenues” are defined in the Representative Agreement as “the Company’s revenues net of actual discounts applied, credits and returns.” Effective January 1, 2019, the Company restructured its China operations from a distribution arrangement with Qifeng Food Technology (Beijing) Co. Ltd. (“Qifeng”), to a license and royalty arrangement and a loan, pursuant to which Qifeng will market and distribute the Company’s products in China, and Celsius will receive an annual royalty payment. The Company intends to pay McGovern its percentage of the annual royalty payment, but McGovern has objected claiming that McGovern is entitled to be paid commissions on the entire royalty payment and the amount of the loan to Qifeng. The Company intends to defend against McGovern’s claims vigorously and has filed a counterclaim related to McGovern’s failure to comply with the covenant of good faith and fair dealing in the Representative Agreement. This matter is still in its early stages and the Company is unable to predict the outcome at this time.

In March of 2019, Daniel Prescod filed a putative class action lawsuit against the Company in the Superior Court for the State of California, County of Los Angeles, Case Number 19STCV09321, filed on March 19, 2019, (the “Prescod Litigation”). Daniel Prescod asserts that the Company’s use of citric acid in its products while simultaneously claiming “no preservatives” violates California Consumer Legal Remedies Act, California Business and Professions Code Section 17200, et seq., and California Business and Professions Code Section 17500, et seq., because citric acid acts as a preservative. The Company does not use citric acid as a preservative in its products, but rather as a flavoring, and therefore it believes that its “no preservatives” claim is fair and not deceptive. A motion to certify the case as a class action was filed and on August 2, 2021, that motion was granted. However, the Company also has a motion for summary adjudication pending and that motion would be dispositive of plaintiff’s claims if granted. No fact discovery has been conducted on the merits and this matter is still in its initial stages. The Company intends to contest the claims vigorously on the merits. Since merits discovery is still in its initial stages, we are unable to predict the outcome at this time.

On January 8, 2021, we received a letter from the SEC Division of Enforcement seeking the production of documents in connection with a non-public fact-finding inquiry by the SEC to determine whether violations of the federal securities laws have occurred. On August 20, 2021, the SEC issued a subpoena for production of documents in connection with the matter. Neither the January 8, 2021 SEC letter nor the August 20, 2021 subpoena means that the SEC has concluded that the Company or anyone else has violated the federal securities laws. We have cooperated and will continue to cooperate with the SEC staff in its investigation and requests. At this time, however, we cannot predict the length, scope, or results of the investigation or the impact, if any, of the investigation on our results of operations.

On March 12, 2022, Christian McCallion filed a putative class action lawsuit against the Company in the United States District Court for the Southern District of Florida. Plaintiff McCallion asserts that because of Celsius’ delay in filing its Annual Report on Form 10-K for the year ended December 31, 2021, there was a decline in the market value of the Company’s securities Plaintiff and as a result, Class members have suffered significant losses and damages. As the Company has previously disclosed in its periodic reports filed with the SEC, prior to filing an application for an automatic fifteen (15) day extension of the original filing date, the Company experienced staffing limitations, unanticipated delays and identified material errors in previous filings. Celsius has not committed any federal securities violations or made false and/or misleading statements and/or material omissions as alleged in the complaint. The Company intends to contest the claims vigorously on the merits.

In addition to the foregoing, from time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business.

The Company has entered into distribution agreements with liquidated damages in case the Company cancels the distribution agreements without Cause. Cause has been defined in various ways. It is management’s belief that no such agreement has created any liability as of March 31, 2022.

Additionally, our business and results of operations may be adversely affected by the pandemic and public health crises related to the COVID-19 outbreak which is affecting the macro-economic environment.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

17.SUBSEQUENT EVENTS

None

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation – The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These unaudited consolidated financial statements and the accompanying notes should be read in conjunction with the Form 10-K filed for December 31, 2021. The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated.

Consolidation Policy — The accompanying consolidated financial statements include the accounts of Celsius Holdings, Inc. and its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Significant Estimates

Significant Estimates — The preparation of consolidated financial statements and accompanying disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Significant estimates include the allowance for doubtful accounts, allowance for inventory obsolescence, the useful lives of property and equipment, impairment of intangible assets & goodwill, valuation of stock-based compensation, and deferred tax asset valuation allowance.

Segment Reporting

Segment Reporting — Operating segments are defined as components of an enterprise that engage in business activities, have discrete financial information, and whose operating results are regularly reviewed by the chief operating decision maker (CODM) to make decisions about allocating resources and to assess performance. Even though we have operations in several geographies, we operate as a single enterprise. Our operations and strategies are centrally designed and executed given that our geographical components are very similar. Our CODM, the CEO, reviews operating results primarily from a consolidated perspective, and makes decisions and allocates resources based on that review. The reason our CODM focuses on consolidated results in making decisions and allocating resources is because of the significant economic interdependencies between our geographical operations and the Company’s U.S. entity.

Concentrations of Risk

Concentrations of Risk — Substantially all of the Company’s revenue derives from the sale of Celsius® functional energy drinks and liquid supplements.

The Company uses single supplier relationships for its raw materials purchases and filling capacity, which potentially subjects the Company to a concentration of business risk. If a supplier had operational problems or ceased making product available to the Company, operations could be adversely affected.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit. At March 31, 2022, the Company had approximately $24.6 million in excess of the Federal Deposit Insurance Corporation limit.

