UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q


QUARTERLY REPORT UNDER SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED

June 30, 2004


Commission File No. 001-13458


SCOTT'S LIQUID GOLD-INC.
4880 Havana Street
Denver, CO  80239
Phone:  303-373-4860

      Colorado                            84-0920811
State of Incorporation                    I.R.S. Employer
                                          Identification No.



	Indicate by check mark whether the Registrant:  (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
                           Yes  [X]             No  [ ]

	Indicate by checkmark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act).
                           Yes  [ ]             No  [X]


	As of June 30, 2004, the Registrant had 10,376,000 shares of
its $0.10 par value common stock outstanding.











PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

SCOTT'S LIQUID GOLD-INC. & SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)

                        Three Months Ended          Six Months Ended
                    -------------------------   -------------------------
                             June 30,                    June 30,
                        2004          2003          2004          2003
                    -----------   -----------   -----------   -----------
Net sales           $ 5,307,900   $ 5,608,000   $10,516,900   $11,343,700

Operating costs
 and expenses:
   Cost of sales      2,970,000     3,063,300     5,720,600     5,921,300
   Advertising          173,400       691,600       637,100     1,500,600
   Selling            1,457,500     1,587,000     2,781,400     3,007,400
   General and
    administrative      950,200       975,700     1,936,700     1,999,700
                    -----------   -----------   -----------   -----------
                      5,551,100     6,317,600    11,075,800    12,429,000
                    -----------   -----------   -----------   -----------

Loss from operations   (243,200)     (709,600)     (558,900)   (1,085,300)
Interest income           9,900        18,200        20,500        34,500
Interest expense        (42,600)      (55,100)      (88,300)     (112,000)
                    -----------   -----------   -----------   -----------
                       (275,900)     (746,500)     (626,700)   (1,162,800)
Income tax
 expense (benefit)         -             -             -             -
                    -----------   -----------   -----------   -----------
Net loss            $  (275,900)  $  (746,500)  $  (626,700)  $(1,162,800)
                    ===========   ===========   ===========   ===========

Net loss per common
 share (Note 3):
   Basic            $     (0.03)  $     (0.07)  $     (0.06)  $     (0.11)
                    ===========   ===========   ===========   ===========
   Diluted          $     (0.03)  $     (0.07)  $     (0.06)  $     (0.11)
                    ===========   ===========   ===========   ===========

Weighted average
 shares outstanding:
   Basic             10,361,900    10,153,100    10,359,000    10,153,100
                    ===========   ===========   ===========   ===========
   Diluted           10,361,900    10,153,100    10,359,000    10,153,100
                    ===========   ===========   ===========   ===========


SCOTT'S LIQUID GOLD-INC. & SUBSIDIARIES
Consolidated Balance Sheets

                                                June 30,     December 31,
                                                  2004           2003
                                              -----------    -----------
                                              (Unaudited)
ASSETS
Current assets:
   Cash and cash equivalents                  $ 2,744,100    $ 3,498,600
   Investment securities                          303,100        305,300
   Trade receivables, net of allowance
    for doubtful accounts of $74,100
    and $82,000, respectively                   1,389,500      1,108,600
   Other receivables                               41,400         35,400
   Inventories                                  3,204,100      3,122,600
   Prepaid expenses                               284,600        256,400
   Deferred tax assets                            558,000        525,000
                                              -----------    -----------
      Total current assets                      8,524,800      8,851,900

Property, plant and equipment, net             14,612,000     14,909,300
Deferred tax assets                               594,000        658,000
Other assets                                       28,000         33,400
                                              -----------    -----------
   TOTAL ASSETS                               $23,758,800    $24,452,600
                                              ===========    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current  liabilities:
   Accounts payable                           $ 1,663,400    $ 1,256,900
   Accrued payroll and benefits                 1,251,500      1,106,300
   Other accrued expenses                         388,300        552,500
   Current maturities of
    long-term debt                                897,000        878,000
                                              -----------    -----------
      Total current liabilities                 4,200,200      3,793,700
Long-term debt, net of current
 maturities                                     2,355,800      2,807,300
Deferred tax liabilities                        1,152,000      1,183,000
                                              -----------    -----------
      Total liabilities                         7,708,000      7,784,000
                                              -----------    -----------

Commitments and contingencies
Shareholders' equity:
   Common stock; $.10 par value, authorized
     50,000,000 shares; issued and
     outstanding 10,376,000 and
     10,356,000 shares, respectively            1,037,600      1,035,600
   Capital in excess of par                     4,936,600      4,927,200
   Accumulated comprehensive income                 3,100          5,600
   Retained earnings                           10,073,500     10,700,200
                                              -----------    -----------
      Shareholders' equity                     16,050,800     16,668,600
                                              -----------    -----------

   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $23,758,800    $24,452,600
                                              ===========    ===========




SCOTT'S LIQUID GOLD-INC. & SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)

                                                      Six Months Ended
                                                          June 30,
                                                --------------------------
                                                    2004           2003
                                                -----------    -----------

Cash flows from operating activities:
Net loss                                        $  (626,700)   $(1,162,800)
                                                -----------    -----------
  Adjustments to reconcile net loss
    to net cash provided (used) by
    operating activities:
      Depreciation and amortization                 369,200        376,600
      Stock issued to ESOP                           11,400           -
      Changes in assets and liabilities:
         Trade and other receivables, net          (286,900)     1,150,900
         Inventories                                (81,500)      (686,300)
         Prepaid expenses and other assets          (28,200)        68,300
         Accounts payable and accrued expenses      387,500        104,700
                                                -----------    -----------
         Total adjustments to net loss              371,500      1,014,200
                                                -----------    -----------
           Net Cash Used by Operating Activities   (255,200)      (148,600)
                                                -----------    -----------

Cash flows from investing activities:
    Purchase of investment securities                  -          (495,600)
    Proceeds from sale or maturity of
      investment securities                            -           800,000
    Purchase of property, plant & equipment         (66,800)        (9,700)
                                                -----------    -----------
           Net Cash Provided (Used) by
            Investing Activities                    (66,800)       294,700
                                                -----------    -----------

Cash flows from financing activities:
    Principal payments on long-term borrowings     (432,500)      (409,900)
                                                -----------    -----------
           Net Cash Used Financing Activities      (432,500)      (409,900)
                                                -----------    -----------
Net Decrease in Cash and Cash Equivalents          (754,500)      (263,800)

Cash and Cash Equivalents, beginning of period    3,498,600      2,786,400
                                                -----------    -----------
Cash and Cash Equivalents, end of period        $ 2,744,100    $ 2,522,600
                                                ===========    ===========

Supplemental disclosures:
    Cash paid during period for:
      Interest                                  $    88,900    $   112,300
                                                ===========    ===========
      Income taxes                              $       100    $     1,000
                                                ===========    ===========


SCOTT'S LIQUID GOLD-INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)

Note 1. Summary of Significant Accounting Policies

(a)	Company Background
	Scott's Liquid Gold-Inc. (a Colorado corporation) was
incorporated on February 15, 1954.  Scott's Liquid Gold-Inc. and
its wholly owned subsidiaries (collectively, the "Company")
manufacture and market quality household and skin care products.
In the first quarter of 2001, the Company began acting as a
distributor in the United States of beauty care products contained
in individual sachets and manufactured by Montagne Jeunesse. The
Company's business is comprised of two segments, household products
and skin care products.

(b)	Principles of Consolidation
	The consolidated financial statements include the accounts of
the Company and its subsidiaries.  All intercompany accounts and
transactions have been eliminated.

(c)	Use of Estimates
	The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from those
estimates.  Significant estimates include, but are not limited
to, realizability of deferred tax assets, reserves for slow moving
and obsolete inventory, customer returns and allowances, and bad
debts.

(d)	Cash Equivalents
	The Company considers all highly liquid investments with an
original maturity of three months or less at the date of acquisition
to be cash equivalents.

(e)	Investments in Marketable Securities
	The Company accounts for investments in marketable securities
in accordance with Statement of Financial Accounting Standards
("SFAS") No. 115 "Accounting for Certain Investments in Debt and
Equity Securities", which requires that the Company classify
investments in marketable securities according to management's
intended use of such investments.  The Company invests its excess
cash and has established guidelines relative to diversification
and maturities in an effort to maintain safety and liquidity.
These guidelines are periodically reviewed and modified to take
advantage of trends in yields and interest rates.  The Company
considers all investments as available for use in its current
operations and, therefore, classifies them as short-term,
available-for-sale investments.  Available-for-sale investments
are stated at fair value, with unrealized gains and losses, if
any, reported net of tax, as a separate component of shareholders'
equity and comprehensive income (loss).  The cost of the securities
sold is based on the specific identification method. Investments
in corporate and government securities as of June 30, 2004, are
scheduled to mature within one year.

(f)	Inventories
	Inventories are stated at the lower of cost  (first-in,
first-out method) or market.  The Company records a reserve for
slow moving and obsolete products and raw materials.


(g)	Property, Plant and Equipment
	Property, plant and equipment are recorded at historical cost.
Depreciation is provided using the straight-line method over
estimated useful lives of the assets ranging from three to
forty-five years. Maintenance and repairs are expensed as incurred.
Improvements that extend the useful lives of the assets or provide
improved efficiency are capitalized.

(h)	Financial Instruments
	Financial instruments which potentially subject the Company to
concentrations of credit risk include cash and cash equivalents,
investments in marketable securities, and trade receivables.  The
Company maintains its cash balances in the form of bank demand
deposits with financial institutions that management believes are
creditworthy.  The Company establishes an allowance for doubtful
accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information.  The Company
has no financial instruments with off-balance sheet risk of
accounting loss.

	The recorded amounts for cash and cash equivalents,
receivables, other current assets, and accounts payable and accrued
expenses approximate fair value due to the short-term nature of
these financial instruments. The fair value of investments in
marketable securities is based upon quoted market value.  The
Company's long-term debt bears interest at a variable rate, the
lender's base rate, which approximates the prime rate.  The
carrying value of long-term debt approximates fair value as of
June 30, 2004 and December 31, 2003.

i)	Long-Lived Assets
The Company accounts for long-lived assets in accordance with the
provisions of SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets."  This Statement requires that
long-lived assets and certain identifiable intangibles be reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset.  If such assets are
considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets.  Assets to be disposed of are
reported at the lower of the carrying amount or fair value less
costs to sell.

