Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Securities Act 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, $0.001 par value | |
Trading Symbol | CELH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,789,201 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 595,476 | $ 614,159 |
Restricted cash | 38,105 | 38,768 |
Accounts receivable-net | 172,032 | 63,311 |
Note receivable-current | 3,587 | 2,979 |
Inventories-net | 154,280 | 173,289 |
Prepaid expenses and other current assets | 15,507 | 11,341 |
Deferred other costs-current | 14,124 | 14,124 |
Total current assets | 993,111 | 917,971 |
Note receivable | 0 | 3,574 |
Property and equipment-net | 12,054 | 10,185 |
Deferred tax asset | 482 | 501 |
Right of use assets-operating leases | 931 | 972 |
Right of use assets-finance leases | 191 | 208 |
Other long-term assets | 263 | 263 |
Deferred other costs-non-current | 258,931 | 262,462 |
Intangibles | 12,359 | 12,254 |
Goodwill | 13,949 | 13,679 |
Total Assets | 1,292,271 | 1,222,069 |
Current liabilities: | ||
Accounts payable and accrued expenses | 107,112 | 107,340 |
Accrued distributor termination fees | 1,063 | 3,986 |
Accrued promotional allowance | 68,225 | 35,977 |
Lease liability obligation-operating leases | 605 | 661 |
Lease liability obligation-finance leases | 69 | 70 |
Deferred revenue-current | 9,563 | 9,675 |
Other current liabilities | 5,094 | 3,586 |
Total current liabilities | 191,731 | 161,295 |
Long-term liabilities: | ||
Lease liability obligation-operating leases | 336 | 326 |
Lease liability obligation-finance leases | 156 | 162 |
Deferred tax liability | 19,250 | 15,919 |
Deferred revenue-non-current | 175,275 | 179,788 |
Total Liabilities | 386,748 | 357,490 |
Commitment and contingencies (Note 19) | ||
Mezzanine Equity: | ||
Series A convertible preferred shares, $0.001 par value, 5% cumulative dividends; 1,467 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively, aggregate liquidation preference of $550,000 as of March 31, 2023 and December 31, 2022, respectively | 824,488 | 824,488 |
Stockholders' Equity: | ||
Common stock, $0.001 par value; 100,000 shares authorized, 76,782 and 76,382 shares issued and outstanding at March 31, 2023 and December 31, 2022,respectively | 77 | 76 |
Additional paid-in capital | 279,872 | 280,668 |
Accumulated other comprehensive income (loss) | (1,287) | (1,881) |
Accumulated deficit | (197,627) | (238,772) |
Total Stockholders’ Equity | 81,035 | 40,091 |
Total Liabilities, Mezzanine Equity and Stockholders' Equity | $ 1,292,271 | $ 1,222,069 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 76,782,000 | 76,382,000 |
Common Stock, Shares, Outstanding | 76,782,000 | 76,382,000 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Cumulative Dividend Percentage | 5% | 5% |
Preferred Stock, Shares Issued | 1,467,000 | 1,467,000 |
Preferred Stock, Shares Outstanding | 1,467,000 | 1,467,000 |
Preferred Stock, Redemption Amount | $ 550,000 | $ 550,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 259,939 | $ 133,388 |
Cost of revenue | 146,121 | 79,494 |
Gross profit | 113,818 | 53,894 |
Selling, general and administrative expenses | 68,905 | 43,778 |
Income from operations | 44,913 | 10,116 |
Other Income (Expense): | ||
Interest income on note receivable | 45 | 78 |
Interest income (expense), net | 4,924 | (2) |
Foreign exchange loss | (118) | (162) |
Total other income (expense) | 4,851 | (86) |
Net income before income taxes | 49,764 | 10,030 |
Income tax expense | (8,537) | (3,351) |
Net income | 41,227 | 6,679 |
Less: dividends on Series A convertible preferred shares | (6,781) | 0 |
Net income attributable to common stockholders | 34,446 | 6,679 |
Other comprehensive loss: | ||
Foreign currency translation gain (loss) | 594 | (491) |
Comprehensive loss | $ 35,040 | $ 6,188 |
Earnings per share: | ||
Basic | $ 0.41 | $ 0.09 |
Diluted | $ 0.40 | $ 0.09 |
Weighted average common shares outstanding: | ||
Basic | 76,673 | 75,239 |
Diluted | 78,759 | 78,289 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity and Mezzanine Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Mezzanine Equity Member | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance, value at Dec. 31, 2021 | $ 217,046 | $ 75 | $ 267,847 | $ 614 | $ (51,490) | |
Beginning balance, shares at Dec. 31, 2021 | 74,909 | |||||
Share-based expense | 4,310 | 4,310 | ||||
Issuance of common stock pursuant to exercise of stock options - Cashless, shares | 248 | |||||
Issuance of common stock pursuant to exercise of stock options - Cash | 810 | 810 | ||||
Issuance of common stock pursuant to exercise of stock options - Cash, shares | 194 | |||||
Foreign currency translation | (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 | |||||
Beginning balance, value at Dec. 31, 2021 | 217,046 | $ 75 | 267,847 | 614 | (51,490) | |
Beginning balance, shares at Dec. 31, 2021 | 74,909 | |||||
Ending balance, value at Dec. 31, 2022 | 40,091 | $ 76 | $ 824,488 | 280,668 | (1,881) | (238,772) |
Ending balance, shares at Dec. 31, 2022 | 76,382 | 1,467 | ||||
Adoption of accounting standard | (82) | (82) | ||||
Share-based expense | 5,507 | 5,507 | ||||
Issuance of common stock pursuant to exercise of stock options - Cashless | 1 | $ 1 | ||||
Issuance of common stock pursuant to exercise of stock options - Cashless, shares | 251 | |||||
Issuance of common stock pursuant to exercise of stock options - Cash | 478 | 478 | ||||
Issuance of common stock pursuant to exercise of stock options - Cash, shares | 149 | |||||
Dividends paid to Series A convertible preferred shares | (6,781) | (6,781) | ||||
Foreign currency translation | 594 | 594 | ||||
Net income | 41,227 | 41,227 | ||||
Ending balance, value at Mar. 31, 2023 | $ 81,035 | $ 77 | $ 824,488 | $ 279,872 | $ (1,287) | $ (197,627) |
Ending balance, shares at Mar. 31, 2023 | 76,782 | 1,467 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ 41,227 | $ 6,679 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation | 404 | 245 |
Amortization | 145 | 141 |
Allowance for credit losses | 837 | 455 |
Amortization of deferred other costs | 3,531 | 0 |
Inventory excess and obsolescence | 1,672 | 2,596 |
Share-based payment expense | 5,507 | 4,310 |
Deferred income taxes | 2,873 | 2,561 |
Foreign exchange loss | 69 | 85 |
Changes in operating assets and liabilities: | ||
Accounts receivable-net | (109,639) | (34,420) |
Inventory-net | 17,338 | 4,531 |
Prepaid expenses and other current assets | (4,166) | 3,513 |
Accounts payable and accrued expenses | 182 | 5,552 |
Accrued promotional allowance | 32,248 | 12,190 |
Accrued distributor termination fees | (2,923) | 0 |
Other current liabilities | 1,508 | 765 |
Change in right of use and lease obligation-net | (15) | (78) |
Deferred revenue | (4,625) | 0 |
Other assets | (4) | 0 |
Net cash (used in) provided by operating activities | (13,831) | 9,125 |
Cash flows from investing activities: | ||
Proceeds from note receivable | 3,233 | 0 |
Purchase of property and equipment | (2,253) | (742) |
Net cash provided by (used in) investing activities | 980 | (742) |
Cash flows from financing activities: | ||
Principal payments on finance lease obligations | (11) | (20) |
Proceeds from exercise of stock options | 478 | 810 |
Dividends paid on preferred shares | (6,781) | 0 |
Net cash (used in) provided by financing activities | (6,314) | 790 |
Effect on exchange rate changes on cash and cash equivalents | (181) | 104 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (19,346) | 9,277 |
Cash, cash equivalents and restricted cash at beginning of the period | 652,927 | 16,255 |
Cash, cash equivalents and restricted cash at end of the period | 633,581 | 25,532 |
Supplemental cash flow disclosures: | ||
Taxes | 408 | 0 |
Interest | $ 0 | $ 2 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2023 | |
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. On August 1, 2022, the Company and PepsiCo Inc. ("Pepsi"), entered into multiple agreements, including a Securities Purchase Agreement (“Purchase Agreement”), Lock-Up Agreements, Registration Rights Agreement, a distribution agreement (“Distribution Agreement”), and a Channel Transition Agreement ("Transition Agreement"). The Securities Purchase Agreement, Lock-Up Agreements and Registration Rights Agreement pertain to the Company’s issuance of approximately 1.5 million shares of Series A Convertible Preferred Stock (“Series A” or “Series A Preferred Stock”) in exchange for cash proceeds of $ 550 million, excluding transaction costs. The Transition Agreement specifies payments to be made by Pepsi to Celsius for transitioning certain existing distribution rights to Pepsi. The Distribution Agreement resulted in Pepsi becoming the Company’s primary distribution supplier for the Company's products in the United States. See Note 13. Related Party Transactions and Note 14. Mezzanine Equity for more information. In connection with the Distribution Agreement and Transition Agreement, the Company terminated agreements with existing suppliers to transition territory rights to Pepsi. These expenses were recognized by the Company upon delivery of termination notices to the other distributors, in accordance with ASC Topic 420 Exit or Disposal Cost Obligations . The Company is engaged in the development, marketing, sale and distribution of “functional” calorie-burning energy drinks and liquid supplements under the Celsius® brand name. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
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 notes 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. The results for the three months ended March 31, 2023 are not necessarily indicative of the results expected for any future period or the full year. These unaudited consolidated financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the Amendment No. 1 to the Annual Report on Form 10-K/A (collectively our "2022 Annual Report"). These unaudited consolidated financial statements and the accompanying notes should be read in conjunction with the 2022 Annual Report. The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform with current period presentation in the consolidated financial statements. Accrued promotional allowance was reallocated from within Accounts payable and accrued expenses and is now reflected as a standalone line item in the consolidated balance sheets and consolidated statements of cashflows. Significant Estimates — The preparation of consolidated financial statements and accompanying disclosures in conformity with US GAAP 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 current expected credit losses, allowance for inventory obsolescence and sales returns, preferred share valuation, the useful lives of property and equipment, impairment of goodwill and intangibles, deferred tax asset valuation allowance, promotional allowance, and valuation of stock-based compensation. Additionally, the business and economic uncertainty resulting from the novel coronavirus (COVID-19) pandemic has made such estimates and assumptions more difficult to calculate. Accordingly, actual results and outcomes could differ from those estimates. 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 the Company has operations in several geographies, it operates as a single enterprise. The Company's 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 the Company's CODM focuses on consolidated results in making decisions and allocating resources is because of the significant economic interdependencies between the Company's 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. Revenue from our customers accounting for more than 10%, for the three months ended March 31, 2023 and 2022 are as follows: 2023 2022 Pepsi 60.2 % — Costco 12.9 % 17.5 % Amazon 8.4 % 10.3 % All other 18.5 % 72.2 % Total 100.0 % 100.0 % Accounts receivable from our customers accounting for more than 10%, for the three months ended March 31, 2023, and the year ended December 31, 2022, are as follows: 2023 2022 Pepsi 75.6 % 47.6 % Amazon 9.3 % 11.8 % All other 15.1 % 40.6 % Total 100.0 % 100.0 % Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and notes 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, 2023 and December 31, 2022, the Company had approximately $ 633.1 million and $ 652.4 million in excess of the Federal Deposit Insurance Corporation limit. Cash Equivalents — The Company considers all highly liquid instruments with original maturities of three months or less when purchased to be cash equivalents. At March 31, 2023 and December 31, 2022 , the Company did not have any investments with original maturities of three months or less. Restricted Cash — The Company received upfront payments from Pepsi during 2022, which are contractually restricted and can only be used to satisfy termination payments due to former distributors or must be repaid to Pepsi. These upfront payments received from Pepsi cannot be used for general operating activities of the Company and have been classified as restricted cash based on the terms of the Transition Agreement. See Note 4. Revenue for more information. Accounts Receivable and Current Expected Credit Losses — The Company is exposed to potential credit risks associated with its product sales and related accounts receivable, as it generally does not require collateral. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, a review of the current status of customers’ trade accounts receivables, and where available, a review of the financial strength and credit ratings of our larger customers. Customers are pooled based on sharing specific risk factors and the Company reassesses these customer pools on a periodic basis. The receivables allowance, is based on aging of the accounts receivable balances and forward-looking information. The Company uses the probability of default and forward-looking information to assess credit risk and estimates expected credit losses for its note receivable related to Qifeng Food Technology (Beijing) Co. Ltd ("Qifeng"). See Note 7. Note Receivable for more information on Qifeng and the note receivable. The Company determines expected credit losses using information such as its customers' credit history, financial condition, industry, credit reports, and current and future economic and market conditions. Allowances can be affected by changes in the industry, customer credit issues or customer bankruptcies when such events are reasonable and supportable. Historical information is used in addition to reasonable and supportable forecast periods. Allowance for Expected Credit Losses Balance as of December 31, 2022 $ 2,147 Current period change for expected credit losses ( 423 ) Balance as of March 31, 2023 $ 1,724 Inventories — Inventories are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. At March 31, 2023 and December 31, 2022, there was an inventory allowance for excess and obsolete products of approximately $ 6.8 million and $ 8.4 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, 2023 and 2022 . Long-lived Asset Geographic Data — The following table sets forth long-lived asset i nformation, 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, United States $ 11,423 $ 9,750 Sweden 1,299 1,251 Finland 424 363 Other 30 1 Long-lived assets related to foreign operations 1,753 1,615 Total long-lived assets-net $ 13,176 $ 11,365 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, and 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, 2023 and December 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 impairment exists. The addition of the Pepsi distribution network shifted the Company's focus to the US market and as a consequence it was determined that impairment indicators for the Func Food Brand's indefinite intangible asset were present. The Company no longer anticipates focusing on the expansion of Func Food branded products, therefore focusing on Celsius branded products. As a result of the strategic shift, the Company recorded an impairment charge in the third quarter of 2022. At March 31, 2023 , there were no indicators of impairment. Revenue Recognition — The Company recognizes revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers ("ASC 606") . Revenue is recognized 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. See Note 4. Revenue for more information. Deferred Revenue — The Company receives payments from certain distributors in new territories as reimbursement for contract termination costs paid to the prior distributors in those territories. Amounts received pursuant to these new and/or amended distribution agreements entered into with certain distributors relating to the costs associated with terminating the Company’s prior distributors, are accounted for as deferred revenue and recognized ratably over the anticipated life of the respective new distribution agreements. As of March 31, 2023, the Company had approximately $ 184.8 million in deferred revenue, of which $ 175.3 million is classified as deferred revenue-non-current and $ 9.6 million is classified as deferred revenue which are presented within the consolidated balance sheets and are contract liabilities related to Pepsi which are recognized ratably over the twenty-year agreement. Refer to Note 13. Related Party Transactions for more information. Accrued distributor termination fees — Termination charges related to certain of the Company’s prior distributors are included in selling and marketing expenses upon termination. Refer to Note 13. Related Party Transactions for more information. The Company also has accrued distributor termination fees of approximately $ 1.1 million related to distributors terminated as a result of the Pepsi agreement as well as payment due back to Pepsi in the amount of $ 37.0 million as the projected payments to the prior distributors was less than the payment received from Pepsi, which are located within accounts payable and accrued expenses, on the Company's consolidated balance sheets. See Note 11. Accounts Payable and Accrued Expenses for more information. 