For the three months ended March 31, 2022, the Company had two customers which accounted for revenue concentrations more than 10 percent. Amazon and Costco accounted for approximately 10.3% and 17.5% of our revenue, respectively, for the three months ended March 31, 2022. For the three months ended March 31, 2021, the company had one customer which accounted for a revenue concentration more than 10%. Amazon accounted for 15.8% of revenue for the three months ended March 31, 2021. At March 31, 2022, Publix represented the only customer with a 10 percent or greater concentration of accounts receivable representing 10.7% of the accounts receivable balance. At December 31, 2021, the company had two customers with a 10 percent or greater concentration of accounts receivable. Amazon and Publix accounted for approximately 22.7% and 10.3% of our accounts receivable balance, respectively, at March 31, 2021.

Cash Equivalents

Cash Equivalents — The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. At March 31, 2022 and December 31, 2021, the Company did not have any investments with maturities of three months or less.

Accounts Receivable

Accounts Receivable — Accounts receivable are reported at net realizable value. The Company establishes an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. At March 31, 2022 and December 31, 2021, there was an allowance for doubtful accounts of approximately $1.2 million and $0.8 million, respectively.

Inventories

Inventories — Inventories include only the purchase cost and are stated at the lower of cost and net realizable value. Cost is determined using the FIFO method. Inventories consist of raw materials and finished products. The Company establishes an inventory allowance to reduce the value of the inventory during the period in which such materials and products are no longer usable or marketable. Specifically, the Company reviews inventory utilization during the past twelve months and also customer orders for subsequent months. If there has been no utilization during the last 12 months and there are no orders in-place in future months which will require the use of an inventory item, then the inventory item will be included as part of the allowance during the period being evaluated. Inventory allowance pertains to excess and obsolete products and certain quality control costs. Management will then specifically evaluate whether these items may be utilized within a reasonable time frame (e.g., 3 to 6 months). At March 31, 2022 and December 31, 2021, there was an inventory allowance for excess and obsolete products of $2.6 million and $2.6 million, respectively. The changes in the allowance are included in cost of revenue.

Property and Equipment

Property and Equipment — Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful life of the asset generally ranging from three to seven years.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets — In accordance with ASC Topic 360, “Property, Plant, and Equipment” the Company reviews the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is determined regarding a long-lived asset if its carrying amount is not recoverable and exceeds its fair value. The carrying amount is not recoverable when it exceeds the sum of the undiscounted cash flows expected to result from use of the asset over its remaining useful life and final disposition. The Company did not record any impairment charges during the three months ended March 31, 2022 and 2021.

Long-lived Asset Geographic Data

Long-lived Asset Geographic Data

The following table sets forth long-lived asset information, which includes property and equipment and right-of-use assets and excludes goodwill and intangibles, where individual countries represent a significant portion of the total:

	March 31,		December 31,
	2022		2021
United States	$	3,330	$	3,043
Sweden		1,314		1,050
Finland		419		301
Long-lived assets related to foreign operations		1,733		1,351
Total long-lived assets-net	$	5,063	$	4,394

Goodwill

Goodwill — The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired, including related tax effects. Goodwill is not amortized; instead, goodwill is tested for impairment on an annual basis as of October 1st, or more frequently if the Company believes indicators of impairment exist. The Company first assesses qualitative factors such as macro-economic conditions, industry and market conditions, cost factors as well as other relevant events, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. If the Company determines that the fair value is less than the carrying value, the Company will recognize an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. At March 31, 2022, there were no indicators of impairment.

Intangible assets

Intangible assets — Intangible assets are comprised of customer relationships and brands acquired in a business combination. The Company amortizes intangible assets with a definitive life over their respective useful lives. Assets with indefinite lives are tested for impairment on an annual basis as of October 1st or more frequently if the Company believes indicators of impairment exist. At March 31, 2022, there were no indicators of impairment.

Revenue Recognition

Revenue Recognition — The Company recognizes revenue in accordance with ASC Topic 606 “Revenue from Contracts with Customers.” The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control or title is transferred based on the commercial terms. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Product sales are recorded net of variable consideration, such as provisions for returns, discounts and allowances. Such provisions are calculated using historical averages and adjusted for any expected changes due to current business conditions. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service, in which case the expense is classified as selling or marketing expense. Provisions for customer volume rebates are based on achieving a certain level of purchases and other performance criteria that are established on a situation basis. These rebates are estimated based on the expected amount to be provided to the customers and are recognized as a reduction of revenue. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Additionally, for any agreements which are 1 year or less, the practical expedient under ASC 340-40-25-4 is applied to expense contract acquisition costs when incurred if the amortization period of the contract asset would have otherwise been recognized in one year or less. Sales taxes and other similar taxes are excluded from revenue.

Customer Advances

Customer Advances — From time to time the Company requires deposits in advance of delivery of products and/or production runs. Such amounts are initially recorded as customer advances liability within other current liabilities. The Company recognizes such revenue as it is earned in accordance with revenue recognition policies. The Company had no customer advances as of March 31, 2022 or December 31, 2021, respectively.

Advertising Costs

Advertising Costs — Advertising costs are expensed as incurred. The Company uses mainly radio, local sampling events, sponsorships, endorsements, and digital advertising. The Company incurred marketing and advertising expenses of approximately $14.5 million and $5.3 million, during the three months ended March 31, 2022 and 2021, respectively.

Research and Development

Research and Development — Research and development costs are charged to general and administrative expenses as incurred and consist primarily of consulting fees, raw material usage and test productions of beverages. The Company incurred expenses of $0.1 million and $0.2 million during the three months ended March 31, 2022 and 2021, respectively.