(j)	Income Taxes
The Company accounts for income taxes in accordance with the
provisions of SFAS No. 109, "Accounting for Income Taxes,"
which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences attributable
to differences between the financial statement carrying amounts of
assets and liabilities and their respective tax bases.  A valuation
allowance is provided when it is more likely than not that some
portion or all of a deferred tax asset will not be realized.  The
ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the period in which
related temporary differences become deductible.  Deferred tax
assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

k)	Revenue Recognition
	Revenue is recognized, generally, upon delivery of products to
customers, which is when title passes.  Reserves for estimated market
development support, pricing allowances and returns are provided in
the period of sale as a reduction of revenue.  Reserves for returns and
allowances are recorded as a reduction of revenue, and are maintained
at a level that management believes is appropriate to account for
amounts applicable to existing sales.  Reserves for coupons and
certain other promotional activities are recorded as a reduction of
revenue at the later of the date at which the related revenue is
recognized or the date at which the sales incentive is offered.
At June 30, 2004 and December 31, 2003 approximately $606,600 and
$873,400, respectively, had been reserved as a reduction of
accounts receivable, and approximately $90,000 and $175,000,
respectively, had been reserved as current liabilities.  Co-op
advertising, marketing funds, slotting fees and coupons are
deducted from gross sales and total $921,800 and $936,600 for
the six months ended at June 30, 2004 and June 30, 2003, respectively.

(l)	Advertising Costs
	The Company expenses advertising costs as incurred.

(m)	Stock-based Compensation
	The Company has elected to follow Accounting Principles Board
Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees"
and related interpretations in accounting for its employee stock
options.  Under APB No. 25, employee stock options are accounted
for based upon the intrinsic value, which is the difference between
the exercise price and fair value of the underlying common stock.
Generally, if the exercise price of employee stock options equals
the market price of the underlying stock on the date of the grant, no
compensation expense is recorded.  The Company has adopted the
disclosure only provisions of SFAS No. 123, "Accounting for
Stock-based Compensation".

	The Company granted 35,000 options for shares of the
Company's common stock during the first quarter of 2004 with an
exercise price equal to $0.76. No options were granted during the
second quarter of 2004.  Had compensation cost been recorded based
on the fair value of options granted by the Company, the Company's
pro-forma net loss and net loss per share would have been as follows:

                              Three Months Ended June 30,
               ------------------------------------------------------
                          2004                         2003
               -------------------------    -------------------------
               As Reported    Pro Forma     As Reported    Pro Forma
               -----------   -----------    -----------   -----------
Net loss       $  (275,900)  $  (275,900)   $  (746,500)  $  (746,500)
Basic loss
 per share     $     (0.03)  $     (0.03)   $     (0.07)  $     (0.07)
Diluted loss
 per share     $     (0.03)  $     (0.03)   $     (0.07)  $     (0.07)

                                 Six Months Ended June 30,
               ------------------------------------------------------
                          2004                        2003
               -------------------------    -------------------------
               As Reported    Pro Forma     As Reported    Pro Forma
               -----------   -----------    -----------   -----------
Net loss       $  (626,700)  $  (643,000)   $(1,162,800)  $(1,209,300)
Basic loss
 per share     $     (0.06)  $     (0.06)   $     (0.11)  $     (0.12)
Diluted loss
 per share     $     (0.06)  $     (0.06)   $     (0.11)  $     (0.12)


	The fair value of options granted has been estimated as of
the date of grant using the following assumptions as of:

                       Three Months Ended           Six Months Ended
                            June 30,                    June 30,
                     ----------------------      ----------------------
                       2004         2003           2004         2003
                     ---------    ---------      ---------    ---------
Dividend rate          $  -        $  -           $  -         $  -
Expected volatility      169%        170%            169%         171%
Risk-free interest
  rate                  3.04%       3.06%           3.04%        3.06%
Expected life
  (in years)             4.5         4.5             4.5          4.5

(n)	Comprehensive Income
	The Company follows SFAS No. 130, "Reporting Comprehensive
Income" which establishes standards for reporting and displaying
comprehensive income and its components. Comprehensive income
includes all changes in equity during a period from non-owner sources.

The following table is a reconciliation of the Company's net loss to
its total comprehensive loss for the three months and six months
ended June 30, 2004 and 2003:

                      Three Months Ended           Six Months Ended
                             June 30,                   June 30,
                    ------------------------  ------------------------
                        2004         2003         2004         2003
                    -----------  -----------  -----------  -----------
Net loss            $  (275,900) $  (746,500) $  (626,700) $(1,162,800)
Unrealized gain
 (loss) on
 investment
 securities              (3,000)         700       (2,500)         800
                    -----------  -----------  -----------  -----------
Comprehensive loss  $  (278,900) $  (745,800) $  (629,200) $(1,162,000)
                    ===========  ===========  ===========  ===========

(o) Shipping and Handling
The Company classifies amounts billed to a customer in a sale
transaction related to shipping and handling as revenue and
classifies shipping and handling costs as a component of selling
expense on the accompanying Consolidated Statement of Operations.
Shipping and handling costs totaled $690,500 and $741,800 for the
six months ended June 30, 2004 and 2003, respectively.  For the
three months ended June 30, 2004 and 2003, shipping and handling
costs totaled $367,300 and $397,700, respectively.

Note 2.
Basis of Preparation of Financial Statements

	These unaudited interim consolidated financial statements of
Scott's Liquid Gold-Inc. and subsidiaries (collectively, the
"Company") have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission.  Such rules
and regulations allow the omission of certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles as long
as the statements are not misleading.  In the opinion of management,
all adjustments necessary for a fair presentation of these interim
statements have been included and are of a normal recurring nature.
These interim financial statements should be read in conjunction
with the financial statements of the Company included in its 2003
Annual Report on Form 10-K.

Note 3.

Per share data was determined by using the weighted average number
of common shares outstanding.  Potentially dilutive securities,
including stock options, are considered only for diluted earnings
per share, unless considered anti-dilutive. The potentially dilutive
securities, which are comprised of outstanding stock options of
1,134,000 and 1,121,100 at June 30, 2004 and 2003, were excluded
from the computation of weighted average shares outstanding due to
the anti-dilutive effect.

A reconciliation of the weighted average number of common shares
outstanding for the three and six months ended June 30, 2004 follows:

                                                              Total
                             Three Months    Six Months       Shares
                             ------------   ------------   ------------
Common shares outstanding,
  beginning of the period    10,356,000     10,356,000     10,356,000
Stock issued to ESOP*             5,900          3,000         20,000
Stock options exercised            -              -              -
                             ----------     ----------     ----------

Weighted average number
 of common shares
 outstanding                 10,361,900     10,359,000     10,376,000

Dilutive effect of common
 share equivalents                -               -             -
                             ----------     ----------     ----------
Diluted weighted average
 number of common shares
 outstanding                 10,361,900     10,359,000     10,376,000
                             ==========     ==========     ==========

*  For the three and six months ended June 30, 2004, the stock
issued to the ESOP is a weighted average.

At June 30, 2004, there were authorized 50,000,000 shares of the
Company's $.10 par value common stock and 20,000,000 shares of
preferred stock issuable in one or more series.  None of the
preferred stock was issued or outstanding at June 30, 2004.

On February 22, 2001, the Company's Board of Directors adopted a
shareholder rights plan for its common stock.  One right was issued
for each share of common stock issued and outstanding on March 2,
2001.  One right will also be issued for each share of common stock
that is issued or sold after that date and prior to the
"Distribution Date."  The Distribution Date means generally a
date which is ten days after a person becomes an "Acquiring
Person" or the commencement of a tender offer that would make a
person a beneficial owner of 15% or more of the Company's common
stock.  An Acquiring Person means generally a person or group owning
beneficially 15% or more of the outstanding shares of common stock,
with certain exceptions.

Each right entitles shareholders to buy one share of the Company's
common stock at an exercise price of $8.00 per share, subject to
adjustments; however, the rights are not exercisable until the
Distribution Date.  The rights will expire on February 21, 2011 or
upon earlier redemption of the rights.  If any person becomes an
Acquiring Person, or certain other events relating to an Acquiring
Person occur, the right will entitle each holder to receive shares
of common stock (or stock of the acquiring party after a merger or
business combination) having a market value of two times the
exercise price of the right.  The Board of Directors may redeem the
rights at a redemption price of $.01 per right at any time prior
to a Distribution Date or the expiration date of the rights on
February 21, 2011.

Note 4.

The Company operates in two different segments: household products
and skin care products. The Company's products are sold in the
United States and internationally (primarily Canada), directly
and through independent brokers, to mass marketers, drug stores,
supermarkets, wholesale distributors and other retail outlets.
Management has chosen to organize the Company around these segments
based on differences in the products sold. The household products
segment includes "Scott's Liquid Gold" for wood, a wood cleaner
which preserves as it cleans, and "Touch of Scent," a room air
freshener. The skin care segment includes "Alpha Hydrox," alpha
hydroxy acid cleansers and lotions, a retinol product, "Diabetic
Skin Care," a healing cream and moisturizer developed to address
skin conditions of diabetics, and skin care sachets of Montagne
Jeunesse distributed by the Company.

The following provides information on the Company's segments for
the three and six months ended June 30:

                                 Three Months ended June 30,
                        ----------------------------------------------
                                2004                    2003
                        ----------------------  ----------------------
                        Household   Skin Care   Household   Skin Care
                        Products    Products    Products    Products
                        ----------  ----------  ---------- -----------

Net sales to
 external customers     $2,452,100  $2,855,800  $2,083,800  $3,524,200
                        ==========  ==========  ==========  ==========
Loss before profit
 sharing,  bonuses and
 income  taxes          $  (43,600) $ (232,300) $  (78,800) $ (667,700)
                        ==========  ==========  ==========  ==========
Identifiable assets     $3,851,500  $6,433,400  $3,397,200  $6,544,300
                        ==========  ==========  ==========  ==========

                                    Six Months ended June 30,
                        ----------------------------------------------
                            2004                    2003
                        ----------------------  ----------------------
                        Household   Skin Care   Household   Skin Care
                        Products    Products    Products    Products
                        ----------  ----------  ----------  ----------
Net sales to
 external               $4,755,400  $5,761,500  $4,317,000  $7,026,700
                        ==========  ==========  ==========  ==========
Loss before profit
 sharing, bonuses and
 income taxes           $ (434,400) $ (192,300) $ (483,800) $ (679,000)
                        ==========  ==========  ==========  ==========
Identifiable assets     $3,851,500  $6,433,400  $3,397,200  $6,544,300
                        ==========  ==========  ==========  ==========

The following is a reconciliation of segment information to
consolidated information for the three and six months ended June 30:

                Three Months ended June 30,   Six Months ended June 30,
                ---------------------------   --------------------------
                    2004           2003           2004           2003
                ------------  -------------   ------------  ------------
Net sales to
 external
 customers      $ 5,307,900    $ 5,608,000    $10,516,900    $11,343,700
                ===========    ===========    ===========    ===========
Loss before
 profit  sharing,
 bonuses and
 income taxes   $  (275,900)   $  (746,500)   $  (626,700)   $(1,162,800)
                ===========    ===========    ===========    ===========
Identifiable
 Assets         $10,284,900    $ 9,941,500    $10,284,900    $ 9,941,500
Corporate
 activities      13,473,900     14,670,500     13,473,900     14,670,500
                -----------    -----------    -----------    -----------
Consolidated
 total assets   $23,758,800    $24,612,000    $23,758,800    $24,612,000
                ===========    ===========    ===========    ===========

Item 2.	Management's Discussion and Analysis of Financial
             and Results of Operations

Results of Operations

During the first half of 2004 we experienced an increase in
household chemical products sales while experiencing a decrease in
our skin care products including the Montagne Jeunesse line of
products.  Our net loss for the first half of 2004 was $626,700
versus a loss of $1,162,800 in the first half of 2003.  The loss
for 2004 was primarily due to slower sales of Montagne Jeunesse
products as explained below.

