Form 4: Celsius Director Settles Forward Sale, Reduces Stake

Celsius Holdings Director Deborah DeSantis settled a prepaid variable forward sale contract, resulting in the disposal of 360,000 shares of common stock.

Summary

• Deborah DeSantis, a Director and 10% Owner of Celsius Holdings, Inc. (CELH), reported the settlement of a Variable Prepaid Forward Sale (VPF) contract.
• The VPF was originally entered into on January 19, 2023, with an unaffiliated third-party buyer.
• Settlement occurred in three tranches on January 8, 2026, January 9, 2026, and January 12, 2026.
• Each tranche involved the physical delivery of 120,000 shares of CELH common stock, totaling 360,000 shares.
• The shares were disposed of by CD Financial LLC, an entity where Ms. DeSantis is the manager and has shared voting and dispositive power.
• Following these transactions, the indirect beneficial ownership of CD Financial LLC decreased from 13,282,396 shares to 13,042,396 shares.
• The cash payment received by CD Financial LLC for each tranche was determined by a formula based on the volume-weighted average price (Settlement Price) on the maturity date, which was between a Floor Price of $29.0933 and a Cap Price of $38.7911.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to a significant reduction in indirect insider ownership by a Director and 10% owner. However, the negative impact is mitigated by the fact that these were pre-arranged transactions under a Rule 10b5-1 plan, indicating a planned liquidity event rather than a reaction to new adverse company developments.

Positives

• The transaction was part of a pre-arranged plan (Rule 10b5-1(c)), indicating a planned liquidity event rather than a reaction to new negative information.
• CD Financial LLC received cash from the original VPF agreement, providing liquidity.

Negatives

• A significant reduction in indirect insider ownership (360,000 shares) by a Director and 10% Owner.
• While pre-arranged, insider selling can sometimes be perceived negatively by the market.

Risks

• Perception of reduced insider confidence due to the disposal of a substantial number of shares.
• Potential for negative market reaction if investors misinterpret the pre-arranged nature of the sale.

Future Outlook

No specific forward-looking statements or guidance are provided in this Form 4 filing, as it reports past transactions.

Industry Context

Insider transactions, particularly those involving significant share disposals by key personnel like directors and large shareholders, are closely watched by the market. While pre-arranged plans (Rule 10b5-1) are common for managing liquidity and avoiding accusations of trading on inside information, large sales can still influence investor sentiment regarding a company's future prospects or valuation, even if the underlying business fundamentals remain strong.

Comparison to Industry Standards

• The use of a Variable Prepaid Forward Sale (VPF) contract is a standard financial instrument for large shareholders to monetize a portion of their holdings, manage risk, and achieve liquidity while potentially deferring capital gains taxes.
• The structure with Floor and Cap prices is typical for such instruments, providing a range for the final settlement value.
• The physical settlement of shares is a common outcome for VPFs.
• Comparable transactions are frequently seen across various industries when founders, early investors, or long-serving executives seek to diversify their personal portfolios, similar to structured sales utilized by executives at tech companies like Microsoft or Amazon, or consumer goods companies.

Related Party Transactions

• The disposal of shares was conducted by CD Financial LLC, an entity where the reporting person, Deborah DeSantis, is the manager and holds shared voting and dispositive power.
• The Carl DeSantis Revocable Trust, which owns a 99% beneficial interest in CD Financial LLC, is also managed by the reporting person as a trustee. This constitutes a related party transaction.

Stakeholder Impact

• Shareholders: May perceive a reduction in insider confidence due to the disposal of a large block of shares, potentially leading to short-term negative sentiment. However, the pre-arranged nature of the sale under a 10b5-1 plan suggests it's a planned liquidity event rather than a signal of deteriorating company fundamentals.

Key Dates

Recommendation

While the disposal of a significant number of shares by a director and 10% owner might typically signal a negative outlook, this transaction was the settlement of a pre-arranged Variable Prepaid Forward Sale (VPF) contract under a Rule 10b5-1 plan. This indicates a planned liquidity event rather than a discretionary sale based on new, negative information about Celsius Holdings. Therefore, it does not necessarily reflect a change in the insider's long-term view of the company's prospects. Investors should consider this a scheduled event and not an immediate bearish signal, warranting a "hold" recommendation to assess future company performance and other market factors.

Keywords

Celsius Holdings, CELH, Form 4, insider transaction, stock sale, director, 10% owner, Deborah DeSantis, Variable Prepaid Forward, VPF, Rule 10b5-1, beneficial ownership