Monster Beverage (MNST) 10-K risk factor changes: FY2023 vs FY2022

| | ● | We [added: primarily] rely on bottlers and other contract packers to manufacture our products. If we are unable to maintain good relationships with our bottlers and contract packers and/or their ability to manufacture our products becomes constrained or unavailable to us, our business could suffer. |

| | ● | We rely on [removed: our breweries] [added: limited Company-owned facilities] for production of certain of our [added: non-alcohol and] alcohol beverages, and developments negatively affecting production at such facilities could materially impact the financial results of our [removed: Alcohol Brands segment.] [added: business.] |

| | ● | Criticism of our beverages [removed: and/or criticism] or a negative perception of our products generally could adversely affect us. |

| | ● | Our inability to implement our growth strategy, including expanding our business in existing and new [removed: sectors, such as the alcohol beverage sector,] [added: sectors] or successfully integrate acquired businesses or assets could adversely affect our business and financial results. |

| | ● | If we are not able to pass on increases in the costs of raw materials, including aluminum cans, ingredients, fuel and/or costs of [removed: co-packing or if] [added: co-packing,] we [removed: experience shortages of such raw materials,] [added: may face a higher cost base, and] our business and results of operations could be [removed: materially,] adversely [removed: affected and result in a higher cost base.] [added: affected.] |

| | ● | Our failure to accurately estimate demand for our products or maintain sufficient inventory levels [added: or anticipate shortages of raw materials] could adversely affect our business and financial results. |

| | ● | The costs of packaging [removed: supplies,] [added: supplies,raw material inputs,] ocean and domestic freight, and inflation generally may adversely affect our results of operations. |

| | ● | Global or regional catastrophic [removed: events, such as the military conflict in Ukraine,] [added: events] could impact our operations and affect our ability to grow our business. |

| | ● | Negative publicity (whether or not warranted) could damage our brand image and corporate [removed: reputation,] [added: reputation] and may cause our business to suffer. |

| | ● | Changes in government regulation, or a failure to comply with existing regulations, related to energy [removed: drinks,] [added: drinks] could adversely affect our business, financial condition and results of operations. |

| | ● | We may be required [removed: in the future] to record a [removed: significant] charge to earnings if our goodwill or intangible assets become impaired. |

Furthermore, as of February [removed: 16, 2023,] [added: 15, 2024,] Mr. Sacks and Mr. Schlosberg together may be deemed to beneficially own and/or exercise voting control over approximately [removed: 9.3%] [added: 8.2%] of our outstanding common stock.

As of February [removed: 16, 2023,] [added: 15, 2024,] TCCC owned approximately [removed: 19.5%] [added: 19.6%] of our common stock.

_We [added: primarily] rely on bottlers and other contract packers to manufacture our products.

In [removed: 2022,] [added: 2023,] we continued to outsource manufacturing of [added: most of] our non-alcohol finished goods to bottlers and other contract packers.

For example, in 2022, sales of many of our product lines continued to be adversely impacted by production capacity constraints as a result of above forecast [added: consumer] demand.

A lengthy disruption or delay in the production of any of our products could significantly adversely affect, and has adversely affected, our revenues from and/or costs of such products, because alternative co-packing facilities in the United States and abroad with adequate [removed: long-][added: long-term capacity may not be available for such products either at commercially reasonable rates and/or costs, within a reasonably short time period and/or within a geographically cost effective distance, if at all.]

_We rely on [removed: our breweries] [added: limited Company-owned facilities] for production of [added: certain of] our [added: non-alcohol and] alcohol beverages, and developments negatively affecting production at such facilities could materially impact the financial results of our [removed: Alcohol Brands segment._][added: business._]

[removed: We] [added: Further, we] are [removed: currently] dependent on [removed: CANarchy’s] [added: Monster Brewing Company’s] portfolio of craft breweries, which includes Oskar Blues Brewery, Cigar City Brewing, Squatters Craft Beers, Wasatch Brewery, Deep Ellum Brewing Company, and Perrin Brewing Company, to manufacture [added: certain of] our alcohol products.

[removed: Adverse] [added: Likewise, adverse] changes or developments affecting our currently limited number of breweries could hinder our ability to produce alcohol products to take to market on a timely basis or require us to entirely suspend [added: certain of] our Alcohol Brands segment operations.

Alternative facilities with sufficient capacity or capabilities may not be readily available or may take significant time or money to run at the same capacity as our [added: Phoenix facility, Norwalk facility or our] current breweries.

Such significant disruption may, in turn, have an adverse effect on gross margins, operating cash flows, and overall financial performance of our [removed: Alcohol Brands segment.][added: business.]

Unilateral decisions by bottlers/distributors, buying groups, convenience [added: and gas] chains, grocery chains, mass merchandisers, specialty chain stores, club stores, e-commerce retailers, e-commerce websites [removed: and] [added: and/or] other customers, including retailer disagreements with our bottlers/distributors, to discontinue carrying all or any of our products that they are carrying at any time, restrict the range of our products they carry, impose restrictions or limitations on the sale of our products and/or the sizes of containers of our products and/or devote less resources to the sale of our products could cause our business to suffer.

Moreover, [removed: competitors’] [added: competitors’, consumers’] or others’ attempts to persuade regulators, retailers, and/or customers in certain countries to reduce the permitted or maximum container sizes for our products from those currently being sold and marketed by us could negatively impact our business.

Bottler/distributor consolidation may also have an [added: adverse] impact on our business.

As a result, if we are unable to maintain good relationships with these bottlers/distributors, if changes in control or ownership occur within the current distribution network, or if they do not effectively focus on marketing, promoting, selling [removed: and] [added: and/or] distributing our products, sales of our products could be adversely affected.

The marketing efforts of our bottlers/distributors are important [removed: for] [added: to] our success.

If our brands prove to be less attractive to our existing [removed: bottlers and distributors,] [added: bottlers/distributors,] if we fail to attract additional [removed: bottlers and distributors,] [added: bottlers/distributors,] and/or our [added: bottlers/distributors do not market, promote and/or distribute our products effectively, our business, financial condition and results of operations could be adversely affected.]

Competitive pressures in the energy drink category could impact our revenues, cause price erosion and/or lower [added: our] market share, any of which could have a material adverse effect on our business and results of operations.

_Criticism of our beverages [removed: and/or criticism] or a negative perception of our products generally could adversely affect us._

Moreover, anti-alcohol groups have successfully advocated, and increasingly continue to advocate, for more stringent labeling requirements, higher taxes, and [added: other regulations designed to curtail alcohol consumption.]

In response to these concerns and advocacy, advertising by alcohol producers could be further restricted, [removed: additional,] [added: additional] cautionary labeling or packaging requirements might be imposed, further restrictions on the sale of alcohol might be imposed, or there may be renewed efforts to impose increased excise or other taxes on alcohol sold in the United States or abroad.

[removed: In addition, the increase] of [removed: such criticism and negative perception of the relative healthfulness or safety of] alcohol beverages [added: generally] could decrease sales and [added: the] consumption of alcohol, including the demand for our alcohol products.

We also compete with companies that are smaller or primarily national or local in operations, such as CELSIUS, PRIME, C4, Alani Nu, [removed: Bang,] GHOST, and others as well as local craft breweries in our Alcohol Brands segment.

[removed: We anticipate competition will remain robust as some] [added: Some] competitors are consolidating (as evidenced by business combinations of substantial value carried out by significant competitors in recent years), building more capacity, expanding geographically, and/or adding more SKUs and styles.

Additionally, the number of competitors, especially craft brewers and craft distilleries, within the alcohol space and the sales of hard seltzers, FMBs, craft-brewed domestic beers, imported beers, CBD and other cannabis beverages, and ready-to-drink spirits are expected to increase, particularly following the U.S. Treasury Report, “Competition in the Market for Beer, Wine and Spirits” (the “Treasury [removed: Report”)] [added: Report”),] which promises to evaluate the impact of consolidation on marketplace competition.

If we are unable to profitably expand our own e-commerce capabilities and/or if e-commerce retailers take significant market share away from traditional [removed: retailers] [added: retailers,] our business may be adversely affected.

_Our inability to implement our growth strategy, including expanding our business in existing and new [removed: sectors, such as the alcohol beverage sector,] [added: sectors] or to successfully integrate acquired businesses or assets could adversely affect our business and financial results._

[removed: On February 17, 2022, we acquired CANarchy, a craft beer and hard seltzer company and] [added: We] may continue to make acquisitions that expand our business [removed: into new sectors in] [added: within] the beverage industry.

Risks associated with entering into a new [removed: sector include:] [added: sector, such as the alcohol beverage sector, include, but are not limited to:] (1) having no or limited experience in such sector; (2) [removed: increased] exposure to certain governmental regulations and compliance requirements; (3) difficulties developing, manufacturing, and marketing the products of newly acquired companies; and (4) our lesser familiarity with consumer preferences in the new sector.

| | ● | Our use of information technology and third party service providers exposes us to cybersecurity breaches and other interruptions that could disrupt our business operations and adversely impact our reputation and results of operations. |

| | ● | If we fail to comply with data privacy and personal data protection laws, we could be subject to adverse publicity, government enforcement actions and/or private litigation, which may negatively impact our business and operating results. |

Currently, Bang Energy® beverages are manufactured at our recently acquired facility in Phoenix.

Adverse changes or developments affecting our Phoenix facility could adversely impact our ability to produce Bang Energy® drinks or cause us to halt our production of such beverages.

In particular, if we are unable to transition distribution agreements in our Alcohol Brands segment, we may face increased costs to change distributors for our alcohol beverages.

Most of our sales are currently derived from our energy drinks.

In addition, the increase of such criticism and negative perception

We anticipate competition will remain robust due to a number of new entrants in the energy drink category.

Moreover, there can be no assurance

that we will successfully react to the emergence of new subcategories within the energy and/or alcohol beverage sectors.

On July 31, 2023, we acquired substantially all of the assets of Bang Energy.

Among other assets, the acquisition included the Bang Energy® drink business.

Prior to the Bang Energy acquisition, we acquired Monster Brewing Company, a craft beer and hard seltzer company, in February 2022.

Our business may also be adversely impacted if we are unable to successfully transition the acquired Bang Energy® beverages to the Company’s primary bottlers/distributors or if we are unable to consolidate operations and/or rationalize brands acquired from Bang Energy® and Monster Brewing Company.

For example, we may be unable to procure shelf space, retain customers, or increase sales of the acquired Bang Energy® beverages.

Our acquisition of Monster Brewing Company and any future acquisitions we may make that expand our business into new sectors in the beverage industry, also pose unique risks.

We do not have possession of the list of such flavor ingredients or formulas used in the production of

For example, recently, certain retailers have ceased the sale of certain beverage products due to continued price increases.

these packaging supplies.

We use derivative instruments to manage a portion of this risk in relation to aluminum for cans.

These

The SEC has also proposed similar rules.

For example, in recent years, we have experienced limited recalls of certain products in Canada, Europe, and the United States.

Our use of information technology and third party service providers exposes us to cybersecurity breaches and other interruptions that could disrupt our business operations and adversely impact our reputation and results of operations.

These incidents may be caused by failures during routine operations, such as system upgrades, or by user errors, as well as network or hardware failures, malicious or

disruptive software, unintentional or malicious actions of employees or contractors, cyberattacks by hackers, criminal groups or nation-state organizations (which may include social engineering, business email compromise, cyber extortion, denial of service, or attempts to exploit vulnerabilities, such as phishing), geopolitical events, natural disasters, failures or impairments of telecommunications networks, or other catastrophic events.