Summary of Results as a Percentage of Net Sales

                                      Year Ended        Six Months Ended
                                      December 31,          June 30,
                                     ------------     ------------------
                                         2003            2004       2003
                                     -----------      -------    -------
Net sales
   Scott's Liquid Gold household
    products                             36.8%          45.2%      38.1%
   Neoteric Cosmetics                    63.2%          54.8%      61.9%
                                        ------         ------     ------
Total Net Sales                         100.0%         100.0%     100.0%
Cost of Sales                            52.6%          54.4%      52.2%
                                        ------         ------     ------
Gross profit                             47.4%          45.6%      47.8%
Other revenue                             0.2%           0.2%       0.3%
                                        ------         ------     ------
                                         47.6%          45.8%      48.1%
                                        ------         ------     ------

Operating expenses                       47.5%          50.9%      57.4%
Interest                                  0.9%           0.9%       1.0%
                                        ------         ------     ------
                                         48.4%          51.8%      58.4%
                                        ------         ------     ------

Loss before income taxes                 (0.8%)         (6.0%)    (10.3%)
                                        ======         ======     ======






Comparative Net Sales

                                                              Percentage
                                                               Increase
                                    2004            2003      (Decrease)
                                -----------    -----------    ----------
Scott's Liquid Gold             $ 3,414,600    $ 3,132,900        9.0%
Touch of Scent                    1,340,700      1,184,100       13.2%
                                -----------    -----------      ------
     Total household
      chemical products           4,755,300      4,317,000       10.2%
                                -----------    -----------      ------

Alpha Hydrox and other
 skin care                        2,150,900      2,359,600       (8.8%)
Montagne Jeunesse skin care       3,610,700      4,667,100      (22.6%)
                                -----------    -----------      ------
     Total skin care products     5,761,600      7,026,700      (18.0%)
                                -----------    -----------      ------

          Total Net Sales       $10,516,900    $11,343,700       (7.3%)
                                ===========    ===========      ======

Six Months Ended June 30, 2004
Compared to Six Months Ended June 30, 2003

	Consolidated net sales for the first half of the current year
were $10,516,900 vs. $11,343,700 for the first six months of 2003, a
decrease of $826,800 or about 7.3%.  Average selling prices for the
first six months of the year 2004 were down by $204,200 over those
of the comparable period of 2003, prices of household products being
down by $103,400, while average selling prices of skin care products
were down by $100,800.  This decrease was primarily due to price
promotions on selected cosmetic products.  Co-op advertising,
marketing funds, slotting fees and coupon expenses paid to retailers
were subtracted from gross sales in accordance with current
accounting policies totaling $921,800 in the first half of 2004
versus $936,600 in the same period in 2003, a decrease of $14,800
or 1.6%.

During the first half of the year, net sales of skin care products
accounted for 54.8% compared to 61.9% for the same period of 2003.
Net sales of these products for those periods were $5,761,600 in
2004 compared to $7,026,700 in 2003, a decrease of $1,265,100 or
18.0%. The Company has continued to experience a drop in unit sales
of the Company's earlier-established alpha hydroxy acid products due
at least in part to maturing in the market for alpha hydroxy
acid-based skin care products and intense competition from producers
of similar or alternative products, many of which are considerably
larger than Neoteric Cosmetics, Inc.  Sales of the Company's Alpha
Hydrox products (with and without alpha hydroxy acid) have also
decreased during 2003 and the first half of 2004, due to reduced
distribution of those products at retail stores, including the
Company's largest and other customers having reduced in prior
quarters the number of types of those products carried on their
shelves and discontinuation in 2003 of these products at certain
retail chains. In addition, increased television advertising for
Alpha Hydrox products in the first half of 2003 was not cost
effective in terms of the impact on sales.  In the second quarter
of 2003, the Company's largest customer (which accounted for 23.6%
 of sales of Alpha Hydrox skin care products in 2002) decreased
significantly the number of stores carrying Alpha Hydrox products
of the Company.  This change has resulted, and is likely to result
in the future, in lower sales of those products.  For the first
half of 2004, the sales of the Company's Alpha Hydrox products
accounted for 25.2% of net sales of skin care products and 13.8%
of total net sales, compared to 25.0% of net sales of skin care
products and 15.5% of total net sales in the first half of 2003.

For 2004, sales of Montagne Jeunesse products comprised a majority
of net sales of the Company's skin care products.  Net sales of
Montagne Jeunesse were approximately $3,610,700 in 2004 compared
to $4,667,100 in 2003.  The Company believes that this decrease in
sales of Montagne Jeunesse is attributable primarily to a decrease
in the number of display promotions at retailers in the first half
of 2004 versus 2003 and to 2003 products that had not sold through
the retail stores until 2004 thus resulting in fewer first half
re-sales.

As part of its sales efforts in the first half of 2003, the Company
used direct response television (infomercial) commercials for the
sale of its Alpha Hydrox products.  These efforts were not repeated
in 2004.  The Company has not used television advertisements for
the Montagne Jeunesse products. The Company did not introduce new
products during the first half of 2004, except different items in
Montagne Jeunesse sachets.

	Sales of household products for the first half of this year
accounted for 45.2% of consolidated net sales compared to 38.1% for
the same period of 2003. These products are comprised of "Scott's
Liquid Gold" for wood, a wood cleaner which preserves as it cleans,
and "Touch of Scent", a room air freshener.  During the six months
ended June 30, 2004, sales of household products were $4,755,300,
as compared to sales of $4,317,000 for the same six months of 2003.
Sales of "Scott's Liquid Gold" for wood were up by $281,700, an
increase of 9.0%.  This increase was due to increased distribution
at retail stores.  Sales of "Touch of Scent" were up by $156,600
or 13.2%. primarily due to an increase in distribution.

	As sales of a consumer product decline, there is the risk
that retail stores will stop carrying the product.  The loss of
any significant customer for any Alpha Hydrox products, "Scott's
Liquid Gold" for wood or "Touch of Scent", could have a significant
adverse impact on the Company's revenues and operating results.
The Company believes that its future success is highly dependent
on favorable acceptance in the marketplace of Montagne Jeunesse
products and the sales of its Alpha Hydrox products and "Scott's
Liquid Gold" for wood.

	On a consolidated basis, cost of goods sold was $5,720,600
during the first six months of 2004 compared to $5,921,300 for the
same period of 2003, a decrease of $200,700 (3.4% on a sales
decrease of 7.3%).  As a percentage of consolidated net sales for
the first half of 2004, cost of goods sold was 54.4% compared to
52.2% in 2003, an increase of 4.2%, which was essentially due to
a greater percentage of off-sales promotions in 2004 versus 2003,
and spreading the ongoing manufacturing costs over the lower
aggregate number of units sold.


Operating Expenses, Interest Expense and Other Income

                                                             Percentage
                                                              Increase
                                    2004            2003     (Decrease)
                                -----------    -----------   ----------
Operating Expenses
     Advertising                $   637,100    $ 1,500,600     (57.5%)
     Selling                      2,781,400      3,007,400      (7.5%)
     General & Administrative     1,936,700      1,999,700      (3.2%)
                                -----------    -----------     ------
          Total operating
           expenses             $ 5,355,200    $ 6,507,700     (17.7%)
                                ===========    ===========     ======

Interest Income                 $    20,500    $    34,500     (40.6%)

Interest Expense                $    88,300    $   112,000     (21.2%)

Operating expenses, comprised primarily of advertising, selling
and general and administrative expenses, decreased $1,152,500 in
the first half of 2004, when compared to the first half of 2003,
largely because of the decrease in advertising expenses.  The
various components of operating expenses are discussed below.

Advertising expenses for the first six months of 2004 were $637,100
compared to $1,500,600 for the comparable six months of 2003, a
decrease of $863,500 or 57.5%.  Advertising expenses applicable
to household products decreased by $175,400 (27.7%) during the
first half of 2004, and advertising expenses for Alpha Hydrox
products decreased for the comparative six-month period by
$688,100 (79.3%).

Selling expenses for the first half of 2004 were $2,781,400
compared to $3,007,400 for the comparable six months of 2003, a
decrease of $226,000 or 7.5%.  That decrease was comprised of a
decrease in promotional costs of $161,000 primarily because there
were fewer sales promotions in 2004 versus 2003, a decrease in
internet and direct television sales expense of $111,500 primarily
because of a decrease in direct television sales advertising in
2004 versus 2003, a decrease in depreciation and royalty expense
of $63,000, offset by an increase in salaries and fringe benefits
of $75,500 primarily because of an increase in personnel in 2004
versus 2003, an increase in sales travel expense of $26,100, and a
net increase in other selling expenses, none of which by itself is
significant, of $7,900.

General and administrative expenses for the first six months of 2004
were $1,936,700 compared to $1,999,700 for the comparable period of
2003, a decrease of $63,000 or 3.2%.  That decrease is made up of a
decrease in professional fees of $116,200 primarily because of a
decrease in audit fees in 2004 versus 2003 and a net decrease in
other administrative expenses, none of which, by itself was
material, of $19,000, offset by an increase in salary and fringe
benefits of $72,200 primarily because of a general increase in
these expenses during the first six months of 2004.

Interest expense for the first six months of 2004 was $88,300 versus
$112,000 for the comparable quarter of 2003.  Interest expense
decreased because of the reduced principal of the Company's bank
loan.  Interest income for the six months ended June 30, 2004 was
$20,500 compared to $34,500 for the same period of 2003, which
consists of interest earned on the Company's cash reserves in 2004
and 2003.  Interest expense will increase in the next few quarters
as the Company borrows under the line of credit described in the
Liquidity and Capital Resources section.

During the second quarter of 2004 and of 2003, expenditures for
research and development were not material (under 2% of revenues).

Three Months Ended June 30, 2004
Compared to Three Months Ended June 30, 2003

Consolidated net sales for the second quarter of the current year
were $5,307,900 vs. $5,608,000 for the comparable quarter of 2003,
a decrease of $300,100 or about 5.4%. Average selling prices for
the second quarter of 2004 were down by $204,800 over those of the
comparable period of 2003, prices of household products being down
by $74,200, while average selling prices of skin care products were
down by $130,600.  Co-op advertising, marketing funds, slotting fees
and coupon expenses paid to retailers were subtracted from gross
sales in accordance with current accounting policies totaling
$406,700 in the second quarter of 2004 versus $445,300 in the same
period in 2003, a decrease of $38,600 or 8.7%.  This decrease was
made up of a decrease in coupon expense of $30,700, a decrease in
slotting expense of $13,500, and an increase in cooperative
advertising expense of $5,600.