Foreign Currency Gain/Losses

Foreign Currency Gain/Losses — Foreign subsidiaries’ functional currency is the local currency of operations and the net assets of foreign operations are translated into U.S. dollars using current exchange rates. The foreign subsidiaries perform re-measurements of their assets and liabilities denominated in non-functional currencies on a periodic basis and the gain or losses from these adjustments are included in the Statement of Operations as foreign exchange gains or losses. For the three months ended March 31, 2022 exchange losses have amounted to approximately $0.2 million while during the three months ended March 31, 2021, we recognized foreign currency gains of approximately $0.3 million mainly related to fluctuations in exchange rates. Translation gain and losses that arise from the translation of net assets, as well as exchange gains and losses on intercompany balances of long-term investment nature, are included in Other Comprehensive Income. The Company incurred foreign currency translation net loss during the three months ended March 31, 2022 of approximately $0.5 million and a net loss of approximately $0.2 million during the three months ended March 31, 2021. Our operations in different countries required that we transact in the following currencies:

Chinese-Yuan

Norwegian-Krone

Swedish-Krona

Finland-Euro

Fair Value of Financial Instruments

Fair Value of Financial Instruments — The carrying value of cash, accounts receivable, accounts payable, other current liabilities and accrued expenses approximate fair value due to their relative short-term maturity and market interest rates.

Fair Value Measurements - ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

Other than those noted previously, the Company did not have any other assets or liabilities measured at fair value at March 31, 2022 and December 31, 2021.

Income Taxes

Income Taxes — The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts

and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open.

The Company’s tax returns for tax years in 2018 through 2020 remain subject to potential examination by the taxing authorities.

Earnings per Share

Earnings per Share — Basic earnings per share are calculated by dividing net income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Refer to the below table for additional details (tabular dollars in thousands except per share amounts):

	For the three months ended March 31,
	2022		2021
Net income	$	6,679	$	585
Income per share:
Basic	$	0.09	$	0.01
Diluted	$	0.09	$	0.01
Weighted average shares outstanding:
Basic		75,239		72,516
Effect of dilutive shared based awards		3,050		4,409
Diluted		78,289		76,925

Share-Based Payments

Share-Based Payments — The Company follows the provisions of ASC Topic 718 “Compensation — Stock Compensation” and related interpretations. As such, compensation cost is measured on the date of grant at the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the grants. On April 30, 2015, the Company adopted the 2015 Stock Incentive Plan. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2017 (note 15). As of March 31, 2022, total shares available are 4.6 million.

Cost of Sales

Cost of Sales — Cost of sales consists of the cost of concentrates and or liquid bases, the costs of raw materials utilized in the manufacture of products, co-packing fees, repacking fees, in-bound & out-bound freight charges, as well as certain internal transfer costs, warehouse expenses incurred prior to the manufacture of the Company’s finished products, inventory allowance for excess and obsolete products, and certain quality control costs. Raw materials account for the largest portion of the cost of sales. Raw materials include cans, bottles, other containers, flavors, ingredients and packaging materials.

Operating Expenses

Operating Expenses — Operating expenses include selling expenses such as warehousing expenses after manufacture, as well as expenses for advertising, samplings and in-store demonstrations costs, costs for merchandise displays, point-of-sale materials and premium items, sponsorship expenses, other marketing expenses and design expenses. Operating expenses also include such costs as payroll costs, travel costs, professional service fees (including legal fees), depreciation and other general and administrative costs.

Shipping and Handling Costs

Shipping and Handling Costs — Shipping and handling costs for freight expense on goods shipped are included in cost of sales. Freight expense on goods shipped for the three months ended March 31, 2022 and 2021 was approximately $3.2 million and $4.2 million, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company adopts all applicable, new accounting pronouncements as of the specified effective dates.

In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. In November 2018, the FASB issued ASU 2018-19, which makes certain improvements to Topic 326. In April and May 2019, the FASB issued ASUs 2019-04 and 2019-05, respectively, which adds codification improvements and transition relief for Topic 326. In November 2019, the FASB issued ASU 2019-10, which delays the effective date of Topic 326 for Smaller Reporting Companies to interim and annual periods beginning after December 15, 2022, with early adoption permitted. We have elected the relief provided. In November 2019, the FASB issued ASU 2019-11, which makes improvements to certain areas of Topic 326. In February 2020, the FASB issued ASU 2020-02, which adds an SEC paragraph, pursuant to the issuance of SEC Staff Accounting Bulletin No. 119, to Topic 326. Topic 326 is effective for the Company for fiscal years and interim reporting periods within those years beginning after December 15, 2022.

All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position except for the previously disclosed above, there have been no new accounting pronouncements not yet effective that have significance to our consolidated financial statements.

Liquidity

Liquidity — These financial statements have been prepared assuming the Company will be able to continue as a going concern. At March 31, 2022, the Company had an accumulated deficit of approximately $44.8 million which includes a net income available to common stockholders of approximately $6.7 million for three months ended March 31, 2022. During the three months ended March 31, 2022 the Company’s net cash provided by operating activities totaled approximately $9.1 million. As of March 31, 2021, the Company had an accumulated deficit of $54.8 million which includes a net income available to common stockholders of $0.6 million for the three months ended March 31, 2021. During the three months ended March 31, 2021 the Company’s net cash used in operating activities totaled approximately $13.3 million.