Any such consequences could materially and adversely affect our financial condition, results of operations and cash flows.

We also may suffer reputational damage because of lost or misappropriated confidential or proprietary information belonging to us, or employees, customers, suppliers or other third party service providers and may become exposed to legal action and increased regulatory oversight, including governmental inquiries, investigations, enforcement actions and regulatory fines.

Although we maintain insurance coverage that may, subject to the policy’s terms and conditions, cover certain aspects of a breach or disruption, such insurance coverage may be insufficient to cover all losses.

In addition, the scope and severity of cyber threats, in particular the use of ransomware attacks, are increasing.

Due to such constant evolving nature and methods of security threats, we cannot predict the form and nature of any future incident, and the cost and operational expense of implementing, maintaining and enhancing protective measures to guard against increasingly complex and sophisticated cyber threats could increase significantly.

If we fail to adequately monitor our third party service providers’ and partners’ performance, including for compliance with regulatory and legal requirements, we may have to incur additional costs to correct errors, our reputation could be harmed or we could be subject to litigation, claims, legal or regulatory proceedings, inquiries or investigations.

These risks may also be present if our third party service providers and partners use separate information systems that are not integrated with our systems and suffer a cybersecurity incident.

These risks are also present in acquired businesses, joint ventures or companies that we invest in or partner with that use separate information systems or have not yet been fully integrated into our information systems.

As a result, we are subject to the risk that the activities associated with our third party service providers and partners will adversely affect our business, even if the cyber incident does not directly impact our systems or information.

The United Kingdom and Ireland income tax returns are subject to examination for the 2019 through 2022 tax years.

In connection with the OECD’s

For the year ended December 31, 2023, we recorded $38.7 million of impairment charges related to certain non-amortizing intangibles.

such controls and procedures, our business, results of operations, financial condition and/or the value of our stock could be materially harmed.

| | ● | We must continually maintain, monitor, protect and/or upgrade our information technology systems, including protecting us from internal and external cybersecurity threats. |

| | ● | Our investments are subject to risks which may cause losses and affect the liquidity of these investments. |

Our acquisition of AFF in 2016 brought our primary flavor supplier in-house for the majority of our Monster Energy® brand energy drinks.

However, we also procure flavors from other independent flavor suppliers.

term capacity may not be available for such products either at commercially reasonable rates and/or costs and/or within a reasonably short time period and/or within a geographically cost effective distance, if at all.

bottlers/distributors do not market, promote and distribute our products effectively, our business, financial condition and results of operations could be adversely affected.

Most of our sales are currently derived from our energy drinks, including our Monster Energy® brand energy drinks, our Reign Total Body Fuel® energy drinks and our Strategic Brands energy drinks (including our affordable brand energy drinks, principally Predator®).

In early 2018, certain retailers in the United Kingdom announced the introduction of voluntary retailer measures to prevent the sale of energy drinks to individuals under the age of 16.

other regulations designed to curtail alcohol consumption.

There is increasing awareness of and concern for health, wellness and nutrition considerations, including

Moreover, industry-wide shortages of certain juice concentrates, supplement ingredients and sweeteners have been and could, from time to time in the future, be experienced, resulting in production fluctuations and/or product shortages.

We do not use derivative instruments to manage this risk.

In China, in particular, COVID-19 policies, including certain lockdowns in 2022, adversely affected sales in the region and may continue to have an impact on our financial results in such country.

Changes in applicable laws, regulations, standards or practices related to greenhouse gas emissions, packaging and water scarcity, as well as initiatives

sale of our products and/or changes in our advertising, marketing and promotion practices, each of which could have an adverse effect on our business, financial condition or results of operations.

We must continually maintain, monitor, protect and/or upgrade our information technology systems, including protecting us from internal and external cybersecurity threats.

However, given the unpredictability of the timing, nature and scope of such disruptions, we could potentially be subject to operational interruption, damage to our brand image and private data exposure.

In the European Union, the General Data Protection Regulation (“GDPR”) became effective in May 2018 for all member states.

Included in the foregoing are long-term uncertainties surrounding the United Kingdom’s withdrawal from the European Union on January 31, 2020 (commonly referred to as

“Brexit”) and any resulting increases in tariffs, importation restrictions, out of stocks, volatility in currency exchange rates, including the valuation of the euro and the British pound in particular, changes in the laws and regulations applied in the United Kingdom or impacts on economic and market conditions in the United Kingdom, the European Union and its member states and elsewhere.

| | ● | _Pricing Actions_ – a discussion of certain pricing actions implemented during [removed: 2022;] [added: 2022 and 2023;] |

| | ● | _Results of Operations_ – an analysis of our consolidated results of operations for the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021;] [added: 2022;] |

[removed: The CANarchy Transaction facilitates our entry into the alcohol beverage sector] [added: We also develop, market, sell] and [removed: brings the Cigar CityTM family] [added: distribute craft beers, FMBs and hard seltzers under a number] of [removed: brands] [added: brands,] including Jai Alai® [removed: IPA and] [added: IPA,] Florida ManTM IPA, [removed: the Oskar BluesTM family of brands including] Dale’s Pale Ale®, Wild [removed: BasinTM] [added: Basin®] Hard Seltzers, [removed: the Deep EllumTM family of brands including] Dallas [removed: Blonde® and] [added: Blonde®,] Deep EllumTM IPA, [removed: the] Perrin Brewing CompanyTM [removed: family of brands including] Black Ale, [removed: the Squatters® family of brands including] Hop Rising® Double IPA, [removed: and the] Wasatch® [removed: family of brands including] Apricot [removed: Hefeweizen to our beverage portfolio.][added: Hefeweizen, The Beast Unleashed®, Nasty BeastTM Hard Tea and a host of other brands.]

[removed: During the year ended December 31, 2022, the Russia-Ukraine conflict] [added: We believe inflation] did not have a [removed: material] [added: significant] impact on our [removed: financial position,] results of operations [removed: and liquidity.][added: for the year ended December 31, 2023.]

[removed: Since the beginning of] [added: During] the COVID-19 pandemic [removed: and the subsequent increased demand for our energy drinks,] we prioritized ensuring product availability for our customers and consumers.

This strategic direction [removed: has] remained in place throughout the global supply chain challenges and disruptions, despite adversely impacting our profitability.

This improvement was primarily attributable to (i) [added: the] Pricing Actions, (ii) our decreased reliance on imported cans and (iii) improved finished product inventory levels in closer proximity to our customers, resulting in a reduction of long-distance freight costs.

| ● Monster Energy® ● Monster Energy Ultra® ● Monster Rehab® ● Monster Energy® Nitro ● Java Monster® ● Punch Monster® ● Juice Monster® ● [removed: Monster Hydro® Energy Water ● Monster Hydro® Super Sport ● Monster Super Fuel® ● Monster Dragon Tea® ●] Reign Total Body Fuel® ● Reign Inferno® Thermogenic Fuel ● Reign Storm® ● [removed: True North® |] [added: Bang Energy®] ● NOS® ● Full Throttle® [added: | |] ● Burn® ● Mother® ● Nalu® ● Ultra Energy® ● Play® and Power Play® (stylized) ● Relentless® ● BPM® ● BU® ● Gladiator® ● Samurai® ● Live+® ● Predator® ● Fury® |

We also develop, market, sell and distribute still and sparkling waters under the [removed: Monster®] [added: Monster] Tour [removed: WaterTM] [added: Water®] brand name.

Our net sales of [removed: $6.31] [added: $7.14] billion for the year ended December 31, [removed: 2022] [added: 2023] represented record annual net sales.

Net changes in foreign currency exchange rates had an unfavorable impact on net sales of approximately [removed: $239.5] [added: $146.7] million for the year ended December 31, [removed: 2022.][added: 2023.]

Our Monster Energy® Drinks segment represented [removed: 92.4%] [added: 91.8%] and [removed: 94.2%] [added: 92.4%] of our net sales for the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

Our Strategic Brands segment represented [removed: 5.6% and] 5.3% [added: and 5.6%] of our net sales for the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

Our Alcohol Brands segment represented [added: 2.6% and] 1.6% of our net sales for the [removed: year] [added: years] ended December 31, [removed: 2022.][added: 2023 and 2022, respectively.]

Our Other segment represented [removed: 0.4%] [added: 0.3%] and [removed: 0.5%] [added: 0.4%] of our net sales for the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

Net changes in foreign currency exchange rates had an unfavorable impact on [removed: our] net sales [removed: of] [added: in] the Monster Energy® Drinks segment of approximately [removed: $222.3] [added: $124.3] million for the year ended December 31, [removed: 2022.][added: 2023.]

Net changes in foreign currency exchange rates had an unfavorable impact on net sales in the Strategic Brands segment of approximately [removed: $17.2] [added: $22.4] million for the year ended December 31, [removed: 2022.][added: 2023.]

Net sales to customers outside the United States amounted to [removed: $2.36] [added: $2.71] billion and [removed: $2.04] [added: $2.36] billion for the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

[added: Such sales were] approximately [added: 38% and] 37% of net sales for [removed: both] the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022, respectively.]

Net changes in foreign currency exchange rates had an unfavorable impact on net sales to customers outside of the United States of approximately [removed: $239.5] [added: $146.7] million for the year ended December 31, [removed: 2022.][added: 2023.]

Net sales to customers outside the United States, on a foreign currency adjusted basis, increased [removed: 27.1%] [added: 21.2%] for the year ended December 31, [removed: 2022.][added: 2023.]

Percentages of our gross billings to our various customer types for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] are reflected below.

| ​ | | [removed: 2022] [added: 2023] | | [removed: 2021] [added: 2022] | | [removed: 2020] [added: 2021] |

| U.S. full service bottlers/distributors | | [removed: 48%] [added: 47%] | ​ | [removed: 51%] [added: 48%] | ​ | [removed: 56%] [added: 51%] |

| International full service bottlers/distributors | | [removed: 39%] [added: 40%] | ​ | 39% | ​ | [removed: 34%] [added: 39%] |

| Club stores and e-commerce retailers | | [removed: 9%] [added: 8%] | ​ | [removed: 8%] [added: 9%] | ​ | 8% |

| Retail grocery, direct convenience, specialty chains and wholesalers | | 2% | ​ | [removed: 1%] [added: 2%] | ​ | 1% |

| Alcohol, [removed: direct] value stores and other | | [removed: 2%] [added: 3%] | ​ | [removed: 1%] [added: 2%] | ​ | 1% |

Our alcohol customers include [removed: J.J. Taylor Distributing,] [added: Reyes Beverage Group,] Ben E.

Coca-Cola Consolidated, Inc. accounted for approximately [removed: 11%, 12%] [added: 10%, 11%] and 12% of our net sales for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

Reyes Coca-Cola Bottling, LLC accounted for approximately 9%, [removed: 10%] [added: 9%] and [removed: 11%] [added: 10%] of our net sales for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

Coca-Cola Europacific Partners (formerly Coca-Cola European Partners) accounted for approximately 13%, [removed: 12%] [added: 13%] and [removed: 10%] [added: 12%] of our net sales for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

| | ● | _International Growth_ – The introduction, development and sustained profitability of our brands internationally remains a key value driver for our corporate growth. One or more of our products are distributed in approximately [removed: 157] [added: 158] countries and territories worldwide. |

These measurements will continue to be a key management focus in [removed: 2023] [added: 2024] and beyond (See “Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations”).