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 deferred revenue. 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, 2023 or December 31, 2022 , respectively. Advertising Costs — Advertising costs are expensed as incurred and charged to selling, general and administrative expenses. The Company mainly uses radio, local sampling events, sponsorships, endorsements, and digital advertising. During the three months ended March 31, 2023 and 2022, the Company incurred marketing and advertising expenses of approximately $ 31.0 million and $ 14.5 million , respectively. Research and Development — Research and development costs are charged to selling, 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 approximately $ 0.3 million and $ 0.1 million during the three months ended March 31, 2023 and 2022 , respectively. Foreign Currency Gain/Loss — 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 Statements of Operations as foreign exchange gains or losses. For the three months ended March 31, 2023 exchange losses have amounted to approximately $ 0.1 million while during the three months ended March 31, 2022, the Company recognized exchange losses of approximately $ 0.2 million mainly related to fluctuations in exchange rates. Translation gains and losses that arise from the translation of net assets from functional currency to the reporting currency, 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 gain during the three months ended March 31, 2023 of approximately $ 0.6 million and a net loss of approximately $ 0.5 million during the three months ended March 31, 2022. The Company's operations in different countries required that it transacts in the following currencies: Chinese-Yuan Hong Kong-Hong Kong Dollar Norwegian-Krone Swedish-Krona Finland-Euro United Kingdom-Pound Sterling Fair Value of Financial Instruments — The carrying value of cash and cash equivalents, accounts receivable, accounts payable, other current liabilities, note receivable and accrued expenses approximate fair value due to their relative short-term maturity and market interest rates. 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 requires 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 consolidated balance sheets 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 2020 through 2022 remain subject to potential examination by the taxing authorities. Earnings per Share —The Company computes earnings per share in accordance with ASC Topic 260 Earnings per Share (“ASC 260”), which requires earnings per share ("EPS") for each class of stock (common stock and participating preferred stock) to be calculated using the two-class method. The two-class method is an allocation of earnings (distributed and undistributed) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings for the reporting period are allocated between common stockholders and other security holders based on their respective participation rights in undistributed earnings. See Note 3. Earnings Per Share for more information. 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 (the "2015 Plan"). This 2015 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 other share-based awards for up to 5 million 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. See N ote 18. Stock-Based Compensation for more information . Cost of Revenue — Cost of Revenue 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 three months ended March 31, 2023 and 2022 was approximately $ 14.2 million and $ 3.2 million , respectively. Recent Accounting Pronouncements The Company adopts all applicable, new accounting pronouncements as of the specified effective dates. Effective January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, using a modified retrospective approach. ASU 2016-13 replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The guidance requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due. Upon adoption, changes in the allowance were not material for the transition period starting January 1, 2023 through the three months ended March 31, 2023 . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 3. EARNINGS PER SHARE The Company computes earnings per share in accordance with ASC 260, which requires EPS for each class of stock (common stock and participating preferred stock) to be calculated using the two-class method. The two-class method is an allocation of earnings (distributed and undistributed) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings for the reporting period are allocated between common shareholders and other security holders based on their respective participation rights in undistributed earnings. Basic earnings per common share is computed by dividing income or loss attributable to common stockholders by the weighted average number of shares of basic common stock outstanding. The Company’s Series A Convertible Preferred Stock is classified as a participating security in accordance with ASC 260. Net income allocated to the holders of Series A Convertible Preferred Stock was calculated based on the stockholders’ proportionate share of weighted average shares of common stock outstanding on an if-converted basis. For purposes of determining diluted earnings per common share, basic earnings per common share was further adjusted to include the effect of potential dilutive common shares outstanding, including unvested restricted stock and performance-based stock units, using the more dilutive of either the two-class method or the treasury stock method, and Series A Convertible Preferred Stock using the if-converted method. Stock options and warrants that were out-of-the-money were not included in the denominator for the calculation of diluted EPS. Under the two-class method of calculating diluted earnings per share, net income is reallocated to common stock, the Series A Convertible Preferred Stock, and all dilutive securities based on the contractual participating rights of the security to share in the current earnings as if all of the earnings for the period had been distributed. For the Three Months Ended March 31, 2023 2022 Numerator: Net income $ 41,227 $ 6,679 Less: dividends paid to Series A convertible preferred stockholders ( 6,781 ) — Undistributed income 34,446 — Income allocated to participating shares ( 2,934 ) — Net income attributable to common shareholders $ 31,512 $ 6,679 Denominator: Weighted average basic common shares outstanding 76,673 75,239 Dilutive effect of common shares 2,086 3,050 Weighted average diluted shares outstanding 78,759 78,289 Earnings per share: Basic 0.41 0.09 Dilutive 0.40 0.09 For the three months ended March 31, 2023 and 2022, 7.3 million and 3.1 million , respectively, of potentially dilutive securities were excluded from the computation of diluted net income per share related to common stockholders as their effect was antidilutive. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Revenue [Abstract] | |
REVENUE | 4. REVENUE The Company recognizes revenue in accordance with ASC 606. Revenue is recognized 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 promotional 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. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives that the Company offers to its customers and their customers. Additionally, for any agreements which are one 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. Promotional (Billback) Allowance The Company’s billback allowance programs with its distributors and/or retailers are executed through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described below and are of varying durations, typically ranging from one week to one year. The Company’s billbacks are calculated based on various programs with distributors and retail customers, and accruals are established for the Company’s anticipated liabilities. These accruals are based on agreed upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and/or distributor and retail customer performance levels. Differences between such estimated expenses and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined. Billbacks (variable consideration) recorded as a reduction to net sales primarily include consideration given to the Company’s distributors or retail customers including, but not limited to the following: • discounts granted off list prices to support price promotions to end-consumers by retailers; • reimbursements given to the Company’s distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products; • the Company’s agreed share of fees given to distributors and/or directly to retailers for advertising, in-store marketing and promotional activities; • the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers, club stores and/or wholesalers; • incentives given to the Company’s distributors and/or retailers for achieving or exceeding certain predetermined volume goals; • discounted products; • contractual fees given to the Company’s distributors related to sales made directly by the Company to certain customers that fall within the distributors’ sales territories; and • contractual fees given to distributors for items sold below defined pricing targets. For three months ended March 31, 2023 and 2022 , promotional allowance included as a reduction of revenue were $ 65.5 million and $ 35.4 million, respectively and accrued promotional allowances were $ 68.2 million . and $ 36.0 million as of March 31, 2023 and December 31, 2022, respectively. Information about the Company’s net sales by geographical location for the three months ended March 31, 2023 and 2022 is as follows: For the Three Months Ended March 31, 2023 2022 North America $ 248,552 $ 123,473 Europe 8,652 8,495 Asia 1,258 966 Other 1,477 454 Net sales $ 259,939 $ 133,388 All of the Company’s North America revenue is derived from the United States, which is the Company’s country of domicile. Total international revenues are approximately $ 11.4 million and $ 9.9 million for the three months ended March 31, 2023 and 2022, respectively, driven in large part by the addition of a number of flavor innovations. Sweden represented the largest foreign portion of total consolidated revenue of approximately $ 5.5 million and $ 5.8 million for the three months ended March 31, 2023 and 2022, respectively. Agreements with Pepsi The Company executed multiple agreements with Pepsi on August 1, 2022, including a Distribution Agreement relating to the sale and distribution of certain of the Company’s beverage products in existing channels and distribution methods in the United States, excluding certain existing customer accounts, sales channels, Puerto Rico and the US Virgin Islands (the “Territory”). Under the Distribution Agreement, the Company has granted Pepsi the right to sell and distribute its existing beverage products in existing channels and distribution methods and future beverage products that are added from time to time as licensed products under the Distribution Agreement in defined territories. The Distribution Agreement represents a master service agreement and can be cancelled by either party without cause in the nineteenth year of the term (i.e., 2041), the twenty-ninth year of the term (i.e., 2051) and each ten (10) year period thereafter (i.e., 2061, 2071, etc.) by providing twelve (12) months’ written notice on August 1st of each such year to the other party. Except for a termination by the Company “with cause” or a termination by Pepsi “without cause”, the Company is required to pay Pepsi certain compensation upon a termination as specified in the Distribution Agreement. The Company agreed to provide Pepsi a right of first offer in the event the Company intends to (i) manufacture, distribute or sell products in certain additional countries as specified in the Distribution Agreement or (ii) distribute or sell products in any future channels and distribution methods during the term of the Agreement. Additionally, pursuant to the Distribution Agreement, the Company and Pepsi agreed to use commercially reasonable efforts to negotiate and execute with Pepsi a distribution agreement reasonably consistent with the Distribution Agreement for the sale and distribution of the Products in Canada, and Pepsi agreed to meet and confer in good faith with the Company regarding the terms and conditions upon which Pepsi may be willing to sell or distribute the Products, either directly or through local sub-distributors in certain other additional countries. The Distribution Agreement includes other customary provisions, including non-competition covenants in favor of the Company, representations and warranties, indemnification provisions, insurance provisions and confidentiality provisions. The Company and Pepsi also executed the Transition Agreement, providing for the Company’s transition of certain existing distribution rights in the Territory to Pepsi. Under the terms of the Transition Agreement, Pepsi would pay the Company up to $ 250 million in multiple tranches to facilitate the Company’s transition of certain distribution rights to Pepsi. Amounts received from Pepsi were contractually restricted to only be used to pay termination fees due to other distributors; any excess cash received over amounts due to other distributors is to be refunded back to Pepsi. The Company received $ 227.8 million in payments from Pepsi. Accounting for the agreements executed with Pepsi. The Company evaluated the Securities Purchase Agreement, Transition Agreement, Distribution Agreement, and other agreements executed with Pepsi on August 1, 2022, as one combined contract since the agreements were executed on the same day, with the same counterparty, in contemplation of one another and contractual terms are defined and referenced across the agreements. These agreements will be referred to as the “Pepsi Arrangement” herein. Management concluded the Pepsi Arrangement was partially in the scope of ASC 606 and partially in the scope of ASC 505, Equity (“ASC 505") and ASC 480, Distinguishing liabilities from equity . The Company first applied the measurement and classification criteria in ASC 505 and ASC 480 with respect to the Company’s issuance of approximately 1.5 million shares of Series A Convertible Preferred Stock, as the substance of the issuance of the Series A Convertible