What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-03-01 compared with 2020-02-28 · 145 added, 143 removed, 279 unchanged (51% of the section changed)

12 unchanged sentences

● Juice Monster®

● Monster Hydro®

● Monster Hydro® Energy Water

● Monster Hydro ® Super Sport

● Monster HydroSport Super Fuel®

● Monster Super Fuel®

● Monster Dragon Tea®

● Caffé Monster®

● Reign Total Body Fuel TM

● Reign Inferno TM Thermogenic Fuel

● Reign Total Body Fuel ®

● Reign Inferno® Thermogenic Fuel

● Full Throttle®

8 unchanged sentences

Reportable Segments

We have three operating and reportable segments;

(i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of our Monster Energy® drinks and Reign Total Body Fuel TM high performance energy drinks, (ii) Strategic Brands segment (“Strategic Brands”), which is comprised primarily of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in 2015, as well as our affordable energy brands, and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits and Flavors, LLC (“AFF”), a wholly-owned subsidiary, to independent third-party customers (the “AFF Third-Party Products”).

Corporate and unallocated amounts that do not specifically relate to a reportable segment have been allocated to “Corporate and unallocated.”

We have three operating and reportable segments, (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of our Monster Energy® drinks and Reign Total Body Fuel® high performance energy drinks, (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, and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits and Flavors, LLC, a wholly-owned subsidiary, 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 distributors.

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2020 Product Introductions

During 2019, we continued to expand our existing portfolio of drinks and further develop our distribution markets.

During 2019, we introduced the following products:

● BPM® Sour Twist

● BU® Island Punch

● Burn® Sour Twist

● Espresso Monster® Salted Caramel

● Java Monster® Farmer’s Oats

● Java Monster® Swiss Chocolate (U.S.

national launch)

● Monster Dragon Tea® Green Tea

● Monster Dragon Tea® Yerba Mate

● Monster Energy Ultra Paradise®

● Monster HydroSport Super Fuel® Charge

● Monster HydroSport Super Fuel® Hang Time

● Monster HydroSport Super Fuel® Striker

● Monster MAXX® Mango Matic

● Monster MAXX® Rad Red

● Monster Mule® (U.S.

national launch)

● Mother® Epic Swell

● Mother® Tropical Blast

● Nalu® Frost

● Nalu® Refresh

● NOS® Power Punch

● NOS® Sonic Sour

● Predator® Mean Green

● Predator® Red Dawn

● Reign Total Body Fuel TM Carnival Candy

● Reign Total Body Fuel TM Lemon Hdz

● Reign Total Body Fuel TM Mang-O-Matic

● Reign Total Body Fuel TM Melon Mania

● Reign Total Body Fuel TM Orange Dreamsicle

● Reign Total Body Fuel TM Peach Fizz

● Reign Total Body Fuel TM Razzle Berry

● Reign Total Body Fuel TM Sour Apple

● Reign Total Body Fuel TM Strawberry Sublime

● Relentless® Sour Twist

● Ultra Energy® Apple Kiwi

During 2020, 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 2020, we sold the following new products to our bottlers/distributors:

● Monster Energy® Dragon Ice Tea TM Lemon (Brazil)

● Monster Energy® Dragon Tea TM (China)

● Monster Energy Ultra Fiesta®

● Monster Energy Ultra Rosa®

● Monster Energy Ultra® Watermelon

● Monster Hydro® Super Sport Blue Streak

● Monster Hydro® Super Sport Red Dawg

● Juice Monster® Khaotic® Energy + Juice

● Juice Monster® Papillon TM Energy + Juice

● Java Monster® 300 French Vanilla

● Java Monster® 300 Mocha

● Reign Total Body Fuel® Lilikoi Lychee

● Reign Inferno® Thermogenic Fuel Jalapeno Strawberry

● Reign Inferno® Thermogenic Fuel Red Dragon

● Reign Inferno® Thermogenic Fuel True BLU

● Burn® Dark Energy

● Burn® Peach

● Burn® Zero Raspberry

● Nalu® Black Tea & Passion Fruit

● Nalu® Green Tea & Ginger

● Fury® Gold Strike

● Ultra Energy® Peach Mango

● Ultra Energy® Zero Raspberry

● Monster Energy® Dragon’s Gold (China)

In the normal course of business, we discontinue certain products and/or product lines.

2 unchanged sentences

Monster Energy® Drinks – a line of carbonated energy drinks.

Our Monster Energy® drinks contain vitamins, minerals, nutrients, herbs and other ingredients (collectively, “supplement ingredients”) and are marketed through our full service distributor network.

Our Monster Energy® drinks contain vitamins, minerals, nutrients, herbs and other ingredients (collectively, “supplement ingredients”).

We offer the following energy drinks under the Monster Energy® drink product line:

Monster Energy®, Lo-Carb Monster Energy®, Monster Assault®, Monster Energy® Fury®, Juice Monster® Khaos®, Juice Monster® Ripper®, Juice Monster® Pipeline Punch®, Juice Monster® Mango Loco®, Juice Monster® Pacific Punch®, Monster Energy® Absolutely Zero, Monster Energy® Import, Monster Energy® Export, Punch Monster® Baller’s Blend®, Punch Monster® Mad Dog, M3(stylized)®, Monster Energy® Super Concentrate, Monster Mule®, Monster Cuba Libre®, Monster Energy Zero Ultra®, Monster Energy Ultra Blue®, Monster Energy Ultra Red®, Monster Energy Ultra Black®, Monster Energy Ultra Paradise®, Monster Energy Ultra Sunrise®, Monster Energy Ultra Citron®, Monster Energy Ultra Violet®, Monster Energy® Gronk, Monster Energy® Valentino Rossi and Monster Energy® Lewis Hamilton 44.

Caffé Monster® Energy Coffee Drinks – a line of non-carbonated, 100% Arabica coffee, reduced fat, dairy based energy coffee drinks.