As of December 31, [removed: 2022,] [added: 2023,] the Company had working capital of [removed: $3.76] [added: $4.43] billion compared to [removed: $3.72] [added: $3.76] billion as of December 31, [removed: 2021.][added: 2022.]

[removed: The increase in working capital was primarily the result of the increase in accounts receivable and inventories,] related to the increase in net sales for the year ended December 31, [removed: 2022.][added: 2023.]

For the year ended December 31, [removed: 2022,] [added: 2023,] our net cash provided by operating activities was approximately [removed: $887.7 million] [added: $1.72 billion] as compared to [removed: $1.16 billion] [added: $887.7 million] for the year ended December 31, [removed: 2021.][added: 2022.]

Principal uses of cash flows in [removed: 2022] [added: 2023] were purchases of investments, purchases of treasury stock, the acquisition of [removed: CANarchy,] [added: Bang Energy,] development of our brands internationally and [removed: acquisitions] [added: purchases] of real property, property and equipment.

[removed: These] [added: Except for the acquisition of Bang Energy, these] principal uses of cash flows are expected to be and remain our principal recurring use of cash and working capital funds in the future (See “Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”).

In addition, articles critical of the caffeine content in energy drinks and their perceived benefits, or alcohol drinks and their misuse or abuse, as well as articles indicating certain health risks of energy [removed: or] [added: and] alcohol drinks have been published.

| | ● | _Bang Energy Acquisition –_ a discussion of our acquisition of Bang Energy on July 31, 2023; |

Bang Energy Acquisition

On July 31, 2023, we completed the Bang Transaction.

The acquired assets primarily include the Bang Energy® drink business and a beverage production facility in Phoenix, AZ.

We implemented pricing actions including (i) price increases effective April 1, 2022 (limited pack sizes), September 1, 2022 and April 1, 2023 (limited pack sizes) in the United States, (ii) price increases at various times in certain international markets during 2022 and 2023 and (iii) decreased promotional allowances as a percentage of net sales in certain markets during 2022 and 2023 (collectively, the “Pricing Actions”).

The Pricing Actions positively impacted gross profit margins in 2023.

Gross Profit Margins

During the year ended December 31, 2023, we experienced an improvement in our gross profit margins as compared to the year ended December 31, 2022.

Keith Company, J.J. Taylor Distributing, and Sheehan Family Companies.

The increase in working capital was primarily the result of the increase in cash and cash equivalents,

| | ● | The emergence of new subcategories within the energy and/or alcohol beverage sectors that we fail (or are late) to successfully react to; |

| Basic | ​ | $ | 1.56 | ​ | $ | 1.13 | ​ | $ | 1.30 | ​ | 38.0 | % | (13.2) | % |

| Diluted | ​ | $ | 1.54 | ​ | $ | 1.12 | ​ | $ | 1.29 | ​ | 38.0 | % | (13.1) | % |

Net changes in foreign currency exchange rates had an unfavorable impact on net sales of approximately $146.7 million for the year ended December 31, 2023.

Net sales of The Beast Unleashed® FMBs, which launched during the 2023 first quarter in the United States on a rolling state basis, were $86.7 million for the year ended December 31, 2023.

Case sales for our craft beers, hard seltzers and FMBs, in 192-ounce equivalents, were 13.1 million cases for the year ended December 31, 2023, an increase of approximately 6.6 million cases or 101.3% higher than case sales of 6.5 million cases for the year ended December 31, 2022 (effectively from February 17, 2022 to December 31, 2022).

The increase for the year ended December 31, 2023 was primarily the result of the Pricing Actions, decreased freight-in costs as well as decreased aluminum can costs.

In addition, operating expenses for the year ended December 31, 2023 included $16.1 million of transaction costs related to the acquisition of Bang Energy and $42.7 million of impairment charges related to the Alcohol Brands segment (the “Alcohol Impairment Charges”).

The Alcohol Impairment Charges, due in part to the continuing challenges in the craft beer and hard seltzer categories, relate to certain non-amortizing intangibles as well as property and equipment, acquired as part of the CANarchy transaction (as defined below in Note 2, “Acquisitions”).

Operating income for the year ended December 31, 2023 increased primarily due to an increase of $619.6 million in gross profit partially offset by an increase in operating expenses of $368.6 million, which includes the Alcohol Impairment Charges.

The increase in the operating loss for the Alcohol Brands segment for the year ended December 31, 2023 was primarily as a result of the Alcohol Impairment Charges of $42.7 million.

Interest and other income (expense), net included a gain on transaction of $45.4 million related to the acquisition of Bang Energy (“Bang Transaction Gain”) for the year ended December 31, 2023.

The decrease in the effective tax rate was primarily attributable to the increase in the stock compensation deduction for the year ended December 31, 2023.

changes in the sales mix of our products and changes in and/or increased advertising and promotional expenses.

The following represents case sales for our craft beers, hard seltzers and FMBs, in 192-ounce equivalents, for the years ended December 31:

| --- | --- | --- | --- | --- | --- | --- |

| (In thousands, except average net sales per case) | | 2023 | | | 20221 | |

| Alcohol Brands segment net sales | | $ | 184,855 | | $ | 101,405 |

| Case sales | ​ | | 13,131 | ​ | | 6,525 |

| Average net sales per case - Alcohol Brands | ​ | $ | 14.08 | ​ | $ | 15.54 |

1_For the year ended December 31, 2022, effectively from February 17, 2022 to December 31, 2022._

To mitigate the impact of inflation, we implemented the Pricing Actions.

equipment, purchases of real property and purchases of treasury stock, through at least the next 12 months.

For the year ended December

31, 2023, cash used in investing activities included $363.4 million related to the acquisition of Bang Energy.

| Contractual Obligations1 | ​ | $ | 417,631 | ​ | $ | 328,200 | ​ | $ | 85,282 | ​ | $ | 4,031 | ​ | $ | 118 |

| Finance Leases | ​ | | 6,620 | ​ | | 6,601 | ​ | | 19 | ​ | | — | ​ | | — |

| Operating Leases | ​ | | 69,311 | ​ | | 13,490 | ​ | | 21,077 | ​ | | 16,922 | ​ | | 17,822 |

| Purchase Commitments2 | ​ | | 414,691 | ​ | | 394,867 | ​ | | 19,315 | ​ | | 509 | ​ | | — |

| ​ | ​ | $ | 908,253 | ​ | $ | 743,158 | ​ | $ | 125,693 | ​ | $ | 21,462 | ​ | $ | 17,940 |

| | ● | _CANarchy Acquisition –_ a discussion of our acquisition of CANarchy on February 17, 2022; |

| --- | --- | --- |

| | ● | _Russia-Ukraine Conflict –_ a discussion of the impact of the Russia-Ukraine conflict on our business and operations; |

| | ● | _The COVID-19 Pandemic_ – a discussion of the impact of the COVID-19 pandemic on our business and operations; |

CANarchy Acquisition

On February 17, 2022, we completed the CANarchy Transaction.

The CANarchy Transaction did not include CANarchy’s stand-alone restaurants.

Our organizational structure for our existing energy beverage business remains unchanged.

CANarchy is functioning independently, retaining its own organizational structure and team.

Russia-Ukraine Conflict

Net sales in Russia and Ukraine combined were approximately 1.1% of our total net sales for the twelve months ended December 31, 2021.

We will continue to monitor future developments relative to this conflict and its potential impacts.

The COVID – 19 Pandemic

The COVID-19 pandemic has directly and indirectly impacted our business.

The duration and severity of this impact will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information regarding the COVID-19 pandemic, as well as the emergence of new variants, the actions taken to limit its spread and the economic impact on local, regional, national and international markets.

See “Part I, Item 1A – Risk Factors.”

In 2022, we implemented measures to mitigate our increased costs through price increases and reductions in promotions (“Pricing Actions”).

We implemented a price increase effective September 1, 2022 in the United States and implemented price increases at various times in certain international markets, all of which positively impacted gross profit margins in the third and fourth quarters of 2022.

Distribution and Supply Chain

During the year ended December 31, 2022, we experienced a significant increase in cost of sales, resulting in a material decrease in both gross profit and gross profit as a percentage of net sales, relative to the comparative year ended December 31, 2021.

The increase in cost of sales was primarily due to (i) increased ingredient and other input costs, including secondary packaging materials and increased co-packing fees, (ii) increased logistical costs, (iii) increased aluminum can costs and (iv) geographical and product sales mix.

In the third and fourth quarters of 2022 we began to see an improvement in our gross profit margins as compared to the second quarter of 2022.

Furthermore, we experienced significant increases in distribution expenses, primarily the result of increased warehousing expenses, as well as increases in other logistical expenses, which adversely impacted operating costs.

We also develop, market, sell and distribute craft beers, FMBs and hard seltzers under a number of brands, including Jai Alai® IPA, Florida ManTM IPA, Dale’s Pale Ale®, Wild BasinTM Hard Seltzers, Dallas Blonde®, Deep EllumTM IPA, Perrin Brewing CompanyTM Black Ale, Hop Rising® Double IPA, Wasatch® Apricot Hefeweizen, The Beast UnleashedTM and a host of other brands.

Such sales were

On February 17, 2022, we completed the CANarchy Transaction which facilitated our entry into the alcohol beverage sector.

Keith, Reyes Beer Division, Sheehan Family Companies, and Admiral Beverage.

| | ● | the continuation or worsening of the COVID-19 pandemic. |

| Basic | ​ | $ | 2.26 | ​ | $ | 2.61 | ​ | $ | 2.66 | ​ | (13.2) | % | (2.1) | % |

| Diluted | ​ | $ | 2.23 | ​ | $ | 2.57 | ​ | $ | 2.64 | ​ | (13.1) | % | (2.4) | % |

There were no comparative 2021 net sales for the Alcohol Brands segment as the Company completed its acquisition of CANarchy on February 17, 2022.

The decrease for the year ended December 31, 2022 was primarily the result of increased freight rates and fuel costs, including costs relating to the importation of aluminum cans, increased ingredient and other input costs, including secondary packaging materials, increased aluminum can costs attributable to higher aluminum commodity pricing, increased co-packing fees, production inefficiencies and geographical sales mix.

The comparative operating expenses for the year ended December 31, 2021 included a $16.9 million reversal of amounts previously accrued in connection with an intellectual property claim.

In addition, CANarchy related depreciation and amortization was $8.7 million for year ended December 31, 2022.

The increase in operating expenses was partially offset by a decrease in distributor termination expenses of $5.3 million for the year ended December 31, 2022.

Operating expenses for the year ended December 31, 2019 (pre COVID-19) were $1.12 billion, or 26.6% of net sales.

The operating loss for the year ended December 31, 2022 was due in part to (i) excess depreciation and amortization as well as the fair value treatment of purchased inventory, all relating to the CANarchy Transaction, (ii) increased input costs and an underutilization

of fixed overhead and (iii) sales volume declines primarily of Wild BasinTM due in part to overall sales declines in the hard seltzer category.

The inventory acquired, which was subsequently sold, was recognized through cost of goods sold at fair value (purchased cost), resulting in no recognized profits on the associated sales.

The increase in the effective tax rate was primarily attributable to the decrease in income in certain foreign jurisdictions with lower tax rates compared to the United States.