If our sales volumes do not meet our projections, expenses exceed our expectations, our plans change, we may be unable to generate enough cash flow from operations to cover our working capital requirements. In such case, we may be required to adjust our business plan, by reducing marketing, lower our working capital requirements and reduce other expenses or seek additional financing. Furthermore, our business and results of operations may be adversely affected by changes in the global macro-economic environment related to the pandemic and public health crises related to the COVID-19 outbreak.

Correction of Immaterial Errors — During the third quarter of 2021, the company performed immaterial corrections to the previously reported consolidated financial statements related to the Func Foods acquisition in 2019. Goodwill increased by $3.7 million and deferred tax liabilities increased by $3.5 million attributable to tax implications of acquired intangible assets that had not been recorded in the purchase accounting treatment acquisition. The impact on the consolidated statements of operations and comprehensive income for the year ended December 31, 2021, resulted in a $0.2 million deferred tax benefit.

Correction of previously issued financial statements — Subsequent to filing the Company’s Quarterly Reports on Form 10-Q for the periods ended June 30, 2021, and September 30, 2021, the Company determined that the calculation of expense of share based compensation related to grants of stock options and restricted stock units (“RSUs”) issued to former employees and retired directors was materially understated during the three-and six-month periods ended June 30, 2021 and three- and nine-month periods ended September 30, 2021 (the “Affected Periods”), based on the application of U.S. generally accepted accounting principles. During the Affected Periods, the stock options and RSUs were modified and the expense should have been calculated and recognized using the fair market value of the awards as of the date of modification and recognized over the remaining service period.

In accordance with Staff Accounting Bulletin ("SAB") No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the misstatements and based on an analysis of quantitative and qualitative factors determined that the impact of the misstatement to its interim reporting periods ending June 30, 2021, and September 30, 2021, was material. Accordingly, the Company has restated its interim consolidated financial statements for the three- and six-months ended June 30, 2021, and three- and nine- months ended September 30, 2021, respectively, and included that restated financial information within our annual report for the period ending December 31, 2021.

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of long-lived asset geographic data

The following table sets forth long-lived asset information, which includes property and equipment and right-of-use assets and excludes goodwill and intangibles, where individual countries represent a significant portion of the total:

	March 31,		December 31,
	2022		2021
United States	$	3,330	$	3,043
Sweden		1,314		1,050
Finland		419		301
Long-lived assets related to foreign operations		1,733		1,351
Total long-lived assets-net	$	5,063	$	4,394

Schedule of anti-dilutive shares

Refer to the below table for additional details (tabular dollars in thousands except per share amounts):

	For the three months ended March 31,
	2022		2021
Net income	$	6,679	$	585
Income per share:
Basic	$	0.09	$	0.01
Diluted	$	0.09	$	0.01
Weighted average shares outstanding:
Basic		75,239		72,516
Effect of dilutive shared based awards		3,050		4,409
Diluted		78,289		76,925

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REVENUE (Tables)

3 Months Ended

Mar. 31, 2022

Revenue

Schedule of net sales by reporting segment

Information about the Company’s net sales by geographical location for the three months ended March 31, 2022 and 2021 is as follows:

	For the three months ended
	March 31,		March 31,
	2022		2021
North America	$	123,473	$	39,003
Europe		8,495		10,368
Asia		966		536
Other		454		128
Net sales	$	133,388	$	50,035

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consist of the following at:

	March 31,			December 31,
	2022			2021
Finished goods	$	106,380		$	123,594
Raw Materials		80,310			70,201
Less: Inventory allowance for excess and obsolete products		(2,596	)		(2,573	)
Inventories	$	184,094		$	191,222

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NOTE RECEIVABLE (Tables)

3 Months Ended

Mar. 31, 2022

Note Receivable

Schedule of note receivable

Note receivable consists of the following at:

	March 31,		December 31,
	2022		2021
Note receivable-current	$	5,833	$	2,588
Note receivable-non-current		3,888		7,117
Total Note receivable	$	9,721	$	9,705

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LEASES (Tables)

3 Months Ended

Mar. 31, 2022

Leases

Schedule of Future Minimum Lease Payments

The future annual minimum lease payments required under the Company’s operating and finance lease liabilities as of March 31, 2022 are as follows:

	Operating			Finance
Future minimum lease payments	Leases			Leases			Total
2022	$	461		$	117		$	578
2023		570			67			637
2024		190			22			212
2025		10			83			93
2026		—			5			5
Total future minimum lease payments		1,231			294			1,525
Less: Amount representing interest		(65	)		(15	)		(80	)
Present value of lease liabilities		1,166			279			1,445
Less: current portion		(569	)		(141	)		(710	)
Long-term portion	$	597		$	138		$	735

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Property and equipment consist of the following at:

	March 31,			December 31,
	2022			2021
Merchandising equipment - coolers	$	3,561		$	3,052
Office Equipment		968			891
Vehicles		456			304
Less: accumulated depreciation		(1,283	)		(1,067	)
Total	$	3,702		$	3,180

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GOODWILL AND INTANGIBLES (Tables)

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of accumulated amortization of intangible assets

March 31, 2022 and December 31, 2021, respectively, were as follows:

	March 31,			December 31,
	2022			2021
Definite-lived intangible assets
Customer relationships	$	13,965		$	14,248
Less: accumulated amortization		(1,257	)		(1,140	)
Definite-lived intangible assets, net	$	12,708		$	13,108
Indefinite-lived intangible assets
Brands	$	3,130		$	3,193
Total Intangibles	$	15,838		$	16,301

Schedule future estimated amortization expense

The following is the future estimated annualized amortization expense related to customer relationships:

As of March 31, 2022:
2022	$	417
2023		559
2024		559
2025		559
2026		559
Thereafter		10,055
Total	$	12,708