We offer the following energy coffee drinks under the Caffé Monster® product line:

Vanilla, Salted Caramel and Mocha.

Monster Energy®, Lo-Carb Monster Energy®, Monster Assault®, Monster Energy® Fury®, Juice Monster® Khaos®, Juice Monster® Khaotic®, Juice Monster® Mango Loco®, Juice Monster® Pacific Punch®, Juice Monster® Papillon TM , Juice Monster® Pipeline Punch®, Juice Monster® Ripper®, Monster® Mango Loco, Monster Energy® Absolutely Zero, Monster Energy® Import, Monster Energy® Export, M3(stylized)®, Monster Energy® Super Concentrate, Monster Mule®, Monster Cuba Libre®, Monster Energy Zero Ultra®, Monster Energy Ultra Black®, Monster Energy Ultra Blue®, Monster Energy Ultra Citron®, Monster Energy Ultra Fiesta®, Monster Energy Ultra Gold®, Monster Energy Ultra Paradise®, Monster Energy Ultra Red®, Monster Energy Ultra Rosa®, Monster Energy Ultra Sunrise®, Monster Energy Ultra Violet®, Monster Energy Ultra® Watermelon, Monster Energy® Mixxd Punch, Monster Energy® Gronk, Monster Energy® Valentino Rossi and Monster Energy® Lewis Hamilton 44.

Espresso Monster® Espresso + Energy Drinks – a line of non-carbonated dairy based espresso + energy drinks.

We offer the following espresso + energy drinks under the Espresso Monster® product line:

Espresso and Cream, Salted Caramel and Vanilla Espresso.

Espresso and Milk, Salted Caramel and Vanilla Espresso.

Java 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® Farmer's Oats, Java Monster® Irish Blend®, Java Monster® Kona Blend, Java Monster® Loca Moca®, Java Monster® Mean Bean®, Java Monster® Salted Caramel, Java Monster® Swiss Chocolate and Java Monster® Vanilla Light.

Monster Dragon Tea® Energy Teas – a line of non-carbonated energy teas.

We offer the following energy teas under the Monster Dragon Tea® product line:

Green Tea, White Tea and Yerba Mate.

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

We offer the following refreshment + energy drinks under the Monster Hydro® product line:

Blue Ice®, Manic Melon®, Mean Green®, Purple Passion®, Tropical Thunder® and Zero Sugar.

Monster HydroSport Super Fuel® – a zero sugar line of non-carbonated, advanced hydration + energy drinks with BCAA’s.

Java Monster® 300 French Vanilla, Java Monster® 300 Mocha, Java Monster® Farmer’s Oats, Java Monster® Irish Blend®, Java Monster® Kona Blend, Java Monster® Loca Moca®, Java Monster® Mean Bean®, Java Monster® Salted Caramel, Java Monster® Swiss Chocolate and Java Monster® Vanilla Light.

Monster Energy® Dragon Iced Tea TM Energy Teas – a line of non-carbonated energy teas.

We offer the following energy teas under the Monster Energy ® Dragon Iced Tea TM product line in different countries:

Green Tea, White Tea and Lemon Ice Tea.

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®, Tropical Thunder® and Zero Sugar.

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

We offer the following refreshment + energy drinks under the Monster Hydro® Super Sport product line:

Blue Streak and Red Dawg.

Monster HydroSport Super Fuel® Hydration + Energy Drinks – a zero sugar line of non-carbonated, advanced hydration + energy drinks with BCAA’s.

We offer the following advanced hydration + energy drinks under the Monster HydroSport Super Fuel® product line:

3 unchanged sentences

Eclipse, Mango Matic, Rad Red, Solaris and Super Dry.

Monster Rehab® Tea + Energy Drinks – a line of non-carbonated energy drinks with electrolytes.

We offer the following tea + energy drinks under the Monster Rehab® drink line:

Monster Rehab® Tea + Lemonade + Energy, Monster Rehab® Tea + Orangeade + Energy, Monster Rehab® Peach Tea + Energy, Monster Rehab® Raspberry Tea + Energy and Monster Rehab® White Dragon Tea + Energy.

Monster Rehab® Energy Drinks – a line of non-carbonated energy drinks with electrolytes.

We offer the following energy drinks under the Monster Rehab® drink line:

Monster Rehab® Tea + Lemonade + Energy, Monster Rehab® Tea + Orangeade + Energy, Monster Rehab® Peach Tea + Energy, Monster Rehab® Raspberry Tea + Energy and Monster Rehab® Strawberry Lemonade + Energy.

Muscle Monster ® Energy Shakes – a line of non-carbonated energy shakes containing 27-grams of protein.

1 unchanged sentence

Chocolate and Vanilla.

Reign Total Body Fuel TM 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 TM product line:

Carnival Candy, Lemon Hdz, Mang-O-Matic, Melon Mania, Orange Dreamsicle, Peach Fizz, Razzle Berry, Sour Apple and Strawberry Sublime.

Reign Inferno TM Thermogenic Fuel – 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.

We offer the following high performance energy drinks under the Reign Inferno TM Thermogenic Fuel product line:

Jalapeno Strawberry, Red Dragon and True BLU.

Reign Total Body 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:

Carnival Candy, Cherry Limeade, Lemon Hdz, Lilikoi Lychee, Mang-O-Matic, Melon Mania, Orange Dreamsicle, Peach Fizz, Razzle Berry, Sour Apple, Strawberry Sublime and White Gummy Bear.

Reign 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.

We offer the following high performance energy drinks under the Reign Inferno® Thermogenic Fuel product line:

Jalapeno Strawberry, Red Dragon, True BLU and Watermelon Warlord.

Products – Strategic Brands Segment

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We offer the following energy drinks under the Burn® product line:

Apple Kiwi, Blue, Cherry, Lemon Ice, Mango, Original, Passion Punch, Sour Twist and Zero.