We do not use derivative financial instruments to protect ourselves from fluctuations in interest rates [removed: and] [added: and, except for aluminum,] generally do not hedge against fluctuations in commodity prices.

Our net sales to customers outside of the United States were approximately [added: 38% and] 37% of consolidated net sales for [removed: both] the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022, respectively.]

[removed: During the year ended] December 31, [removed: 2022,] [added: 2023,] we entered into forward currency exchange contracts with financial institutions to create an economic hedge to specifically manage a portion of the foreign exchange risk exposure associated with certain consolidated subsidiaries’ non-functional currency denominated assets and liabilities.

All foreign currency exchange contracts entered into by us as of December 31, [removed: 2022] [added: 2023] have terms of three months or less.

Therefore, gains and losses on our foreign currency exchange contracts are recognized in [added: interest and] other [removed: (expense) income,] [added: income (expense),] net, in the consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item.

We do not consider the potential loss resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates as of December 31, [removed: 2022] [added: 2023] to be significant.

[removed: As of December 31, 2022, we had $1.31 billion in cash and cash equivalents, $1.36 billion in short-term investments and $61.4 million in long-term investments] Certain of these investments are subject to general credit, liquidity, market and interest rate risks.

During the year ended

As of December 31, 2023, we had $2.30 billion in cash and cash equivalents, $955.6 million in short-term investments and $76.4 million in long-term investments.

| ● Monster Energy® ● Monster Energy Ultra® ● Monster Rehab® ● Monster Energy®Nitro ● Java Monster® ● Punch Monster® ● Juice Monster® ● [removed: Monster Hydro® Energy Water ● Monster Hydro® Super Sport ● Monster Super Fuel® ● Monster Dragon Tea® ●] Reign Total Body Fuel® ● Reign Inferno® Thermogenic Fuel ● Reign Storm® ● [removed: True North® | |] [added: Bang Energy®] ● NOS® ● Full Throttle® [added: | |] ● Burn® ● Mother® ● Nalu® ● Ultra Energy® ● Play® and Power Play® (stylized) ● Relentless® ● BPM® ● BU® ● Gladiator® ● Samurai® ● Live+® ● Predator® ● Fury® |

We also develop, market, sell and distribute craft beers, hard seltzers and flavored malt beverages (“FMBs”) under a number of brands, including Jai Alai® IPA, Florida ManTM IPA, Dale’s Pale Ale®, Wild [removed: BasinTM] [added: Basin®] Hard Seltzers, Dallas Blonde®, Deep EllumTM IPA, Perrin Brewing CompanyTM Black Ale, Hop Rising® Double IPA, Wasatch® Apricot Hefeweizen, The Beast [removed: UnleashedTM] [added: Unleashed®, Nasty BeastTM Hard Tea] and a host of other brands.

We also develop, market, sell and distribute still and sparkling waters under the [removed: Monster®] [added: Monster] Tour [removed: WaterTM] [added: Water®] brand name.

According to Beverage Marketing Corporation, domestic U.S. wholesale sales in [removed: 2022] [added: 2023] for the “alternative” beverage category of the market are estimated at approximately [removed: $72.9] [added: $73.4] billion, representing an increase of approximately [removed: 10.4%] [added: 5.9%] over estimated domestic U.S. wholesale sales in [removed: 2021] [added: 2022] of approximately [removed: $66.1] [added: $69.3] billion.

We have four operating and reportable segments: (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of our Monster Energy® drinks, Reign Total Body Fuel® high performance energy drinks, [removed: Monster_®_ Tour WaterTM] [added: Reign Storm® total wellness energy drinks, Bang Energy® drinks] and [removed: True North® Pure Energy Seltzers,] [added: Monster Tour Water®,] (ii) Strategic Brands segment (“Strategic Brands”), which is primarily comprised of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in 2015 as well as our affordable energy brands, [added: Predator® and Fury®,] (iii) Alcohol Brands segment (“Alcohol Brands”), which is [removed: primarily] comprised of [removed: the] various craft [removed: beers and] [added: beers,] hard seltzers [removed: purchased as part of our acquisition of CANarchy Craft Brewery Collective LLC (“CANarchy”) on February 17, 2022 as well as The Beast UnleashedTM] [added: and] FMBs and (iv) Other segment (“Other”), which is comprised of certain products sold by American Fruits and Flavors LLC (“AFF”), a wholly-owned subsidiary of the Company, to independent third-party customers (the “AFF Third-Party Products”).

Our Monster Energy® Drinks segment primarily generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage [removed: distributors.][added: distributors (“bottlers/distributors”).]

To a lesser extent, our Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to [removed: bottlers and full service beverage distributors.][added: bottlers/distributors.]

Generally, the Alcohol Brands segment [removed: will have] [added: has] lower gross profit margin percentages than the Monster Energy® Drinks segment.

For certain risks with respect to our [removed: energy drinks] [added: beverages] see “Part I, Item 1A – Risk Factors” below.

[removed: 2022] [added: 2023] Product Introductions

During [removed: 2022,] [added: 2023,] we continued to expand our existing energy drink portfolio by adding additional products to our portfolio in a number of countries and further developed our distribution markets.

During [removed: 2022,] [added: 2023,] we sold the following new products to our customers:

| | ● | Java Monster® [removed: Cold Brew] [added: Café] Latte |

| | ● | Monster Energy® [removed: Lewis Hamilton 44] Zero Sugar |

| | ● | Monster Energy® Ultra [removed: Peachy Keen®] [added: Strawberry DreamsTM] |

Those products or product lines discontinued in [removed: 2022,] [added: 2023,] either individually or in aggregate, did not have a material adverse impact on our financial position, results of operations or liquidity.

_Monster Energy® [removed: Drinks –_] [added: Drinks_ –] a line of carbonated energy drinks.

[added: We offer the following energy drinks under the Monster Energy® drink product line: Monster Energy®, Monster Energy® Zero Sugar, Lo-Carb Monster Energy®, Monster Assault®, Juice Monster® Aussie Style LemonadeTM, Juiced Monster® Bad Apple®, Juice Monster® Khaotic®, Juice Monster® Mango Loco®, Juice Monster® Pacific Punch®, Juice Monster® PapillonTM (Juiced Monster®] Monarch in certain [removed: countries)] [added: countries),] Juice Monster® Pipeline Punch®, Juice Monster® Ripper®, [added: Juice Monster® Rio PunchTM,] Monster Energy® Import, Monster Energy® Export, M3(stylized)®, Monster Mule®, Monster [removed: Cuba Libre®, Monster] Energy Zero Ultra®, Monster Energy Ultra Black®, Monster Energy Ultra Blue®, Monster [added: Energy® Ultra Fantasy Ruby RedTM, Monster] Energy Ultra Fiesta® Mango, Monster Energy® Ultra Golden Pineapple®, Monster Energy Ultra Paradise®, Monster Energy® Ultra Peachy Keen®, Monster Energy Ultra Red®, Monster Energy Ultra Rosa®, Monster [removed: Energy] [added: Energy®] Ultra Strawberry [removed: Dreams®,] [added: DreamsTM,] Monster Energy Ultra Sunrise®, Monster Energy Ultra Violet®, Monster Energy Ultra® Watermelon, Monster Energy® Mixxd Punch, Monster Energy® Valentino Rossi, Monster Energy® Lewis Hamilton 44, Monster Energy® Lewis Hamilton 44 Zero Sugar, Monster Energy® Super Cola® (Japan), Monster® (stylized) Reserve Kiwi Strawberry, Monster® (stylized) Reserve Orange Dreamsicle, Monster® (stylized) Reserve [added: Peaches N’ Crème, Monster® (stylized) Reserve] Watermelon and Monster® (stylized) Reserve White Pineapple.

_Java [removed: Monster_® _Coffee] [added: Monster® Coffee] + Energy Drinks_ – a line of non-carbonated dairy based coffee + energy drinks.

We offer the following coffee + energy drinks under the Java Monster® product line: Java Monster® 300 French Vanilla, Java Monster® 300 Mocha, Java Monster® [added: Café Latte, Java Monster®] Cold Brew Latte, Java Monster® Cold Brew Sweet Black, Java Monster® Irish Blend®, Java Monster® [removed: Kona Blend,] [added: Irish Crème,] Java Monster® Loca Moca®, Java Monster® Mean [removed: Bean®, Java Monster® Salted Caramel] [added: Bean®] and Java Monster® [removed: Vanilla Light.][added: Salted Caramel.]

We offer the following energy [removed: teas] [added: drinks] under the [removed: Monster Energy_®_ Dragon Iced TeaTM] [added: Rehab® Monster®] product [removed: line in different countries:] [added: line:] Green Tea, Peach Tea, [removed: Raspberry] [added: Strawberry Lemonade,] Tea [added: + Lemonade, Watermelon] and [removed: Lemon] [added: Wild Berry] Tea.

We offer the following [removed: refreshment +] energy drinks under the [removed: Monster Hydro® Super Sport] [added: BPM®] product line: [removed: Blue Streak, Killer Kiwi, Macho] [added: Focus Berry Red, Focus] Mango and [removed: Red Dawg.][added: Revive Peach.]

[removed: _Monster®] [added: _Monster] Tour [removed: Water_TM _–_] [added: Water® –_] a line of deep well still and sparkling waters.

We offer the following energy drinks under the [removed: Rehab® Monster®] [added: BU®] product line: [removed: Peach Tea, Raspberry Tea, Strawberry Lemonade, Tea + Lemonade] [added: Island Punch] and [removed: Watermelon.][added: Original.]

_Reign Total Body [removed: Fuel_® _High] [added: Fuel® High] Performance Energy Drinks_ – a line of high performance energy drinks with BCAA’s, B vitamins, electrolytes and CoQ10 with zero sugar.

We offer the following high performance energy drinks under the Reign Total Body Fuel® product line: Cherry Limeade, Lemon Hdz, Lilikoi Lychee, Mang-O-Matic, Melon Mania, Orange Dreamsicle, Peach Fizz, Razzle Berry, Reignbow Sherbet, [added: Sour Gummy Worm,] Strawberry Sublime, Tropical Storm and White Gummy Bear.

_Reign [removed: Inferno_® _Thermogenic] [added: Inferno® Thermogenic] Fuel High Performance Energy Drinks_ – a line of high performance energy drinks with a thermogenic performance blend in addition to BCAA’s, B vitamins, electrolytes, and CoQ10 with zero sugar.

_Reign [removed: Storm_® _Total] [added: Storm® Total] Wellness Energy Drinks_ – a line of better-for-you energy drinks with natural caffeine, Biotin, Zinc, B vitamins, Vitamin A and Vitamin C, with zero sugar.

We offer the following under the Reign Storm® Total Wellness Energy product line: [removed: Valencia Orange,] [added: Citrus Zest, Guava Strawberry, Harvest Grape,] Kiwi Blend, Peach Nectarine, and [removed: Harvest Grape.][added: Valencia Orange.]

_BPM®_ [removed: –] [added: –] a line of carbonated energy drinks.

We offer the following energy drinks under the [removed: BPM®] [added: NOS_®_] product line: [removed: Focus Berry Red, Mango and] [added: GT Grape, Original, Sonic] Sour [removed: Twist.][added: and Zero Sugar.]

[removed: _BU®_ –] [added: _BU® –_] a line of carbonated energy drinks.

We offer the following energy drink under the [removed: BU®] [added: Fury_®_] product line: [removed: Original.][added: Gold Strike.]

