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Celsius Holdings, Inc.

2424 North Federal Highway-Suite 208

Boca Raton, FL 33431

Via Edgar

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Manufacturing

100 F Street, N.E.

Washington, D.C. 20549

Attention: SiSi Cheng and Anne McConnell

Re: Celsius Holdings, Inc.

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

Filed February 29, 2024

File No. 001-34611

Dear Ms. Cheng and Ms. McConnell,

We respectfully submit this letter in response to the comments from the staff of the Division of Corporation Finance (the “Staff”), received by a letter dated June 17, 2024, relating to the above-mentioned Annual Report on Form 10-K for the Year ended December 31, 2023 (the “Form 10-K”) and the Current Report on Form 8-K dated February 29, 2024 (the “Form 8-K”).

We appreciate the opportunity to address the Staff’s comments with respect to our Form 10-K and Form 8-K. The Staff’s comments have been reproduced below in italicized text. Our responses thereto are set forth immediately following the reproduced comment. In the responses below, references to the “Company”, “we”, “our”, and “us” refer to Celsius Holdings, Inc. Capitalized terms used in our responses below and not defined herein have the respective meanings given to them in the Form 10-K.

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

Consolidated Financial Statements

13. Related Party Transactions, page F-22

1. We note your disclosures of transactions recognized in your financial statements related to Pepsi, a related party. Please revise your annual and quarterly financial statements in future filings to state amounts from related party transactions on the face of your balance sheets, statements of operations, and statements of cash flows as required by Rule 4-08(k) of Regulation S-X.

Response:

We acknowledge the importance of transparent disclosure of related party matters and respectfully advise the Staff that when preparing our financial statements, we reviewed and considered the applicability of Rule 4-08(k) of Regulation S-X, which provides that certain financial information with respect to related party transactions should be set forth on the face of the appropriate financial statements. Within the notes to our consolidated financial statements in the Form 10-K, we included related party information in note 13 to the consolidated financial statements, captioned “Related Party Transactions”. Therein, we identified transactions entered into with related parties and their respective impacts on our consolidated balance sheets, consolidated statements of operations and comprehensive income and consolidated statements of cash flows. In addition, we have included specific disclosures associated with Pepsi in other sections, as applicable, such as in note 2 to the consolidated financial statements, captioned “Concentrations of Risk”. Consequently, we believe that we have provided transparent and clear disclosure of our related party transactions and their impact upon our consolidated financial position, results of operations and cash flows.

We believe that including more specific disclosure of our transactions with Pepsi (particularly specific dollar amounts) on the face of our financial statements would provide our competitors with critical, competitively sensitive information regarding our margins and the profitability of our relationship with Pepsi, which would result in competitive harm to the Company. We are concerned that our other customers and potential customers will use this information to our detriment in their negotiations with us, which would similarly result in competitive harm. Due to the commercially and competitively sensitive nature of information pertaining to our distributor relationship with Pepsi, we respectfully submit to the Staff that we believe that our current approach to related party disclosure is consistent with Rule 4-08(k), as well as with Section 552(b)(4) of the Freedom of Information Act, 5 U.S.C.A. § 552(b)(4) (1976) and the parallel Commission regulation, 17 C.F.R. § 200.80(b)(4) (1976), which exempt from public disclosure “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.”

In addition to the competitive harm that would result from such additional disclosures, the transactions with Pepsi disclosed in note 13 to the consolidated financial statements impact several financial statement line items. We believe that including additional lines items within the face of our financial statements regarding the impact of all related party transactions would not provide useful information to investors but would instead add undue complexity to our financial statements that may result in potential confusion to readers of our financial statements. Additionally, we believe that the need to then also revise prior period financial statements for comparability would be unduly burdensome in comparison to the benefits derived by the readers of our financial statements.