Preferred Stock was determined to be a financing transaction. See Note 14. Mezzanine Equity for more information. After application of the measurement and classification principles in ASC 505, and ASC 480, the Company accounted for the residual revenue elements of the Pepsi Arrangement under ASC 606. The revenue elements of the Pepsi Arrangement consisted of (i) a $ 227.8 million upfront payment received from Pepsi under the Transition agreement and (ii) a $ 282.5 million implicit payment made to Pepsi by Celsius, representing the excess fair value over issuance proceeds received for the Series A Convertible Preferred Stock. The $ 227.8 million upfront payment received from Pepsi was only to be used by Celsius to transition territory rights from terminated distributors to Pepsi; any excess cash received from Pepsi over transition payments made by Celsius to the Company’s terminated distributors was contractually restricted and due back to Pepsi. As of March 31, 2023, the Company has recorded a refund liability of $ 37.0 million representing cash refunds due back to Pepsi and recognized $ 184.8 million as deferred revenues (a contract liability). As of December 31, 2022, the Company recorded a refund liability of $ 34.8 million in accounts payable and accrued expenses representing cash refunds due back to Pepsi and recognized the difference of $ 193.0 million as part of deferred revenues. The deferred revenues will be recognized by Celsius ratably over the twenty-year agreement term. The Company recognized $ 2.4 million and $ 4.2 million of deferred revenues in the consolidated statements of operations and comprehensive income for the three months ended March 31, 2023 and the year ended December 31, 2022, respectively. The $ 282.5 million excess fair value over issuance proceeds of the Series A Convertible Preferred Stock represents an implicit payment made to a customer. The Company concluded that this implicit payment meets the definition of an asset and has been recorded as a Deferred Other Cost current and non-current, in the Company's consolidated balance sheets. The Company will amortize the asset balance as contra-revenues ratably over a twenty-year period consistent with the term of the Distribution Agreement. The Company recognized contra-revenues of $ 3.5 million in the consolidated statements of operations and comprehensive income in the three months ended March 31, 2023 related to the upfront payment included in Deferred Other Cost current and non-current. The Company will assess the Deferred Other Cost asset for impairment at each reporting period. For product sales under the Distribution Agreement, the Company will recognize revenues when control of the underlying goods are transferred to Pepsi based on the contractual terms of noncancellable purchase orders issued by Pepsi. The Company’s customary revenue recognition policy as explained above is applied with respect to rebates. License Agreement In January 2019, the Company entered into a license and repayment of investment agreement with 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 Qifeng 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 $ 0.6 million and $ 0.5 million for the three months ended March 31, 2023 and 2022 , respectively, which is reflected in revenues from Asia. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 5. INVENTORIES Inventories consist of the following: March 31, December 31, Finished goods $ 110,525 $ 119,229 Raw Materials 50,558 62,491 Less: Inventory reserve ( 6,803 ) ( 8,431 ) Inventories $ 154,280 $ 173,289 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Prepaid Expenses And Other Current Assets [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets total approximately $ 15.5 million and $ 11.3 million at March 31, 2023 and December 31, 2022, respectively, consisting 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. |
NOTE RECEIVABLE
NOTE RECEIVABLE | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Note Receivable [Abstract] | |
NOTE RECEIVABLE | 7. NOTE RECEIVABLE Note receivable consists of the following: March 31, December 31, Note Receivable-current $ 3,587 $ 2,979 Note Receivable-non-current — 3,574 Total Note Receivable $ 3,587 $ 6,553 Effective January 1, 2019, the Company restructured its China distribution efforts by entering into two separate economic agreements as it relates to the commercialization of its Celsius products (i.e., the license and repayment of investment agreement with Qifeng, as described above). See Note 4. Revenue, for information regarding the license agreement with Qifeng. Under a separate economic agreement, Qifeng will repay the marketing investments made by Celsius into the China market through 2018, over a five-year period. The repayment, which was formalized via a note receivable from Qifeng (the "Note"), will need to be serviced even if the licensing agreement is cancelled or terminated. The Note is denominated in Chinese-Yuan. Scheduled principal payments plus accrued interest for the Note 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 initially 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, 2023 and 2022, interest income for the Note 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, based on historical experience of Qifeng’s ability to pay, the current economic environment, forward-looking information 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, 2023 and December 31, 2022, the Note was not deemed to be impaired. Payment in-full was received pertaining to the amounts due on March 31, 2023. As evidence of solvency for the Note, a stock certificate in Celsius Holding's Inc. which amounts to 30,000 of shares owned by an affiliate under common control of Qifeng is being held at a brokerage account. A letter of guarantee was executed with several restrictions regarding their shares. In particular, it was agreed that the stock would not be sold or transferred without the prior written consent from Celsius Holding's, Inc. There are other restrictions and agreements, which include that a statement of account will be provided to Celsius on a quarterly basis to confirm and validate the existence of the remaining shares. The shares serve as one component of management's consideration when evaluating impairment indicators. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Leases [Abstract] | |
LEASES | 8. LEASES The Company’s leasing activities include operating leases for its corporate office space from a related party (see Note 13. Related Party Transactions ) 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 is recognized on a straight-line basis over the lease term and is included in selling, general and administrative expenses. 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, 2023 are as follows: Operating Finance Future minimum lease payments Leases Leases Total 2023 $ 527 $ 65 $ 592 2024 376 40 416 2025 54 68 122 2026 31 65 96 2027 — — — Total future minimum lease payments 988 238 1,226 Less: Amount representing interest ( 47 ) ( 13 ) ( 60 ) Present value of lease liabilities 941 225 1,166 Less: current portion ( 605 ) ( 69 ) ( 674 ) Long-term portion $ 336 $ 156 $ 492 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 9. PROPERTY AND EQUIPMENT Property and equipment consist of the following: Estimated Useful Life in Years March 31, December 31, Merchandising equipment - coolers 3 - 7 $ 11,848 $ 9,885 Office equipment 3 - 7 1,158 1,124 Vehicles 5 1,524 1,257 Less: accumulated depreciation ( 2,476 ) ( 2,081 ) Total $ 12,054 $ 10,185 Depreciation expense amounted to approximately $ 0.4 million and $ 0.2 million for the three months ended March 31, 2023 and 2022 , respectively. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | 10. GOODWILL AND INTANGIBLES At March 31, 2023 and December 31, 2022, goodwill consists of approximately $ 13.9 million and $ 13.7 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, 2023 and December 31, 2022, respectively, were as follows: March 31, December 31, Definite-lived intangible assets Customer relationships $ 13,683 $ 13,418 Less: accumulated amortization ( 1,779 ) ( 1,610 ) Definite-lived intangible assets, net $ 11,904 $ 11,808 Indefinite-lived intangible assets Brands $ 2,984 $ 2,984 Less: Impairment ( 2,529 ) ( 2,538 ) Indefinite-lived intangible assets, net $ 455 $ 446 Total Intangibles $ 12,359 $ 12,254 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, 2023 and 2022 was approximately $ 0.1 million , and $ 0.1 million , respectively. Amortization expense is reflected in selling, general and administrative expenses. See Note 2. Basis of Presentation and Summary of Significant Accounting Policies , for more information regarding our indefinite-lived intangible asset, Brands. 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: 2023 $ 411 2024 547 2025 547 2026 547 2027 547 Thereafter 9,305 Total $ 11,904 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following: March 31, December 31, Accounts payable $ 16,536 $ 36,248 Due to Pepsi (1) 37,042 34,807 Accrued freight 1,717 8,532 Accrued expenses 36,443 19,081 Unbilled purchases 15,374 8,672 Total $ 107,112 $ 107,340 (1) See Note 13. Related Party Transactions for more information related to Pepsi. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
OTHER CURRENT LIABILITIES | 12. OTHER CURRENT LIABILITIES Other current liabilities consist of the following: March 31, December 31, Short-term VAT payable $ 320 $ 198 State Beverage Container Deposit 4,774 3,388 Total $ 5,094 $ 3,586 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Transactions with Pepsi As further described in Note 14. Mezzanine Equity , on August 1, 2022, the Company issued approximately 1.5 million shares of non-voting Series A Convertible Preferred stock (“Series A”) to Pepsi. On an as-converted basis the Series A held by Pepsi accounts for approximately 8.5 % of the Company’s outstanding Common Stock, on the date of issuance. Also, as discussed in Note 14, the Securities Purchase Agreement entered into on August 1, 2022 (the Purchase Agreement”) granted Pepsi the right to designate a nominee for election to the Company’s nine-member board of directors, so long as Pepsi meets certain ownership requirements with respect to the Company’s stock. During the year ended 2022, a Pepsi executive was nominated by Pepsi and elected to the Company’s board of directors. Based on Pepsi’s contractual representation rights for a seat on the Company’s Board of Directors, the Company has concluded that Pepsi represents a related party to the Company. The following transactions were recognized in the Company’s financial statements: • Net sales to Pepsi amounted to $ 156.5 million for three months ended March 31, 2023 and are included in revenue on the accompanying consolidated statements of operations and comprehensive income. • Estimated promotional allowance related to Pepsi was $ 32.8 million at March 31, 2023 and is included in accrued promotional allowance in the Company's consolidated balance sheets. • Accounts receivable due from Pepsi on March 31, 2023 and December 31, 2022, were $ 127.9 million and $ 31.6 million, respectively, and are included in accounts receivable, net on the Company’s consolidated balance sheets. • Pepsi paid the Company $ 227.8 million in cash under the Transition Agreement, during the year ended 2022. This amount was used to pay termination fees owed by the Company to terminated distributors. The Company has recorded deferred revenues of $ 184.8 million , which is presented net of $ 2.4 million of revenue recognized at March 31, 2023, and a liability payable, "due to Pepsi" of $ 37.0 million , and deferred revenues of $ 189.5 million, net of $ 4.2 million of revenue recognized at December 31, 2022, and a liability payable due to Pepsi of $ 34.8 million representing refund liabilities owed to Pepsi under the Transition Agreement which are included in accounts payable and accrued expenses on the accompanying consolidated balance sheets as of March 31, 2023 and December 31, 2022. • The issuance of Series A to Pepsi was recorded at fair value, determined to be $ 832.5 million, on August 1, 2022. Cash proceeds from the issuance of Series A received from Pepsi were $ 550 million. See Note 14. Mezzanine Equity for more information. • The Company recorded a $ 282.5 million asset as Deferred Other Costs, representing the excess of the $ 832.5 million fair value of the Series A Preferred Stock over the issuance proceeds of $ 550 million. Amounts representing the unamortized deferred other costs of $ 14.1 million and $ 258.9 million and $ 14.1 million and $ 262.5 million are presented in deferred other costs-current and deferred other costs-non-current, respectively, as of March 31, 2023 and December 31, 2022 in the consolidated balance sheets. Accumulated amortization accounted for $ 9.5 million at March 31, 2023 as an offset of revenue in the consolidated statements of operations and comprehensive income. No accumulated amortization was recognized during the three months ended March 31, 2022 related to the Series A Preferred Stock. See Notes 1. Organization and Description of Business, 2. Basis of Presentation and Summary of Significant Accounting Policies, 11. Accounts Payable and Accrued Expenses, and 14. Mezzanine Equity for more information. Related Party Leases The Company’s office is leased from a company affiliated with CD Financial, LLC which is controlled by one of our major stockholders. The lease extends until December 2024 with a monthly rent of $ 35 thousand . |
MEZZANINE EQUITY
MEZZANINE EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Mezzanine Equity [Abstract] | |
MEZZANINE EQUITY | 14. MEZZANINE EQUITY Series A Convertible Preferred Stock As of March 31, 2023 and December 31, 2022, the Company has designated and authorized approximately 1.5 million shares of Series A Convertible Preferred Stock with a par value of $ 0.001 per share and a stated value of $ 375 per share. The stated value per share may be increased from time-to-time in the event dividends on the Series A are paid-in-kind (“PIK dividends”) pursuant to the Series A Certification of Designation (the “Series A Certificate”). On August 1, 2022, pursuant to the Purchase Agreement, the Company issued approximately 1.5 million shares of Series A, representing 100 % of the authorized Series A shares, to Pepsi for stated cash consideration aggregating $ 550 million, excluding issuance costs. The Series A was issued concurrently with the execution of Distribution Agreement and the Transition Agreement. The Company determined that the aggregate fair value of the Series A on the issuance date was $ 832.5 million, or approximately $ 568 per share. Accordingly, the Series A Convertible Preferred Stock was recorded at that amount, net of issuance costs of $ 8.0 million, in the Company’s consolidated balance sheets and statements of changes in stockholders’ equity and mezzanine equity. Mezzanine Classification The Series A Convertible Preferred Stock is redeemable in the event of a change in control as defined in the Series A Certificate. S99-3A(2) of the SEC's Accounting Series Release No. 268 ("ASR 268") requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (i) at a fixed or determinable price on a fixed or determinable date, (ii) at the option of the holder, or (iii) upon the occurrence of an event that is not solely within the control of the issuer. Preferred securities that are mandatorily redeemable are required to be classified by the issuer as liabilities whereas under ASR 268, an issuer should classify a preferred security whose redemption is contingent on an event not entirely in control of the issuer as mezzanine equity. The Series A is not mandatorily redeemable, however, a change in control is not solely in control of the Company, and accordingly, the Company determined that mezzanine treatment is appropriate for the Series A and has presented it as such in our consolidated balance sheets and consolidated statements of changes in stockholders' equity and mezzanine equity as of and for the period ending March 31, 2023 and December 31, 2022. The Series A is not