Apple Kiwi, Blue, Cherry, Dark Energy, Lemon Ice, Mango, Original, Passion Punch, Peach, Zero Raspberry, Sour Twist and Zero.

Full Throttle® – a line of carbonated energy drinks.

We offer the following energy drinks under the Full Throttle® product line:

Blue Agave and Citrus.

Blue Agave and Original (Citrus).

Fury® – a line of affordable carbonated energy drinks.

We offer the following energy drink under the Fury ® product line:

Gladiator® – a line of carbonated energy drinks.

8 unchanged sentences

We offer the following energy drinks under the Nalu ® product line:

Exotic, Frost, Original, Passion and Refresh.

Black Tea & Passion Fruit, Exotic, Frost, Green Tea & Ginger, Original, Passion and Refresh.

NOS® – a line of carbonated energy drinks.

We offer the following energy drinks under the NOS ® product line:

Charged Citrus, Cherried Out, GT Grape, Nitro Mango, Original, Power Punch, Sonic Sour, Sugar Free and Turbo.

GT Grape, Nitro Mango, Original, Sonic Sour and Turbo.

Play® and Power Play ® (stylized) – a line of carbonated energy drinks.

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We offer the following energy drinks under the Ultra Energy® product line:

Apple Kiwi, Fury, Mango, Original and Passion Punch.

Apple Kiwi, Fury, Mango, Original, Passion Punch, Peach Mango and Zero Raspberry.

Products – Other Segment

6 unchanged sentences

Manufacture and Distribution

We do not directly manufacture finished goods, but instead outsource the manufacturing process to third-party bottlers and contract packers.

We do not operate our own manufacturing facilities for finished goods, but instead outsource the manufacturing process to third-party bottlers and contract packers.

AFF develops and manufactures the primary flavors for our Monster Energy® Drinks segment.

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All of our finished goods are manufactured by various third-party bottlers and co-packers situated throughout the United States and abroad, under separate arrangements with each party.

The majority of our co-packaging arrangements are generally on a month-to-month basis or are terminable upon request and do not generally obligate us to produce any minimum quantities of products within specified periods.

Our co-packaging arrangements vary in terms and do not generally obligate us to procure minimum quantities of products within specified periods.

In some instances, subject to agreement, certain equipment may be purchased exclusively by us and/or jointly with our co-packers, and installed at their facilities to enable them to produce certain of our products.

4 unchanged sentences

Our ability to estimate demand for our products is imprecise, particularly with new products, and may be less precise during periods of rapid growth, particularly in new markets.

If we materially underestimate demand for our products and/or are unable to secure sufficient ingredients or raw materials including, but not limited to, aluminum cans, aluminum cap

cans, sleek aluminum cans, aluminum cans with re-sealable ends, PET plastic bottles, caps, labels, flavors, juice concentrates, coffee, tea, supplement ingredients, other ingredients and certain sweeteners, and/or procure adequate packing arrangements and/or obtain adequate or timely shipment of our products, we might not be able to satisfy demand on a short-term basis.

If we materially underestimate demand for our products and/or are unable to secure sufficient ingredients or raw materials including, but not limited to, aluminum cans, aluminum cap cans, sleek aluminum cans, aluminum cans with re-sealable ends, PET plastic bottles, caps, labels, flavors, juice

concentrates, coffee, tea, supplement ingredients, other ingredients and certain sweeteners, and/or procure adequate packing arrangements and/or obtain adequate or timely shipment of our products, we might not be able to satisfy demand on a short-term basis.

(See “Part I, Item 1A – Risk Factors”).

Our production arrangements are generally of short duration or are terminable upon request.

For many of our products, including certain of our Monster Energy® brand energy drinks, our Java Monster® product line, our Espresso Monster® product line, our Caffé Monster® product line, our Monster Hydro® product line, our Monster HydroSport Super Fuel® product line, our Muscle Monster® product line, our Monster MAXX® product line, our Juice Monster® product line, our Reign Total Body Fuel TM product line, our Reign Inferno TM Thermogenic Fuel product line and certain of our other products, there are limited co-packing facilities in our domestic and international markets with adequate capacity and/or suitable equipment to package our products.

For the majority of our products, including our Monster Energy® brand energy drinks, our Java Monster® product line, our Espresso Monster® product line, our Monster Hydro® product lines, our Monster HydroSport Super Fuel® product line, our Monster Super Fuel® product line, our Muscle Monster® product line, our Monster MAXX® product line, our Juice Monster® product line, our Reign Total Body Fuel® product line, our Reign Inferno® Thermogenic Fuel product line and certain of our other products, there are limited co-packing facilities in our domestic and international markets with adequate capacity and/or suitable equipment to package our products.

We believe a short disruption or delay in production would not significantly affect our revenues;

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Distribution levels vary by product and geographic location.

Net sales outside the United States were $1.33 billion, $1.09 billion and $909.3 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Net sales outside the United States were $1.51 billion, $1.33 billion and $1.09 billion for the years ended December 31, 2020, 2019 and 2018, respectively.

Monster Energy ® Distribution Agreements

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(a) Amended and Restated Distribution Coordination Agreement with TCCC, pursuant to which we have designated, and in the future may designate, subject to TCCC’s approval, territories in Canada and the United States in which bottlers from TCCC’s network of wholly or partially-owned and independent bottlers (the “TCCC North American Bottlers”) will distribute and sell, or continue to distribute and sell, our Monster Energy® brand energy drinks.

(b) Amended and Restated Distribution Agreement with Coca-Cola Refreshments (“CCR”), pursuant to which CCR distributes, directly and through certain sub-distributors, our Monster Energy® brand energy drinks in a large portion of the United States.

As of March 1, 2018, all of the territory previously falling under the Amended and Restated Distribution Agreement with CCR has been assigned by CCR to various TCCC network bottlers in the United States, including Coca-Cola Consolidated, Inc.

and Reyes Coca-Cola Bottling, LLC.