During the second quarter of 2004, net sales of skin care products
accounted for 53.8% of consolidated net sales compared to 62.8% for
the second quarter of 2003.  Net sales of these products for those
periods were $2,855,800 in 2004 compared to $3,524,200 in 2003, a
decrease of $668,400 or 19.0%. Net sales of Montagne Jeunesse were
approximately $1,946,500 in the second quarter of 2004 compared to
$2,623,300 in the second quarter of 2003.  Please see the discussion
above for the first half of 2004 for additional information regarding
sales of skin care products, which is also applicable to sales of
skin care products in the second quarter.

Sales of household products for the second quarter of this year
accounted for 46.2% of consolidated net sales compared to 37.2% for
the same period of 2003. These products are comprised of "Scott's
Liquid Gold" for wood, a wood cleaner which preserves as it cleans,
and "Touch of Scent", a room air freshener.  During the second
quarter of 2004, sales of household products were $2,452,100, as
compared to sales of $2,083,800 for the same three months of 2003.
Sales of "Scott's Liquid Gold" for wood were up by $185,300, an
increase of 11.8%.  Sales of "Touch of Scent" were up by $183,000
or 35.6%. Please see the discussion above for the first half of
2004 for additional information regarding sales of household
products, which is also applicable to sales of household products
in the second quarter of 2004.

On a consolidated basis, cost of goods sold was $2,970,000 during
the second quarter of 2004 compared to $3,063,300 for the same
period of 2003, a decrease of $93,300 (3.0%, on a sales decrease
of 5.4%).  As a percentage of consolidated net sales for the
second quarter of 2004, cost of goods sold was 56.0% compared to
54.6% in 2003, an increase of 2.4%, which was essentially due to
a greater percentage of off-sales promotions in 2004 versus 2003,
and spreading the ongoing manufacturing costs over the lower
aggregate number of units sold.

Operating expenses, comprised primarily of advertising, selling
and general and administrative expenses, decreased $673,200 in
the second quarter of 2004, when compared to the same period
during 2003, largely because of the decrease in advertising expenses.

Advertising expenses for the second quarter of 2004 were $173,400
compared to $691,600 for the comparable quarter of 2003, a decrease
of $518,200 or 74.9%. Advertising expenses applicable to household
products decreased by $150,600 (64.5%) during the second quarter of
2004, and advertising expenses for Alpha Hydrox products decreased
for the comparative three-month period by $367,600 (80.2%).

Selling expenses for the three months ended June 30, 2004 were
$1,457,500 compared to $1,587,000 for the comparable three months
of 2003, a decrease of $129,500 or 8.2%.  That decrease was
comprised of a decrease in promotional expenses of $145,700
primarily because there were fewer sales promotions in 2004
versus 2003, a decrease in internet and direct television
sales expense of $36,300, and a decrease in depreciation and
royalty expense of $31,400 offset by a net increase in salary
and fringe benefits and related travel of $71,900 primarily because
of an increase in personnel in 2004 versus 2003, and other selling
expenses, none of which by itself is significant, of $12,000.

General and administrative expenses for the second quarter of 2004
were $950,200 compared to $975,700 for the comparable period of
2003, a decrease of $25,500 or 2.6%.  Such decrease was attributable
to a decrease in professional fees of $43,800, offset by a net
increase in other administrative expenses, none of which by itself
was significant, of $18,300.

Interest expense for the second quarter of 2004 was $42,600 versus
$55,100 for the comparable period of 2003.  Interest income for the
three months ended June 30, 2004 was $9,900 compared to $18,200 for
the same period of 2003. Other income essentially consists of
interest earned on the Company's cash reserves.

During the second quarter of 2004 and of 2003, expenditures for
research and development were not material (under 2% of revenues).

Liquidity and Capital Resources

	On August 10, 2004 the Company obtained a $1,500,000 line of
credit from a bank to finance additional inventory and accounts
receivable associated with upcoming holiday sales.  The line of credit
bears interest at a rate of .5% over the bank's base rate (4.25% at
July 31, 2004) and matures in one year.  The line of credit is
secured by inventory and accounts receivable.  The covenants are the
same as the bank loan described below.

	The Company has a bank loan for approximately $3.3 million
at the bank's base rate, adjustable yearly (4.75% at June 30, 2004),
secured by the Company's land and buildings, with principal and
interest payable monthly through November 2007.  The loan agreement
contains a number of covenants, including the requirement for
maintaining a current ratio of at least 1:1 and a ratio of
consolidated long-term debt to consolidated net worth of not
more than 1:1.   The Company may not declare any dividends that
would result in a violation of either of these covenants.  The
foregoing requirements were met at the end of the first half of 2004.

During the first half of 2004, the Company's working capital
decreased by $733,600, and concomitantly, its current ratio
(current assets divided by current liabilities) decreased from
2.3:1 at December 31, 2003 to 2.0:1 at June 30, 2004. This
decrease in working capital is attributable to a net loss in the
first six months of 2004 of $626,700, and a reduction in long-term
debt of $451,500, a decrease in deferred tax liabilities of
$31,000, and a decrease in accumulated comprehensive income of
$2,500, offset by depreciation in excess of capital additions of
$297,300, a decrease in non-current deferred tax assets of
$64,000, a decrease in other assets of $5,400, and an increase
in common stock and capital in excess of par of $11,400.

At June 30, 2004, trade accounts receivable were $1,389,500 versus
$1,108,600 at year-end, largely because sales in June of 2004 were
greater than those of December of 2003.  Accounts payable increased
from the end of 2003 through June of 2004 by $406,500 primarily due
to an increase in sales promotion and trade suppliers payables.  At
June 30, 2004 inventories were $81,500 more than at December 31,
2003.  Accrued payroll and benefits increased $145,200 from
December 31, 2003 to June 30, 2004 primarily because of the increase
in accrued benefits.  Other accrued liabilities decreased by
$164,200 primarily because of a decrease in accrued property taxes
and a decrease in accrued coupon expense.

The Company has no significant capital expenditures planned for 2004.
The Company expects that its available cash and cash flows from
operating activities will fund its cash requirements through at
least June 30, 2005.

The Company's dependence on operating cash flow means that risks
involved in its business can significantly affect its liquidity.
Any loss of a significant customer, any further decreases in
distribution of its skin care or household chemical products,
any new competitive products affecting sales levels of the Company's
products, or any significant expense not included in the Company's
internal budget could result in the need to raise cash, such as
through a bank financing.  Please also see other risks summarized
in "Forward Looking Statements" below.

Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss due to adverse changes in
financial and commodity market prices and rates.  The Company is
not materially exposed to market risks regarding interest rates
because the interest on the Company's outstanding debt is at the
lender's base rate, which approximates the prime rate, adjustable
yearly.  The Company's investments in debt and equity securities
are short-term and not subject to significant fluctuations in fair
value.  If interest rates were to rise 10% from year-end levels,
the fair value of the Company's debt and equity securities would
have decreased by approximately $13,000.  Further, the Company
does not use foreign currencies in its business.  Currently, it
receives payments for sales to parties in foreign countries in
U.S. dollars.  Additionally, the Company does not use derivative
instruments or engage in hedging activities.  As a result, the
Company does not believe that near-term changes in market risks
will have a material effect on results of operations, financial
position or cash flows of the Company.

Forward-Looking Statements

	This report may contain "forward-looking statements" within
the meaning of U.S. federal securities laws. These statements are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.  Forward-looking
statements and the Company's performance inherently involve
risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements.  Factors that
would cause or contribute to such differences include, but are
not limited to, continued acceptance of the Company's products
in the marketplace; the degree of success of any new product or
product line introduction by the Company; competitive factors; any
decrease in distribution of (i.e., retail stores carrying) the
Company's significant products; continuation of the Company's
distributorship agreement with Montagne Jeunesse; the need for
effective advertising of the Company's products; limited resources
available for such advertising; new competitive products and/or
technological changes; dependence upon third party vendors and
upon sales to major customers; changes in the regulation of the
Company's products, including applicable environmental regulations;
adverse developments in any pending litigation; the loss of any
executive officer; and other matters discussed in the Company's
periodic filings with the Securities and Exchange Commission.  The
Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may
arise after the date of this report.

Item 3.	Quantitative and Qualitative Disclosures About
             Market Risk

	Please see "Market Risks" in Item 2 of Part I of this Report
which information is incorporated herein by this reference.

Item 4.	Controls and Procedures

	As of June 30, 2004, the Company conducted an evaluation,
under the supervision and with the participation of the Chief
Executive Officer and Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and
procedures.  Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls
and procedures are effective to ensure that information required to
be disclosed by the Company in reports that we file or submit under
the Securities Exchange Act of 1934 is recorded, processed,
summarized, and reported within the time periods specified in
Securities and Exchange Commission rules and forms as of June 30,
2004.  There was no change in our internal control over financial
reporting during the quarter ended June 30, 2004 that has materially
affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.


PART II	OTHER INFORMATION

Item 1.	Not Applicable

Item 2.	Not Applicable

Item 3.	Not Applicable

Item 4.	Submission of Matters to a Vote of Security Holders

On May 20, 2004, the Company held its 2004 Annual Meeting of
Shareholders.  At that meeting, the seven existing directors were
nominated and re-elected as directors of the Company.  These seven
persons constitute all members of the Board of Directors of the
Company.  These directors and the votes for and withheld for each
of them were as follows:

                          For              Withheld
                        ---------          --------
Mark E. Goldstein       8,492,288           213,684
Jeffrey R. Hinkle       8,492,288           213,684
Jeffry B. Johnson       8,491,888           214,084
Dennis P. Passantino    8,492,288           213,684
Carl A. Bellini         8,491,518           214,454
Dennis H. Field         8,491,318           214,654
Gerald J. Laber         8,491,418           214,554

Item 5.	Not Applicable

Item 6.	Exhibits and Reports on Form 8-K

(a)	Reports on Form 8-K

The following reports were filed by the Company on Form 8-K during
the second quarter of 2004:  A report filed on May 14, 2004
reporting an event under Item 5, Other Events and Regulation
FD Disclosure.

(b)	Exhibits

31.1 Rule 13a-14(a) Certification of the Chief Executive
        Officer
31.2 Rule 13a-14(a) Certification of the Chief Financial
        Officer
32.1	Section 1350 Certification
10.0	Business Loan Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

				SCOTT'S LIQUID GOLD-INC.


August 11, 2004			BY:	/s/ Mark E. Goldstein
    Date 				--------------------------------------
					Mark E. Goldstein
					President and Chief Executive Officer


August 11, 2004			BY:	/s/ Jeffry B. Johnson
    Date				--------------------------------------
					Jeffry B. Johnson
					Treasurer and Chief Financial Officer


EXHIBIT INDEX

Exhibit No.           Document

31.1 Rule 13a-14(a)   Certification of the Chief Executive Officer
31.2 Rule 13a-14(a)   Certification of the Chief Financial Officer
32.1                  Section 1350 Certification
10.0                  Business Loan Agreement




									EXHIBIT 31.1

CERTIFICATION

I, Mark E. Goldstein, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the
quarter ended June 30, 2004 of Scott's Liquid Gold-Inc.;

2. Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in
light of the circumstances under which such statements
were made, not misleading with respect to the period covered
by this report;

3.	Based on my knowledge, the financial statements and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for,
the periods presented in this report;

4.	The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;

b)	evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such
evaluation; and

(c)	disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors
and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and

b)	any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal control over financial reporting.



