Celsius Holdings, Inc. (CELH) Must Restate its Financial Statements
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Celsius Holdings, Inc. (NASDAQ: CELH) securities between August 12, 2021 and March 1, 2022, for violations of the Securities Exchange Act of 1934. Celsius develops, markets, and sells functional drinks and liquid supplements.
According to the complaint, on March 1, 2022, Celsius disclosed it could not timely file its 2021 annual report due to “staffing limitations, unanticipated delays and unidentified material errors in previous filings.” Specifically, Celsius “determined that the calculation and expense of non-cash share-based compensation, related to grants of stock options and restricted stock units awarded to certain former employees and retired directors were materially understated for the three and six month periods ended June 30, 2021 and three and nine month periods ended September 30, 2021.” As a result, management concluded that there was a material weakness in the Company’s internal controls over financial reporting. On this news, the Company’s stock fell to an intra-day low of $56.21 per share on March 2, 2022. Over two trading sessions, the Company’s stock fell $5.20, or 8.3%, to close at $57.60 per share on March 3, 2022.
During the class period, defendants failed to disclose to investors that there was a material weakness in Celsius’s internal controls over financial reporting, which caused the Company to improperly record expenses for non-cash share-based compensation for second and third quarters of 2021. As a result, the Company’s financial statements for those periods would be restated, including to report a net loss for the third quarter of 2021.
Next Steps: If you acquired shares of Celsius Holdings, Inc. (CELH) between August 12, 2021 and March 1, 2022, you have until May 16, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.