Also, while we acknowledge that the practices of other public companies in applying the U.S. Securities and Exchange Commission’s rules and regulations do not control the Staff’s position in any particular issue of interpretation, we believe that the practices of other public companies may be instructive and perhaps persuasive in our circumstances. As we determined the appropriate presentation of related party transactions in our financial statements, we reviewed recent public filings of other entities with similar business operations and revenues from related parties, noting that these reporting companies did not include related party information on the face of their respective financial statements but rather within the notes to the financial statements as we did in the Form 10-K. Monster Beverage Corporation (“Monster”) is one such example given the ownership interest in Monster by The Coca-Cola Company and given that many investors consider that relationship similar to our relationship with Pepsi. We strongly believe that the commercially sensitive nature of such information and harm to be caused by the disclosure thereof, as well as the potential for confusion by more complex financial statements and the burden imposed thereby are likely the reasons other public companies utilize a method of related party disclosures similar to ours.

2. We note your disclosures regarding the agreements you entered into with Pepsi during 2022. Please more fully explain the terms of the agreements and the basis for your accounting for the agreements. Please specifically address the following:

•Tell us the contractual terms of the agreements, including the existence and nature of potential renewal options.

Response:

We respectfully direct the Staff’s attention to note 4 to the consolidated financial statements “Revenue”, which details the Distribution Agreement with Pepsi, effective from August 1, 2022. As disclosed in such note, the Distribution Agreement provides the terms and conditions for us to sell our products to Pepsi and authorizes Pepsi to sell and distribute our existing and future beverage products in the defined territories within the United States. Additionally, the Distribution Agreement has provisions for termination without cause and without penalty by either party in the nineteenth year (2041), in the twenty-ninth year (2051), and at the end of every subsequent ten-year period thereafter by providing 12 months’ notice. While the Distribution Agreement does not explicitly outline traditional renewal terms, it is structured to allow for ongoing engagement without fixed end dates, subject to its termination provisions.

As further discussed in notes 4 and 13 to the consolidated financial statements, in conjunction with the Distribution Agreement, the Transition Agreement with Pepsi addressed the termination of previous distributor contracts, which contracts included standard industry termination penalties. Pepsi agreed to reimburse the Company up to $250 million for these termination expenses. Amounts received from Pepsi as reimbursement for termination expenses were measured at the amount of consideration received by the distributor and accounted for as a liability and classified as deferred revenue, which are recognized ratably over the twenty-year term of the Distribution Agreement as credits to revenue. The total termination costs for which Pepsi reimbursed us (net of unused proceeds returned to Pepsi) was approximately $193 million.

The Securities Purchase Agreement, which we entered into with Pepsi concurrently with the Distribution Agreement and the Transition Agreement, provided for Pepsi's acquisition of approximately 1.5 million shares of the Company’s Series A Convertible Preferred Stock (“Series A Shares”), convertible into common stock on specified terms. This agreement includes specific rights and restrictions, such as non-transferability clauses, the right for Pepsi to nominate a board member, and provisions detailing conditions under which the preferred stock could be redeemed or converted. These terms align the long-term interests of both parties and provide a framework for Pepsi's active participation in our corporate governance. As further discussed below, the Series A Shares are classified outside of permanent equity and presented in the mezzanine section of our balance sheet. The excess of the fair value over the issuance proceeds of the Series A Shares was recorded as a debit to Deferred Other Costs (which is an asset on the Company’s consolidated balance sheets). These Deferred Other Costs are being amortized ratably over the twenty-year term of the Distribution Agreement as a reduction (debit) to revenue.

•Explain any facts and circumstances under which the agreements can be terminated by either party, including the potential consequences in the event the agreements are terminated.