considered mandatorily redeemable. Pursuant to the Purchase Agreement, Pepsi, together with its affiliates, have certain rights and is also subject to various restrictions with respect to the percentage of the Company’s outstanding common shares on an as-converted basis through purchases of the Company’s Common Stock in the open market and the accumulation of PIK dividends. Additionally, pursuant to the Purchase Agreement, Pepsi has the right to designate one nominee for election to Company’s board of directors, for so long as Pepsi (together with its affiliates) beneficially owns at least approximately 3.7 million shares of the Company’s outstanding Common Stock on an as-converted basis. In August of 2022, the Company expanded the number of seats from eight to nine in connection with the election of a Pepsi representative to the Company’s board of directors. Liquidation Preference The Series A ranks, with respect to distribution rights and rights on liquidation, winding-up and dissolution, (i) senior and in priority of payment to the Company’s Common Stock, (ii) on parity with any class or series of capital stock of the Company expressly designated as ranking on parity with the Series A, and (iii) junior to any class or series of capital stock of the Company expressly designated as ranking senior to the Series A. The aggregate liquidation preference of the Series A is $ 550 million as of March 31, 2023 and December 31, 2022. Voting The Series A confers no voting rights, except as otherwise required by applicable law, and with respect to matters that adversely change the powers, preferences, privileges, rights or restrictions given to the Series A or provided for its benefit, or would result in securities that would be senior to or pari passu with the Series A. As described above, Pepsi does have a contractual right to representation on the Company’s Board of Directors, subject to certain shareholdings thresholds. Dividends The Series A entitles the holder to cumulative dividends, which are payable quarterly in arrears either in cash, in-kind, or a combination thereof, at the Company’s election (“Regular Dividends”). Regular Dividends accrue on each share Series A at the rate of 5.00 % per annum, subject to adjustment as set forth in the Series A Certificate. In addition to such quarterly Regular Dividends, shares of Series A also entitle the holder to participate in any dividends paid on the Company’s Common Stock on an as-converted basis. During the quarter ended March 31, 2023, the Company declared and paid $ 6.8 million in Regular Dividends on the Series A, which amounted to $ 4.62 per share of Series A. There are no cumulative undeclared dividends on the Series A at March 31, 2023. In addition, there were no dividends issued to common shareholders as of the three months ended March 31, 2023 and 2022. Redemption Pursuant to certain conditions set forth in the Series A Certificate, Series A may be redeemed at a price per share of Series A equal to the sum of (i) the stated value of such share of Series A as of the applicable Redemption Date, plus (ii) without duplication, all accrued and unpaid dividends previously added to the stated value of such share of Series A, and all accrued and unpaid dividends per share of Series A through such Redemption Date (the “Redemption Price”). Company’s Optional Redemption At any time from and after the earlier of (i) August 1, 2029, if the ten-day volume weighted average price of the Company’s Common Stock ( the “Ten-Day VWAP”) does not exceed the conversion price on the date immediately prior to the date the Company delivers a redemption notice to the holders, and (ii) the cancellation of the Distribution Agreement by the Company, if the Ten-Day VWAP does not exceed the Conversion Price on the date immediately prior to the date the Company delivers a redemption notice to the holders, the Company shall have the right to redeem all (and not less than all) of the then-outstanding shares of Series A, at the Redemption Price. In the event of a Company optional redemption, the Company shall affect such redemption by paying the entire Redemption Price on or before the date that is thirty days after the delivery of the Company’s redemption notice and by redeeming all the shares of Series A on such date. Change in Control Redemption In the event of (i) a sale or transfer, directly or indirectly, of all or substantially all of the assets of the Company in any transaction or series of related transactions (other than sales in the ordinary course of business); or (ii) any merger, consolidation or reorganization of the Company with or into any other entity or entities as a result of which the holders of the Company’s outstanding capital stock (on a fully-diluted basis) immediately prior to the merger, consolidation or reorganization no longer represent at least a majority of the voting power of the surviving or resulting Company or other entity; or (iii) any sale or series of sales, directly or indirectly, beneficially or of record, of shares of the Company’s capital stock by the holders thereof which results in any Person or group of Affiliated Persons owning capital stock holding more than 50 % of the voting power of the Company (a “Change in Control”) the Company (or its successor) shall redeem all (and not less than all) of the then-issued and outstanding shares of Series A. Upon such redemption, the Company will pay or deliver, as applicable, to each holder in respect of each share of Series A held by such holder, an amount equal to the greater of (A) cash in an amount equal to the Redemption Price and (B) the amount of cash and/or other assets (including securities) such holder would have received had each share of Series A held by such holder as of the close of business on the business day immediately prior to the effective date of such transaction resulting in a Change of Control, converted into a number of shares of Common Stock equal to the then-applicable Conversion Ratio and participated in such transaction resulting in such Change of Control as a holder of shares of Common Stock (such greater amount, the “Change of Control Redemption Price”). If, in connection with a transaction resulting in a Change of Control, the Company or its successor shall not have sufficient funds legally available under the Nevada law governing distributions to stockholders to redeem all outstanding shares of Series A, then the Company shall (A) redeem, pro rata among the holders, a number of shares of Series A equal to the number of shares of Series A that can be redeemed with the maximum amount legally available for the redemption of such shares of Series A under the Nevada law governing distributions to stockholders, and (B) redeem all remaining shares of Series A not redeemed because of the foregoing limitations at the applicable Change of Control Redemption Price as soon as practicable after the Company (or its successor) is able to make such redemption out of assets legally available for the purchase of such share of Series A. The inability of the Company (or its successor) to make a redemption payment for any reason shall not relieve the Company (or its successor) from its obligation to affect any required redemption when, as and if permitted by applicable law. Holder Right to Request Redemption On each of August 1, 2029, August 1, 2032, and August 1, 2035, the majority holders shall have the right, upon no less than six months prior written notice to the Company, to request that the Company redeem all (and not less than all) of the then-outstanding shares of Series A, at the Redemption Price. In the event of a holder optional redemption, the Redemption Price shall be payable, and the shares of Series A redeemed by the Company, in three equal installments, commencing on August 1, 2029, August 1, 2032, or August 1, 2035, as applicable, and in each case on the fifteenth- and thirtieth-month anniversary thereafter (each a "Redemption Date”). On each Redemption Date for a holder optional redemption, the Company shall redeem, on a pro rata basis in accordance with the number of shares of Series A owned by each holder, that number of outstanding shares of Series A determined by dividing (i) the total number of shares of Series A outstanding immediately prior to such Redemption Date by (ii) the number of remaining Redemption Dates (including the Redemption Date to which such calculation applies). If, on any Redemption Date, Nevada law governing distributions to stockholders or the terms of any indebtedness of the Company to banks and other financial institutions engaged in the business of lending money prevent the Company from redeeming all share of Series A to be redeemed, the Company shall ratably redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem the remaining shares as soon as it may lawfully do so under such law. 8 % per annum, (y) from such fifteenth-month anniversary of such Redemption Date until the thirtieth-month anniversary of such Redemption Date, the dividend rate with respect to such unredeemed share of Series A shall automatically increase to 10 % per annum and (z) from and after such thirtieth-month anniversary of such Redemption Date, the dividend rate with respect to any such unredeemed share of Series A shall automatically increase to 12 % per annum, in each case until such share is duly redeemed or converted. Conversion The shares of Series A may be converted into shares of the Company’s Common Stock pursuant to the Series A Certificate either at the option of the Company or subject to an automatic conversion as discussed below. The Series A was issued with a conversion price of $ 75 which is potentially subject to adjustment pursuant to the Series A Certificate. The Conversion Ratio is calculated as the quotient of (a) the sum of (x) the stated value of such share of Series A as of the applicable conversion date, plus (y) of all accrued and unpaid dividends previously added to the stated value of such share of Series A, and without duplication, all accrued and unpaid dividends per share of Series A through the applicable conversion date; divided by (b) the conversion Price as of the conversion date. As of March 31, 2023 , the conversion ratio of the Series A into common was 1 to 5 . At March 31, 2023 , approximately 7.3 million shares of the Company’s Common Stock are issuable upon conversion of the Series A Convertible Preferred Stock. Company Optional Conversion At any time from and after August 1, 2029, provided the Ten-Day VWAP immediately prior to the date the Company delivers a conversion notice to the holders of Series A exceeds the Conversion Price, the Company may elect to convert all, but not less than all, of the outstanding shares of Series A into shares of the Company’s Common Stock. Automatic Conversion The Series A will convert automatically into shares of the Company’s Common Stock upon the occurrence of any of the following, each, an “Automatic Conversion Event”: • Any date from and after the valid termination of the Distribution Agreement by the Company or Pepsi, if the Ten-Day VWAP immediately preceding such date exceeds the Conversion Price of such share as of such date. • Any date from and after August 1, 2028, on which (x) the Company’s products meet a market share requirement during a specified period (as defined in the Distribution Agreement) and (y) the Ten-Day VWAP immediately prior to such date exceeds the Conversion Price of such share as of such date. In the case of an automatic conversion, each share of Series A then outstanding shall be converted into the number of shares of Common Stock equal to the Conversion Ratio of such share in effect as of the automatic conversion date. The occurrence of an Automatic Conversion Event will terminate any right of the holder to receive a redemption at their request even if such request has already been submitted, provided that the Series A shares have not already been redeemed Other Accounting Matters The Company has adopted Accounting Standards Update 2020-06 (“ASU 2020-06”), effective January 1, 2022. The provisions of ASU 2020-06 prohibit the recognition of a beneficial conversion feature on preferred shares issued after the adoption of the ASU. The Company adopted ASU 2020-06 for the Preferred Series A for the year ended December 31, 2022. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 15. STOCKHOLDERS’ EQUITY Issuance of common stock pursuant to exercise of stock options and other awards During the three months ended March 31, 2023, the Company issued an aggregate of 0.4 million shares of its common stock pursuant to the exercise of stock options granted under the Company’s 2015 Plan. The Company received aggregate proceeds of approximately $ 0.5 million for 0.1 million options exercised for cash, with the balance of the options having been exercised on a “cashless” basis. During the three months ended March 31, 2022 , the Company issued an aggregate of 0.4 million shares of its common stock pursuant to the exercise of stock options granted under the Company's 2015 Plan. The Company received aggregate proceeds of approximately $ 0.8 million for 0.2 million options exercised for cash, with the balance of the options having been exercised on a “cashless” basis. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENTS | 16. 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. The Company engaged a third-party valuation firm to assist in determining the fair value of the approximately 1.5 million shares of Series A Convertible Preferred Stock issued on August 1, 2022. The Series A Convertible Preferred Stock is classified in mezzanine equity, see Note 14. Mezzanine Equity for more information . Mezzanine equity and the valuation of the Series A Convertible Preferred Stock represents a non-recurring fair value measurement. We used a Monte Carlo simulation model to determine the fair value of the Series A Convertible Preferred Stock on August 1, 2022. The Monte Carlo simulation utilized multiple input variables to determine the value of the Series A Convertible Preferred Stock including a volatility rate of 45 %, risk free interest rate of 2.69 %, 5.0 % dividend rate, the closing price of the Company’s common stock on the issuance date of $ 98.87 , a debt discount rate of 12.5 % and a discount for lack of marketability attributed to the registration period of the underlying stock. The selected historical volatility was based on Celsius and a certain peer group. The risk-free interest rate was based on the US STRIPS Rate with a corresponding term as of issuance date. The 5.0 % dividend rate is consistent with the provisions of the Series A Convertible Preferred Stock and with the Company’s past payments made in cash. The debt discount rate was based on estimated credit analysis and corresponding market yields as of the issuance date. The Company applied a nominal discount for lack of marketability with respect to the assumed registration period of the underlying shares. The following is a tabular presentation of the non-recurring fair value measurement along with the level within the fair value hierarchy: March 31, Level 1 Level 2 Level 3 Mezzanine equity: Series A convertible preferred shares $ — $ 824,488 $ — Total $ — $ 824,488 $ - Other than those noted previously, the Company did not have any other assets or liabilities measured at fair value at March 31, 2023 and December 31, 2022 . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME-TAXES | 17. INCOME TAXES In general, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability on the effective tax rates from quarter to quarter. The Company’s effective tax rate may change from period-to-period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation and state and local income taxes. The effective income tax rate for the three months ended March 31, 2023 was 17.2 %. The effective income tax rate for the three months ended March 31, 2023 differed from the statutory federal income tax rate of 21.0 % primarily due to windfall benefits on stock-based compensation awards, disallowed compensation expense and state 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. The Company is subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. The Company recognizes those tax positions that meet the more-likely-than-not recognition threshold and establishes tax reserves for uncertain tax positions that do not meet this threshold. Interest and penalties associated with income tax matters are included in the provision for income taxes in the consolidated statements of operations and comprehensive income. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | 18. STOCK-BASED COMPENSATION The Company adopted the 2006 Incentive Stock Plan on January 18, 2007. This plan was intended to provide incentives to 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 terminated 10 years after the adoption date, issued awards have their own schedule of terminations. The Company is no longer granting awards under this plan and there are no unvested awards as of March 31, 2023. The Company adopted the 2015 Plan on April 30, 2015. The 2015 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 million shares. In addition, there is a provision in the 2015 Plan for an annual increase to the maximum number of shares authorized under the 2015 Plan. The increase shall be added on the first day of the calendar year beginning January 1, 2016, equal to 15% of the number of shares outstanding as of such date. As of March 31, 2023, approximately 6.0 million shares are available for issuance under the 2015 Plan. See Note 15. Stockholders' Equity for more information. For the three months ended March 31, 2023 and 2022, the Company recognized an expense of approximately $ 5.5 million and $ 4.3 million , respectively, of non-cash compensation expense (included in selling, general and administrative expense in the accompanying consolidated statements of operations and comprehensive income). Stock Options 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 were options to purchase approximately 1.9 million shares that have vested as of March 31, 2023 and December 31, 2022. Upon exercise, shares of new common stock are issued by the Company . No options were issued during the three months ended March 31, 2023 and December 31, 2022. The Company determines the fair value of restricted stock-based awards based on the market price on the date of grant. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances and recognizes forfeitures as they occur. 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: March 31, 2023 (1) 2022 (1) 2021 Expected volatility NA NA 69.18 - 81.11 % Expected term NA NA 4.49 - 5.00 Years Risk-free interest rate NA NA 0.32 % - 1.39 % Forfeiture Rate NA NA 0.0 % (1) No stock options were issued for the three months ended March 31, 2023 and the year ended December 31, 2022 . A summary of the status of the Company’s outstanding stock options as of March 31, 2023 and changes during the periods ending on that date is as follows: Weighted Average Aggregate Weighted Shares Exercise Grant Date Intrinsic Average (000’s) Price Value (000’s) Term (Yrs) Options At December 31, 2022 2,266 $ 9.66 $ 213,914 5.43 Granted Exercised ( 249 ) 5.11 97.26 22,992 Forfeiture and cancelled ( 1 ) 14.53 At March 31, 2023 2,016 $ 10.22 $ 166,829 5.52 Exercisable at March 31, 2023 1,888 $ 8.42 $ 159,544 5.37 The following table summarizes information about employee stock options outstanding at March 31, 2023: Outstanding Options Vested Options Range of Exercise Price Number Outstanding at March 31, 2023 (000's) Weighted Average Remaining Life Weighted Average Exercise Price Number Exercisable at March 31, 2023 (000's) Weighted Average Exercise Price Weighted Average Remaining Life $0.34 - $1.05 30 0.58 $ 1.19 30 $ 0.58 1.19 $1.97 - $2.95 5 1.97 2.77 5 1.97 2.77 $3.23 - $4.85 1,389 3.81 5.07 1,389 3.81 5.07 $5.59 - $8.38 214 5.76 5.23 214 5.76 5.23 $14.53 - $21.79 61 14.53 7.34 40 14.53 7.34 $21.80 - $32.70 16 21.80 7.59 10 21.80 7.59 $42.64 - $63.96 301 42.67 7.76 200 42.67 7.76 Outstanding options 2,016 10.22 $ 5.52 1,888 $ 8.42 5.37 As of March 31, 2023 and 2022, the Company had approximately $ 2.4 million and $ 6.6 million, respectively, 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 0.7 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 the 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 award activity for the three months ended March 31, 2023 and 2022 is presented in the following table: Three Months Ended March 31, 2023 March 31, 2022 Weighted Weighted Average Average Grant Date Grant Date Shares Fair Value Shares Fair Value Unvested at beginning of period — $ — 0.2 $ 14.72 Transfers to restricted stock units — — — — Granted — — — — Vested — — — — Forfeited and cancelled — — Unvested at end of period — $ — 0.2 $ 14.72 There were no restricted stock awards granted, vested or outstanding during the three months ended March 31, 2023. Fair value of shares vested during the three months ended March 31, 2023 and 2022 was immaterial. There was no unrecognized compensation expense related to outstanding restricted stock awards for the three months ended March 31, 2023. Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2022 was approximately $ 0.0 million and was expensed over 0.3 years. 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, 2023 and 2022 is presented in the following table: Three Months Ended March 31, 2023 March 31, 2022 Weighted Weighted Average Average Grant Date Grant Date Shares (000's) Fair Value Shares (000's) Fair Value Unvested at beginning of period 539 $ 60.73 566 $ 52.66 Transfers to restricted stock awards — — — — Granted 124 103.17 189 74.57 Vested ( 157 ) 57.46 ( 111 ) 51.10 Forfeited and cancelled ( 31 ) 63.63 ( 18 ) 54.88 Unvested at end of period 475 $ 72.67 626 $ 59.50 The total fair value of shares vested during the three months ended March 31, 2023 and 2022 was approximately $ 16.2 million and $ 5.6 million, respectively. Un recognized compensation expense related to outstanding restricted stock units to employees and directors as of March 31, 2023 and 2022 was $ 27.5 million and $ 29.7 million, respectively, and is expected to be expensed over the next 2.2 years. Performance-based Stock Awards The Company issued 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. Some of 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) and some of the awards are linked to employees of the Company and have specific performance-based metrics to be met in year one and year two of the issuance. 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. In the third quarter of 2022, the Human Resources and Compensation Committee of the Board of Directors approved the issuance of “Performance-based RSUs” to certain employees which represented restricted share units with performance-based vesting. The aggregate grant date fair value of $ 7.5 million included an immediate vesting of 20 % of the shares as well as specific performance-based metrics to be met in year one and year two of the issuance. The Company believes the performance-based metrics are probable of being a chieved and will recognize expense each tranche of the awards separately using the accelerated attribution method according to ASC 718. A summary of the Company’s PSU activity for the three months ended March 31, 2023 and 2022 is presented in the following table: Three Months Ended March 31, 2023 March 31, 2022 Weighted Weighted Average Average Grant Date Grant Date Shares (000's) Fair Value Shares (000's) Fair Value Unvested at beginning of period 76 $ 91.48 15 $ 64.65 Granted — — — — Vested — — — — Forfeited and cancelled — — — — Unvested at end of period 76 $ 91.48 15 $ 64.65 Unrecognized compensation expense related to outstanding PSUs issued to employees and non-employee consultants as of March 31, 2023 and 2022 was approximately $ 3.2 million and $ 0.9 million, respectively, and is expected to be expensed over the nex t 1.4 y ears. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 19. COMMITMENTS AND CONTINGENCIES Legal 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, 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. No fact discovery was conducted on the merits. On October 12, 2022, the Company and Mr. Prescod notified the court that an agreement in principle to settle had been reached to resolve the case, in connection with the Hezi matter described below. On November 23, 2021, a case related to the Prescod Litigation, Amit Heli and Joseph Nina v. Celsius Holdings, Inc. was filed in the United States District Court for the Southern District of New York, Case No. 1:21-cv-09892. The Company answered the complaint on February 11, 2022. Like the Prescod Litigation, the plaintiffs in this case allege that the Company’s use of citric acid in its products while simultaneously claiming “no preservatives” constitutes false advertising and unfair or deceptive trade practices. Unlike the Prescod Litigation, in this case the violations alleged are of New York’s General Business Law. As with the Prescod Litigation, 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. On October 12, 2022, the Company and Mr. Prescod notified the courts that an agreement in principle to settle had been reached to resolve the Prescod and Hezi case for an aggregate amount of $ 7.8 million. The Company and Mr. Prescod submitted the settlement agreement to the court, which entered its preliminary approval on November 23, 2022, and set a final Fairness Hearing for March 31, 2023, for judicial approval. On March 31, 2023, the District Court of the Southern District of New York issued its order granting final approval of the settlement. As of March 31, 2023 and December 31, 2022, $ 7.8 million was accrued and included in accounts payable and accrued expenses in the consolidated balance sheet. Celsius paid the balance of the $ 7.8 million to the Settlement Administrator on April 17, 2023. On January 8, 2021, the Company 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. Subsequent to January 8, 2021, the Company received subpoenas for production of documents in connection with the matter. The investigation and requests from the SEC do not represent that the SEC has concluded that the Company or anyone else has violated the federal securities laws. The Company has cooperated and will continue to cooperate with the SEC staff in its investigation and requests. At this time, however, the Company 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 16, 2022, Christian McCallion filed a class action lawsuit against the Company in the United States District Court for the Southern District of Florida. Plaintiff McCallion asserts that because of the Company's 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 and as a result, class members suffered significant losses and damages. On June 6, 2022 Judge Middlebrooks appointed a lead class plaintiff and the Company filed its Motion to Dismiss on August 5, 2022. On March 22, 2023, the motion to dismiss was granted in part and denied in part, and discovery has commenced with anticipated summary judgment motions later this year. 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. The Company does not believe it has 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. On January 11, 2023, Doreen R. Lampert filed a derivative stockholder complaint against certain of the Company’s directors and a former officer and, nominally, against the Company, in the United Stated District Court of the District of Nevada. Plaintiff Lampert asserts that the same allegations giving rise to the McCallion class action lawsuit also support claims for breach of fiduciary duty against the directors and former officer, among other claims. The deadline to respond to the complaint will be April 20, 2023. The parties agreed to stay this action pending the close of discovery in the McCallion matter. The Company does not believe its directors or former officer have breached any fiduciary duties or are otherwise liable under the theories plead in the complaint and the Company intends to contest the claims vigorously on the merits. On May 4, 2021, Plaintiffs Strong Arm Productions USA, Inc., Tramar Dillard p/k/a Flo Rida, and D3M Licensing Group, LLC filed a lawsuit against the Company in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida. Plaintiffs asserted that the Company breached two endorsement and licensing agreements that were entered into between Plaintiffs and the Company in 2014 and 2016. Plaintiffs alleged the Company had reached certain revenue and sales benchmarks set forth in the 2014 agreement that entitled them to receive 750,000 shares of the Company's stock. In addition, Plaintiffs claimed they were entitled to receive unspecified royalties under the 2016 agreement. A jury trial commenced on this matter on January 10, 2023. On January 18, 2023, the jury rendered a verdict against the Company for $ 82.6 million in compensatory damages. On April 27, 2023, the trial court denied the Company's filed post-trial motions which sought (i) judgment in favor of the Company dismissing the case notwithstanding the verdict based on the plain language of the contracts at issue; (ii) in the alternative, granting a new trial due to the numerous errors at trial; or (iii) in the alternative, reducing the award of damages to $ 2.1 million, which reflects the Company’s stock price on the date that the jury found the relevant revenue and sales benchmarks at issue were met. The Company filed a notice of appeal to the Fourth District Court of Appeal for the State of Florida on February 21, 2023. The judgment will accrue post-judgement interest at 5.52 percent per year as of February 13, 2023. As a result, we believe that the likelihood that the amount of the judgment will be affirmed is not probable. We currently estimate a range of possible outcomes between $ 2.1 million and $ 82.6 million plus interest, and we have accrued a liability as of March 31, 2023 and December 31, 2022, reflected in accounts payable and accrued expenses in the consolidated balance sheets, at the lower end of the range, which is the amount we believe is the most likely estimate for a probable loss on this matter. The ultimate loss to the Company of the litigation matter could be materially different from the amount the Company has accrued. The Company cannot predict or estimate the duration or ultimate outcome of this matter. Commitments 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. If management makes the decision to terminate an agreement without cause, an estimate of expected damages is accrued, and an expense is recorded within operating expenses during the period in which termination was initiated. As of March 31, 2023 and December 31, 2022, we have contingent commitment to third parties of $ 29.3 million and $ 30.7 million, respectively. Our guarantees are primarily related to third party suppliers and have arisen through the normal course of business. The contingent commitments may have various terms, and none are individually significant. Additionally, our business and results of operations may be adversely affected by the business and economic uncertainty resulting from the pandemic and public health crises related to COVID-19, which is affecting the macro-economic environment. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date the consolidated financial statements are issued. Except for the matters discussed in Note 19. Commitments and Contingencies , there were no other subsequent events that would have required adjustment or disclosure in the consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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 notes 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. The results for the three months ended March 31, 2023 are not necessarily indicative of the results expected for any future period or the full year. These unaudited consolidated financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the Amendment No. 1 to the Annual Report on Form 10-K/A (collectively our "2022 Annual Report"). These unaudited consolidated financial statements and the accompanying notes should be read in conjunction with the 2022 Annual Report. The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform with current period presentation in the consolidated financial statements. Accrued promotional allowance was reallocated from within Accounts payable and accrued expenses and is now reflected as a standalone line item in the consolidated balance sheets and consolidated statements of cashflows. |