(c) Amended and Restated International Distribution Coordination Agreement with TCCC, pursuant to which we have designated, and in the future may designate, countries, or territories within countries, in which we wish to appoint TCCC network bottlers to distribute and sell our Monster Energy® brand energy drinks, subject to TCCC’s approval.

(b) Amended and Restated International Distribution Coordination Agreement with TCCC, pursuant to which we have designated, and in the future may designate, countries, or territories within countries, in which we wish to appoint TCCC network bottlers to distribute and sell our Monster Energy® brand energy drinks, subject to TCCC’s

In February 2020, the Amended and Restated International Distribution Coordination Agreement with TCCC was renewed for an additional five year term.

(d) Additionally, we have entered into distribution agreements for certain of our Monster Energy® products with various TCCC network bottlers, both in the United States and internationally.

As of December 31, 2019, all distribution territories in the U.S.

have been transitioned to TCCC network bottlers.

(c) Additionally, we have entered into distribution agreements for certain of our Monster Energy® products with various TCCC network bottlers, both in the United States and internationally.

All distribution territories in the United States, and substantially all distribution territories internationally have been transitioned to TCCC network bottlers/distributors.

Strategic Brands Distribution Agreements

3 unchanged sentences

The principal raw materials used in the manufacturing of our products are aluminum cans, aluminum cap cans, sleek aluminum cans, aluminum cans with re-sealable ends, PET plastic bottles, caps, as well as flavors, juice concentrates, glucose, sugar, sucralose, milk, cream, protein, coffee, tea, supplement ingredients and other packaging materials, the costs of which are subject to fluctuations.

As a consequence of the COVID-19 pandemic, we have seen a shift in consumer channel preferences and package configurations, including an increase in at-home consumption and a decrease in food service on-premise consumption.

This shift has resulted in increased industry demand for aluminum cans, leading to aluminum cans being in short supply.

AFF is the primary flavor supplier for our Monster Energy® brand energy drinks.

1 unchanged sentence

For our Strategic Brands energy drinks, we purchase flavors, concentrates and/or beverage bases from flavor suppliers including TCCC in the United States and abroad, and may purchase certain other ingredients from independent suppliers located in the United States and abroad.

With regard to our Java Monster®, Espresso Monster®, Caffé Monster® and Muscle Monster® product lines, the dairy, protein 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.

With regard to our Java Monster®, Espresso Monster® and Muscle Monster® product lines, the dairy, protein 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.

For certain flavors purchased from third-party suppliers and used in a limited number of our Monster Energy® brand energy drinks and/or our Strategic Brands energy drinks, these third-party flavor suppliers own the proprietary rights to certain of their flavor formulas.

We do not have possession of the list of such flavor ingredients or formulas used in the production of certain of our products and certain of our blended concentrates, and we may be unable to obtain comparable

flavors or concentrates from alternative suppliers on short notice.

Our third-party flavor suppliers generally do not make such flavors and/or blended concentrates available to other third-party customers.

We have identified alternative suppliers for many of the ingredients contained in many of our beverages.

However, industry-wide shortages of certain flavors, fruits and fruit juices, coffee, tea, dairy-based products, supplement ingredients and sweeteners have been, and could from time to time in the future be, encountered, which could interfere with and/or delay production of certain of our products.

However, industry-wide shortages of certain flavors, fruits and fruit juices, coffee, tea, dairy-based products, supplement ingredients

and sweeteners have been, and could from time to time in the future be, encountered, which could interfere with and/or delay production of certain of our products.

We continually endeavor to develop back-up sources of supply for certain of our flavors and concentrates purchased from third-party suppliers, as well as to negotiate arrangements with our existing suppliers, which would enable us to obtain access to certain of such concentrates or flavor formulas under certain circumstances.

8 unchanged sentences

We have experienced and continue to experience competition from new entrants in the energy drink and energy shot categories.

A number of companies who market and distribute iced teas, coffees, juice cocktails, enhanced waters and sports drinks in various larger volume packages in glass and plastic bottles (including Bai, Sobe Life Water, BODYARMOR, Vitamin Water, CORE, Snapple, Arizona, Fuse, Ocean Spray, Honest Tea, Gold Peak Tea, Powerade, Gatorade Bolt 24 and Starbucks) and 12- and 16-ounce cans (such as Mountain Dew Kickstart and Mountain Dew Amp Game Fuel), have added supplement ingredients to their products with a view to marketing their products as “functional” or energy beverages or as having “functional” benefits.

A number of companies who market and distribute iced teas, coffees, juice cocktails, enhanced waters and sports drinks in various larger volume packages in glass and plastic bottles (including BODYARMOR, Vitamin Water, CORE, Snapple, Arizona, Ocean Spray, Honest Tea, Gold Peak Tea, Powerade, Gatorade Bolt 24 and Starbucks) and 12- and 16-ounce cans (such as Mountain Dew Kickstart and Amp Game Fuel), have added supplement ingredients to their products with a view to marketing their products as “functional” or energy beverages or as having “functional” benefits.

We believe that many of those products contain lower levels of supplement ingredients, principally deliver refreshment and are positioned differently from our energy or “functional” drinks.

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(See “Government Regulation” below for additional information).

We compete not only for consumer preference, but also for maximum marketing and sales efforts by multi-brand licensed bottlers, brokers and distributors, many of which have a principal affiliation with competing companies and brands.

We compete not only for consumer preference, but also for maximum marketing, sales efforts and attention from our multi-brand licensed bottlers, brokers and distributors, many of which have a principal affiliation with competing companies and brands.

Our products compete with all liquid refreshments and in many cases with products of much larger and in some cases better financed competitors, including the products of numerous nationally and internationally known producers such as TCCC, PepsiCo, Inc.

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(“KDP”) and Red Bull GmbH.

We also compete with companies that

are smaller or primarily local in operation.

We also compete with companies that are smaller or primarily local in operation.

Our products also compete with private-label brands such as those carried by grocery store chains, convenience store chains and club stores.