We offer the following energy drinks under the Burn® product line: Apple Kiwi, Blue, Dark Energy, Fruit Punch, [added: Guava,] Mango, Original, Passion Punch, Peach, Peach Mango, Pineapple, Royal, Sour [removed: Twist] [added: Twist, Watermelon Zero Sugar, Yellow] and Zero Raspberry.

_Full Throttle®_ [removed: –] [added: –] a line of carbonated energy drinks.

[removed: _Fury®_ –] [added: _Fury® –_] a line of affordable carbonated energy drinks.

We offer the following energy drinks under the [removed: Fury_®_] [added: Predator_®_] product line: Gold [removed: Strike and] [added: Strike, Malt Smash, Mango Mayhem,] Mean [removed: Green.][added: Green, Peach, Punch, Purple Rain, Red Apple, Spicy Ginger and Tropical.]

[removed: _Gladiator®_ –] [added: _Mother®_ –] a line of carbonated energy drinks.

[removed: _Mother®_ –] [added: _Nalu® –_] a line of carbonated energy drinks.

We offer the following energy drinks under the Mother_®_ product line: Epic Swell, Frosty Berry, Kicked [removed: Apple_®_,] [added: Apple,] Kiwi Sublime, Lava Guava, Original, Passion, [added: Rainbow Sherbet,] Sugar Free, Tropical [removed: BlastTM] [added: Blast] and Zero Sugar Razzle Berry.

The Company’s subsidiaries primarily develop and market energy drinks.The Company’s subsidiary, CANarchy Craft Brewery Collective LLC (“CANarchy”), was renamed Monster Brewing Company effective January 2024.

In 2022, we completed our acquisition of Monster Brewing Company, which facilitated our entry into the alcohol beverage sector.

_Bang Energy Acquisition_

On July 31, 2023, we completed our acquisition of substantially all of the assets of Vital Pharmaceuticals, Inc. and certain of its affiliates (collectively, “Bang Energy”) (the “Bang Transaction”).

The acquired assets primarily include the Bang Energy® drink business and a beverage production facility in Phoenix, AZ.

_Stock Split_

On February 28, 2023, we announced a two-for-one stock split of our common stock to be effected in the form of a 100% stock dividend.

The common stock dividend was issued on March 27, 2023 (the “Stock Split”) and our common stock began trading at the split adjusted price on March 28, 2023.

Accordingly, all per share amounts, average common stock outstanding, common stock outstanding, common stock repurchased and equity-based compensation presented in the consolidated financial statements and notes in this Form 10-K have been adjusted retroactively, where applicable, to reflect the Stock Split.

Stockholders’ equity has been retroactively adjusted, where applicable, to give effect to the Stock Split for all periods presented by reclassifying the par value of the additional shares issued in connection with the Stock Split to common stock from retained earnings and additional paid-in capital.

| | ● | Bang Energy® Black Cherry Vanilla |

| | ● | Bang Energy® Blue Razz® |

| | ● | Bang Energy® Candy Apple Crisp® |

| | ● | Bang Energy® Cotton Candy |

| | ● | Bang Energy® Delish Strawberry KissTM |

| | ● | Bang Energy® Peach Mango |

| | ● | Bang Energy® Purple HazeTM |

| | ● | Bang Energy® Radical Skadattle® |

| | ● | Bang Energy® Rainbow Unicorn® |

| | ● | Bang Energy® Sour Heads® |

| | ● | Bang Energy® Star Blast® |

| | ● | Bang Energy® Wyldin’ WatermelonTM |

| | ● | Burn® Watermelon Zero Sugar |

| | ● | Monster Energy® Nitro Cosmic PeachTM |

| | ● | Monster® Reserve Kiwi Strawberry |

| | ● | Monster Tour Water® Deep Well Water |

| | ● | Monster Tour Water® Sparkling Deep Well Water |

| | ● | Mother® Rainbow Sherbet |

| | ● | Nalu® Cassis Lavender |

| | ● | Nalu® Strawberry Rhubarb |

| --- | --- | --- |

| | ● | NOS® Zero Sugar |

| --- | --- | --- |

| | ● | Predator® Punch |

| --- | --- | --- |

| | ● | Rehab® Monster® Wild Berry Tea |

| --- | --- | --- |

| | ● | Reign Storm® Citrus Zest |

| --- | --- | --- |

| | ● | Reign Storm® Guava Strawberry |

The Company’s subsidiaries primarily develop and market energy drinks.

_CANarchy Acquisition_

On February 17, 2022, we completed our acquisition of CANarchy, a craft beer and hard seltzer company, for $329.5 million in cash (net of cash acquired), after certain working capital adjustments (the “CANarchy Transaction”).

The transaction facilitates our entry into the alcohol beverage sector and brings the Cigar CityTM family of brands including Jai Alai® IPA and Florida ManTM IPA, the Oskar BluesTM family of brands including Dale’s Pale Ale®, Wild BasinTM Hard Seltzers, the Deep EllumTM family of brands including Dallas Blonde® and Deep EllumTM IPA, the Perrin Brewing CompanyTM family of brands including Black Ale, the Squatters® family of brands including Hop Rising® Double IPA and the Wasatch® family of brands including Apricot Hefeweizen to our beverage portfolio.

The transaction did not include CANarchy’s stand-alone restaurants.

Our organizational structure for our existing energy beverage business remains unchanged.

CANarchy is functioning independently, retaining its own organizational structure and team.

| | ● | Java Monster® Cold Brew Sweet Black |

| | ● | Juice Monster® Aussie Style LemonadeTM |

| | ● | Live+® Watermelon |

| | ● | Monster® (stylized) Reserve Orange Dreamsicle |

| | ● | Mother® Kiwi Sublime |

| | ● | Mother® Lava Guava |

| | ● | Nalu® Melon Splash |

| | ● | Play® Fruit Punch |

| | ● | Play® Peach |

| | ● | Predator® Peach |

| | ● | Predator® Red Apple |

| | ● | Rehab® Monster® Watermelon |

| | ● | Reign Total Body Fuel® Reignbow Sherbet |

| | ● | Reign Total Body Fuel® Tropical Storm |

| | ● | Relentless® Peach |

| | ● | Relentless® Raspberry |

We offer the following energy drinks under the Monster Energy® drink product line: Monster Energy®, Monster Energy® Zero Sugar, Lo-Carb Monster Energy®, Monster Assault®, Monster® Mango Loco®, Juice Monster® Aussie Style LemonadeTM, Juice Monster® Khaotic®, Juice Monster® Mango Loco®, Juice Monster® Pacific Punch®, Juice Monster® PapillonTM (Juiced Monster®

_Monster Energy® Dragon Iced Tea_TM _Energy Teas_ – a line of non-carbonated energy teas.

_Monster Hydro®_ includes two product lines: Energy Water and Super Sport.

Monster Hydro® Energy Water is a line of non-carbonated, lightly sweetened refreshment + energy drinks.

We offer the following refreshment + energy drinks under the Monster Hydro® Energy Water product line: Blue Ice®, Watermelon®, Purple Passion® and Tropical Thunder®.

Monster Hydro® Super Sport is a line of non-carbonated, lightly sweetened refreshment + energy drinks that features an enhanced electrolyte blend and BCAA’s.

_True North_® _Pure Energy Seltzers_ – a line of natural, plant-based energy drinks with an immunity boost, containing zero sugar, sweeteners, artificial flavors or colors.

We offer the following energy seltzers under the True North® product line: Black Cherry, Cucumber Lime, Grapefruit Lemonade, Mandarin Yuzu, Watermelon Mist and White Peach Pear.

We offer the following energy drink under the Gladiator® product line: Original.

We offer the following energy drinks under the Predator_®_ product line: Gold Strike, Malt Smash, Mango Mayhem, Mean Green, Peach, Purple Rain, Red Apple, Spicy Ginger and Tropical.

_Ultra Energy®_ – a line of carbonated energy drinks.

We offer the following energy drinks under the Ultra Energy® product line: Apple Kiwi, Original, Passion Punch, Peach Mango and Zero Raspberry.

Most of our alcohol finished goods are manufactured at one of our seven owned or leased manufacturing facilities, but we have started and will increase production and packaging at co-packers as we require additional capacity.

With regard to our Java Monster® product line, the dairy and retort co-packing industries are subject to shortages and increased demand from time to time, which may result in production disruption and/or higher prices.

as TCCC, PepsiCo, Inc. (“PepsiCo”), Keurig Dr. Pepper Inc. (“KDP”) and Red Bull GmbH.

Our Monster Hydro® Energy Water and Monster Hydro® Super Sport product lines compete directly with BODYARMOR, Vitamin Water, Sparkling Ice, Bai, Propel, Vita Coco, Lucozade, Powerade, Gatorade, Gatorade Fast Twitch, Gatorade Bolt24 and Prime Hydration.

Keith, Reyes Beer Division, Sheehan Family Companies, and Admiral Beverage.

As of December 31, [removed: 2022 and 2021,] [added: 2022,] no loss contingencies were included in the Company’s consolidated balance [removed: sheets.][added: sheet.]

As of December 31, 2023, $0.3 million of loss contingencies were included in the Company’s accompanying consolidated balance sheet.

On September 29, 2022, a jury in the U.S. District Court for the Central District of California (the “District Court”) awarded Monster Energy Company (“MEC”) approximately $293 million in damages in its false advertising and trade secrets case against Vital Pharmaceuticals, Inc. (“VPX”), the maker of Bang Energy.

The jury found VPX and its chief executive officer to have falsely advertised the “Super Creatine” ingredient of Bang Energy and to have acted willfully and deliberately in violating the federal Lanham Act.

The jury also found that VPX stole trade secrets and interfered with MEC’s contracts over shelf space with certain key vendors.

The parties are currently briefing post-verdict issues, including MEC’s motion for a permanent injunction relating to “Super Creatine” and request for enhanced and punitive damages.

In April 2022, MEC and Orange Bang, Inc. (“Orange Bang”) filed a joint motion in the District Court to confirm a final arbitration award against VPX that awarded MEC and Orange Bang $175.0 million and a 5% royalty on all future sales of VPX’s Bang Energy drink and other Bang-branded products as well as certain fees and costs.

Pursuant to the terms of the agreement between MEC and Orange Bang, the award and future royalties will, after accounting for MEC’s expended fees and costs, be shared equally between MEC and Orange Bang.

The arbitration arose from a settlement agreement that VPX entered into in 2010 with Orange Bang, a family-owned beverage business.

Pursuant to the terms of that agreement, VPX is only permitted to use the Bang mark on “creatine-based” products or on Bang products that are marketed and sold

only in the vitamin and dietary supplement sections of stores.

On September 29, 2022, the District Court entered final judgment confirming the award.

On October 28, 2022, VPX filed a notice of appeal of the District Court’s final judgment confirming the award.

On October 10, 2022, VPX, along with certain of its domestic subsidiaries and affiliates, filed for protection under Chapter 11 of the Bankruptcy Code in the Southern District of Florida.

Due to such ongoing proceedings, VPX’s appeal of the District Court’s final judgment confirming the final arbitration award is stayed.

While reserving all rights to appeal, VPX made its first royalty payment of $3.6 million on February 14, 2023, which is for sales of Bang Energy drinks and other Bang-branded products from October 10, 2022 through December 31, 2022.

This payment is subject to potential claw back if, among other things, the judgment and final arbitration award are overturned on appeal or VPX becomes administratively insolvent.

