FOR IMMEDIATE RELEASE
Celsius Announces Closing of $10 Million Convertible Note Financing with Strategic Partners
Files Shelf Registration Statement to Facilitate Future Long-Term Financings
Boca Raton, FL (December 27, 2018) – (Nasdaq: CELH) Celsius Holdings Inc., maker of the leading global fitness drink, CELSIUS®, today announced that the Company has entered into convertible loan agreements with its affiliates Charmnew Limited (“Charmnew”), Grieg International Limited (“Grieg”) and CD Financial, LLC (“CD Financial”), its largest shareholder, for the issuance of an aggregate of $10 million in principal amount of unsecured convertible notes due December 2020.
The principal amount of the loan with CD Financial is $5 million and replaces an existing $3.5 million credit facility between the Company and CD Financial, netting additional proceeds of $1.5 million. The principal amount of the loans with Charmnew and Grieg are $3.0 million and $2.0 million, respectively and represent new capital. Celsius intends to use the aggregate of $6.5 million of net proceeds from the loans for working capital purposes in support of the ongoing expansion of its operations.
The convertible notes bear interest at a rate of 5% per annum, payable semi-annually, and mature two years from the effective date of each note. Holders of the notes each have the option, on or prior to the maturity date, to convert the entire principal amount and all accrued but unpaid interest on the notes into shares of Celsius’ common stock at a conversion price equal to the average closing price for our shares during the 10 business days prior to the loan finding date, less a discount of 10%. Prepayment of a note requires prior written consent from the lender.
“The continued excitement and investment by our strategic partners and largest shareholders, reinforces their support of Celsius, along with our progress and achievements throughout 2018 and the continued momentum the company is positioned for going forward. Their financial support has provided Celsius the growth capital needed at strategic times in the past without the need to utilize more dilutive open market funding transactions and today’s announcement further solidifies our ongoing partnership,” commented John Fieldly, President and Chief Executive Officer. “The additional capital provides Celsius sufficient resources to execute our current 2019 operating plans given our proven ability to achieve continued record sales growth at a cash flow breakeven level in North America and Europe. Moreover, we have completed the initial capital-intensive launch of our product line in China and while we will continue to have expenditures for ongoing marketing initiatives, we will evaluate different “going to market models” to allow us to achieve the best ROI for our shareholders, as we expand throughout this important market for Celsius.”
In addition, the Company also announced that while it has no present intention to undertake any additional financing initiatives, in order to facilitate future long-term financings, Celsius has filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (the “SEC”) to register the potential offer and sale to the public, from time to time in one or more offerings, of an indeterminate number of shares of its common stock, preferred stock, debt securities, rights and warrants up to a total aggregate offering amount of $50,000,000.
The specifics of any future offering, including the prices and terms of any such securities offered by the Company, will be determined at the time of any such offering and will be described in detail in a separate prospectus supplement, which will be filed with the SEC at the time of the offering. The registration statement is subject to review by the SEC. The filing of the shelf registration does not constitute an offer of securities for sale and does not require the Company to offer or sell any securities.
The registration statement on Form S-3 has not yet been declared effective by the SEC. The securities may not be sold and offers to buy may not be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Celsius Holdings, Inc.
Celsius Holdings, Inc. (Nasdaq: CELH), founded in April 2004, is a global company with a proprietary, clinically proven formula for its brand CELSIUS®. Celsius Holdings, Inc. has a corporate mission to become the global leader of a branded portfolio consisting of proprietary, clinically proven innovations which offer significant health benefits. CELSIUS®’ Original Line comes in nine delicious sparkling and non-carbonated flavors in sleek 12oz cans and is also available in single-serve powdered packets. CELSIUS®’ Natural Line is available in five refreshing flavors and the line is naturally caffeinated and naturally sweetened.
New to the portfolio, trainer-grade CELSIUS HEAT™ offers an additional 100mg of caffeine over CELSIUS®, to total 300mg per can, and contains 2,000mg of L-citrulline, a vasodilator. CELSIUS HEAT™ is sold in 16oz cans and is available in seven carbonated flavors. CELSIUS HEAT™ is a thermogenic pre-workout drink and targets professional trainers, competitive athletes, the military and first responders. CELSIUS HEAT™ was developed for those seeking a trainer-grade version of CELSIUS® versus the Original Line, which is sold in a smaller can package and appeals to the masses as an active lifestyle brand.
CELSIUS® has zero sugar, no preservatives, no aspartame, no high fructose corn syrup, and is non-GMO, with no artificial flavors or colors. The CELSIUS® line of products is Certified Kosher and Vegan. CELSIUS® is also soy and gluten free and contains very little sodium. CELSIUS® is sold nationally at fitness clubs, 7-Eleven, Sprouts, The Fresh Market and key regional retailers such as HEB, Publix, Winn-Dixie, Harris Teeter, Shaw’s, Food Lion, CVS and many others.
CELSIUS®’ functional claims are backed by six published university studies. The first study was conducted in 2005 and additional studies from the University of Oklahoma were conducted over the next five years. The studies were published in peer-reviewed journals and validate the unique benefits that CELSIUS® provides. For more information, please visit www.celsiusholdingsinc.com.