Domestically, our energy drinks compete directly with Red Bull, Rockstar, Amp, Venom, VPX Redline, Rip It, Xenergy, 5-Hour Energy Shots, MiO Energy, Stacker 2, VPX Bang, V8 + Energy, Uptime, hi*ball, CELSIUS, C4, Coca-Cola Energy and many other brands.

PepsiCo also markets and/or distributes additional products in that market segment such as Pepsi Max, Mountain Dew, Mountain Dew Kickstart and Mountain Dew Amp Game Fuel.

Internationally, our energy drinks compete with Red Bull (including non-carbonated Red Bull in China and Asia), Rockstar, V-Energy, Lucozade, Coca-Cola Energy and numerous local and private-label brands that usually differ from country to country, such as HELL, Amper, Shock, Tiger, Boost, TNT, Shark, Dragon, Score, Sting, Hot 6, Battery, Bullit, Flash Up, Black, Non-Stop, Bomba, Semtex, Vive 100, Dark Dog, Speed, Guarana, M-150, Lipovitan, Bacchus, Volt, Bolt, Mr.

Domestically, our energy drinks compete directly with Red Bull, Rockstar, Amp and Amp GameFuel, Venom, VPX Redline, 5-Hour Energy Shots, MiO Energy, Stacker 2, VPX Bang, V8 + Energy, Uptime, hi*ball, CELSIUS, C4, Alani Nu, 3D Energy, Coca-Cola Energy, ZOA Energy, Rowdy Energy and many other brands.

In 2020, PepsiCo acquired Rockstar and entered into an agreement with VPX to distribute VPX Bang products in the United States.

markets and/or distributes additional products in that market segment such as Pepsi Max, Mountain Dew, Mountain Dew Kickstart and Mountain Dew Amp Game Fuel.

Internationally, our energy drinks compete with Red Bull (including non-carbonated Red Bull in China and Asia), Rockstar, V-Energy, Lucozade, Coca-Cola Energy and numerous local and private-label brands that usually differ from country to country, such as HELL, Amper, Shock, Tiger, Fearless, Boost, TNT, Shark, Dragon, Score, Sting, Hot 6, Suntory ZONE, Battery, Bullit, Flash Up, Black, Non-Stop, Bomba, Semtex, Vive 100, Dark Dog, Speed, Guarana, M-150, Lipovitan, Bacchus, Volt, Bolt, Mr.

Big, Boom, Raptor, Amp, Fusion, Hi-Tiger, Eastroc Super Drink, Carabao, Power Horse, XL, Crazy Tiger, Effect, Missile, Nocco, Adrenaline Rush, Real Gold, War Horse, BLU, and a host of other international brands.

Our Reign Total Body Fuel TM and Reign Inferno TM Thermogenic Fuel high performance energy drinks compete with VPX Bang, Adrenaline Shoc, C4, CELSIUS, Rockstar XDURANCE and Quake in the performance energy category.

Our Java Monster®, Espresso Monster® and Caffé Monster® product lines compete directly with Starbucks Frappuccino, Starbucks Doubleshot, Starbucks Doubleshot Energy Plus Coffee, Starbucks Tripleshot and other Starbucks coffee drinks, Costa Coffee, Rockstar Roasted, Dunkin Donuts, Gold Peak, Stok, High Brew, McCafé, hi*ball, Douwe Egberts Coffee, Emmi CAFFÈ, Bang Keto Coffee, Nescafe and International Delight.

Our Reign Total Body Fuel® and Reign Inferno® Thermogenic Fuel high performance energy drinks compete with VPX Bang, Adrenaline Shoc, C4, CELSIUS, NOCCO, Rockstar XDURANCE and Quake in the performance energy category.

Our Java Monster® and Espresso Monster® product lines compete directly with Starbucks Frappuccino, Starbucks Doubleshot, Starbucks Doubleshot Energy Plus Coffee, Starbucks Tripleshot and other Starbucks coffee drinks, Costa Coffee, Rockstar Roasted, Dunkin Donuts, Gold Peak, Stok, High Brew, McCafé, hi*ball, Douwe Egberts Coffee, Emmi CAFFÈ, Bang Keto Coffee, Nescafe and International Delight.

Our Muscle Monster® product line competes directly with Muscle Milk, Core Power, Premier Protein, Kellogg’s Special K Protein, Bolthouse Farms Protein, EAS AdvantEDGE, EAS Myoplex and Gatorade G Series 03 Recover.

Our Monster Hydro® and Monster HydroSport Super Fuel® product lines compete directly with Vitamin Water, Sparkling Ice, Bai, Propel, Vita Coco, Lucozade, Powerade, Gatorade Bolt 24 and BODYARMOR.

Our Monster Hydro® Energy Water, Monster HydroSport Super Fuel® and Monster Hydro® Super Sport product lines compete directly with Vitamin Water, Sparkling Ice, Bai, Propel, Vita Coco, Lucozade, Powerade, Gatorade Bolt 24 and BODYARMOR.

Sales and Marketing

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Where appropriate, we partner with our bottlers/distributors and/or retailers to assist our marketing efforts.

We increased expenditures for our sales and marketing programs by approximately 10.9% in 2019 compared to 2018.

This increase was primarily due to increased expenditures for social media, sponsorships and endorsements as well

as advertising.

As of December 31, 2019, we employed 2,422 employees in sales and marketing activities, of which 1,273 were employed on a full-time basis.

We decreased expenditures for our sales and marketing programs by approximately 9.7% in 2020 compared to 2019.

This decrease was primarily due to decreased expenditures for sponsorship and endorsements and decreased expenditures for travel and entertainment, each largely as a consequence of the COVID-19 pandemic.

The costs for certain postponed or rescheduled events have been, or may be, deferred to future periods.

Due to the uncertainty surrounding the

COVID-19 pandemic, we are unable to estimate in which future periods, if any, such deferred sponsorship and endorsement costs will be recognized.