In addition, per ASC 450 “Contingencies”, the Company will not recognize the September 2022 jury award or April 2022 arbitration award until the awards are realized or realizable.

As of March 1, 2023, the proceedings have yet to progress to a stage where there is sufficient information for an accurate timeline of when the awards, including any royalty payments received, will be realized or realizable, if at all.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was [removed: $44,291,170,358] [added: $55,372,401,420] computed by reference to the closing sale price for such stock on the Nasdaq Global Select Market on June 30, [removed: 2022,] [added: 2023,] the last business day of the registrant’s most recently completed second fiscal quarter.

The number of shares of the registrant’s common stock, $0.005 par value per share (being the only class of common stock of the registrant), outstanding on February [removed: 16, 2023] [added: 15, 2024] was [removed: 522,409,358] [added: 1,040,636,235] shares.

Portions of the registrant’s Definitive Proxy Statement to be filed subsequent to the date hereof with the Commission pursuant to Regulation 14A in connection with the registrant’s [removed: 2023] [added: 2024] Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission no later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, [removed: 2022.][added: 2023.]

| [1A.](#ITEM1ARISKFACTORS_382207) | ​ | [Risk Factors](#ITEM1ARISKFACTORS_382207) | [removed: 20] [added: 21] |

| [1B.](#ITEM1BUNRESOLVEDSTAFFCOMMENTS_224132) | ​ | [Unresolved Staff Comments](#ITEM1BUNRESOLVEDSTAFFCOMMENTS_224132) | [removed: 39] [added: 41] |

| [2.](#ITEM2PROPERTIES_652488) | ​ | [Properties](#ITEM2PROPERTIES_652488) | [removed: 39] [added: 42] |

| [3.](#ITEM3LEGALPROCEEDINGS_355230) | ​ | [Legal Proceedings](#ITEM3LEGALPROCEEDINGS_355230) | [removed: 40] [added: 42] |

| [4.](#ITEM4MINESAFETYDISCLOSURES_9150) | ​ | [Mine Safety Disclosures](#ITEM4MINESAFETYDISCLOSURES_9150) | [removed: 41] [added: 42] |

| [5.](#ITEM5MARKETFORTHEREGISTRANTSCOMMONEQUITY) | ​ | [Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ITEM5MARKETFORTHEREGISTRANTSCOMMONEQUITY) | [removed: 42] [added: 43] |

| [7.](#ITEM7MANAGEMENTSDISCUSSIONANDANALYSISOFF) | ​ | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ITEM7MANAGEMENTSDISCUSSIONANDANALYSISOFF) | [removed: 44] [added: 45] |

| [8.](#ITEM8FINANCIALSTATEMENTSANDSUPPLEMENTARY) | ​ | [Financial Statements and Supplementary Data](#ITEM8FINANCIALSTATEMENTSANDSUPPLEMENTARY) | [removed: 67] [added: 68] |

| [1C.](#ITEM1CCYBERSECURITY_492000) | ​ | [Cybersecurity](#ITEM1CCYBERSECURITY_492000) | 41 |

Our Board recognizes the importance of maintaining the trust and confidence of our customers, consumers, employees and other stakeholders and oversees all cybersecurity matters.

Management plays a central role in our information security program, which is a critical component of our enterprise risk management and includes the implementation of controls aligned with industry best practices and applicable frameworks to identify threats, deter attacks and protect our Company assets.

In addition, we engage a range of cybersecurity experts, including cybersecurity auditors, assessors, and consultants, in evaluating and testing our risk management systems.

These partnerships enable us to leverage specialized knowledge and insights and ensure that our cybersecurity strategies and processes remain in line with industry best practices.

Our collaboration with these third parties includes regular audits, threat assessments, and consultation on security enhancements.

Our Chief Information Officer and his team are responsible for leading our cybersecurity strategy, policy, standards, architecture, and processes.

Our information security leadership team has more than 20 years of combined experience in cyber and information security matters.

Our information security program is also supported by our Chief Compliance Officer and other members of senior management.

We conduct periodic reviews of our program by internal and external experts with the results of those reviews reported to senior management and the Board.

We have procedures in place for selecting and managing our relationships with third-party service providers and other business partners.

For example, we require certain third-party service providers and other business partners to provide us with SOC II reports that demonstrate compliance with security standards.

We also actively engage with industry participants, as well as intelligence and law enforcement communities as appropriate, as part of our continuing efforts to evolve our cybersecurity governance.

Our information security team promptly informs our Incident Response Team of potentially material cybersecurity incidents, including with respect to our third-party service providers.

The Chief Information Officer briefs our Co-Chief Executive Officers and reports to the Audit Committee of our Board (the “Audit Committee”).

The Audit Committee, in turn and if necessary, briefs the Board on, among other matters, our cyber risks and threats, the status of projects to strengthen our information security systems (such as employee cybersecurity training), an assessment of the information security program, and the emerging threat landscape.

The Cybersecurity and Compliance Steering Committee, comprised of senior members of management, has convened and is scheduled to convene on a quarterly basis to review all matters related to strengthening our cybersecurity posture and providing governance.

For a discussion regarding risks from cybersecurity threats that are reasonably likely to affect the Company, see “Part I, Item 1A – Risk Factors – Our use of information technology and third party service providers exposes us to cybersecurity breaches and other interruptions that could disrupt our business operations and adversely impact our reputation and results of operations” and “If we fail to comply with data privacy and personal data protection laws, we could be subject to adverse publicity, government enforcement actions and/or private litigation, which may negatively impact our business and operating results.”

Our owned corporate [removed: facilities] [added: headquarters] located in Corona, California, consist of (i) [removed: an approximately 141,000 square-foot,] [added: a] free-standing, six-story building (LEED Gold and ENERGY STAR certified), (ii) [removed: an approximately 147,625 square-foot] [added: a] three-story parking structure and storage facility, which houses our [removed: approximately 14,000 square-foot] quality control laboratory, (iii) [removed: an approximately 75,426 square foot,] [added: a] free-standing, three-story building (currently pursuing ENERGY STAR certification), (iv) [removed: an approximately 20,661 square-foot,] [added: a] free-standing, single-story building and (v) [removed: an approximately 49,617 square-foot,] [added: a] free-standing, two-story building.

Our owned Southern California warehouse and distribution center is located in Rialto, California, [removed: consisting of an approximately 1,000,000 square-foot building] which is LEED certified.

We [removed: intend to] utilize the property as a manufacturing facility for certain of our products.

As of February 15, 2024, our principal properties include the following:

During 2023, we acquired a beverage production facility in Phoenix, Arizona, to manufacture certain of our energy drink products.

Manufacturing commenced in January 2024.

In January 2024, we acquired additional land adjoining the property to support continued development of the manufacturing site.

As of February 16, 2023, our principal properties include our corporate headquarters as well as our Southern California warehouse and distribution center.

As of February [removed: 16, 2023,] [added: 15, 2024,] there were [removed: 522,409,358] [added: 1,040,636,235] shares of the Company’s common stock outstanding held by approximately [removed: 183] [added: 189] holders of record.

On [removed: March 13, 2020,] [added: June 14, 2022,] the Company’s Board of Directors authorized a share repurchase program for the purchase of up to $500.0 million of the Company’s outstanding common stock (the [removed: “March 2020] [added: “June 2022] Repurchase Plan”).

During the year ended December 31, [removed: 2022,] [added: 2023,] the Company purchased approximately [removed: 5.1] [added: 3.3] million shares of common stock at an average purchase price of [removed: $86.89] [added: $55.52] per share, for a total amount of approximately [removed: $441.5] [added: $182.8] million (excluding broker commissions), which exhausted the availability under the [removed: March 2020] [added: June 2022] Repurchase Plan.

On [removed: June 14, 2022,] [added: November 7, 2023,] the Company’s Board of Directors authorized a share repurchase program for the purchase of up to an additional $500.0 million of the Company’s outstanding common stock (the [removed: “June 2022] [added: “November 2023] Repurchase Plan”).

During the year ended December 31, [removed: 2022,] [added: 2023,] the Company purchased approximately [removed: 3.6] [added: 4.8] million shares of common stock at an average purchase price of [removed: $88.73] [added: $54.31] per share, for a total amount of approximately [removed: $317.2] [added: $260.3] million (excluding broker commissions), under the [removed: June] [added: November] 2022 Repurchase Plan.

As of [removed: March 1, 2023, $182.8] [added: February 27, 2024, $500.0] million remained available for repurchase under the [removed: June 2022] [added: November 2023] Repurchase Plan.

During the year ended December 31, [removed: 2022,] [added: 2023,] no shares were repurchased under the November [removed: 2022] [added: 2023] Repurchase Plan.

As of [removed: March 1, 2023, $500.0] [added: February 27, 2024, $142.4] million remained available for repurchase under the November 2022 Repurchase Plan.

The aggregate amount of the Company’s outstanding common stock that remains available for repurchase under all previously authorized repurchase plans is [removed: $682.8] [added: $642.4] million as of [removed: March 1, 2023.][added: February 27, 2024.]

During the year ended December 31, [removed: 2022, 0.2] [added: 2023, 3.8] million shares of common stock were purchased from employees in lieu of cash payments for options exercised or withholding taxes due for a total amount of [removed: $12.5] [added: $214.2] million.

Such shares are included in common stock in treasury in the accompanying consolidated balance sheet at December 31, [removed: 2022.][added: 2023.]

The following tabular summary reflects the Company’s repurchase activity during the quarter ended December 31, [removed: 2022.][added: 2023.]

| November [removed: 2, 2022] [added: 7, 2023] Authorization | | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 500,000 |

[removed: ][added: ]

Cumulative total return assumes an initial investment of $100 on December 31, [removed: 2017.][added: 2018.]

The Company’s [removed: current] self-selected peer group is comprised of TCCC, [removed: Dr. Pepper Snapple Group, Inc. (through July 9, 2018),] Keurig Dr. Pepper [removed: Inc. (after July 10, 2018),] [added: Inc.,] Constellation Brands, Inc., Molson Coors Beverage Company and PepsiCo, Inc. [removed: The Company’s former self-selected peer group is comprised of TCCC, Dr. Pepper Snapple Group, Inc. (through July 9, 2018), Keurig Dr. Pepper Inc. (after July 10, 2018), National Beverage Corporation, Jones Soda Company and PepsiCo, Inc. The Company removed National Beverage Corporation and Jones Soda Company from its peer group and added Constellation Brands, Inc. and Molson Coors Beverage Company to its peer group, as such latter companies have higher market capitalizations and because the Company has recently entered the alcohol beverage industry.]

| Oct 1 – Oct 31, 2023 | ​ | — | ​ | $ | — | ​ | — | ​ | $ | 282,838 |

| Nov 1 – Nov 30, 2023 | | — | ​ | $ | — | | — | ​ | $ | 782,838 |

| Dec 1 – Dec 31, 2023 | | 791,317 | ​ | $ | 54.57 | | 791,317 | ​ | $ | 739,643 |

| Oct 1 – Oct 31, 2022 | ​ | 2,263,063 | ​ | $ | 89.10 | ​ | 2,263,063 | ​ | $ | 182,837 |

| Nov 1 – Nov 30, 2022 | | — | ​ | $ | — | | — | ​ | $ | 682,837 |

| Dec 1 – Dec 31, 2022 | | — | ​ | $ | — | | — | ​ | $ | 682,837 |

The information required to be furnished in response to this Item 8 follows the signature page and Index to Exhibits hereto at pages 77 through [removed: 125.][added: 124.]

