Form 4: Celsius Director's Entity Enters $372M Forward Sale

An entity associated with Celsius Holdings Director Dean DeSantis has entered into a variable prepaid forward contract involving up to 7.9 million shares for $372.3 million.

Summary

• Dean DeSantis, a Director and 10% owner of Celsius Holdings, Inc. (CELH), reported a transaction involving an entity he is associated with, CD Financial, LLC ('CD').
• On August 7, 2025, CD entered into a variable prepaid forward contract with Citigroup Global Markets Inc.
• Under the contract, CD is obligated to deliver up to 7,900,000 shares of Celsius Holdings, Inc. common stock (or an equivalent amount of cash) at maturity.
• The maturity occurs in 15 approximately equal components from September 7, 2027, to September 27, 2027.
• In exchange for this obligation, CD will receive a cash payment of $372,347,277.72 on September 9, 2025.
• CD pledged 7,900,000 shares of Celsius common stock to secure its obligations, retaining dividend and voting rights during the pledge term.
• The contract specifies a Floor Price of $48.4239 and a Cap Price of $64.5652 for determining the number of shares to be delivered based on the Settlement Price.
• CD retains options to net-settle with cash or shares, or fully settle with 100% of pledged shares for a variable cash payment.

Sentiment

Score: 6

Explanation: The transaction is a neutral event from a company operations perspective, as it's an insider's financial management strategy. It provides liquidity to the reporting person's entity while retaining some upside and voting rights. However, the future disposition of a large block of shares could be seen as a slight negative overhang, and the complexity of the derivative might be viewed with caution by some investors. It's not directly positive or negative for Celsius's operational performance.

Positives

• CD Financial, LLC, an entity associated with a 10% owner, will receive a significant cash payment of $372,347,277.72, which could be used for diversification or other investments.
• The reporting person's entity retains voting and dividend rights on the pledged shares during the term of the pledge, maintaining some influence and income stream.
• The variable prepaid forward contract allows for potential upside participation if the stock price rises above the Cap Price, albeit with a reduced share delivery.
• The contract provides flexibility for CD to elect cash or net-settlement, or full settlement with pledged shares, depending on market conditions.

Negatives

• The transaction involves a future disposition of up to 7,900,000 shares of Celsius Holdings, Inc. common stock, representing a significant portion of the reporting person's indirect holdings.
• The pledge of 7,900,000 shares as collateral ties up a substantial block of stock.
• If the stock price falls below the Floor Price of $48.4239, CD will deliver all pledged shares for the applicable component, potentially realizing a lower effective price per share than the current market value at the time of the contract.
• The transaction introduces complexity through a derivative instrument, which may not be fully understood by all investors.

Risks

• Market Price Volatility: The number of shares to be delivered by CD is dependent on the future market price of Celsius common stock relative to the Floor Price ($48.4239) and Cap Price ($64.5652). Significant price fluctuations could impact the value received or the number of shares delivered.
• Liquidity Risk: The pledge of 7,900,000 shares reduces the immediate liquidity of these shares for CD until the contract matures or is settled.

Future Outlook

The filing details a future obligation to deliver shares between September 7, 2027, and September 27, 2027, based on the market price of Celsius common stock at that time. This indicates a long-term view on the disposition of a significant block of shares.

Industry Context

Variable prepaid forward contracts are a common financial instrument used by large shareholders, often insiders, to monetize a portion of their holdings, diversify their portfolio, or raise capital while deferring capital gains taxes and retaining some upside potential and voting rights. This transaction is consistent with such practices in the financial industry for managing large equity positions.

Comparison to Industry Standards

• Variable prepaid forward contracts are a standard tool for large shareholders to manage concentrated stock positions, similar to those used by founders or early investors in companies like Amazon (Jeff Bezos) or Microsoft (Bill Gates) to diversify holdings without an outright sale.
• The structure, including floor and cap prices, is typical for these types of derivatives, offering a balance between immediate cash generation and retaining some exposure to future stock appreciation.
• The retention of voting and dividend rights during the pledge period is also a common feature, distinguishing it from a direct sale or a simple loan against shares.

Related Party Transactions

• The transaction involves Dean DeSantis, a Director and 10% owner of Celsius Holdings, Inc., through an entity (CD Financial, LLC) in which his family trust has a 99% beneficial interest. This constitutes a related party transaction.

Stakeholder Impact

• Shareholders: The future delivery of up to 7,900,000 shares could create a perception of potential future selling pressure, although the shares are already pledged. The transaction itself does not directly impact the company's operations or financial health.
• Reporting Person/Associated Entity: CD Financial, LLC gains significant liquidity ($372.3 million) while retaining some upside potential and voting rights on the pledged shares.

Next Steps

• CD Financial, LLC will receive the cash payment of $372,347,277.72 on September 9, 2025.
• The variable prepaid forward contract will mature in 15 approximately equal components between September 7, 2027, and September 27, 2027, at which point shares (or cash equivalent) will be delivered.

Key Dates

Recommendation

This Form 4 filing reports a financial transaction by a significant insider, not an operational update for Celsius Holdings. While it provides liquidity to the insider and involves a large block of shares, it doesn't fundamentally alter the investment thesis for Celsius based on its business performance. The transaction is a sophisticated financial instrument for managing a concentrated position, which is a neutral event for the company's core business. Investors should continue to evaluate Celsius based on its financial results, growth prospects, and market position rather than solely on this insider's portfolio management strategy.

Keywords

Celsius Holdings, CELH, Dean DeSantis, Form 4, beneficial ownership, variable prepaid forward contract, derivative, stock sale, equity, Citigroup Global Markets, 10b5-1, insider transaction