Our customers are primarily full service beverage bottlers/distributors, retail grocery, drug and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, value stores, e-commerce retailers and the military.

Percentages of our gross sales to our various customer types for the years ended December 31, 2019, 2018 and 2017 are reflected below.

Percentages of our gross billings to our various customer types for the years ended December 31, 2020, 2019 and 2018 are reflected below.

Such information includes sales made by us directly to the customer types concerned, which include our full service beverage bottlers/distributors in the United States.

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International full service bottlers/distributors

Club stores, mass merchandisers and e-commerce retailers

Retail grocery, specialty chains and wholesalers

Club stores and e-commerce retailers

Retail grocery, direct convenience, specialty chains and wholesalers

Direct value stores and other

Our customers include Coca-Cola Canada Bottling Limited, Coca-Cola Consolidated, Inc., Coca-Cola Bottling Company United, Inc., Reyes Coca-Cola Bottling, LLC, Great Lakes Coca-Cola Distribution, LLC, Coca-Cola Southwest Beverages LLC, The Coca-Cola Bottling Company of Northern New England, Inc., Swire Pacific Holdings, Inc.

(USA), Liberty Coca-Cola Beverages, LLC, Coca-Cola European Partners, Coca-Cola Hellenic, Coca-Cola FEMSA, Coca-Cola Amatil, Swire Coca-Cola (China), COFCO Coca-Cola, Coca-Cola Beverages Africa, Coca-Cola İçecek and certain other TCCC network bottlers, Asahi Soft Drinks, Co., Ltd., Kalil Bottling Group (until March 5, 2019), Big Geyser, Inc.

(until April 5, 2019), Wal-Mart, Inc.

(including Sam’s Club) and Costco Wholesale Corporation.

(including Sam’s Club), Costco Wholesale Corporation and Amazon.com, Inc.

A decision by any large customer to decrease amounts purchased from us or to cease carrying our products could have a material negative effect on our financial condition and consolidated results of operations.

TCCC, through certain consolidated subsidiaries (the “TCCC Subsidiaries”), accounted for approximately 2%, 3% and 18% of our net sales for the years ended December 31, 2019, 2018 and 2017, respectively.

As part of TCCC’s North America Refranchising initiative (the “North America Refranchising”), the territories of certain TCCC Subsidiaries have been transitioned to certain independent TCCC bottlers/distributors and bottlers/distributors which TCCC accounts for under the equity method (the “TCCC Related Parties”).

Accordingly, our percentage of net sales to the TCCC Subsidiaries significantly decreased for the years ended December 31, 2019, 2018 and 2017.

Coca-Cola Consolidated, Inc.

accounted for approximately 13% of our net sales for the years ended December 31, 2019, 2018 and 2017.

Reyes Coca-Cola Bottling, LLC accounted for approximately 11%, 12% and 6% of the Company’s net sales for the years ended December 31, 2019, 2018 and 2017, respectively.

Coca-Cola European Partners accounted for approximately 10%, 10% and 9% of the Company’s net sales for the years ended December 31, 2019, 2018 and 2017, respectively.

accounted for approximately 12%, 13% and 13% of our net sales for the years ended December 31, 2020, 2019 and 2018, respectively.

Reyes Coca-Cola Bottling, LLC accounted for approximately 11%, 11% and 12% of our net sales for the years ended December 31, 2020, 2019 and 2018, respectively.

Coca-Cola European Partners accounted for approximately 10% of our net sales for the years ended December 31, 2020, 2019 and 2018.

Sales of ready-to-drink beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales volumes.

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Quarterly fluctuations may also be affected by other factors including the introduction of new products, the opening of new markets, particularly internationally, where temperature fluctuations may be more pronounced, the addition of new bottlers and distributors, changes in the mix of the sales of our finished products and increased or decreased advertising and promotional expenses.

However, the COVID-19 pandemic may have an impact on consumer behaviors that may result in temporary changes in the seasonal fluctuations of our business.

Intellectual Property

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We regard our trademarks, service marks, copyrights, domain names, trade dress and other intellectual property as very important to our business.

We consider Monster®, Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Tea®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Hydro® (stylized), Monster HydroSport Super Fuel®, Espresso Monster®, Caffé Monster®, Monster MAXX®, Reign Total Body Fuel™, Reign Inferno TM , BU®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, Predator®, Live+® and BPM® to be our core trademarks.

We consider Monster®, Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Tea®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Hydro® (stylized), Monster HydroSport Super Fuel®, Monster Super Fuel®, Espresso Monster®, Monster MAXX®, Reign Total Body Fuel®, Reign Inferno®, BU®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, Predator®, Fury®, Live+® and BPM® to be our core trademarks.

We also own the intellectual property of our most important flavors for certain of our Monster Energy® Brand energy drinks in perpetuity.

We have registered Monster®, Monster Energy®, ®, Monster Energy Ultra®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, M Hydro®, Espresso Monster®, Caffé Monster®, Monster MAXX®, BU®, Nalu®, Burn®, Mother®, Play®, Power Play® (stylized), Relentless®, Ultra Energy®, BPM®, Live+®, Reign®, Reign Total Body Fuel® and Reign Inferno TM outside of the United States in certain jurisdictions.

We have registered Monster®, Monster Energy®, ®, Monster Energy Ultra®, Unleash the Beast!®, Mutant®, Monster Rehab®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, M Hydro®, Espresso Monster®, Monster MAXX®, BU®, Nalu®, Burn®, Mother®, Play®, Power Play® (stylized), Relentless®, Ultra Energy®, BPM®, Predator®, Fury®, Live+®, Reign®, Reign Total Body Fuel® and Reign Inferno® outside of the United States in certain jurisdictions.

We protect our trademarks by applying for registrations and registering our trademarks with the United States Patent and Trademark Office and with government agencies in other countries around the world, particularly where our products are distributed and sold.