DATED:  August 11, 2004

                                /s/ Mark E. Goldstein
                                ------------------------------------
                                Mark E. Goldstein
                                President, Chief Executive Officer,
                                 and Chairman of the Board
                                Principal Executive Officer


								EXHIBIT 31.2

CERTIFICATION

I, Jeffry B. Johnson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for the
quarter ended June 30, 2004 of Scott's Liquid Gold-Inc.;

2.	Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;

3.	Based on my knowledge, the financial statements and other
financial information included in this report, fairly present in
all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods
presented in this report;

4.	The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
 and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;

b)	evaluated the effectiveness of the registrant's disclosure
controls and procedures and  presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report
based on such evaluation; and

(c)	disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting; and

5.	The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors
and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in
the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report
financial information; and

b)	any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal control over financial reporting.

DATED:  August 11, 2004

                               /s/ Jeffry B. Johnson
                               --------------------------------------
                               Jeffry B. Johnson
                               Treasurer and Chief Financial Officer
                               Principal Financial Officer


                                                   EXHIBIT 32.1

CERTIFICATION OF 10-Q REPORT
OF
SCOTT'S LIQUID GOLD-INC.

FOR THE QUARTER JUNE 30, 2004

1.   The undersigned are the Chief Executive Officer and the Chief
Financial Officer of Scott's Liquid Gold-Inc. ("Scott's Liquid
Gold").  This Certification is made pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.  This Certification accompanies the
10-Q Report of Scott's Liquid Gold for the quarter ended
June 30, 2004.

2.   We certify that such 10-Q Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 and that the information contained in such 10-Q
Report fairly presents, in all material respects, the financial
condition and results of operations of Scott's Liquid Gold.

This Certification is executed as of August 11, 2004.

/s/ Mark E. Goldstein
- -----------------------------------
Mark E. Goldstein
President, Chief Executive Officer
 and Chairman of the Board
Principal Executive Officer

/s/ Jeffry B. Johnson
- -----------------------------------
Jeffry B. Johnson
Treasurer and Chief Financial Officer
Principal Financial Officer


								EXHIBIT 10.0

BUSINESS LOAN AGREEMENT

Borrower:	Scott's Liquid Gold-Inc.
		4880 Havana Street
		Denver, CO  80239

Lender:	Citywide Banks
		PO Box 128
		Aurora, CO  80040-0128
		(303) 365-3600

THIS BUSINESS LOAN AGREEMENT dated August 10, 2004, is made and
executed between Scott's Liquid Gold-Inc. ("Borrower") and Citywide
Banks ("Lender") on the following terms and conditions. Borrower
has received prior commercial loans from Lender or has applied to
Lender for a commercial loan or loans or other financial
accommodations, including those which may be described on any
exhibit or schedule attached to this Agreement ("Loan"). Borrower
understands and agrees that: (A) in granting, renewing, or
extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements as set forth in this
Agreement; (B) the granting, renewing, or extending of any Loan
by Lender at all times shall be subject to Lender's sole judgment
and discretion; and (C) all such Loans shall be and remain subject
to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of August 10, 2004, and
shall continue in full force and effect until such time as all of
Borrower's Loans In favor of Lender have been paid in full,
including principal, interest, costs, expenses, attorneys' fees,
and other fees and charges, or until August 10, 2005.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make
the initial Advance and each subsequent Advance under this
Agreement shall be subject to the fulfillment to Lender's
satisfaction of all of the conditions set forth in this Agreement
and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following
documents for the Loan: (1) the Note; (2) Security Agreements
granting to Lender security interests in the Collateral; (3)
financing statements and all other documents perfecting Lender's
Security Interests; (4) evidence of insurance as required below;
(5) together with all such Related Documents as Lender may require
for the Loan; all in form and substance satisfactory to Lender and
Lender's counsel.

Borrower's Authorization. Borrower shall have provided in form
and substance satisfactory to Lender properly certified resolutions,
duly authorizing the execution and delivery of this Agreement, the
Note and the Related Documents, In addition, Borrower shall have
provided such other resolutions, authorizations, documents and
instruments as Lender or its counsel, may require.

Payment of Fees and Expenses. Borrower shall have paid to Lender
all fees, charges, and other expenses which are then due and
payable as specified in this Agreement or any Related Document.

Representations and Warranties. The representations and warranties
set forth in this Agreement, in the Related Documents, and in any
document or certificate delivered to Lender under this Agreement
are true and correct.

No Event of Default. There shall not exist at the time of any
Advance a condition which would constitute an Event of Default
under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to Lender, as of the date of this Agreement, as of the date of
each disbursement of loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any
Indebtedness exists:

Organization. Borrower is a corporation for profit which is, and
at all times shall be, duly organized, validly existing, and in
good standing under and by virtue of the laws of the State of
Colorado Borrower has the full power and authority to own its
properties and to transact the business in which it is presently
engaged or presently proposes to engage. Borrower maintains an
office at 4880 Havana Street, Denver, CO 80239. Unless Borrower
has designated otherwise in writing, the principal office is the
office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender
prior to any change in the location of Borrower's state of
organization or any change in Borrower's name. Borrower shall do
all things necessary to preserve and to keep in full force and
effect its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or
court applicable to Borrower and Borrower's business activities.

Assumed Business Names. Borrower has filed or recorded all
documents or filings required by law relating to all assumed
business names used by Borrower. Excluding the name of Borrower,
the following is a complete list of all assumed business names
under which Borrower does business:  SLG Chemicals, Inc.; Neoteric
Cosmetics, Inc.; and, Colorado Product Concepts, Inc.

Authorization. Borrower's execution, delivery, and performance of
this Agreement and all the Related Documents have been duly
authorized by all necessary action by Borrower and do not conflict
with, result in e violation of, or constitute a default under (1)
any provision of (a) Borrower's articles of incorporation or
organization, or bylaws, or (b) any agreement or other instrument
binding upon Borrower or (2) any law, governmental regulation,
court decree, or order applicable to Borrower or to Borrower's
properties.

Financial Information. Each of Borrower's financial statements
supplied to Lender truly and completely discloses Borrower's
financial condition as of the date of the statement, and there
has been no material adverse change in Borrower's financial
condition subsequent to the date of the most recent financial
statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.

Legal Effect. This Agreement constitutes, and any instrument or
agreement Borrower is required to give under this Agreement when
delivered will constitute legal, valid, and binding obligations of
Borrower enforceable against Borrower in accordance with their
respective terms.

Properties. Except as contemplated by this Agreement or as
previously disclosed in Borrower's financial statements or in
writing to Lender and as accepted by Lender, and except for
property tax liens for taxes not presently due and payable,
Borrower owns and has good title to all of Borrower's properties
free and clear of all Security Interests, and has not executed
any security documents or financing statements relating to such
properties. All of Borrower's properties are titled in Borrower's
legal name, and Borrower has not used or filed a financing
statement under any other name for at least the last five (5) years.

Hazardous Substances. Except as disclosed to and acknowledged by
Lender in writing, Borrower represents and warrants that: (1) During
the period of Borrower's ownership of Borrower's Collateral, there
has been no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance
by any person on, under, about or from any of the Collateral. (2)
Borrower has no knowledge of, or reason to believe that there has
been (a) any breach or violation of any Environmental Laws; (b) any
use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any Hazardous Substance on, under, about or
from the Collateral by any prior owners or occupants of any of the
Collateral; or (c) any actual or threatened litigation or claims of
any kind by any person relating to such matters. (3) Neither
Borrower nor any tenant, contractor, agent or other authorized
user of any of the Collateral shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on,
under, about or from any of the Collateral; and any such activity
shall be conducted in compliance with all applicable federal,
state, and local laws, regulations, and ordinances, including
without limitation ell Environmental Laws. Borrower authorizes
Lender end its agents to enter upon the Collateral to make such
inspections and tests as Lender may deem appropriate to determine
compliance of the Collateral with this section of the Agreement.
Any inspections or tests made by Lender shall be at Borrower's
expense and for Lender's purposes only and shall not be construed
to create any responsibility or liability on the part of Lender to
Borrower or to any other person. The representations and warranties
contained herein are based on Borrower's due diligence in
investigating the Collateral for hazardous waste and Hazardous
Substances. Borrower hereby (1) releases and waives any future
claims against Lender for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any such
laws, and (2) agrees to indemnify and hold harmless Lender against
any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer
resulting from a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal,
release or threatened release of a hazardous waste or substance
on the Collateral. The provisions of this section of the Agreement,
including the obligation to indemnify, shall survive the payment
of the Indebtedness and the termination, expiration

or satisfaction of this Agreement and shall not be affected by
Lender's acquisition of any interest in any of the Collateral,
whether by foreclosure or otherwise.

Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for
unpaid taxes) against Borrower is pending or threatened, and no
other event has occurred which may materially adversely affect
Borrower's financial condition or properties, other than litigation,
claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing.

Taxes. To the best of Borrower's knowledge, all of Borrower's tax
returns and reports that are or were required to be filed, have
been filed, and all taxes, assessments and other governmental
charges have been paid in full, except those presently being or
to be contested by Borrower in good faith in the ordinary course
of business and for which adequate reserves have been provided.

Lien Priority. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filling or attachment of any Security
interests on or affecting any of the Collateral directly or
indirectly securing repayment of Borrower's Loan and Note, that
would be prior or that may in any way be superior to Lender's
Security Interests and rights in and to such Collateral.

Binding Effect. This Agreement, the Note, all Security Agreements
(if any), and all Related Documents are binding upon the signers
thereof, as well as upon their successors, representatives and
assigns, and are legally enforceable in accordance with their
respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender
that, so long as this Agreement remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing
of (1) all material adverse changes in Borrower's financial
condition, and (2) all existing and all threatened litigation,
claims, investigations, administrative proceedings or similar
actions affecting Borrower or any Guarantor which could materially
affect the financial condition of Borrower or the financial
condition of any Guarantor.

Financial Records. Maintain its books and records in accordance
with GAAP, applied on a consistent basis, and permit Lender to
examine and audit Borrower's books and records at all reasonable
times.

Financial Statements. Furnish Lender with the following:

Annual Statements. As soon as available, but in no event later
than ninety (90) days after the end of each fiscal year, Borrower's
balance sheet and income statement for the year ended, audited by
a certified public accountant satisfactory to Lender.

Interim Statements. As soon as available, but in no event later
than forty (40) days after the end of each month, Borrower's
balance sheet and profit and loss statement for the period ended,
prepared by Borrower.

Additional Requirements. Borrower will provide Lender with Monthly
Accounts Receivable Agings, Accounts Payable Agings, Monthly
Borrowing Base Certificates and Monthly Inventory Breakdown.