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

Schedule of accounts payable and accrued expenses

Accounts payable and accrued expenses consist of the following at:

	March 31,		December 31,
	2022		2021
Accounts payable	$	50,541	$	35,821
Promotional allowances		31,227		19,037
Freight		12,512		15,872
Accrued expenses		12,769		15,311
Unbilled purchases		2,258		5,438
Total	$	109,307	$	91,479

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OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

Schedule of other current liabilities

Other current liabilities consist of the following at:

	March 31,		December 31,
	2022		2021
Other Liabilities-State Beverage Container Deposit	$	1,734	$	976
Total	$	1,734	$	976

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of black - scholes option-pricing model valuation assumption

The calculation of the fair value of the awards using the Black-Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:

	Three months ended March 31,
	2022	2021
Expected volatility	69.2% - 81.1%	69.18%-81.11%
Expected term	4.5 - 5.0 Years	4.49-5.00 Years
Risk-free interest rate	0.3% - 1.4%	0.32% - 1.39%
Forfeiture Rate	0.0%	0.0%

Schedule of outstanding stock options

A summary of the status of the Company’s outstanding stock options as of March 31, 2022 and changes during the periods ending on that date is as follows:

				Weighted Average						Weighted
	Shares			Exercise		Grant Date Fair		Aggregate Intrinsic		Average Remaining
	(000’s)			Price		Value		Value (000’s)		Term (Yrs)
Options
At December 31, 2021		3,600		$	7.47			$	241,515		6.37
Granted		—		$	—	$	—
Exercised		(209	)	$	4.02	$	48.44	$	80,500
Forfeiture and cancelled		(1	)	$	4.66
At March 31, 2022		3,390		$	7.68				161,015		6.26
Exercisable at March 31, 2022		2,560		$	5.59			$	126,964		5.78

Schedule of employee stock options outstanding

The following table summarizes information about employee stock options outstanding at March 31, 2022:

	Outstanding Options						Vested Options
	Number						Number
	Outstanding		Weighted		Weighted		Exercisable		Weighted		Weighted
Range of	at		Averaged		Averaged		at		Averaged		Averaged
Exercise	March 31,		Remaining		Exercise		March 31,		Exercise		Remaining
Price	2022 (000’s)		Life		Price		2022 (000’s)		Price		Life
$0.20 - $0.53		20		1.84	$	0.34		20	$	0.34		1.84
$0.65 - $1.80		100		2.91	$	1.05		100	$	1.05		2.91
$1.83 - $2.84		107		3.78	$	1.97		107	$	1.97		3.78
$3.20 - $6.20		2,783		6.18	$	4.16		2,208	$	4.21		5.87
$7.20-$60.00		380		8.68	$	37.15		125	$	37.33		8.69
Outstanding options		3,390		6.26	$	7.68		2,560	$	5.59		5.78

Schedule of restricted stock activity

A summary of the Company’s restricted stock activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022				March 31, 2021
			Weighted					Weighted
			Average					Average
			Grant Date					Grant Date
	Shares (000's)		Fair Value		Shares (000's)			Fair Value
Unvested at beginning of period		0.2	$	14.72		66		$	28.11
Transfers to restricted stock units		—		—		(46	)		34.02
Granted		—		—		—			—
Vested		—		—		—			22.30
Forfeiture and cancelled		—		—		—			—
Unvested at end of period		0.2	$	14.72		20		$	14.72

A summary of the Company’s restricted stock unit activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022					March 31, 2021
				Weighted					Weighted
				Average					Average
				Grant Date					Grant Date
	Shares (000's)			Fair Value		Shares (000's)			Fair Value
Unvested at beginning of period		566		$	52.66		—		$	—
Transfers from restricted stock awards		—			—		46			34.02
Granted		189			74.57		468			50.56
Vested		(111	)		51.10		—			—
Forfeited and cancelled		(18	)		54.88		(10	)		50.31
Unvested at end of period		626		$	59.50	$	504		$	49.06

Schedule of Stock-based Awards Issued to Non-employee Consultants

A summary of the Company’s PSU activity for the three months ended March 31, 2022 and 2021 is presented in the following table:

	For the three months ended
	March 31, 2022				March 31, 2021
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares (000's)		Fair Value		Shares (000's)		Fair Value
Unvested at beginning of period		15	$	64.65		—	$	—
Granted		—		—		—		—
Vested		—		—		—		—
Forfeited and cancelled		—		—		—		—
Unvested at end of period		15	$	64.65	$	—	$	—

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ORGANIZATION AND DESCRIPTION OF BUSINESS (Additional Information) (Details) - Func Food Group [Member]	3 Months Ended
	Mar. 31, 2022
Business Acquisition [Line Items]
Equity acquired	100.00%
Date of Acquisition	Oct. 25, 2019

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Total long-lived assets	$ 5,063	$ 4,394
Long-lived assets related to foreign operations	1,733	1,351
UNITED STATES
Total long-lived assets	3,330	3,043
SWEDEN
Long-lived assets related to foreign operations	1,314	1,050
FINLAND
Long-lived assets related to foreign operations	$ 419	$ 301

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ / shares in Units, shares in Thousands		3 Months Ended
		Mar. 31, 2022	Mar. 31, 2021
Accounting Policies [Abstract]
Net income		$ 6,679	$ 585
Income per share:
Basic		$ 0.09	$ 0.01
Diluted		$ 0.09	$ 0.01
Weighted average shares outstanding:
Basic		75,239	72,516
Effect of dilutive shared based awards		3,050	4,409
Diluted	[1]	78,289	76,925

[1] Please refer to Earnings Per Share section for further details.