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The production, distribution and sale in the United States of many of our products are subject to various U.S.

federal and state regulations, including but not limited to:

federal, state and local regulations, including but not limited to:

the Federal Food, Drug and Cosmetic Act (“FD&C Act”);

the Occupational Safety and Health Act;

the Occupational Safety and Health Act and various state laws and regulations governing workplace health and safety;

various environmental statutes;

the Safe Drinking Water and Toxic Enforcement Act of 1986 (“California Proposition 65”) and a number of other federal, state and local statutes and regulations applicable to the production, transportation, sale, safety, advertising, marketing, labeling and ingredients of such products.

United States, the production, distribution and sale of many of our products are also subject to numerous statutes and regulations.

Outside the United States, the production, distribution and sale of many of our products are also subject to numerous statutes and regulations.

We also may in the future be affected by other existing, proposed and potential future regulations or regulatory actions, including those described below, any of which could adversely affect our business, financial condition and results of operations.

See “Part I, Item 1A – Risk Factors – Changes in government regulation, or failure to comply with existing regulations, could adversely affect our business, financial condition and results of operations” below for additional information.

Furthermore, legislation may be introduced in the United States and other countries at the federal, state and municipal level in respect of each of the subject areas discussed below.

Furthermore, legislation may be introduced in the United States and other countries at the federal, state, municipal and supranational level in respect of each of the subject areas discussed below.

Public health officials and health advocates are increasingly focused on the public health consequences associated with obesity, especially as it affects children, and are seeking legislative change to reduce the consumption of sweetened beverages.

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In California, we are subject to California Proposition 65, a law which requires that a specified warning be provided before exposing California consumers to any product that contains in excess of threshold amounts of a substance listed by California as having been found to cause cancer or reproductive toxicity.

California Proposition 65 does not require a warning if the manufacturer of a product can demonstrate that the use of the product in question exposes consumers to an average daily quantity of a listed substance that is below that threshold amount, which is determined either by scientific criteria set forth in applicable regulations or via a “safe harbor” threshold that may be established by the state, or the substance is naturally occurring, is the result of necessary cooking, or is subject to another applicable exception.

If we are required to add warning labels to any of our products or place warnings in certain locations where our products are sold, it will be difficult to predict whether, or to what extent, such a warning would have an adverse impact on sales of our products in those locations or elsewhere.

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Food and Drug Administration (the “FDA”) revised regulations with respect to serving size information and nutrition labeling on food and beverage products, including a new requirement to disclose the amount of added sugars in such products.

These changes went into effect on January 1, 2020, though FDA announced that it will not enforce these provisions for the first six months after that date.

These changes went into effect on January 1, 2020, though FDA announced that it is not focusing on enforcement due to challenges in meeting these requirements, particularly during the COVID-19 pandemic.

Further, in December 2018, the U.S.

Department of Agriculture promulgated regulations requiring that, by January 1, 2022, the labels of certain bioengineered foods must include a disclosure that the food is bioengineered.

Department of Agriculture promulgated regulations requiring that, by January 1, 2022, the labels of certain bioengineered foods include a disclosure that the food is bioengineered.

We may incur significant costs to alter our existing packaging materials to comply with these and other new regulations.

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Court of Appeals for the Ninth Circuit, sitting en banc, granted a preliminary injunction blocking enforcement of the ordinance, concluding that a First Amendment challenge to the ordinance was likely to succeed on the merits.

In September 2019, two members of the San Francisco Board of Supervisors introduced legislation to amend the ordinance.

The district court expressed its intent to assess the possible mootness of the current ordinance in light of the legislative proposal, but has granted the parties’ requests to delay further action pending expected legislative consideration of the proposed amendment.

In February 2020, the San Francisco Board of Supervisors passed legislation to amend the ordinance.

The plaintiff amended its pleading and litigation continues in the Northern District of California over this revised legislation.

In July 2012, we received a subpoena from the Attorney General for the State of New York in connection with an investigation relating to the advertising, marketing, promotion, ingredients, usage and sale of our Monster Energy® brand energy drinks.

We cannot predict the outcome of this inquiry and what effect, if any, it may have on our business, financial condition or results of operations.

Other countries, such as the member states of the Gulf Cooperation Council, Yemen, Colombia, Brazil, the Dominican Republic, Mexico, and the People’s Republic of China are also considering new labeling requirements, which may require us to amend our labels and warning statements.

Other countries, such as the member states of the Gulf Cooperation Council, Colombia, Brazil, the Dominican Republic and Mexico, and the People’s Republic of China are also considering, or have enacted, new labeling requirements, which may require us to amend our labels and warning statements.

The United Kingdom Government has also suggested that it may review food labeling laws following the United Kingdom’s departure from the European Union (“Brexit”).

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states, counties, municipalities and/or in certain foreign countries.

For example, in the United States, bills seeking to impose an age restriction on the sale of energy drinks have been introduced in the South Carolina and Connecticut legislatures.

For example, in the United States, bills seeking to impose an age restriction on the sale of energy drinks have been introduced

in the South Carolina and Connecticut legislatures.

Outside of the United States, for example, Latvia, Lithuania and Turkey prohibit the sale of energy drinks to persons under the age of 18;

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Latvia and Scotland prohibit the sale of energy drinks in educational establishments;

and Turkey prohibits the sale or advertising of energy drinks in “collective consumption areas.” Latin American countries such as Chile, Colombia and Brazil are considering age and other sales restrictions on energy drinks, as are other European countries such as the United Kingdom, Romania and Bulgaria, and in the Middle East, there have been discussions of an age restriction for energy drinks.

and Turkey prohibits the sale or advertising of energy drinks in “collective consumption areas,” such as sports complexes, schools or hospitals.

Latin American countries such as Chile, Colombia and Brazil are considering age and other sales restrictions on energy drinks, as are other countries such as the United Kingdom, Romania and Bulgaria.

Excise Taxes on Energy Drinks.