All financial reports required to be provided under this Agreement
shall be prepared in accordance with GAAP, applied on a consistent
basis, and certified by Borrower as being true and correct.

Additional Information. Furnish such additional information and
statements, as Lender may request from time to time.

Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with
respect to Borrower's properties and operations, in form, amounts,
coverages and with insurance companies acceptable to Lender.
Borrower, upon request of Lender, will deliver to Lender from time
to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will
not be cancelled or diminished without at least ten (10) days
prior written notice to Lender. Each insurance policy also shall
include an endorsement providing that coverage in favor of Lender
will not be impaired in any way by any act, omission or default
of Borrower or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security
interest for the Loans, Borrower will provide Lender with such
lender's loss payable or other endorsements as Lender may require.

Insurance Reports. Furnish to Lender, upon request of Lender,
reports on each existing insurance policy showing such information
as Lender may reasonably request, including without limitation the
following: (1) the name of the insurer; (2) the risks insured;
(3) the amount of the policy; (4) the properties insured; (5) the
then current property values on the basis of which insurance has
been obtained, and the manner of determining those values; and
(6) the expiration date of the policy. In addition, upon request
of Lender (however not more often than annually), Borrower will
have an independent appraiser satisfactory to Lender determine,
as applicable, the actual cash value or replacement cost of any
Collateral. The cost of such appraisal shall be paid by Borrower.

Other Agreements. Comply with all terms and conditions of all
other agreements, whether now or hereafter existing, between
Borrower and any other party and notify Lender immediately in
writing of any default in connection with any other such agreements.

Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender
in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of
every kind and nature, imposed upon Borrower or its properties,
income, or profits, prior to the date on which penalties would
attach, and all lawful claims that, if unpaid, might become a
lien or charge upon any of Borrower's properties, income, or
profits.

Performance. Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the
Related Documents, and in all other instruments and agreements
between Borrower and Lender. Borrower shall notify Lender
immediately in writing of any default in connection with any
agreement.

Operations. Maintain executive and management personnel with
substantially the same qualifications and experience as the
present executive and management personnel; provide written notice
to Lender of any change in executive and management personnel;
conduct its business affairs in a reasonable and prudent manner.

Environmental Studies. Promptly conduct and complete, at
Borrower's expense, all such investigations, studies, samplings
end testings as may be requested by Lender or any governmental
authority relative to any substance, or any waste or by-product
of any substance defined as toxic or a hazardous substance under
applicable federal, state, or local law, rule, regulation, order
or directive, at or affecting any property or any facility owned,
leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws,
ordinances, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the conduct of Borrower's
properties, businesses and operations, and to the use or occupancy
of the Collateral, including without limitation, the Americans With
Disabilities Act. Borrower may contest in good faith any such law,
ordinance, or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Borrower
has notified Lender in writing prior to doing so and so long as,
in Lender's sole opinion, Lender's interests in the Collateral are
not jeopardized. Lender may require Borrower to post adequate
security or a surety bond, reasonably satisfactory to Lender, to
protect Lender's interest.

Inspection. Permit employees or agents of Lender at any reasonable
time to Inspect any and all Collateral for the Loan or Loans and
Borrower's other properties and to examine or audit Borrower's books,
accounts, and records and to make copies and memoranda of Borrower's
books, accounts, and records. If Borrower now or at any time hereafter
maintains any records (including without limitation computer
generated records and computer software programs for the generation
of such records) in the possession of a third party, Borrower,
upon request of Lender, shall notify such party to permit Lender
free access to such records at all reasonable times and to provide
Lender with copies of any records it may request, all at Borrower's
expense.

Compliance Certificates. Unless waived in writing by Lender, provide
Lender at least annually, with a certificate executed by Borrower's
chief financial officer, or other officer or person acceptable to
Lender, certifying that the representations and warranties set forth
in this Agreement are true and correct as of the date of the
certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.

Environmental Compliance and Reports. Borrower shall comply in all
respects with any and all Environmental Laws; not cause or permit
to exist, as a result of an intentional or unintentional action or
omission on Borrower's part or on the part of any third party, on
property owned and/or occupied by Borrower, any environmental
activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state or
local governmental authorities; shall furnish to Lender promptly
and in any event within thirty (30) days otter receipt thereof a
copy of any notice, summons, lien, citation, directive, letter or
other communication from any governmental agency or instrumentality
concerning any intentional or unintentional action or omission on
Borrower's part in connection with any environmental activity
whether or not there is damage to the environment and/or other
natural resources.

Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
assignments, financing statements, instruments, documents and other
agreements as Lender or its attorneys may reasonably request to
evidence and secure the Loans and to perfect all Security Interests.

LENDER'S EXPENDITURES. If any action or proceeding is commenced
that would materially affect Lender's interest in the Collateral
or if Borrower fails to comply with any provision of this Agreement
or any Related Documents, including but not limited to Borrower's
failure to discharge or pay when due any amounts Borrower is
required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be
obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes,
liens, security interests, encumbrances and other claims, at any
time levied or placed on any Collateral and paying all costs for
insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then
bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Borrower.
All such expenses will become a part of the Indebtedness and, at
Lender's option, will (A) be payable on demand; (B) be added to
the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the
term of any applicable insurance policy; or (2) the remaining
term of the Note; or (C) be treated as a balloon payment which
will be due and payable at the Note's maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the
prior written consent of Lender:

Indebtedness and Liens.  (1) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated
by this Agreement, create, incur or assume indebtedness for
borrowed money, including capital leases, (2) sell transfer
mortgage, assign, pledge, lease, grant a security interest in,
or encumber any of Borrower's assets (except as allowed as
Permitted Liens), or (3) sell with recourse any of Borrower's
accounts, except to Lender.

Continuity of Operations. (1) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (2) cease operations, liquidate, merge, transfer, acquire
or consolidate with any other entity, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business.

Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance
money or assets to any other person, enterprise or entity,
(2) purchase, create or acquire any interest in any other
enterprise or entity, or (3) incur any obligation as surety or
guarantor other than in the ordinary course of business.

Agreements. Borrower will not enter into any agreement containing
any provisions which would be violated or breached by the
performance of Borrower's obligations under this Agreement or
in connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make
any Loan to Borrower, whether under this Agreement or under any
other agreement, Lender shall have no obligation to make Loan
Advances or to disburse Loan proceeds if: (A) Borrower or any
Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower
or any Guarantor has with Lender; (B) Borrower or any Guarantor
dies, becomes incompetent or becomes insolvent, files a petition
in bankruptcy or similar proceedings, or is adjudged a bankrupt;
(C) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the
value of any Collateral securing any Loan; or (D) any Guarantor
seeks, claims or otherwise attempts to limit, modify or revoke
such Guarantor's guaranty of the Loan or any other loan with
Lender; or (E) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender
(whether checking, savings, or some other account). This includes
all accounts Borrower holds jointly with someone else and all
accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which
setoff would be prohibited by law. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums
owing on the Indebtedness against any and all such accounts.

DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

Payment Default. Borrower fails to make any payment when due under
the Loan.

Other Defaults. Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or to comply with or
to perform any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.

Default in Favor of Third Parties. Borrower or any Grantor defaults
under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other
creditor or person that may materially affect any of Borrower's or
any Grantor's property or Borrower's or any Grantor's ability to
repay the Loans or perform their respective obligations under this
Agreement or any of the Related Documents.

False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower's existence
as a going business, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower's property, any assignment for
the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.

Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure
of any collateral document to create a valid and perfected security
interest or lien) at any time and for any reason.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the Loan.
This includes a garnishment of any of Borrower's accounts, including
deposit accounts, with Lender, However, this Event of Default shall
not apply if there is a good faith dispute by Borrower as to the
validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits
with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness.

Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of the Loan is impaired.

Insecurity. Lender in good faith believes itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related
Documents, all commitments and obligations of Lender under this
Agreement or the Related Documents or any other agreement immediately
will terminate (including any obligation to make further Loan
Advances or disbursements), and, at Lender's option, all
indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an
Event of Default of the type described in the "Insolvency"
subsection above, such acceleration shall be automatic and not
optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law,
in equity, or otherwise. Except as may be prohibited by applicable
law, all of Lender's rights and remedies shall be cumulative and
may be exercised singularly or concurrently, Election by Lender
pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform
an obligation of Borrower or of any Grantor shall not affect
Lender's right to declare a default and to exercise its rights
and remedies.

ADDITION PROVISION. Maintain current ratio of at least 1:1

Maintain long term debt/consolidated net worth, in accordance with
Generally Accepted Accounting Principles (GAAP) as currently in
effect, of not more than 1:1.

Above ratios must be maintained in order for company to pay dividends.

MISCELLANBOUS PROVISIONS. The following miscellaneous provisions
are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.

Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all
of Lender's reasonable costs and expenses, including Lender's
attorneys' fees and Lender's legal expenses, incurred in
connection with the enforcement of this Agreement. Lender may
hire or pay someone also to help enforce this Agreement, and
Borrower shall pay the reasonable costs and expenses of sued
enforcement. Costs and expenses include Lender's

attorneys' fees and legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Borrower also shall pay all
court costs and such additional fees as may be directed by the
court.

Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.

Consent to Loan Participation. Borrower agrees and consents to
Lender's sale or transfer, whether now or later, of one or more
participation interests in the Loan to one or more purchasers,
whether related or unrelated to Lender. Lender may provide,
without any limitation whatsoever, relating to the Loan, and
Borrower hereby waives any rights to privacy Borrower may have
with respect to such matters. Borrower additionally waives any
and all notices of sale of participation interests, as well as all
notices of any repurchase of such participation interests. Borrower
also agrees that the purchasers of any such participation interests
will be considered as the absolute owners of such interests In the
Loan and will have all the rights granted under the participation
agreement or agreements governing the sale of such participation
interests. Borrower further waives all rights of offset or
counterclaim that it may have now or later against Lender or against
any purchaser of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce Borrower's
obligation under the Loan irrespective of the failure or insolvency
of any holder of any interest in the Loan.  Borrower further agrees
that the purchaser of any such participation interests many enforce
its interests irrespective of any personal claims or defenses that
Borrower may have against Lender.

Governing Law. This Agreement will be governed by, construed and
enforced in accordance with federal law and the laws of the State
of Colorado. This Agreement has been accepted by Lender in the
State of Colorado.

No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor
any course of dealing between Lender and Borrower, or between
Lender and any Grantor, shall constitute a waiver of any of Lender's
rights or of any of Borrower's or any Grantor's obligations as to
any future transactions. Whenever the consent of Lender is required
 under this Agreement, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such
consent may be granted or withheld in the sole discretion of Lender.