Under the supervision and with the participation of our management, including our Co-Chief Executive Officers and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on the framework in _Internal Control – Integrated Framework_ _(2013)_ issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our management’s evaluation under the framework in _Internal Control - Integrated Framework (2013)_, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

Our internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] has been audited by [removed: Deloitte] [added: Ernst] & [removed: Touche] [added: Young] LLP, an independent registered public accounting firm, as stated in their attestation.

_Changes in Internal Control Over Financial Reporting_ – There were no changes in the Company’s internal controls over financial reporting during the quarter ended December 31, [removed: 2022,] [added: 2023,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

To the [added: Stockholders and the] Board of Directors [removed: and Stockholders] of [added: Monster Beverage Corporation and Subsidiaries]

[removed: Opinion] [added: Opinion] on Internal Control [removed: over] [added: Over] Financial [removed: Reporting][added: Reporting]

We have audited [removed: the] [added: Monster Beverage Corporation and Subsidiaries’] internal control over financial reporting [removed: of Monster Beverage Corporation and subsidiaries (the ”Company”)] as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in [removed: _Internal Control —Integrated] [added: Internal Control—Integrated] Framework [removed: (2013)_] issued by the Committee of Sponsoring Organizations of the Treadway Commission [removed: (“COSO”).][added: (2013 Framework), (the COSO criteria).]

In our opinion, [removed: the Company] [added: Monster Beverage Corporation and Subsidiaries (the Company)] maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on [removed: criteria established in _Internal Control — Integrated Framework (2013)_ issued by COSO.][added: the COSO criteria.]

We [removed: have] also [added: have] audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [removed: (“PCAOB”),] [added: (PCAOB),] the consolidated [removed: financial statements] [added: balance sheet of Monster Beverage Corporation] and [removed: financial statement schedule] [added: Subsidiaries] as of [added: December 31, 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity] and [added: cash flows] for the year ended December 31, [removed: 2022,] [added: 2023, and the related notes (collectively referred to as the “financial statements”)] of the Company and our report dated [removed: March 1, 2023,] [added: February 29, 2024] expressed an unqualified opinion [removed: on those financial statements.][added: thereon.]

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial [removed: reporting,] [added: reporting] included in the accompanying [removed: Management’s] [added: “Management’s Annual] Report on Internal Control Over Financial [removed: Reporting.][added: Reporting”.]

[removed: Definition] [added: Definition] and Limitations of Internal Control [removed: over] [added: Over] Financial [removed: Reporting][added: Reporting]

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that [removed: the] controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

| ​ | ​ |

| --- | --- |

| ​ | /s/ Ernst & Young LLP |

| Irvine, CA | ​ |

| February 29, 2024 | ​ |

Monster Beverage Corporation

Corona, California

/s/ DELOITTE & TOUCHE LLP

Costa Mesa, California

March 1, 2023

The information required by this item regarding our directors is included under the caption “Proposal One – Election of Directors” in our Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, [removed: 2022] [added: 2023] (the [removed: “2023] [added: “2024] Proxy Statement”) and is incorporated herein by reference.

Information concerning the Audit Committee and the Audit Committee Financial Expert is reported under the caption “Audit Committee; Report of the Audit Committee; Duties and Responsibilities” in our [removed: 2023] [added: 2024] Proxy Statement and is incorporated herein by reference.

Information concerning the compensation of our directors and executive officers and Compensation Committee Interlocks and Insider Participation is reported under the captions “Compensation Discussion and Analysis,” and “Compensation Committee,” respectively, in our [removed: 2023] [added: 2024] Proxy Statement and is incorporated herein by reference.

Information concerning the beneficial ownership of the Company’s Common Stock of (a) those persons known to the Company to be the beneficial owners of more than 5% of the Company’s common stock; (b) each of the Company’s directors and nominees for director; and (c) the Company’s executive officers and all of the Company’s current directors and executive officers as a group is reported under the caption “Principal Stockholders and Security Ownership of Management” in our [removed: 2023] [added: 2024] Proxy Statement and is incorporated herein by reference.

Information concerning shares of the Company’s Common Stock authorized for issuance under the Company’s equity compensation plans is reported under the caption “Employee Equity Compensation Plan Information” in our [removed: 2023] [added: 2024] Proxy Statement and is incorporated herein by reference.

Information concerning certain relationships and related transactions is reported under the caption “Certain Relationships and Related Transactions and Director Independence” in our [removed: 2023] [added: 2024] Proxy Statement and is incorporated herein by reference.

Information concerning our accountant fees and our Audit Committee’s pre-approval of audit and permissible non-audit services of independent auditors is reported under the captions “Principal Accounting Firm Fees” and “Pre-Approval of Audit and Non-Audit Services,” respectively, in our [removed: 2023] [added: 2024] Proxy Statement and is incorporated herein by reference.

| ​ | | [removed: [Report] [added: [Reports] of Independent Registered Public Accounting [removed: Firm](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU)] [added: Firms](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU)] (PCAOB ID No. [added: 42 and PCAOB ID No.] 34) | | 78 |

| ​ | ​ | [Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021](#BALANCESHEETS_625207)] [added: 2022](#BALANCESHEETS_625207)] | ​ | 81 |

| ​ | ​ | [Consolidated Statements of Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#CONSOLIDATEDSTATEMENTSOFINCOME_622029)] [added: 2021](#CONSOLIDATEDSTATEMENTSOFINCOME_622029)] | ​ | 82 |

| ​ | ​ | [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#COMPREHENSIVEINCOME_444106)] [added: 2021](#COMPREHENSIVEINCOME_444106)] | ​ | 83 |

| ​ | ​ | [Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#EQUITY_813398)] [added: 2021](#EQUITY_813398)] | ​ | 84 |

| ​ | ​ | [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#CASHFLOWS_256883)] [added: 2021](#CASHFLOWS_256883)] | ​ | 85 |

| ​ | ​ | [Valuation and Qualifying Accounts for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#SCH)] [added: 2021](#SCH)] | ​ | [removed: 125] [added: 124] |

| 3.1 | [removed: [Certificate] [added: [Second Amended and Restated Certificate] of Incorporation of the [removed: Company, as amended] [added: Company] (incorporated by reference to Exhibit 3.1 to our Form [removed: 10-K] [added: 8-K] dated [removed: November 7, 2016).](https://www.sec.gov/Archives/edgar/data/865752/000110465916155163/a16-20895_1ex3d1.htm)] [added: June 27, 2023).](https://www.sec.gov/Archives/edgar/data/865752/000110465923074933/tm2319592d1_ex3-1.htm)] |

| 3.2 | [removed: [Second] [added: [Third] Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3.2 to our Form 8-K dated [removed: April 16, 2018).](https://www.sec.gov/Archives/edgar/data/865752/000110465918024237/a18-10038_1ex3d2.htm)] [added: June 27, 2023).](https://www.sec.gov/Archives/edgar/data/865752/000110465923074933/tm2319592d1_ex3-2.htm)] |

| 21* | [removed: [Subsidiaries](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex21.htm)] [added: [Subsidiaries](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex21.htm)] |

| [removed: 23*] [added: 23.1*] | [Consent of [removed: Independent Registered Public Accounting Firm](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex23.htm)] [added: Deloitte & Touche LLP, independent registered public accounting firm](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex23d1.htm)] |

| 31.1* | [Certification by Co-Chief Executive Officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex31d1.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex31d1.htm)] |

| 31.2* | [Certification by Co-Chief Executive Officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex31d2.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex31d2.htm)] |

| 31.3* | [Certification by Chief Financial Officer pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex31d3.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex31d3.htm)] |

| 32.1* | [Certification by Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex32d1.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex32d1.htm)] |

| 32.2* | [Certification by Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex32d2.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex32d2.htm)] |

| 32.3* | [Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465923027245/mnst-20221231xex32d3.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex32d3.htm)] |

| 101* | The following materials from Monster Beverage Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2022] [added: 2023] are furnished herewith, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] (ii) Consolidated Statements of Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] (iv) Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] (v) Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] and (vi) Notes to Consolidated Financial Statements. |

| 104* | The cover page from Monster Beverage Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2022,] [added: 2023,] formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101. |

| /s/ RODNEY C. SACKS | | Rodney C. Sacks | | Date: [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ HILTON H. SCHLOSBERG | ​ | Hilton H. Schlosberg | ​ | Date: [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ RODNEY C. SACKS | ​ | Chairman of the Board of | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ HILTON H. SCHLOSBERG | ​ | Vice Chairman of the Board of Directors | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ THOMAS J. KELLY | ​ | Chief Financial Officer (principal financial | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ ANA DEMEL | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ JAMES L. DINKINS | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ GARY P. FAYARD | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ MARK J. HALL | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ TIFFANY M. HALL | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ JEANNE P. JACKSON | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ STEVEN G. PIZULA | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

| /s/ MARK S. VIDERGAUZ | ​ | Director | ​ | [removed: March 1, 2023] [added: February 29, 2024] |

[removed: | [Report of Independent Registered Public Accounting Firm](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU) | 78 |][added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM]

| [Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021](#BALANCESHEETS_625207)] [added: 2022](#BALANCESHEETS_625207)] | 81 |

| [Consolidated Statements of Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#STATEMENTSOFINCOME_553557)] [added: 2021](#STATEMENTSOFINCOME_553557)] | 82 |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#COMPREHENSIVEINCOME_444106)] [added: 2021](#COMPREHENSIVEINCOME_444106)] | 83 |

| [Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#EQUITY_813398)] [added: 2021](#EQUITY_813398)] | 84 |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#CASHFLOWS_256883)] [added: 2021](#CASHFLOWS_256883)] | 85 |

| [Financial Statement Schedule – Valuation and Qualifying Accounts for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#SCH)] [added: 2021](#SCH)] | [removed: 125] [added: 124] |

We have audited the accompanying consolidated balance [removed: sheets] [added: sheet] of Monster Beverage Corporation and [removed: subsidiaries] [added: Subsidiaries] (the [removed: “Company”)] [added: Company)] as of December 31, [removed: 2022 and 2021,] [added: 2023,] the related consolidated statements of income, comprehensive income, [removed: stockholders’] [added: stockholders'] equity and cash [removed: flows,] [added: flows] for [removed: each of] the [removed: three years in the period] [added: year] ended December 31, [removed: 2022,] [added: 2023,] and the related notes and [removed: the] [added: financial statement] schedule listed in the Index [removed: at] [added: in] Item 15(a) (collectively referred to as the [removed: “financial] [added: “consolidated financial] statements”).

In our opinion, the [added: 2022 and 2021] financial [removed: statements] [added: statements, before the effects of the adjustments to retrospectively apply the stock split discussed in Note 1 to the financial statements,] present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022 and 2021,] [added: 2022,] and the results of its operations and its cash flows for [removed: each of] the [removed: three] years [removed: in the period] ended December 31, [removed: 2022,] [added: 2022 and 2021,] in conformity with accounting principles generally accepted in the United States of America.

We [removed: have] also [added: have] audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [removed: (“PCAOB”),] [added: (PCAOB),] the [removed: Company’s] [added: Company's] internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in [removed: _Internal Control–Integrated] [added: Internal Control-Integrated] Framework [removed: (2013)_] issued by the Committee of Sponsoring Organizations of the Treadway Commission [added: (2013 framework),] and our report dated [removed: March 1, 2023,] [added: February 29, 2024] expressed an unqualified opinion [removed: on the Company’s internal control over financial reporting.][added: thereon.]