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Excise taxes on sweetened beverages already are in effect in certain foreign countries where we do business, such as France, the United Kingdom, Ireland, South Africa and Mexico.

Other countries, including Brazil, are considering similar measures.

Poland recently established a tax on drinks with added sugars, specifically targeting beverages containing caffeine and taurine.

Other countries, including the Dominican Republic, are considering similar measures.

In addition, legislation has been proposed in certain jurisdictions that would specifically impose excise taxes on energy drinks.

For example, Estonia, Poland and Ukraine are considering proposals that would impose an excise tax on energy drinks.

For example, Kuwait is considering a proposal that would impose an excise tax on energy drinks.

Such targeted legislation has been passed in other countries.

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Some jurisdictions where we do business have prescribed limited caffeine content for beverages.

For example, on January 1, 2013, new requirements took effect in Canada that limited the amount of caffeine contained in any beverage in a single-serving can or bottle to less than 180 milligrams, and imposed limits on the concentration levels for caffeine.

For example, in Canada, the maximum amount of caffeine cannot exceed 180 mg per single-serving container or per serving (500 ml) in the case of a multi-serving container.

We adjusted the caffeine levels in certain of our Monster Energy® products that are sold in Canada to address these regulations, although the majority of our products were unaffected.

In Europe, examples of caffeine restrictions include the Netherlands where there is a limit of 35mg/100ml, and Norway introduced, as of January 1, 2020 (subject to transition periods), a limit of 32mg/100ml.

Caffeine limit restrictions or restrictions on combining caffeine with other ingredients or in particular product sectors (such as performance beverages/sport drinks) have also been implemented or proposed in other jurisdictions, including Turkey, India and Pakistan’s Punjab region.

Such restrictions

could require reformulations of certain of our products.

Such restrictions could require reformulations of certain of our products.

However, we may not be able to satisfactorily reformulate our products in all jurisdictions that adopt similar legislation.

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We package our products in a variety of different package types and sizes including, for certain of our Monster Energy® brand energy drinks, aluminum cans larger than 16 fluid ounces.

Certain jurisdictions, such as the member states of the Gulf Cooperation Council, Yemen, Costa Rica and the Dominican Republic, are considering container size limitations on energy drinks and other beverages which may require us to change the size of our products sold in these countries.

Certain jurisdictions, such as Colombia, Costa Rica, Egypt and the Dominican Republic, are considering container size limitations on energy drinks and other beverages which may require us to change the size of our products sold in these countries.

Other countries, like England, have considered and rejected proposed can size limitations although it is open to such markets to revisit these and other similar proposals.

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Our facilities in the United States are subject to federal, state and local environmental laws and regulations.

Our operations in other countries are subject to similar laws and regulations that may be applicable in such countries.

Our operations in other countries are subject to similar federal, state, local and supranational laws and regulations that may be applicable in such countries.

Compliance with these provisions has not had, nor do we expect such compliance to have, any material adverse effect upon our capital expenditures, net income or competitive position.

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In certain other states and countries where our products are sold, we are also required to collect deposits from our customers and to remit such deposits to the respective jurisdictions based upon the number of cans and bottles of certain carbonated and non-carbonated products sold in such states.

As of December 31, 2019, we employed a total of 3,529 employees, of which 2,655 were employed on a full-time basis.

Of our 3,529 employees, we employed 1,107 in administrative and operational capacities and 2,422 persons in sales and marketing capacities.

Human Capital Resources

As of December 31, 2020, we have employees in 66 countries, with a total of 3,666 employees working worldwide.

This employee population includes 2,535 employees in North America, 228 employees in Latin America, 217 employees in Asia Pacific and 686 employees in Europe, Mideast and Africa (“EMEA”).

Most of our employees are full-time (3,013 employees) and the remaining 653 employees hold part-time positions.

Of our 3,666 employees, we employ 1,185 in corporate and operational capacities (including administration, human resources, legal, information technology, operations, facilities, warehouse, product development, regulatory and accounting) and 2,481 persons in sales and marketing capacities.

In 2020, we established our Equality, Diversity and Inclusion (EDI) Leadership Advisory Group, comprised of leaders from across the Company, designed to provide insight on our diversity and inclusion efforts and to assist in the integration of the EDI program with our overall strategy and business objectives.

We provide training for our employees covering harassment, discrimination and unconscious bias.

We support our employees through a variety of training and development programs.

We have a mid-level manager development program, in which participants learn leadership skills, network with peers and senior executives, and tackle critical initiatives.

We also have a leadership development platform in partnership with a third party, for senior leaders to receive university grade certificates in business strategy and innovation and complete Food and Beverage Executive courses as well as an electronic learning platform that focuses on business acumen, professional development and technical capabilities.

We provide compensation packages designed to attract and retain talent while maintaining alignment with market compensation surveys.

We have multiple short-term incentive programs focused on incentivizing and retaining talent throughout the organization and provide long-term incentive programs to employees through equity and/or performance cash awards.

We currently cover the cost of insurance premiums including medical, dental, vision, life, accidental death and dismemberment, short and long term disability, and an Employee Assistance Program (EAP) covering full-time employees and share in the cost of insurance premiums covering eligible dependents including medical, dental and vision coverage.

We also offer several voluntary benefits to full-time employees, including supplemental life insurance, whole life insurance, accident insurance, critical illness insurance, flexible spending accounts, travel insurance, pre-paid legal, healthy rewards programs, identity theft assistance, and retirement savings account(s).

Available Information

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Our Internet address is www.monsterbevcorp.com .

Information contained on our website is not part of this Annual Report on Form 10-K.

Our SEC filings (including any amendments) will be made available free of charge at www.monsterbevcorp.com , as soon as reasonably practicable after we electronically file such material with, or furnish it to,

Information contained on our website is not part of or incorporated into this filing or any of our other filings with the SEC.

In addition, you may request a copy of these filings (excluding exhibits) at no cost by writing to, or telephoning us, at the following address or telephone number:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business