Significant Estimates | Significant Estimates — The preparation of consolidated financial statements and accompanying disclosures in conformity with US GAAP 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 current expected credit losses, allowance for inventory obsolescence and sales returns, preferred share valuation, the useful lives of property and equipment, impairment of goodwill and intangibles, deferred tax asset valuation allowance, promotional allowance, and valuation of stock-based compensation. Additionally, the business and economic uncertainty resulting from the novel coronavirus (COVID-19) pandemic has made such estimates and assumptions more difficult to calculate. Accordingly, actual results and outcomes could differ from those estimates. |
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 the Company has operations in several geographies, it operates as a single enterprise. The Company's 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 the Company's CODM focuses on consolidated results in making decisions and allocating resources is because of the significant economic interdependencies between the Company's 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. Revenue from our customers accounting for more than 10%, for the three months ended March 31, 2023 and 2022 are as follows: 2023 2022 Pepsi 60.2 % — Costco 12.9 % 17.5 % Amazon 8.4 % 10.3 % All other 18.5 % 72.2 % Total 100.0 % 100.0 % Accounts receivable from our customers accounting for more than 10%, for the three months ended March 31, 2023, and the year ended December 31, 2022, are as follows: 2023 2022 Pepsi 75.6 % 47.6 % Amazon 9.3 % 11.8 % All other 15.1 % 40.6 % Total 100.0 % 100.0 % Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and notes 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, 2023 and December 31, 2022, the Company had approximately $ 633.1 million and $ 652.4 million in excess of the Federal Deposit Insurance Corporation limit. |
Cash Equivalents | Cash Equivalents — The Company considers all highly liquid instruments with original maturities of three months or less when purchased to be cash equivalents. At March 31, 2023 and December 31, 2022 , the Company did not have any investments with original maturities of three months or less. |
Restricted Cash | Restricted Cash — The Company received upfront payments from Pepsi during 2022, which are contractually restricted and can only be used to satisfy termination payments due to former distributors or must be repaid to Pepsi. These upfront payments received from Pepsi cannot be used for general operating activities of the Company and have been classified as restricted cash based on the terms of the Transition Agreement. See Note 4. Revenue for more information. |
Accounts Receivable and Current Expected Credit Losses | Accounts Receivable and Current Expected Credit Losses — The Company is exposed to potential credit risks associated with its product sales and related accounts receivable, as it generally does not require collateral. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, a review of the current status of customers’ trade accounts receivables, and where available, a review of the financial strength and credit ratings of our larger customers. Customers are pooled based on sharing specific risk factors and the Company reassesses these customer pools on a periodic basis. The receivables allowance, is based on aging of the accounts receivable balances and forward-looking information. The Company uses the probability of default and forward-looking information to assess credit risk and estimates expected credit losses for its note receivable related to Qifeng Food Technology (Beijing) Co. Ltd ("Qifeng"). See Note 7. Note Receivable for more information on Qifeng and the note receivable. The Company determines expected credit losses using information such as its customers' credit history, financial condition, industry, credit reports, and current and future economic and market conditions. Allowances can be affected by changes in the industry, customer credit issues or customer bankruptcies when such events are reasonable and supportable. Historical information is used in addition to reasonable and supportable forecast periods. Allowance for Expected Credit Losses Balance as of December 31, 2022 $ 2,147 Current period change for expected credit losses ( 423 ) Balance as of March 31, 2023 $ 1,724 |
Inventories | Inventories — Inventories are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. At March 31, 2023 and December 31, 2022, there was an inventory allowance for excess and obsolete products of approximately $ 6.8 million and $ 8.4 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, 2023 and 2022 . |
Long-lived Asset Geographic Data | Long-lived Asset Geographic Data — The following table sets forth long-lived asset i nformation, 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, United States $ 11,423 $ 9,750 Sweden 1,299 1,251 Finland 424 363 Other 30 1 Long-lived assets related to foreign operations 1,753 1,615 Total long-lived assets-net $ 13,176 $ 11,365 |
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, and 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, 2023 and December 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 impairment exists. The addition of the Pepsi distribution network shifted the Company's focus to the US market and as a consequence it was determined that impairment indicators for the Func Food Brand's indefinite intangible asset were present. The Company no longer anticipates focusing on the expansion of Func Food branded products, therefore focusing on Celsius branded products. As a result of the strategic shift, the Company recorded an impairment charge in the third quarter of 2022. At March 31, 2023 , 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 ("ASC 606") . Revenue is recognized 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. See Note 4. Revenue for more information. |
Deferred Revenue | Deferred Revenue — The Company receives payments from certain distributors in new territories as reimbursement for contract termination costs paid to the prior distributors in those territories. Amounts received pursuant to these new and/or amended distribution agreements entered into with certain distributors relating to the costs associated with terminating the Company’s prior distributors, are accounted for as deferred revenue and recognized ratably over the anticipated life of the respective new distribution agreements. As of March 31, 2023, the Company had approximately $ 184.8 million in deferred revenue, of which $ 175.3 million is classified as deferred revenue-non-current and $ 9.6 million is classified as deferred revenue which are presented within the consolidated balance sheets and are contract liabilities related to Pepsi which are recognized ratably over the twenty-year agreement. Refer to Note 13. Related Party Transactions for more information. |
Accrued distributor termination fees | Accrued distributor termination fees — Termination charges related to certain of the Company’s prior distributors are included in selling and marketing expenses upon termination. Refer to Note 13. Related Party Transactions for more information. The Company also has accrued distributor termination fees of approximately $ 1.1 million related to distributors terminated as a result of the Pepsi agreement as well as payment due back to Pepsi in the amount of $ 37.0 million as the projected payments to the prior distributors was less than the payment received from Pepsi, which are located within accounts payable and accrued expenses, on the Company's consolidated balance sheets. See Note 11. Accounts Payable and Accrued Expenses for more information. |
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 deferred revenue. 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, 2023 or December 31, 2022 , respectively. |
Advertising Costs | Advertising Costs — Advertising costs are expensed as incurred and charged to selling, general and administrative expenses. The Company mainly uses radio, local sampling events, sponsorships, endorsements, and digital advertising. During the three months ended March 31, 2023 and 2022, the Company incurred marketing and advertising expenses of approximately $ 31.0 million and $ 14.5 million , respectively. |
Research and Development | Research and Development — Research and development costs are charged to selling, 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 approximately $ 0.3 million and $ 0.1 million during the three months ended March 31, 2023 and 2022 , respectively. |
Foreign Currency Gain/Losses | Foreign Currency Gain/Loss — 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 Statements of Operations as foreign exchange gains or losses. For the three months ended March 31, 2023 exchange losses have amounted to approximately $ 0.1 million while during the three months ended March 31, 2022, the Company recognized exchange losses of approximately $ 0.2 million mainly related to fluctuations in exchange rates. Translation gains and losses that arise from the translation of net assets from functional currency to the reporting currency, 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 gain during the three months ended March 31, 2023 of approximately $ 0.6 million and a net loss of approximately $ 0.5 million during the three months ended March 31, 2022. The Company's operations in different countries required that it transacts in the following currencies: Chinese-Yuan Hong Kong-Hong Kong Dollar Norwegian-Krone Swedish-Krona Finland-Euro United Kingdom-Pound Sterling |
Fair Value of Financial Instruments | Fair Value of Financial Instruments — The carrying value of cash and cash equivalents, accounts receivable, accounts payable, other current liabilities, note receivable and accrued expenses approximate fair value due to their relative short-term maturity and market interest rates. |
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 requires 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 consolidated balance sheets 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 2020 through 2022 remain subject to potential examination by the taxing authorities. |
Earnings per Share | Earnings per Share —The Company computes earnings per share in accordance with ASC Topic 260 Earnings per Share (“ASC 260”), which requires earnings per share ("EPS") for each class of stock (common stock and participating preferred stock) to be calculated using the two-class method. The two-class method is an allocation of earnings (distributed and undistributed) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings for the reporting period are allocated between common stockholders and other security holders based on their respective participation rights in undistributed earnings. See Note 3. Earnings Per Share for more information. |
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 (the "2015 Plan"). This 2015 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 other share-based awards for up to 5 million 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. See N ote 18. Stock-Based Compensation for more information . |
Cost of Revenue | Cost of Revenue — Cost of Revenue 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 three months ended March 31, 2023 and 2022 was approximately $ 14.2 million and $ 3.2 million , respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company adopts all applicable, new accounting pronouncements as of the specified effective dates. Effective January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, using a modified retrospective approach. ASU 2016-13 replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The guidance requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due. Upon adoption, changes in the allowance were not material for the transition period starting January 1, 2023 through the three months ended March 31, 2023 . |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of revenue & accounts receivable with customers | Revenue from our customers accounting for more than 10%, for the three months ended March 31, 2023 and 2022 are as follows: 2023 2022 Pepsi 60.2 % — Costco 12.9 % 17.5 % Amazon 8.4 % 10.3 % All other 18.5 % 72.2 % Total 100.0 % 100.0 % Accounts receivable from our customers accounting for more than 10%, for the three months ended March 31, 2023, and the year ended December 31, 2022, are as follows: 2023 2022 Pepsi 75.6 % 47.6 % Amazon 9.3 % 11.8 % All other 15.1 % 40.6 % Total 100.0 % 100.0 % |
Schedule of Allowance for Exepected Credit Losses | The Company determines expected credit losses using information such as its customers' credit history, financial condition, industry, credit reports, and current and future economic and market conditions. Allowances can be affected by changes in the industry, customer credit issues or customer bankruptcies when such events are reasonable and supportable. Historical information is used in addition to reasonable and supportable forecast periods. Allowance for Expected Credit Losses Balance as of December 31, 2022 $ 2,147 Current period change for expected credit losses ( 423 ) Balance as of March 31, 2023 $ 1,724 |
Schedule of Long-Lived Assets by Geographic Areas | The following table sets forth long-lived asset i nformation, 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, United States $ 11,423 $ 9,750 Sweden 1,299 1,251 Finland 424 363 Other 30 1 Long-lived assets related to foreign operations 1,753 1,615 Total long-lived assets-net $ 13,176 $ 11,365 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Under the two-class method of calculating diluted earnings per share, net income is reallocated to common stock, the Series A Convertible Preferred Stock, and all dilutive securities based on the contractual participating rights of the security to share in the current earnings as if all of the earnings for the period had been distributed. For the Three Months Ended March 31, 2023 2022 Numerator: Net income $ 41,227 $ 6,679 Less: dividends paid to Series A convertible preferred stockholders ( 6,781 ) — Undistributed income 34,446 — Income allocated to participating shares ( 2,934 ) — Net income attributable to common shareholders $ 31,512 $ 6,679 Denominator: Weighted average basic common shares outstanding 76,673 75,239 Dilutive effect of common shares 2,086 3,050 Weighted average diluted shares outstanding 78,759 78,289 Earnings per share: Basic 0.41 0.09 Dilutive 0.40 0.09 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Revenue [Abstract] | |
Schedule of net sales by reporting segment | Information about the Company’s net sales by geographical location for the three months ended March 31, 2023 and 2022 is as follows: For the Three Months Ended March 31, 2023 2022 North America $ 248,552 $ 123,473 Europe 8,652 8,495 Asia 1,258 966 Other 1,477 454 Net sales $ 259,939 $ 133,388 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following: March 31, December 31, Finished goods $ 110,525 $ 119,229 Raw Materials 50,558 62,491 Less: Inventory reserve ( 6,803 ) ( 8,431 ) Inventories $ 154,280 $ 173,289 |
NOTE RECEIVABLE (Tables)
NOTE RECEIVABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Note Receivable [Abstract] | |
Schedule of Note Receivable | Note receivable consists of the following: March 31, December 31, Note Receivable-current $ 3,587 $ 2,979 Note Receivable-non-current — 3,574 Total Note Receivable $ 3,587 $ 6,553 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure Leases [Abstract] | |