[removed: Critical] [added: Critical] Audit [removed: Matter][added: Matter]

The critical audit matter communicated below is a matter arising from the [removed: current-period] [added: current period] audit of the financial statements that was communicated or required to be communicated to the [removed: Audit Committee] [added: audit committee] and [removed: that] [added: that:] (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, [removed: subjective,] [added: subjective] or complex [removed: judgments.][added: judgment.]

The communication of [added: the] critical audit [removed: matters] [added: matter] does not alter in any way our opinion on the [added: consolidated] financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or [removed: disclosures] [added: disclosure] to which it relates.

[added: |] We have served as the [removed: Company’s] [added: Company's] auditor since [removed: 1991.][added: 2023. | ​ |]

[removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES][added: To the Stockholders and the Board of Directors of Monster Beverage Corporation and Subsidiaries]

| 23.2* | [Consent of Ernst & Young LLP, independent registered public accounting firm](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex23d2.htm) |

| 97* | [Monster Beverage Corporation Clawback Policy, effective as of December 1, 2023.](https://www.sec.gov/Archives/edgar/data/865752/000110465924029425/mnst-20231231xex97.htm) |

| [Reports of Independent Registered Public Accounting Firms](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU) | 78 |

Opinion on the Financial Statements

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

As described in Note 1, in 2023 the Company’s Board of Directors approved a two-for-one stock split distributed in the form of a stock dividend, and all references to number of shares and per share information in the consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis.

We audited the adjustments that were applied to restate the number of shares and per share information reflected in the 2022 and 2021 consolidated financial statements.

Our procedures included (a) agreeing the authorization for the two-for-one stock split to the Company’s underlying records obtained from management, and (b) testing the mathematical accuracy of the restated number of shares, basic and diluted earnings per share, common stock repurchased and other applicable disclosures such as equity-based compensation.

In our opinion, such adjustments are appropriate and have been properly applied.

However, we were not engaged to audit, review, or apply any procedures to the 2022 and 2021 consolidated financial statements of the Company other than with respect to such adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2022 and 2021 consolidated financial statements taken as a whole.

Basis for Opinion

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We conducted our audit in accordance with the standards of the PCAOB.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

| ​ | ​ | |

| *​* | ​ | Accrued Promotional Allowances |

| _Description of the Matter_ | ​ | The Company recorded $269.1 million in accrued promotional allowances as of December 31, 2023. As described in Notes 1 and 3 of the consolidated financial statements, the Company’s promotional allowances are calculated based on various programs and agreements with its bottlers/distributors and retail customers, and accruals are established at the time of the initial product sale. These accruals are based on agreed-upon terms as well as the Company’s historical experience with similar programs. Promotional allowances for the Company’s energy drink products primarily include consideration given to its non-alcohol bottlers/distributors or retail customers. The promotional expenditures are recorded as a reduction to net sales in the period the underlying sale occurs. Auditing the accrued promotional allowances was challenging due to the amount of data utilized to compute the accrual as a result of the number of bottlers/distributors and retail customers. |

| _How We Addressed the Matter in Our Audit_ | ​ | We obtained an understanding, evaluated the design, and tested the operating effectiveness of management’s controls over promotional allowances. We also tested controls over management’s review of the amount of the recorded promotional allowances and tested management's controls to validate the completeness and accuracy of data used in management’s estimate. Our substantive audit procedures included, among others, testing the data underlying the promotional allowances and testing the completeness and accuracy of the accrued promotional allowances. We evaluated the completeness of the accrual by selecting accrued promotional allowances recorded, sending confirmation requests to the bottlers/distributors and retail customers and testing a sample of payments made subsequent to year end. We performed analytical procedures considering historical relationships between the promotional allowances recorded to sales. We additionally performed detail testing over the current year promotional expenditures and performed testing over management’s lookback analysis comparing the previous year-end accrued promotional allowances amounts to actual payments. Lastly, we performed inquiries of the Company’s sales and marketing personnel in order to corroborate our understanding of new and existing promotional programs that could impact the amounts recorded. |

| ​ | ​ |

| ​ | /s/ Ernst & Young LLP |

| ​ | ​ |

| ​ | ​ |

| Irvine, California | ​ |

| ​ | ​ |

| February 29, 2024 | ​ |

We have audited, before the effects of the adjustments to retrospectively apply the stock split discussed in Note 1 to the consolidated financial statements, the consolidated balance sheet of Monster Beverage Corporation and subsidiaries (the “Company”) as of December 31, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for the years ended December 31, 2022 and 2021, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the “financial statements”) (the 2022 and 2021 financial statements before the effects of the retrospective adjustments discussed in Note 1 to the financial statements are not presented herein).

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the stock split discussed in Note 1 to the financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied.

Those retrospective adjustments were audited by other auditors.

These financial statements are the responsibility of the Company’s management.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

We began serving as the Company’s auditor in 1991.

In 2023, we became the predecessor auditor.

| ​ | | 2023 | | | 2022 | |

| Cash and cash equivalents | ​ | $ | 2,297,675 | ​ | $ | 1,307,141 |

| STOCKHOLDERS’ EQUITY1: | ​ | ​ | ​ | ​ | ​ | ​ |

| Common stock - $0.005 par value; 5,000,000 shares authorized; 1,122,592 shares issued and 1,041,571 shares outstanding as of December 31, 2023; 1,283,688 shares issued and 1,044,600 shares outstanding as of December 31, 2022 | ​ | ​ | 5,613 | ​ | ​ | 6,418 |

Accrued Promotional Allowances — Refer to Note 3 to the financial statements

_Critical Audit Matter Description_

The Company’s promotional and other allowances are calculated based on various programs with its bottlers/distributors and retail customers, and accruals are established at the time of the initial product sale for the Company’s anticipated liabilities.

These accruals are based on agreed-upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and/or bottler/distributor and retail customer performance levels.

Promotional and other allowances for the Company’s energy drink products primarily include consideration given to its non-alcohol bottlers/distributors or retail customers, including, but not limited to, the following: (i) discounts granted off list prices to support price promotions to end consumers by retailers; (ii) reimbursements given to bottlers/distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances, and other fees for both new and existing products; (iii) agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing, and promotional activities; (iv) agreed share of slotting, shelf space allowances, and other fees given directly to retailers, club stores and/or wholesalers; (v) incentives given to bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals; (vi) discounted or free products; (vii) contractual fees given to bottlers/distributors related to sales made by the Company directly to certain customers that fall within the bottlers’/distributors’ sales territories; and (viii) certain commissions paid based on sales to bottlers/distributors.

The promotional programs for the Company’s energy drink products are of varying durations, typically ranging from one week to one year based on the agreed-upon terms.

The nature of such programs is determined on a per retail customer basis, and in certain instances, the same program is set for multiple retail customers.

The promotional expenditures are recorded as a reduction to net sales in the period the underlying sale occurs.

Total promotional expenditures included as a reduction to net sales were $990.6 million for the year ended December 31, 2022, and accrued promotional allowances were $255.6 million as of December 31, 2022.

We identified accrued promotional allowances as a critical audit matter because of the extent and subjective nature of management judgment required with respect to estimating consumer participation and/or distributor and retail customer performance levels and future promotional claims, which required a high degree of auditor judgement and an increased extent of effort.

_How the Critical Audit Matter Was Addressed in the Audit_

Our audit procedures over accrued promotional allowances for energy drink products, with respect to management’s judgment regarding levels of consumer participation and/or distributor and retail customer performance levels and future promotional claims, included the following, among others:

| | ● | We tested the effectiveness of controls over accrued promotional allowances, including those controls pertaining to management’s estimation of future promotional claims. |

| --- | --- | --- |

| | ● | We selected a sample of accrued promotional allowances recorded for specific distributors and retail customers and sent confirmation requests of the accrual recorded and key terms of the agreement directly to the distributor or retail customer. We compared the confirmation response to the accrued amount recorded by the Company. In instances of nonreplies to our confirmation request from the distributor or retail customer, we performed alternative procedures as follows: (1) developing an expectation of the accrual using current-year claim and payment data, and/or (2) vouching known claim submissions, unpaid as of period-end, to underlying supporting documentation. |

| | ● | We tested the promotional expenditure amount recorded as a reduction to net sales and assessed the reasonableness of management’s estimate by developing an expectation of the amount, based on historical promotional expenditure amounts recorded as a percentage of sales, and compared our expectation to the recorded promotional expenditure amount. |

| | ● | We performed inquiries with the Company’s sales and marketing personnel to corroborate our understanding of new and existing promotional programs that may alter the relationship between gross billings and promotional allowances, as such programs are considered by management when estimating future promotional claims. |

| | ● | We evaluated management’s ability to estimate promotional allowances by comparing the actual promotional allowances subsequently paid to the original estimates of management. |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- |

| STOCKHOLDERS’ EQUITY: | ​ | ​ | ​ | ​ | ​ | ​ |

| Common stock - $0.005 par value; 1,250,000 shares authorized; 641,844 shares issued and 522,300 shares outstanding as of December 31, 2022; 640,043 shares issued and 529,323 shares outstanding as of December 31, 2021 | ​ | ​ | 3,209 | ​ | ​ | 3,200 |

| Additional paid-in capital | ​ | | 4,780,013 | | | 4,652,620 |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Basic | ​ | $ | 2.26 | ​ | $ | 2.61 | ​ | $ | 2.66 |

| Diluted | ​ | $ | 2.23 | ​ | $ | 2.57 | ​ | $ | 2.64 |

| Basic | ​ | | 526,779 | ​ | | 528,763 | ​ | | 529,639 |

| Diluted | ​ | | 533,221 | ​ | | 535,639 | ​ | | 534,807 |

| Reclassification adjustment for net gains included in net income | ​ | | — | ​ | | — | ​ | | — |

| Net change in available-for-sale investments | ​ | | (4,887) | ​ | | (1,041) | ​ | | (110) |

| Balance, January 1, 2020 | | 636,460 | | $ | 3,182 | | $ | 4,397,511 | | $ | 5,022,480 | | $ | (32,387) | | (99,762) | | $ | (5,219,505) | | $ | 4,171,281 |

| Exercise of stock options | | 2,202 | ​ | ​ | 11 | ​ | ​ | 72,925 | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 72,936 |

| Repurchase of common stock | | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | (10,803) | ​ | ​ | (595,918) | ​ | ​ | (595,918) |

| Net income | | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,409,594 | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 1,409,594 |

| Balance, December 31, 2020 | ​ | 638,662 | ​ | $ | 3,193 | ​ | $ | 4,537,982 | ​ | $ | 6,432,074 | ​ | $ | 3,034 | ​ | (110,565) | ​ | $ | (5,815,423) | ​ | $ | 5,160,860 |

| Exercise of stock options | | 1,381 | ​ | ​ | 7 | ​ | ​ | 45,716 | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 45,723 |

| Exercise of stock options | ​ | 1,801 | ​ | ​ | 9 | ​ | ​ | 64,006 | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | 64,015 |

| CASH AND CASH EQUIVALENTS, beginning of year | ​ | | 1,326,462 | ​ | | 1,180,413 | ​ | | 797,957 |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Per Share Amounts)