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended			12 Months Ended
	Mar. 31, 2022	Sep. 30, 2021	Mar. 31, 2021	Dec. 31, 2021
Product Information [Line Items]
Allowance for doubtful accounts	$ 1,200,000			$ 800,000
Amount excess of FDIC limit	24,600,000
Inventory reserve	2,600,000			2,600,000
Impairment of long lived assets	0
Customer advances	0			0
Advertising expense	14,500,000		$ 5,300,000
Research and development expense	100,000		200,000
Exchange losses	200,000
Recognized foreign currency gains			0.3
Foreign Currency Translation	$ 500,000		200,000
Income tax benefit	50
Number of shares available	4,600,000
Freight expense	$ 3,200,000		4,200,000
Increase in deferred tax liabilities		$ 3,500,000
Impact On Deferred Tax Benefit				200,000
Accumulated deficit	44,811,000		(54,800,000)	$ 51,490,000
Net income	6,679,000		585,000
Net cash used in operating activities	$ (9,125,000)		$ 13,318,000
Change in Goodwill		$ 3,700,000
Amazon [Member]
Product Information [Line Items]
Accounts Receivable, Percentage			22.70%
Publix [Member]
Product Information [Line Items]
Accounts Receivable, Percentage	10.70%		10.30%
Stock Incentive Plan 2015 [Member]
Product Information [Line Items]
Percentage of provision for annual increase in shares	15.00%
Stock Incentive Plan 2015 [Member] | Maximum [Member]
Product Information [Line Items]
Number of shares available	5,000,000
Revenue Benchmark [Member] | Minimum [Member] | Customer Concentration Risk [Member] | Costco [Member]
Product Information [Line Items]
Concentration Risk, Percentage	17.50%
Revenue Benchmark [Member] | Minimum [Member] | Customer Concentration Risk [Member] | Amazon [Member]
Product Information [Line Items]
Concentration Risk, Percentage	10.30%		15.80%

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REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Net sales	$ 133,388	$ 50,035
North America [Member]
Net sales	123,473	39,003
Europe [Member]
Net sales	8,495	10,368
Asia [Member]
Net sales	966	536
Other [Member]
Net sales	$ 454	$ 128

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REVENUE (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues	$ 133,388	$ 50,035
License Agreement [Member]
Revenues	$ 500	300
Term of agreement	The term of the agreement is 50 years, with annual royalty fees due from Qifeng after the end of each calendar year. The royalty fees are based on a percentage of Qifeng’s sales of Celsius branded products; however, the fees are fixed for the first five years of the agreement, totaling approximately $6.9 million, and then are subject to annual guaranteed minimums over the remaining term of the agreement.
Royalty fees	$ 6,900
Foreign Revenues [Member]
Revenues	9,900	11,000
Foreign Revenues [Member] | SWEDEN
Revenues	$ 5,800	$ 6,500

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INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Finished goods	$ 106,380	$ 123,594
Raw Materials	80,310	70,201
Less: Inventory allowance for excess and obsolete products	(2,596)	(2,573)
Inventories	$ 184,094	$ 191,222

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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Prepaid Expenses And Other Current Assets
Prepaid Expense and Other Assets, Current	$ 10,042	$ 13,555

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NOTE RECEIVABLE (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Note Receivable
Note receivable-current	$ 5,833	$ 2,588
Note receivable-non-current	3,888	7,117
Total Note receivable	$ 9,721	$ 9,705

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NOTE RECEIVABLE (Details Narrative) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Investment agreement term	5 years
Note Receivable description	Scheduled principal payments plus accrued interest are due annually on March 31 of each year starting in 2020. The note receivable is recorded at amortized cost and accrues interest at a rate per annum equal to the weighted average of 5% of the outstanding principal up to $5 million and 2% of the outstanding principal above $5 million.
Weighted average interest rate	3.21%
Interest income	$ 0.1	$ 0.1
Instalment collateral shares	97,830
Debt instrument, Term	5 years
Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Weighted average interest rate	5.00%
Outstanding principal amount	$ 5.0
Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Weighted average interest rate	2.00%
Outstanding principal amount	$ 5.0
Investment Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payment for royalty fees	$ 6.9

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LEASES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
2022	$ 578
2023	637
2024	212
2025	93
2026	5
Total future minimum lease payments	1,525
Less: Amount representing interest	(80)
Present value of lease liabilities	1,445
Less: current portion	(710)
Long-term portion	735
Operating Leases
2022	461
2023	570
2024	190
2025	10
2026	0
Total future minimum lease payments	1,231
Less: Amount representing interest	(65)
Present value of lease liabilities	1,166
Less: current portion	(569)	$ (512)
Long-term portion	597	658
Finance Leases
2022	117
2023	67
2024	22
2025	83
2026	5
Finance Lease, Liability, Payment, Due, Total	294
Less: Amount representing interest	(15)
Present value of lease liabilities	279
Less: current portion	(141)	(157)
Long-term portion	$ 138	$ 45

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PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation	$ (1,283)	$ (1,067)
Total	3,702	3,180
Merchandising Equipment - Coolers [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	3,561	3,052
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	968	891
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 456	$ 304

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 245	$ 108

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GOODWILL AND INTANGIBLES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Definite-lived intangible assets
Customer relationships	$ 13,965	$ 14,248
Less: accumulated amortization	(1,257)	(1,140)
Definite-lived intangible assets, net	12,708	13,108
Indefinite-lived intangible assets
Brands	3,130	3,193
Total Intangibles	$ 15,838	$ 16,301