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, 2023 are as follows: Operating Finance Future minimum lease payments Leases Leases Total 2023 $ 527 $ 65 $ 592 2024 376 40 416 2025 54 68 122 2026 31 65 96 2027 — — — Total future minimum lease payments 988 238 1,226 Less: Amount representing interest ( 47 ) ( 13 ) ( 60 ) Present value of lease liabilities 941 225 1,166 Less: current portion ( 605 ) ( 69 ) ( 674 ) Long-term portion $ 336 $ 156 $ 492 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following: Estimated Useful Life in Years March 31, December 31, Merchandising equipment - coolers 3 - 7 $ 11,848 $ 9,885 Office equipment 3 - 7 1,158 1,124 Vehicles 5 1,524 1,257 Less: accumulated depreciation ( 2,476 ) ( 2,081 ) Total $ 12,054 $ 10,185 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Accumulated Amortization of Intangible Assets | The gross carrying amount and accumulated amortization of intangible assets as of March 31, 2023 and December 31, 2022, respectively, were as follows: March 31, December 31, Definite-lived intangible assets Customer relationships $ 13,683 $ 13,418 Less: accumulated amortization ( 1,779 ) ( 1,610 ) Definite-lived intangible assets, net $ 11,904 $ 11,808 Indefinite-lived intangible assets Brands $ 2,984 $ 2,984 Less: Impairment ( 2,529 ) ( 2,538 ) Indefinite-lived intangible assets, net $ 455 $ 446 Total Intangibles $ 12,359 $ 12,254 |
Schedule Future Estimated Amortization Expense | The following is the future estimated annualized amortization expense related to customer relationships: 2023 $ 411 2024 547 2025 547 2026 547 2027 547 Thereafter 9,305 Total $ 11,904 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following: March 31, December 31, Accounts payable $ 16,536 $ 36,248 Due to Pepsi (1) 37,042 34,807 Accrued freight 1,717 8,532 Accrued expenses 36,443 19,081 Unbilled purchases 15,374 8,672 Total $ 107,112 $ 107,340 (1) See Note 13. Related Party Transactions for more information related to Pepsi. |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of other current liabilities | Other current liabilities consist of the following: March 31, December 31, Short-term VAT payable $ 320 $ 198 State Beverage Container Deposit 4,774 3,388 Total $ 5,094 $ 3,586 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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: March 31, 2023 (1) 2022 (1) 2021 Expected volatility NA NA 69.18 - 81.11 % Expected term NA NA 4.49 - 5.00 Years Risk-free interest rate NA NA 0.32 % - 1.39 % Forfeiture Rate NA NA 0.0 % (1) No stock options were issued for the three months ended March 31, 2023 and the year ended December 31, 2022 . |
Schedule of outstanding stock options | A summary of the status of the Company’s outstanding stock options as of March 31, 2023 and changes during the periods ending on that date is as follows: Weighted Average Aggregate Weighted Shares Exercise Grant Date Intrinsic Average (000’s) Price Value (000’s) Term (Yrs) Options At December 31, 2022 2,266 $ 9.66 $ 213,914 5.43 Granted Exercised ( 249 ) 5.11 97.26 22,992 Forfeiture and cancelled ( 1 ) 14.53 At March 31, 2023 2,016 $ 10.22 $ 166,829 5.52 Exercisable at March 31, 2023 1,888 $ 8.42 $ 159,544 5.37 |
Schedule of employee stock options outstanding | The following table summarizes information about employee stock options outstanding at March 31, 2023: Outstanding Options Vested Options Range of Exercise Price Number Outstanding at March 31, 2023 (000's) Weighted Average Remaining Life Weighted Average Exercise Price Number Exercisable at March 31, 2023 (000's) Weighted Average Exercise Price Weighted Average Remaining Life $0.34 - $1.05 30 0.58 $ 1.19 30 $ 0.58 1.19 $1.97 - $2.95 5 1.97 2.77 5 1.97 2.77 $3.23 - $4.85 1,389 3.81 5.07 1,389 3.81 5.07 $5.59 - $8.38 214 5.76 5.23 214 5.76 5.23 $14.53 - $21.79 61 14.53 7.34 40 14.53 7.34 $21.80 - $32.70 16 21.80 7.59 10 21.80 7.59 $42.64 - $63.96 301 42.67 7.76 200 42.67 7.76 Outstanding options 2,016 10.22 $ 5.52 1,888 $ 8.42 5.37 |
Schedule of restricted stock activity | A summary of the Company’s restricted stock award activity for the three months ended March 31, 2023 and 2022 is presented in the following table: Three Months Ended March 31, 2023 March 31, 2022 Weighted Weighted Average Average Grant Date Grant Date Shares Fair Value Shares Fair Value Unvested at beginning of period — $ — 0.2 $ 14.72 Transfers to restricted stock units — — — — Granted — — — — Vested — — — — Forfeited and cancelled — — Unvested at end of period — $ — 0.2 $ 14.72 |
Schedule of restricted stock unit activity | 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, 2023 and 2022 is presented in the following table: Three Months Ended March 31, 2023 March 31, 2022 Weighted Weighted Average Average Grant Date Grant Date Shares (000's) Fair Value Shares (000's) Fair Value Unvested at beginning of period 539 $ 60.73 566 $ 52.66 Transfers to restricted stock awards — — — — Granted 124 103.17 189 74.57 Vested ( 157 ) 57.46 ( 111 ) 51.10 Forfeited and cancelled ( 31 ) 63.63 ( 18 ) 54.88 Unvested at end of period 475 $ 72.67 626 $ 59.50 |
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, 2023 and 2022 is presented in the following table: Three Months Ended March 31, 2023 March 31, 2022 Weighted Weighted Average Average Grant Date Grant Date Shares (000's) Fair Value Shares (000's) Fair Value Unvested at beginning of period 76 $ 91.48 15 $ 64.65 Granted — — — — Vested — — — — Forfeited and cancelled — — — — Unvested at end of period 76 $ 91.48 15 $ 64.65 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of company's Preferred shares (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements, Nonrecurring Value Measurement [Abstract] | |
Summary of Preferred shares | March 31, Level 1 Level 2 Level 3 Mezzanine equity: Series A convertible preferred shares $ — $ 824,488 $ — Total $ — $ 824,488 $ - |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Additional Information) (Details) - Transition Agreement [Member] - Convertible Preferred Stock [Member] $ in Millions | Aug. 01, 2022 USD ($) shares |
Business Acquisition [Line Items] | |
Stock issued during period, Shares | shares | 1,500,000 |
Proceeds from issuance of convertible preferred stock | $ | $ 550 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | PepsiCo Inc [Member] | ||
Product Information [Line Items] | ||
Total | 60.20% | 0% |
Revenue Benchmark [Member] | Customer Concentration Risk Two [Member] | Costco | ||
Product Information [Line Items] | ||
Total | 12.90% | 17.50% |
Revenue Benchmark [Member] | Customer Concentration Risk Three [Member] | Amazon | ||
Product Information [Line Items] | ||
Total | 8.40% | 10.30% |
Revenue Benchmark [Member] | Customer Concentration Risk Four Member | All Other | ||
Product Information [Line Items] | ||
Total | 18.50% | 72.20% |
Revenue Benchmark [Member] | Customer Concentration Risk Total [Member] | ||
Product Information [Line Items] | ||
Total | 100% | 100% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | PepsiCo Inc [Member] | ||
Product Information [Line Items] | ||
Total | 75.60% | 47.60% |
Accounts Receivable [Member] | Customer Concentration Risk Two [Member] | Amazon | ||
Product Information [Line Items] | ||
Total | 9.30% | 11.80% |
Accounts Receivable [Member] | Customer Concentration Risk Four Member | All Other | ||
Product Information [Line Items] | ||
Total | 15.10% | 40.60% |
Accounts Receivable [Member] | Customer Concentration Risk Total [Member] | ||
Product Information [Line Items] | ||
Total | 100% | 100% |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details 1) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Accounting Policies [Abstract] | |
Balance as of December 31, 2022 | $ 2,147 |
Current period change for expected credit losses | 423 |
Balance as of March 31, 2023 | $ 1,724 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Total Longlived Assets | $ 13,176 | $ 11,365 |
Longlived Assets Related To Foreign Operations | 1,753 | 1,615 |
UNITED STATES | ||
Total Longlived Assets | 11,423 | 9,750 |
SWEDEN | ||
Longlived Assets Related To Foreign Operations | 1,299 | 1,251 |
FINLAND | ||
Longlived Assets Related To Foreign Operations | 424 | 363 |
Other [Member] | ||
Longlived Assets Related To Foreign Operations | $ 30 | $ 1 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands, shares in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Product Information [Line Items] | |||
Accounts Receivable, Allowance for Credit Loss, Current | $ 1,724 | $ 2,147 | |
Amount excess of FDIC limit | 633,100 | 652,400 | |
Inventory Valuation Reserves | 6,800 | 8,400 | |
Impairment of long lived assets | 0 | 0 | |
Deferred revenue | 184,800 | ||
Distribution agreements termination expense | 37,000 | ||
Marketing and Advertising Expense | 31,000 | $ 14,500 | |
Contract with Customer, Liability, Noncurrent | 0 | 0 | |
Research and Development Expense | 300 | 100 | |
Exchange Losses | 100 | 200 | |
Foreign Currency Transaction Gain, before Tax | $ 600 | ||
Foreign Currency Transaction Loss, before Tax | 500 | ||
Income Tax Expenses Benefit | 0.50 | ||
Freight Expense | $ 14,200 | 3,200 | |
Accumulated deficit | 197,627 | $ 238,772 | |
Net loss | 41,227 | 6,679 | |
Net cash used in operating activities | 13,831 | (9,125) | |
Termination Payable | 1,100 | ||
Deferred revenue-current | 9,600 | ||
Deferred Revenue, Noncurrent | 175,300 | ||
PepsiCo Inc [Member] | |||
Product Information [Line Items] | |||
Deferred revenue | $ 184,800 | $ 189,500 | |
Maximum [Member] | |||
Product Information [Line Items] | |||
Property and equipment estimated useful life | 7 years | ||
Minimum [Member] | |||
Product Information [Line Items] | |||
Property and equipment estimated useful life | 3 years | ||
Stock Incentive Plan 2015 [Member] | |||
Product Information [Line Items] | |||
Percentage of provision for annual increase in shares | 15% | ||
Stock Incentive Plan 2015 [Member] | Maximum [Member] | |||
Product Information [Line Items] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | shares | 5 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ 41,227 | $ 6,679 |
Less: dividends paid to Series A convertible preferred stockholders | (6,781) | 0 |
Undistributed income | 34,446 | 0 |
Income allocated to participating shares | (2,934) | 0 |
Net income attributable to common shareholders for basic earnings per share | 34,446 | 6,679 |
Net income attributable to common shareholders | $ 31,512 | $ 6,679 |
Weighted average basic common shares outstanding | 76,673 | 75,239 |
Dilutive effect of common shares | 2,086 | 3,050 |
Weighted average diluted shares outstanding | 78,759 | 78,289 |
Earnings per share, basic | $ 0.41 | $ 0.09 |
Earnings per share, dilutive | $ 0.40 | $ 0.09 |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Potentially Dilutive Shares Outstanding | 7.3 | 3.1 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net sales | $ 259,939 | $ 133,388 |
North America [Member] | ||
Net sales | 248,552 | 123,473 |
Europe [Member] | ||
Net sales | 8,652 | 8,495 |
Asia [Member] | ||
Net sales | 1,258 | 966 |
Other [Member] | ||
Net sales | $ 1,477 | $ 454 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 12 Months Ended | ||
Aug. 01, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenues | $ 259,939 | $ 133,388 | ||
Promotional allowance included as a reduction of revenue | 65,500 | 35,400 | ||
Accrued promotional allowances | $ 68,200 | $ 36,000 | ||
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. | |||
Upfront payment received | $ 227,800 | |||
Contract Liability | 184,800 | 193,000 | ||
License Agreement [Member] | ||||
Revenues | 600 | 500 | ||
Royalty Fees | 6,900 | |||
PepsiCo Inc [Member] | ||||
Upfront payment received | $ 227,800 | |||
Payment received | 227,800 | |||
Implicit Payment | 282,500 | |||
Refund liability | 37,000 | 34,800 | ||
Deferred Revenue | 2,400 | $ 4,200 | ||
excess fair value over issuance proceeds | 282,500 | |||
contra-revenues | $ 3,500 | |||
Shares, Issued Series A | 1.5 | |||
Total payment | $ 250,000 | |||
SWEDEN | ||||
Revenues | $ 5,500 | 5,800 | ||
Foreign Revenues [Member] | ||||
Revenues | $ 11,400 | $ 9,900 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 110,525 | $ 119,229 |
Raw Materials | 50,558 | 62,491 |
Less: Inventory reserve | (6,803) | (8,431) |
Inventories | $ 154,280 | $ 173,289 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Disclosure Prepaid Expenses And Other Current Assets [Abstract] | ||
Prepaid expenses and other current assets | $ 15,507 | $ 11,341 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Disclosure Note Receivable [Abstract] | ||
Note receivable-current | $ 3,587 | $ 2,979 |
Note receivable-non-current | 0 | 3,574 |
Total Note receivable | $ 3,587 | $ 6,553 |
NOTE RECEIVABLE (Details Narrat
NOTE RECEIVABLE (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Note Receivable Description | Scheduled principal payments plus accrued interest for the Note 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 initially 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 | 30,000 | |
Debt instrument, Term | 5 years | |
Minimum [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Weighted average interest rate | 5% | |
Outstanding principal amount | $ 5 | |
Maximum [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Weighted average interest rate | 2% | |
Outstanding principal amount | $ 5 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
2023 | $ 592 | |
2024 | 416 | |
2025 | 122 | |
2026 | 96 | |
2027 | 0 | |
Total future minimum lease payments | 1,226 | |
Less: Amount representing interest | (60) | |
Present value of lease liabilities | 1,166 | |
Less: current portion | (674) | |
Long-term portion | 492 | |
Operating Leases | ||
2023 | 527 | |
2024 | 376 | |
2025 | 54 | |
2026 | 31 | |
2027 | 0 | |
Total future minimum lease payments | 988 | |
Less: Amount representing interest | (47) | |
Present value of lease liabilities | 941 | |
Less: current portion | (605) | $ (661) |
Long-term portion | 336 | 326 |
Finance Leases | ||
2023 | 65 | |
2024 | 40 | |
2025 | 68 | |
2026 | 65 | |
2027 | 0 | |
Total future minimum lease payments | 238 | |
Less: Amount representing interest | (13) | |
Present value of lease liabilities | 225 | |
Less: current portion | (69) | (70) |
Long-term portion | $ 156 | $ 162 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (2,476) | $ (2,081) |
Total | $ 12,054 | 10,185 |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Merchandising Equipment - Coolers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 11,848 | 9,885 |
Merchandising Equipment - Coolers [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Merchandising Equipment - Coolers [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,158 | 1,124 |
Office Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Office Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,524 | $ 1,257 |
Property, Plant and Equipment, Useful Life | 5 years |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 404 | $ 245 |
GOODWILL AND INTANGIBLES (Detai
GOODWILL AND INTANGIBLES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Definite-lived intangible assets | ||
Customer relationships | $ 13,683 | $ 13,418 |
Less: accumulated amortization | (1,779) | (1,610) |
Definite-lived intangible assets, net | 11,904 | 11,808 |
Indefinite-lived intangible assets | ||
Brands | 2,984 | 2,984 |
Less: impairment | (2,529) | (2,538) |
Indefinite-lived intangible assets, net | 455 | 446 |
Total Intangibles | $ 12,359 | $ 12,254 |
GOODWILL AND INTANGIBLES (Det_2
GOODWILL AND INTANGIBLES (Details 1) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 411 |
2024 | 547 |
2025 | 547 |
2026 | 547 |
2027 | 547 |
Thereafter | $ 9,305 |
GOODWILL AND INTANGIBLES (Det_3
GOODWILL AND INTANGIBLES (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible Assets, Net (Including Goodwill) | $ 13.9 | $ 13.7 | |
Amortized over estimated useful life | 25 years | ||
Amortization expense | $ 0.1 | $ 0.1 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 16,536 | $ 36,248 | |
Due to Pepsi | [1] | 37,042 | 34,807 |
Accrued freight | 1,717 | 8,532 | |
Accrued expenses | 36,443 | 19,081 | |
Unbilled purchases | 15,374 | 8,672 | |
Total | $ 107,112 | $ 107,340 | |
[1] See Note 13. Related Party Transactions for more information related to Pepsi. |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Short-term | ||