Response:

As outlined in note 4 to the consolidated financial statements and Part I, Item 1 “Business” of the Form 10-K, the Distribution Agreement with Pepsi allows for termination by either party without cause at the end of the nineteenth year (2041), the twenty-ninth year (2051), and at the end of every subsequent ten-year interval thereafter, by providing 12 months’ notice. Additionally, either party to the Distribution Agreement may terminate the agreement with “cause” (including by Pepsi if the Company undergoes a change of control involving a competitor). “Cause” includes customary terms, such as insolvency of the other party, cessation of material parts of the other party’s beverage business, and material breach of the Distribution Agreement. Also, the Company and Pepsi may terminate the Distribution Agreement in connection with the execution by the Company of a binding written agreement to consummate a change of control. 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 effect of these termination fees would likely be material to our financial statements and would be recorded as a selling, general and administrative expense upon termination of the Distribution Agreement.

As disclosed in note 2 to the consolidated financial statements “Concentrations of Credit Risk”, Pepsi accounted for 59.4% of our revenue for the year ended December 31, 2023 and 69.0% of our accounts receivable at December 31, 2023, illustrating the substantial dependence we have on this relationship for our sales and cash flow. The loss of this primary distributor would necessitate seeking new distribution channels or partnerships to replace the extensive network provided by Pepsi, which could disrupt our operations and potentially lead to a significant short-term decline in sales and operational efficiencies. As disclosed in Part I, Item 1A “Risk Factors” of the 10-K, we caution investors that “[w]e have extensive commercial arrangements with Pepsi and, as a result, significant disagreements with Pepsi or a termination of these arrangements could materially adversely impact our financial position and results of operations.” In addition, we discuss such risks in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to the Form 10-K, including, among other things, the fact that “[a]ny disruption in Pepsi’s operations, shifts in their strategic focus, reduction in service levels or support for our products, or changes in the terms of our partnership could directly impact our sales performance and revenue streams. This dependency also extends to accounts receivable, where a significant portion of our receivables is tied to Pepsi. Delays or defaults in these receivables could adversely affect our cash flow and financial planning.”

•Explain how product pricing and other material terms under the agreements are determined, including when and how often pricing terms are negotiated.

Response:

The Distribution Agreement with Pepsi provides specific guidelines and parameters around terms of the sales of our goods to Pepsi, as well as for sales to third parties. These terms include the prices Pepsi must pay Celsius for products that Pepsi resells to Pepsi’s customers (i.e., a distributor wholesale price) and the pricing principles for product sales to end customers. In addition, the agreement incorporates quarterly and annual reviews, as well as evaluation procedures associated with pricing parameters on a go-forward basis. The agreement is structured to ensure that we meet our strategic objectives of achieving efficient distribution of Celsius products and support Pepsi’s ability to execute its customer sales effectively at the retail level.

We and Pepsi review our relationship, including terms of the Distribution Agreement, periodically but at least quarterly. We develop an annual joint business plan projecting results that we hope to achieve in the coming year and engage in annual and quarterly business reviews to determine the performance of the relationship. Mechanisms exist for both the Company and Pepsi to evaluate adjusting pricing during the year, but at least once annually. In addition, our teams perform quarterly updates, and we work together as a part of the joint business planning process to formalize alignment on promotional calendars, incentive programs, promotional strategies and other activities to drive growth of our business.

The specific pricing models and information with respect to our agreement with Pepsi constitute commercially sensitive information that we customarily and actually treat as confidential. We further believe that this information is exempt from public disclosure under Section 552(b)(4) of the Freedom of Information Act, 5 U.S.C.A. § 552(b)(4) (1976), and the parallel Commission regulation, 17 C.F.R. § 200.80(b)(4) (1976), as “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.”

•Tell us the terms and conditions related to the amounts you received from Pepsi to reimburse you for the termination of former distribution agreements, including any provision that would require you to repay the amount in the event the agreements with Pepsi were terminated.

Response:

As disclosed in note 4 to the consolidated financial statements, under the Transition Agreement, Pepsi agreed to pay us up to $250 million to facilitate the transition of distribution rights to Pepsi from prior distributors, which the Distribution Agreement required that we terminate. Amounts received from Pepsi were contractually restricted to only be used to pay termination fees due to former distributors; any excess cash received over amounts due to other distributors was required to be refunded back to Pepsi. We refunded any excess amounts to P