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GOODWILL AND INTANGIBLES (Details 1) $ in Thousands	Mar. 31, 2022 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2022	$ 417
2023	559
2024	559
2025	559
2026	559
Thereafter	10,055
Total	$ 12,708

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GOODWILL AND INTANGIBLES (Details Narrative) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets, Net (Including Goodwill)	$ 14.2		$ 14.5
Amortized over estimated useful life	25 years
Amortization expense	$ 0.1	$ 0.2

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ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accounts payable	$ 50,541	$ 35,821
Promotional allowances	31,227	19,037
Freight	12,512	15,872
Accrued expenses	12,769	15,311
Unbilled Purchases	2,258	5,438
Total	$ 109,307	$ 91,479

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OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Other Liabilities-State Beverage Container Deposit	$ 1,734	$ 976
Total	$ 1,734	$ 976

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RELATED PARTY TRANSACTIONS (Details Narrative)	3 Months Ended
	Mar. 31, 2022 USD ($)
CD Financial, LLC [Member] | Majority Shareholder [Member] | Building [Member]
Related Party Transaction [Line Items]
Monthly expense	$ 24,494

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STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)						3 Months Ended
	Jun. 14, 2021	Jun. 11, 2021	Jun. 11, 2021	Jun. 09, 2021	Jun. 09, 2021	Mar. 31, 2022	Mar. 31, 2021
Subsidiary, Sale of Stock [Line Items]
Proceeds from Options exercised						$ 810,000	$ 716,000
Number of options exercised			873,141			209,000
Sales of common stock				6,518,267
Share price				$ 0.001	$ 0.001
Public offering price					$ 62.50
Additional share purchase					977,740
Selling Stockholders [Member]
Subsidiary, Sale of Stock [Line Items]
Sales of common stock	6,257,455	739,188
Net Proceeds from sale of common stock	$ 375,447,300
Company [Member]
Subsidiary, Sale of Stock [Line Items]
Sales of common stock	1,133,953
Net Proceeds from sale of common stock	$ 67,769,386
Shares issued	1,133,953
Stock Incentive Plan 2015 [Member]
Subsidiary, Sale of Stock [Line Items]
Number of option shares granted						442,694	322,858
Proceeds from Options exercised						$ 800,000	$ 700,000
Number of options exercised						194,338	234,546

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INCOME TAXES (Details Narrative)	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Tax Credit, Percent	33.60%
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent	21.00%

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STOCK-BASED COMPENSATION (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Forfeiture Rate	0.00%	0.00%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	69.20%	69.18%
Risk-free interest rate	4 years 6 months	4 years 5 months 26 days
Risk-free interest rate	0.30%	0.32%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	81.10%	81.11%
Risk-free interest rate	5 years	5 years
Risk-free interest rate	1.40%	1.39%

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STOCK-BASED COMPENSATION (Details 1) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	12 Months Ended
	Jun. 11, 2021	Mar. 31, 2022	Dec. 31, 2021
Share-based Payment Arrangement [Abstract]
Options outstanding Balance at beginning		3,600,000
Weighted Average Exercise Price, Balance at beginning		$ 7.47
Aggregate Intrinsic Value Balance at beginning		$ 241,515
Weighted Average Remaining Term Beginning Balance			6 years 4 months 13 days
Options outstanding, Granted		0
Weighted Average Exercise Price, Granted		$ 0
Weighted Average Grant Date Fair Value Granted		$ 0
Options outstanding, Exercised	(873,141)	(209,000)
Weighted Average Exercise Price, Exercised		$ 4.02
Weighted Average Grant Date Fair Value Exercised		$ 48.44
Aggregate Intrinsic Value Exercised		$ 80,500
Options outstanding, Forfeiture and cancelled		(1,000)
Weighted Average Exercise Price, Forfeiture and cancelled		$ 4.66
Options outstanding, Balance at end		3,390,000	3,600,000
Weighted Average Exercise Price, Balance at end		$ 7.68	$ 7.47
Aggregate Intrinsic Value Balance at end		$ 161,015	$ 241,515
Weighted Average Remaining Term Ending Balance		6 years 3 months 3 days
Options outstanding, Exercisable at end		2,560,000
Weighted Average Exercise Price, Exercisable at end		$ 5.59
Aggregate Intrinsic Value Exercisable		$ 126,964
Weighted Average Remaining Term, exercisable		5 years 9 months 10 days