VAT payable | $ 320 | $ 198 |
State Beverage Container Deposit | 4,774 | 3,388 |
Total | $ 5,094 | $ 3,586 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Aug. 01, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||
Accrued promotional allowance | $ 68,225,000 | $ 35,977,000 | ||
Deferred revenue | 184,800,000 | |||
Revenues | 259,939,000 | $ 133,388,000 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 1,779,000 | $ 1,610,000 | ||
Lease Expiration Date | Dec. 31, 2024 | |||
Series A Preferred Stock [Member] | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock, shares issued | 1.5 | 1,467,000 | 1,467,000 | |
Issuance of series A, fair value | $ 832,500,000 | |||
PepsiCo Inc [Member] | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock, shares issued | 1,500,000 | |||
Percentage of common stock outstanding | 8.50% | |||
Net sales | 156,500,000 | |||
Accrued promotional allowance | 32,800,000 | |||
Accounts receivable due | 127,900,000 | $ 31,600,000 | ||
Cash paid by Pepsi | $ 227,800,000 | |||
Deferred revenue | 184,800,000 | 189,500,000 | ||
Revenues | 2,400,000 | 4,200,000 | ||
Accumulated amortization | 9,500,000 | |||
Liability payable due | 37,000,000 | 34,800,000 | ||
Deferred contract asset in other assets | 282,500,000 | |||
PepsiCo Inc [Member] | Contract assets current [Member] | ||||
Related Party Transaction [Line Items] | ||||
Unamortized deferred contract costs | 14,100,000 | 14,100,000 | ||
PepsiCo Inc [Member] | Contract assets non current [Member] | ||||
Related Party Transaction [Line Items] | ||||
Unamortized deferred contract costs | 258,900,000 | $ 262,500,000 | ||
PepsiCo Inc [Member] | Series A Preferred Stock [Member] | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from issuance of common stock | $ 550,000,000 | |||
Issuance of series A, fair value | $ 832,500,000 | 832,500,000 | ||
Deferred contract asset in other assets, representing the excess | 550,000,000 | |||
C D Financial L L C [Member] | Majority Shareholder [Member] | Building [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly Rent | $ 35,000 |
MEZZANINE EQUITY (Details Narra
MEZZANINE EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Aug. 01, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||
Amount of issuance of common dividends | $ 824,488 | $ 824,488 | |
Percentage of voting right, preferred stock | 50% | ||
Common stock, par value | $ 0.001 | $ 0.001 | |
Series A Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 1,500,000 | 1,500,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, stated value | $ 375 | $ 375 | |
Preferred stock, shares issued | 1.5 | 1,467,000 | 1,467,000 |
Issuance of series A, fair value | $ 832,500 | ||
Per share of aggregate fair value of preferred share | $ 568 | ||
Debt issuance costs | $ 8,000 | ||
Preferred stock, liquidation preference, value | $ 550,000 | $ 550,000 | |
Preferred stock, dividend rate | 5% | 5% | |
Accrued dividend | 5% | ||
Dividends | $ 6,800 | ||
Preferred stock, dividends per share | $ 4.62 | ||
Debt conversion price | $ 75 | ||
Common stock issued upon conversion | 7,300,000 | ||
Series A Preferred Stock [Member] | Minimum [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, conversion ratio | 1 | ||
Series A Preferred Stock [Member] | Maximum [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, conversion ratio | 5 | ||
Series A Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued | 1,500,000 | ||
Percentage of share authorized | 100% | ||
Cash consideration to related party | $ 550,000 | ||
Common stock, other shares outstanding | 3,700,000 | ||
8% [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, dividend rate | 8% | ||
10% [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, dividend rate | 10% | ||
12% [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, dividend rate | 12% |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||
Proceeds from Options exercised | $ 478 | $ 810 |
Number of options excercised | 249,000 | |
Stock Incentive Plan 2015 [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of option shares granted | 400,000 | 400,000 |
Proceeds from Options exercised | $ 500 | $ 800 |
Number of options excercised | 100,000 | 200,000 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Preferred stock shares (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Level 1 | |
Preferred Stock, Value, Issued | $ 0 |
Level 2 | |
Preferred Stock, Value, Issued | 0 |
Level 3 | |
Preferred Stock, Value, Issued | 824,488 |
Series A convertible preferred shares | Level 1 | |
Preferred Stock, Value, Issued | 0 |
Series A convertible preferred shares | Level 2 | |
Preferred Stock, Value, Issued | 0 |
Series A convertible preferred shares | Level 3 | |
Preferred Stock, Value, Issued | $ 824,488 |
FAIR VALUE MEASUREMENTS (Additi
FAIR VALUE MEASUREMENTS (Additional Information) (Details) - Series A convertible preferred shares - USD ($) | 3 Months Ended | ||
Aug. 01, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Preferred stock issued | 1.5 | 1,467,000 | 1,467,000 |
Volatility Rate | 45% | ||
Risk free interest rate | 2.69% | ||
Preferred stock, dividend rate | 5% | 5% | |
Closing Price | $ 98.87 | ||
Debt discount rate | 12.50% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Tax Credit, Percent | 17.20% | 33.60% |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 21% | 21% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Forfeiture Rate | 0% |
Minimum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Expected volatility | 69.18% |
Expected term | 4 years 5 months 26 days |
Risk-free interest rate | 0.32% |
Maximum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Expected volatility | 81.11% |
Expected term | 5 years |
Risk-free interest rate | 1.39% |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Options outstanding Balance at beginning | 2,266,000 | |
Options outstanding, Exercised | (249,000) | |
Options outstanding, Forfeiture and cancelled | (1,000) | |
Options outstanding, Balance at end | 2,016,000 | 2,266,000 |
Options, Exercisable, Number | 1,888,000 | |
Weighted Average Exercise Price, Balance at beginning | $ 9.66 | |
Exercises in Period, Weighted Average Exercise Price | 5.11 | |
Weighted Average Grant Date Fair Value Exercised | 97.26 | |
Forfeitures and Expirations in Period, Weighted Average Exercise Price | 14.53 | |
Weighted Average Exercise Price, Balance at end | 10.22 | $ 9.66 |
Exercisable, Weighted Average Exercise Price | $ 8.42 | |
Aggregate Intrinsic Value Balance at beginning | $ 213,914 | |
Aggregate Intrinsic Value Exercised | 22,992 | |
Aggregate Intrinsic Value Balance at end | 166,829 | $ 213,914 |
Aggregate Intrinsic Value Exercisable | $ 159,544 | |
Weighted Average Remaining Term, Begining Bal. | 5 years 5 months 4 days | |
Weighted Average Remaining Term Beginning Balance | 5 years 6 months 7 days | |
Exercisable, Weighted Average Remaining Contractual Term | 5 years 4 months 13 days |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details 2) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 2,016 |
Outstanding Options, Weighted Average Remaining Contractual Term | 10 years 2 months 19 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 5.52 |
Vested Options, Shares Exercisable | shares | 1,888 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 8.42 |
Vested Options, Weighted Averaged Remaining Life | 5 years 4 months 13 days |
Range Of Exercise Price 1 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 30 |
Outstanding Options, Weighted Average Remaining Contractual Term | 6 months 29 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 1.19 |
Vested Options, Shares Exercisable | shares | 30 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 0.58 |
Vested Options, Weighted Averaged Remaining Life | 1 year 2 months 8 days |
Range Of Exercise Price 2 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 5 |
Outstanding Options, Weighted Average Remaining Contractual Term | 1 year 11 months 19 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 2.77 |
Vested Options, Shares Exercisable | shares | 5 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 1.97 |
Vested Options, Weighted Averaged Remaining Life | 2 years 9 months 7 days |
Range Of Exercise Price 3 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 1,389 |
Outstanding Options, Weighted Average Remaining Contractual Term | 3 years 9 months 21 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 5.07 |
Vested Options, Shares Exercisable | shares | 1,389 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 3.81 |
Vested Options, Weighted Averaged Remaining Life | 5 years 25 days |
Range Of Exercise Price 4 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 214 |
Outstanding Options, Weighted Average Remaining Contractual Term | 5 years 9 months 3 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 5.23 |
Vested Options, Shares Exercisable | shares | 214 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 5.76 |
Vested Options, Weighted Averaged Remaining Life | 5 years 2 months 23 days |
Range Of Exercise Price 5 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 61 |
Outstanding Options, Weighted Average Remaining Contractual Term | 14 years 6 months 10 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 7.34 |
Vested Options, Shares Exercisable | shares | 40 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 14.53 |
Vested Options, Weighted Averaged Remaining Life | 7 years 4 months 2 days |
Range Of Exercise Price6 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 16 |
Outstanding Options, Weighted Average Remaining Contractual Term | 21 years 9 months 18 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 7.59 |
Vested Options, Shares Exercisable | shares | 10 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 21.80 |
Vested Options, Weighted Averaged Remaining Life | 7 years 7 months 2 days |
Range Of Exercise Price7 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Outstanding Options, shares | shares | 301 |
Outstanding Options, Weighted Average Remaining Contractual Term | 42 years 8 months 1 day |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 7.76 |
Vested Options, Shares Exercisable | shares | 200 |
Vested Options, Weighted Averaged Exercise Price | $ / shares | $ 42.67 |
Vested Options, Weighted Averaged Remaining Life | 7 years 9 months 3 days |
STOCK-BASED COMPENSATION (Det_4
STOCK-BASED COMPENSATION (Details 3) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Unvested at beginning of period | 0.2 | |
Unvested at beginning of period (in Dollars per share) | $ 14.72 | |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Unvested Weighted Average Grant Date Fair Value | $ 14.72 | |
Unvested at end of period | 0.2 | |
Unvested at end of period (in Dollars per share) | $ 14.72 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Unvested at beginning of period | 539,000 | 566,000 |
Unvested at beginning of period (in Dollars per share) | $ 60.73 | $ 52.66 |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Unvested Weighted Average Grant Date Fair Value | $ 72.67 | $ 59.50 |
Granted | 124,000 | 189,000 |
Restricted stock granted (in Dollars per share) | $ 103.17 | $ 74.57 |
Vested | (157,000) | (111,000) |
Restricted stock vested (in Dollars per share) | $ 57.46 | $ 51.10 |
Forfeiture and cancelled | (31,000) | (18,000) |
Restricted Stock Forfeiture And Cancelled In Dollars Per Share | $ 63.63 | $ 54.88 |
Unvested at end of period | 475,000 | 626,000 |
Unvested at end of period (in Dollars per share) | $ 72.67 | $ 59.50 |
Performance Shares [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Unvested at beginning of period | 76,000 | 15,000 |
Unvested at beginning of period (in Dollars per share) | $ 91.48 | $ 64.65 |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Unvested Weighted Average Grant Date Fair Value | $ 91.48 | $ 64.65 |
Unvested at end of period | 76,000 | 15,000 |
Unvested at end of period (in Dollars per share) | $ 91.48 | $ 64.65 |
STOCK-BASED COMPENSATION (Det_5
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) shares in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2015 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 5 | |||
Stock issued during period value stock options purchase | $ 478,000 | $ 810,000 | ||
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 2,400,000 | $ 6,600,000 | ||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 8 months 12 days | 3 months 18 days | ||
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 0 | $ 0 | ||
Share-based compensation service or vesting period of grant | 10 years | |||
Options to purchase vested | 1.9 | |||
Unrecognized compensation expense | $ 0 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 2 months 12 days | |||
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 27,500,000 | 29,700,000 | ||
Performance Shares [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 3,200,000 | 900,000 | ||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 4 months 24 days | |||
Aggregate target payout | $ 7,500,000 | |||
Immediate vesting of shares | 20% | |||
Vested [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested in Period, Fair Value | $ 16,200,000 | 5,600,000 | ||
General and Administrative Expense [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Payment Arrangement, Expense | $ 5,500,000 | $ 4,300,000 | ||
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 Arrangement by Share-Based Payment Award, Description | 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 were options to purchase approximately 1.9 million shares that have vested as of March 31, 2023 and December 31, 2022. Upon exercise, shares of new common stock are issued by the Company | |||
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 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Description | In addition, there is a provision in the 2015 Plan for an annual increase to the maximum number of shares authorized under the 2015 Plan. The increase shall be added on the first day of the calendar year beginning January 1, 2016, equal to 15% of the number of shares outstanding as of such date. | |||
Provisions Of Options Grant And Other Share Based Awards Permitted | 6 | |||
Stock issued during period value stock options purchase | $ 0 | $ 0 | ||
Stock Incentive Plan 2015 and 2016 [Member] | Maximum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 5 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Apr. 17, 2023 | Feb. 02, 2023 | Jan. 18, 2023 | Oct. 12, 2022 | May 04, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | |
Loss Contingencies [Line Items] | ||||||||
Agreement settlement amount | $ 7.8 | $ 7.8 | ||||||
Compensatory damages | $ 82.6 | |||||||
Post Judgment Interest | 5.52% | |||||||
contingent commitment to third parties | 29.3 | $ 30.7 | ||||||
Reducing award damages value | $ 2.1 | |||||||
NY | November 23, 2021 | ||||||||
Loss Contingencies [Line Items] | ||||||||
Agreement settlement amount | $ 7.8 | |||||||
Maximum [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrued liability | 82.6 | |||||||
Minimum [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accrued liability | $ 2.1 | |||||||
DThreeM Licensing Group | F and L | ||||||||
Loss Contingencies [Line Items] | ||||||||
Sales revenue bench mark receive shares | 750,000 | |||||||
Subsequent Event [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Payment for settlement | $ 7.8 |
SUBSEQUENT EVENTS (Additional I
SUBSEQUENT EVENTS (Additional Information) (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Aug. 01, 2022 | |
Subsequent Event [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Series A Preferred Stock [Member] | |||
Subsequent Event [Line Items] | |||
Preferred stock, shares issued | 1,467,000 | 1,467,000 | 1.5 |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Accrued dividend | 5% | ||
Securities Purchase Agreement [Member] | Series A Preferred Stock [Member] | |||
Subsequent Event [Line Items] | |||
Preferred stock, shares issued | 1,500,000 | ||
Common stock, other shares outstanding | 3,700,000 |