Form 4: Celsius Holdings Director Enters Prepaid Variable Forward Sale Contract for 100,000 Shares

William H. Milmoe, a Director and 10% owner of Celsius Holdings, Inc., entered into a prepaid variable forward sale contract involving 100,000 shares of the company's common stock, receiving an upfront cash payment of $3.8 million.

Summary

• William H. Milmoe, a Director and 10% owner of Celsius Holdings, Inc. (CELH), entered into a prepaid variable forward sale contract with an unaffiliated third-party purchaser on June 16, 2025.
• The contract obligates Mr. Milmoe to deliver up to 100,000 shares of Celsius common stock (or an equivalent cash amount) at the contract's maturity on June 21, 2027.
• In exchange for assuming this obligation, Mr. Milmoe received an upfront cash payment of $3,798,794.10 on June 23, 2025.
• He pledged 100,000 shares of Celsius common stock to secure his obligations under the contract but retains dividend and voting rights in the pledged shares during the term.
• The number of shares to be delivered at maturity depends on the volume-weighted average price (VWAP) of Celsius common stock on the designated valuation date, with a Floor Price of $39.2979 and a Cap Price of $52.3972.
• Mr. Milmoe retains the option to net-settle the contract with cash or shares, or fully settle with 100% of the pledged shares for a variable cash payment.

Sentiment

Score: 5

Explanation: The document is a factual report of an insider transaction. It is neutral in sentiment regarding the company's performance, as it describes a personal financial strategy of a director rather than company-specific operational or financial news. The transaction itself is a common financial maneuver for large shareholders.

Positives

• The reporting person received a significant upfront cash payment of $3,798,794.10, providing immediate liquidity.
• The reporting person retains dividend and voting rights for the pledged shares until the contract matures, allowing continued participation in company governance and income.
• The variable forward structure allows the reporting person to potentially benefit from some upside in the stock price up to the Cap Price, while also providing downside protection below the Floor Price.

Negatives

• The reporting person has effectively locked in a sale of up to 100,000 shares, limiting future upside participation beyond the Cap Price of $52.3972.
• The transaction represents a reduction in the reporting person's direct economic exposure to the full future appreciation of Celsius stock.
• The pledging of shares, while common in such transactions, could be perceived negatively by some investors, even though dividend and voting rights are retained.

Risks

• Market Price Volatility: The number of shares to be delivered, or the cash equivalent, is dependent on the future market price of Celsius common stock, introducing uncertainty for the reporting person's final obligation.
• Counterparty Risk: While the filing states an "unaffiliated third-party purchaser," there is always an inherent, albeit typically low, risk associated with the counterparty's ability to fulfill their side of the contract.
• Liquidity Risk for Reporting Person: If the stock price falls significantly, the reporting person might be obligated to deliver all 100,000 shares, potentially crystallizing a loss compared to the current market value if the upfront payment was less than the current market value of 100,000 shares.

Future Outlook

The document details a specific derivative transaction by an insider and does not provide forward-looking statements or guidance regarding the company's operational or financial performance. It outlines the future settlement mechanism and maturity date of the contract.

Management Comments

• "On June 16, 2025, the Reporting Person entered a prepaid variable forward sale contract with an unaffiliated third-party purchaser."
• "The contract obligates the Reporting Person to deliver to the purchaser up to 100,000 shares of Celsius Holdings, Inc. common stock (or, at his election, an equivalent amount of cash based on the market price of Celsius common stock) at the maturity of the contract (occurring on June 21, 2027)."
• "In exchange for assuming this obligation, the Reporting Person received a cash payment of $3,798,794.10 on June 23, 2025."
• "The Reporting Person pledged 100,000 shares of Celsius common stock to secure his obligations under the contract and retained dividend and voting rights in the Pledged Shares during the term of the pledge."

Industry Context

This transaction is an example of an insider using a sophisticated financial instrument to monetize a portion of their equity holdings while retaining some upside potential and voting rights. Such transactions are common among executives and large shareholders seeking liquidity or diversification without an outright sale. In the beverage industry, where Celsius operates, executive compensation often includes significant equity, making such financial planning tools relevant for long-term holders.

Comparison to Industry Standards

• Prepaid variable forward contracts are a standard financial instrument used by high-net-worth individuals and corporate insiders to monetize concentrated stock positions, manage risk, and achieve liquidity without immediately selling shares.
• Companies like Coca-Cola (KO) or PepsiCo (PEP) executives, or those in other high-growth consumer goods companies, might utilize similar structures to manage their equity exposure.
• The structure, including the floor and cap prices, is typical for these types of contracts, allowing the seller to participate in a limited range of stock appreciation while providing downside protection.
• The retention of voting and dividend rights is a common feature that distinguishes these transactions from outright sales or simple pledges for a loan.

Stakeholder Impact

• Shareholders: The transaction indicates a director monetizing a portion of their holdings, which could be interpreted as a diversification or liquidity event. The pledging of shares might be viewed with slight caution, though voting rights are retained. The total number of shares involved (100,000) is relatively small compared to the company's overall market capitalization, so the direct impact on share supply is minimal.
• Company: No direct operational or financial impact on Celsius Holdings, Inc. as this is a personal transaction of a director.

Next Steps

• Maturity of the prepaid variable forward sale contract on June 21, 2027, at which point the Reporting Person will deliver shares or cash based on the contract terms.

Key Dates

Recommendation

Keywords

Celsius Holdings, CELH, SEC Form 4, Insider Transaction, Prepaid Variable Forward Sale Contract, Equity Derivatives, Director Stock Sale, Share Pledge, William H. Milmoe, Stock Ownership Change