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STOCK-BASED COMPENSATION (Details 2)	3 Months Ended
	Mar. 31, 2022 $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number Outstanding at end | shares	3,390
Weighted Averaged Remaining Life	6 years 3 months 3 days
Weighted Averaged Exercise Price | $ / shares	$ 7.68
Number Exercisable at end | shares	2,560
Weighted Averaged Exercise Price | $ / shares	$ 5.59
Weighted Averaged Remaining Life	5 years 9 months 10 days
Range Of Exercise Price 1 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number Outstanding at end | shares	20
Weighted Averaged Remaining Life	1 year 10 months 2 days
Weighted Averaged Exercise Price | $ / shares	$ 0.34
Number Exercisable at end | shares	20
Weighted Averaged Exercise Price | $ / shares	$ 0.34
Weighted Averaged Remaining Life	1 year 10 months 2 days
Range Of Exercise Price 2 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number Outstanding at end | shares	100
Weighted Averaged Remaining Life	2 years 10 months 28 days
Weighted Averaged Exercise Price | $ / shares	$ 1.05
Number Exercisable at end | shares	100
Weighted Averaged Exercise Price | $ / shares	$ 1.05
Weighted Averaged Remaining Life	2 years 10 months 28 days
Range Of Exercise Price 3 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number Outstanding at end | shares	107
Weighted Averaged Remaining Life	3 years 9 months 10 days
Weighted Averaged Exercise Price | $ / shares	$ 1.97
Number Exercisable at end | shares	107
Weighted Averaged Exercise Price | $ / shares	$ 1.97
Weighted Averaged Remaining Life	3 years 9 months 10 days
Range Of Exercise Price 4 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number Outstanding at end | shares	2,783
Weighted Averaged Remaining Life	6 years 2 months 4 days
Weighted Averaged Exercise Price | $ / shares	$ 4.16
Number Exercisable at end | shares	2,208
Weighted Averaged Exercise Price | $ / shares	$ 4.21
Weighted Averaged Remaining Life	5 years 10 months 13 days
Range Of Exercise Price 5 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number Outstanding at end | shares	380
Weighted Averaged Remaining Life	8 years 8 months 4 days
Weighted Averaged Exercise Price | $ / shares	$ 37.15
Number Exercisable at end | shares	125
Weighted Averaged Exercise Price | $ / shares	$ 37.33
Weighted Averaged Remaining Life	8 years 8 months 8 days

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STOCK-BASED COMPENSATION (Details 3) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested at beginning of period	200	66,000
Unvested at beginning of period (in Dollars per share)	$ 14.72	$ 28.11
Transfers to restricted stock units	0	(46,000)
Restricted stock Transfers to restricted stock units(in Dollars per share)	$ 0	$ 34.02
Granted	0	0
Restricted stock granted (in Dollars per share)	$ 0	$ 0
Vested	0	0
Restricted stock vested (in Dollars per share)	$ 0	$ 22.30
Forfeiture and cancelled	0	0
Restricted stock Forfeiture and cancelled (in Dollars per share)	$ 0	$ 0
Unvested at end of period	200	20,000
Unvested at end of period (in Dollars per share)	$ 14.72	$ 14.72
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested at beginning of period	566,000	0
Unvested at beginning of period (in Dollars per share)	$ 52.66	$ 0
Transfers to restricted stock units	0	46,000
Restricted stock Transfers to restricted stock units(in Dollars per share)	$ 0	$ 34.02
Granted	189,000	468,000
Restricted stock granted (in Dollars per share)	$ 74.57	$ 50.56
Vested	(111,000)	0
Restricted stock vested (in Dollars per share)	$ 51.10	$ 0
Forfeiture and cancelled	(18,000)	(10,000)
Restricted stock Forfeiture and cancelled (in Dollars per share)	$ 54.88	$ 50.31
Unvested at end of period	626,000	504,000
Unvested at end of period (in Dollars per share)	$ 59.50	$ 49.06
Stock-based Awards Issued to Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested at beginning of period	15,000	0
Unvested at beginning of period (in Dollars per share)	$ 64.65	$ 0
Granted	0	0
Restricted stock granted (in Dollars per share)	$ 0	$ 0
Vested	0	0
Restricted stock vested (in Dollars per share)	$ 0	$ 0
Forfeiture and cancelled	0	0
Restricted stock Forfeiture and cancelled (in Dollars per share)	$ 0	$ 0
Unvested at end of period	15,000	0
Unvested at end of period (in Dollars per share)	$ 64.65	$ 0

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STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended
	Jan. 18, 2007	Apr. 30, 2015	Mar. 31, 2022	Mar. 31, 2021	Feb. 28, 2015	May 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available			4,600,000
Average share price (in dollars per share) (in Dollars per share)			$ 0
Unrecognized pre-tax non-cash compensation expense (in Dollars)			$ 6.6
Period unrecognized pre-tax non-cash compensation expense			1 year 8 months 12 days
Share-based compensation service or vesting period of grant			10 years
Options to purchase vested			3,400,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period unrecognized pre-tax non-cash compensation expense			3 months 18 days
Unrecognized compensation expense			$ 0.0	$ 0.2
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period unrecognized pre-tax non-cash compensation expense			2 years 4 months 24 days
Unrecognized compensation expense			$ 29.7	22.8
Stock-based Awards Issued to Non-employee Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period unrecognized pre-tax non-cash compensation expense			4 years 3 months 18 days
Fair value of shares vested			$ 0.1
Unrecognized compensation expense			0.9
Equity Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized pre-tax non-cash compensation expense (in Dollars)			$ 6.6
Period unrecognized pre-tax non-cash compensation expense			1 year 8 months 12 days
Vested [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of shares vested			$ 5.6
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-cash compensation expense (in Dollars)			$ 4.3	$ 3.6
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation service or vesting period of grant			2 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation service or vesting period of grant			3 years
Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Plan expiration term	10 years
Number of shares authorized		5,000,000			4,600,000
Stock incentive plan, description		In addition, there is a provision for an annual increase of 15% of the shares pertaining to the 2015 plan that are outstanding
Number of shares available			4,600,000
Issued options shares			3,400,000
Average share price (in dollars per share) (in Dollars per share)			$ 7.68
Fair value of shares issued (in Dollars)			$ 161.0
Purchase of common shares			0	303,750
Stock Incentive Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized		4,600,000			4,250,000	3,500,000	2,500,000
Stock Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized		5.1				4,250,000	3,500,000
Stock Incentive Plan 2015 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available			5,000,000