Notices. Any notice required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise required by
law), when deposited with a nationally recognized overnight courier,
or, if mailed, when deposited in the United States mail, as first
class, certified or registered mail postage prepaid, directed to
the addresses shown near the beginning of this Agreement. Any party
may change its address for notices under this Agreement by giving
formal written notice to the other parties, specifying that the
purpose of the notice is to change the party's address. For notice
purposes, Borrower agrees to keep Lender informed at all times of
Borrower's current address. Unless otherwise provided or required by
law, if there is more than one Borrower, any notice given by Lender
to any Borrower is deemed to be notice given to all Borrowers.

Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or
unenforceable as to any circumstance, that finding shall not make
the offending provision illegal, invalid, or unenforceable as to
any ether circumstance. If feasible, the offending provision shall
be considered modified so that it becomes legal, valid and
enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement. Unless otherwise
required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality
validity or enforceability of any other provision of this Agreement.

Subsidiaries and Affiliates of Borrower. To the extent the context
of any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the
word "Borrower" as used in this Agreement shall include all of
Borrower's subsidiaries and affiliates. Notwithstanding the foregoing
however, under no circumstances shall this Agreement be construed
to require Lender to make any Loan or other financial accommodation
to any of Borrower's subsidiaries or affiliates.

Successors and Assigns. All covenants and agreements by or on behalf
of Borrower contained in this Agreement or any Related Documents
shall bind Borrower's successors and assigns and shall inure to the
benefit of Lender and its successors and assigns. Borrower shall
not, however, have the right to assign Borrower's rights under this
Agreement or any interest therein, without the prior written consent
of Lender.

Survival of Representations and Warranties. Borrower understands
and agrees that in extending Loan Advances, Lender is relying on
all representations, warranties, and covenants made by Borrower in
this Agreement or in any certificate or other instrument delivered
by Borrower to Lender under this Agreement or the Related Documents.
Borrower further agrees that regardless of any investigation made by
Lender, all such representations, warranties and covenants will
survive the extension of Loan Advances and delivery to Lender of
the Related Documents, shall be continuing in nature, shall be
deemed made and redated by Borrower at the time each Loan Advance
is made, and shall remain in full force and effect until such time
as Borrower's Indebtedness shall be paid in full, or until this
Agreement shall be terminated in the manner provided above,
whichever is the last to occur.

Time is of the Essence. Time is of the essence in the performance
of this Agreement.

Waive Jury. All parties to this Agreement hereby waive the right
to any jury trial in any action, proceeding, or counterclaim brought
by any party against any other party.

DEFINITIONS. The following capitalized words and terms shall have
the following meanings when used in this Agreement. Unless
specifically stated to the contrary, all references to dollar
amounts shall mean amounts in lawful money of the United States
of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the
context may require. Words and terms not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the
Uniform Commercial Code. Accounting words and terms not otherwise
defined in this Agreement shall have the meanings assigned to them
in accordance with generally accepted accounting principles as in
effect on the date of this Agreement:

Advance. The word "Advance" means a disbursement of Loan funds made,
or to be made, to Borrower or on Borrower's behalf on a line of
credit or multiple advance basis under the terms and conditions
of this Agreement.

Agreement. The word "Agreement" means this Business Loan Agreement,
as this Business Loan Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time. Borrower. The word
"Borrower" means Scott's Liquid Gold-Inc. and includes all
co-signers and co-makers signing the Note.

Collateral. The word "Collateral" means all property and assets
granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the form of
a security interest, mortgage, collateral mortgage, deed of trust,
assignment, pledge, crop pledge, chattel mortgage, collateral
chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title
retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.

Environmental Laws. The words "Environmental Laws" mean any and
all state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended,
42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C.
Section 180t, et seq., the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, et seq., or other applicable state or
federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words "Event of Default" mean any of the
events of default set forth in this Agreement in the default
section of this Agreement.

GAAP. The word "GAAP" means generally accepted accounting
principles.

Grantor. The word "Grantor" means each and all of the persons or
entities granting a Security Interest in any Collateral for the
Loan, including without limitation all Borrowers granting such a
Security Interest.

Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Loan.

Guaranty. The word "Guaranty" means the guaranty from Guarantor
to Lender, including without limitation a guaranty of all or part
of the Note.

Hazardous Substances. The words "Hazardous Substances" mean
materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, may cause or
pose a present or potential hazard to human health or the
environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The
words "Hazardous Substances" are used in their very broadest sense
and include without limitation any and all hazardous or toxic
substances, materials or waste as defined by or listed under the
Environmental Laws. The term "Hazardous Substances" also includes,
without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.

Indebtedness. The word "Indebtedness" means the indebtedness
evidenced by the Note or Related Documents, including all principal
and interest together with all other indebtedness and costs and
expenses for which Borrower is responsible under this Agreement or
under any of the Related Documents.

Lender. The word "Lender" means Citywide Banks, its successors and
assigns.

Loan. The word "Loan" means any and all loans and financial
accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, including without limitation
those loans and financial accommodations described herein or
described on any exhibit or schedule attached to this Agreement
from time to time.

Note. The word "Note" means the Note executed by Scott's Liquid
Gold-inc. in the principal amount of $1,500,000.00 dated
August 10, 2004, together with all renewals of, extensions of,
modifications of, refinancing of, consolidations of, and
substitutions for the note or credit agreement.

Permitted Liens. The words "Permitted Liens" mean (1) liens and
security interests securing Indebtedness owed by Borrower to
Lender; (2) liens for taxes, assessments, or similar charges
either not yet due or being contested in good faith; (3) liens
of materialmen, mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary course of business and
securing obligations which are not yet delinquent; (4) purchase
money liens or purchase money security interests upon or in any
property acquired or held by Borrower in the ordinary course of
business to secure indebtedness outstanding on the date of this
Agreement or permitted to be incurred under the paragraph of
this Agreement titled "Indebtedness and Liens", (5) liens and
security interests which, as of the date of this Agreement, have
been disclosed to and approved by the Lender in writing; and
(6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with
respect to the net value of Borrower's assets.

Related Documents. The words "Related Documents" mean all
promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages,
and all other instruments, agreements end documents, whether
now or hereafter existing, executed in connection with the Loan.

Security Agreement. The words "Security Agreement" mean and
include without limitation any agreements, promises, covenants,
arrangements, understandings or other agreements, whether created
by law, contrast, or otherwise, evidencing, governing,
representing, or creating a Security Interest.

Security Interest. The words "Security Interest" mean, without
limitation, any and all types of collateral secede, present and
future, whether in the form of a lien, charge, encumbrance,
mortgage, deed of trust, security deed, assignment, pledge, crop
pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien or title retention contrast, lease or consignment
intended as a security device, or any other security or lien
interest whatsoever whether created by law, contract, or otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS, THIS
BUSINESS LOAN AGREEMENT IS DATED AUGUST 10, 2004.

BORROWER:

Scott's Liquid Gold-Inc.

By:  /s/ Jeffry B. Johnson
     --------------------------------------
     Jeffry B. Johnson, C.F.O. &
      Treasurer of Scott's Liquid Gold-Inc.

LENDER:

Citywide Banks

By:  /s/
     _______________________________
     Authorized Signer

PROMISSORY NOTE

Borrower:	Scott's Liquid Gold-Inc. (TIN: 84-0920811)
		4880 Havana St.
		Denver, CO  80239

Lender:	Citywide Banks
		PO Box 128
		Aurora, CO  80040-0128
		(303) 365-3600

Principal Amount: $1,500,000.00
Initial Rate: 4.750%
Date of Note: August 10, 2004

PROMISE TO PAY. Scott's Liquid Gold-Inc. ("Borrower") promises to
pay to Citywide Banks ("Lender"), or order, in lawful money of the
United States of America, the principal amount of One Million Five
Hundred Thousand & 00/100 Dollars ($1,500,000.00) or so much as may
be outstanding, together with interest on the unpaid outstanding
principal balance of each advance. Interest shall be calculated
from the date of each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid Interest on August 10,
2005. In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment dote, beginning
September 10, 2004, with all subsequent interest payments to be due
on the same day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any
accrued unpaid interest; then to principal; then to any unpaid
collection costs; and then to any late charges. The annual interest
rate for this Note is computed on a 365/360 basis; that is, by
applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding.
Borrower will pay Lender at Lender's address shown above or at such
other place as Leader may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject
to change from time to time based on changes in an independent index
which is The Prime Rate as Published in the Wall Street Journal
(the "Index"). The Index is not necessarily the lowest rate charged
by Lender on its loans. If the Index becomes unavailable during the
term of this loan, Lender may designate a substitute index after
notice to Borrower. Lender will tell Borrower the current Index
rate upon Borrower's request. The interest rate change will not
occur more often than each Day. Borrower understands that Lender
may make Icons based on other rates as well. The Index currently
is 4.250% per annum. The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 0.500 percentage
points over the Index, resulting in an initial rate of 4.750% per
annum. NOTICE: Under no circumstances will the interest rate on
this Note be more than the maximum rate allowed by applicable law.

PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan
fees and other prepaid finance charges are earned fully as of the
date of the loan and will not be subject to refund upon early
payment (whether voluntary or as a result of default), except as
otherwise required by law, In any event, even upon full prepayment
of this Note, Borrower understands that Lender is entitled to a
minimum interest charge of $25.00. Other than Borrower's obligation
to pay any minimum interest charge, Borrower may pay without penalty
all or e portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments of
accrued unpaid interest. Rather, early payments will reduce the
principal balance due. Borrower agrees not to send Lender payments
marked "paid in full", "without recourse", or similar language. If
Borrower sends such a payment, Lender may accept it without losing
any of Lender's rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender. All written
communications concerning disputed amounts, including any check or
other payment instrument that indicates that the payment constitutes
"payment in full" of the amount owed or that is tendered with other
conditions or limitations or as full satisfaction of a disputed
amount must be mailed or delivered to: Citywide Banks, PO Box 128,
Aurora, CO 80040-0128.

LATE CHARGE. If a payment is 10 days or more late, Borrower will
be charged 5.000% of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay
upon final maturity, at Lender's option, and if permitted by
applicable law, Lender may add any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid
at the rate provided in this Note (including any increased rate).
Upon default, Lender, at its option, may, if permitted under
applicable law, increase the variable interest rate on this Note
to 21.000% per annum. The interest rate will not exceed the
maximum rate permitted by applicable law.

DEFAULT. Each of the following shall constitute an event of
default ("Event of Default") under this Note:

Payment Default. Borrower fails to make any payment when due
under this Note.

Other Defaults. Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this
Note of in any of the related documents or to comply with or to
perform any term, obligation, covenant or condition contained in
any other agreement between Lender and Borrower.

Default in Favor of Third Parties. Borrower or any Grantor
defaults under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of
any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the
related documents.

False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Note or the related documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower's existence
as a going business, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower's property, any assignment for
the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the loan.
This includes a garnishment of any of Borrower's accounts,
including deposit accounts, with Lender. However, this Event of
Default shall not apply if there is a good faith dispute by Borrower
as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding and if Borrower
gives Lender written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for
the creditor or forfeiture proceeding, in an amount determined by
Lender, in its sole discretion, as being an adequate reserve or
bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs
with respect to any guarantor, endorser, surety, or accommodation
party of any of the indebtedness or any guarantor, endorser,
surety, or accommodation party dies or becomes incompetent, or
revokes or disputes the validity of, or liability under, any
guaranty of the indebtedness evidenced by this Note.

Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment
or performance of this Note is impaired,

Insecurity. Lender in good faith believes itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.

ATTORNEYS' FEES, EXPENSES. Lender may hire or pay someone else to
help collect this Note if Borrower does not pay. Borrower will pay
Lender the reasonable costs of such collection. This includes,
subject to any limits under applicable law, Lender's attorneys'
fees and Lender's legal expenses, whether or not there is a
lawsuit, including without limitation attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify
or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other.

GOVERNING LAW. This Note will be governed by, construed and enforced
in accordance with federal law and the laws of the State of Colorado.
This Note has been accepted by Lender in the State of Colorado.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender
(whether checking, savings, or some other account). This includes
all accounts Borrower holds jointly with someone else and all
accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which
setoff would be prohibited by law. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all
sums owing on the indebtedness against any and all such accounts.

COLLATERAL. Borrower acknowledges this Note is secured by Accounts
Receivables and Inventory.

LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note may be requested either orally or in
writing by Borrower or directions by telephone or otherwise to
Lender are to be directed to Lender's office shown above. The
following person currently is authorized to request advances and
authorize payments under the line of credit until Lender receives
from Borrower, at Lender's address shown above, written notice of
revocation of his or her authority: Jeffry B. Johnson, Chief
Financial Officer and Treasurer of Scott's Liquid Gold-Inc.
Borrower agrees to be liable for all sums either: (A) advanced
in accordance with the instructions of an authorized person or
(B) credited to any of Borrower's accounts with Lender. The
unpaid principal balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal
records, including daily computer print-outs. Lender will have
no obligation to advance funds under this Note if: (A) Borrower
or any guarantor is in default under the terms of this Note or
any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of
this Note; (B) Borrower or any guarantor ceases doing business
or is insolvent; (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee
of this Note or any other loan with Lender; (D) Borrower has
applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (E) Lender in good faith
believes itself insecure.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon
Borrower, and upon Borrower's heirs, personal representatives,
successors and assigns, and shall inure to the benefit of Lender
and its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING
AGENCIES. Please notify us if we report any inaccurate information
about your account(s) to a consumer reporting agency. Your written
notice describing the specific Inaccuracy(ies) should be sent to us
at the following address: Citywide Banks Operations Center PO Box
128 Aurora, CO 80040-0128

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and
any other person who signs, guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, and
notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs
this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree
that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest
in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of
or notice to anyone other than the party with whom the modification
is made. The obligations under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
PROMISSORY NOTE.

BORROWER:

SCOTT'S LIQUID GOLD-INC.


BY:  /s/ Jeffry B. Johnson
     --------------------------------------
     Jeffry B. Johnson, C.F.O. &
      Treasurer of Scott's Liquid Gold-Inc.






CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL

Corporation:	Scott's Liquid Gold-Inc. (TIN: 84-0920811)
			4880 Havana Street
			Denver, CO  80239

Lender:	Citywide Banks
		PO Box 128
		Aurora, CO  80040-0128
		(303) 365-3600

I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

THE CORPORATION'S EXISTENCE. The complete and correct name of the
Corporation is Scott's Liquid Gold-Inc. ("Corporation"). The
Corporation is a corporation for profit which is, and at all times
shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of the State of Colorado The
Corporation has the full power and authority to own its properties
and to transact the business in which it is presently engaged or
presently proposes to engage. The Corporation maintains an office
at 4880 Havana Street, Denver, CO 80239. Unless the Corporation
has designated otherwise in writing, the principal office is the
office at which the Corporation keeps its books and records. The
Corporation will notify Lender prior to any change in the location
of The Corporation's state of organization or any change in The
Corporation's name. The Corporation shall do all things necessary
to preserve and to keep in full force and effect its existence,
rights and privileges, and shall comply with all regulations,
rules, ordinances, statutes, orders and decrees of any governmental
or quasi-governmental authority or court applicable to the
Corporation and The Corporation's business activities.

RESOLUTIONS ADOPTED. At a meeting of the Directors of the
Corporation, or if the Corporation is a close corporation having
no Board of Directors then at a meeting of the Corporation's
shareholders, duly called and held on August 2, 2004, at which
a quorum was present and voting, or by other duly authorized
action in Lieu of a meeting, the resolutions set forth in this
Resolution were adopted.

OFFICER. The following named person is an officer of Scott's
Liquid Gold-Inc.:
NAMES              TITLES           AUTHORIZED  ACTUAL SIGNATURES
Jeffry B. Johnson  CFO & Treasurer      Y       /s/ Jeffry B. Johnson
                                                ---------------------

ACTIONS AUTHORIZED. The authorized person listed above may enter
into any agreements of any nature with Lender, and those agreements
will bind the Corporation. Specifically, but without limitation, the
authorized person is authorized, empowered, and directed to do the
following for and on behalf of the Corporation:

Borrow Money. To borrow, as a cosigner or otherwise, from time to
time from Lender, on such terms as may be agreed upon between the
Corporation and Lender, such sum or sums of money as in his or her
judgment should be borrowed, without limitation.

Execute Notes. To execute and deliver to Lender the promissory note
or notes, or other evidence of the Corporation's credit
accommodations, on Lender's forms, at such rates of interest and
on such terms as may be agreed upon, evidencing the sums of money
so borrowed or any of the Corporation's indebtedness to Lender,
and also to execute and deliver to Lender one or more renewals,
extensions, modifications, refinancings, consolidations, or
substitutions for one or more of the notes, any portion of the
notes, or any other evidence of credit accommodations.

Grant Security. To mortgage, pledge, transfer, endorse, hypothecate,
or otherwise encumber and deliver to Lender any property now or
hereafter belonging to the Corporation or in which the Corporation
now or hereafter may have an interest, including without limitation
all of the Corporation's real properly end all of the Corporation's
personal property (tangible or intangible), as security for the
payment of any loans or credit accommodations so obtained, any
promissory notes so executed (including any amendments to or
modifications, renewals, and extensions of such promissory notes),
or any other or further indebtedness of the Corporation to Lender
at any time owing, however the same may be evidenced. Such property
may be mortgaged, pledged, transferred, endorsed, hypothecated or
encumbered at the time such loans are obtained or such indebtedness
is incurred, or at any other time or times, and may be either in
addition to or in lieu of any property theretofore mortgaged,
pledged, transferred, endorsed, hypothecated or encumbered.

Execute Security Documents. To execute end deliver to Lender the
forms of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which Lender may require and which shall evidence the terms and
conditions under and pursuant to which such liens and encumbrances,
or any of them, are given; and also to execute and deliver to Lender
any other written instruments, any chattel paper, or any other
collateral, of any kind or nature, which Lender may deem necessary
or proper in connection with or pertaining to the giving of the
liens and encumbrances.

Negotiate Items. To draw, endorse, and discount with Lender all
drafts, trade acceptances, promissory notes, or other evidences of
indebtedness payable to or belonging to the Corporation or in which
the Corporation may have an interest, and either to receive cash for
the same or to cause such proceeds to be credited to the
Corporation's account with Lender, or to cause such other
disposition of the proceeds derived therefrom as he or she may
deem advisable.

Further Acts. In the case of lines of credit, to designate
additional or alternate individuals as being authorized to request
advances under such lines, and in all cases, to do and perform
such other acts and things, to pay any and all fees and costs, and
to execute and deliver such other documents and agreements,
including agreements waiving the right to a trial by jury, as the
officer may in his or her discretion deem reasonably necessary or
proper in order to carry into effect the provisions of this
Resolution. The following person currently is authorized to request
advances and authorize payments under the line of credit until
Lender receives from the Corporation, at Lender's address shown
above, written notice of revocation of his or her authority:
Jeffry B. Johnson, Chief Financial Officer and Treasurer of
Scott's Liquid Gold-Inc.

ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all
documents or filings required by law relating to all assumed
business names used by the Corporation. Excluding the name of the
Corporation, the following is a complete list of all assumed
business names under which the Corporation does business: None.

NOTICES TO LENDER. The Corporation will promptly notify Lender in
writing at Lender's address shown above (or such other addresses
as Lender may designate from time to time) prior to any (A) change
in the Corporation's name; (B) change in the Corporation's assumed
business name(s); (C) change in the management of the Corporation;
(D) change in the authorized signer(s); (E) change in the
Corporation's principal office address; (F) change in the
Corporation's state of organization; (G) conversion of the
Corporation to a new or different type of business entity; or
(H) change in any other aspect of the Corporation that directly
or indirectly relates to any agreements between the Corporation
and Lender. No change in the Corporation's name or state of
organization will take effect until after Lender has received notice.

CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officer
named above is duly elected, appointed, or employed by or for the
Corporation, as the case may be, and occupies the position set
opposite his or her respective name. This Resolution now stands
of record on the books of the Corporation, is in full force and
effect, and has not been modified or revoked in any manner
whatsoever.

CONTINUING VALIDITY. Any and all acts authorized pursuant to this
Resolution and performed prior to the passage of this Resolution
are hereby ratified and approved. This Resolution shall be
continuing, shall remain in full force and effect and Lender may
rely on it until written notice of its revocation shall have been
delivered to and received by Lender at Lender's address shown
above (or such addresses as Lender may designate from time to
time) .  Any such notice shall not affect any of the Corporation's
agreements or commitments in effect at the time notice is given.

IN TESTIMONY WHEREOF, I have hereunto set my hand and attest that
the signature set opposite the name listed above is his or her
genuine signature.  I have read all the provisions of this
Resolution, and I personally and on behalf of the Corporation
certify that all statements and representations made in this
Resolution are true and correct. This Corporate Resolution to
Borrow / Grant Collateral is dated August 2, 2004.

                             CERTIFIED TO AND ATTESTED BY:


                             /s/ Jeffry B. Johnson
                             -------------------------------
                            Jeffry B. Johnson, C.F.O. &
                             Treasurer of Scott's Liquid Gold-Inc.






COMMERCIAL SECURITY AGREEMENT


Grantor:	Scott's Liquid Gold-Inc.
		4880 Havana Street
		Denver, CO  80239

Lender:	Citywide Banks
		PO Box 128
		Aurora, CO  80040-0128
		(303) 365-3600

THIS COMMERCIAL SECURITY AGREEMENT dated August 10, 2004, is made
and executed between Scott's Liquid Gold-Inc. ("Grantor") and
Citywide Banks ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor
grants to Lender a security interest in the Collateral to secure
the Indebtedness and agrees that Lender shall have the rights
stated in this Agreement with respect to the Collateral, in addition
to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this
Agreement means the following described property, whether now
owned or hereafter acquired, whether now existing or hereafter
arising, and wherever located, in which Grantor is giving to
Lender a security interest for the payment of the Indebtedness
and performance of all other obligations under the Note and this
Agreement:

All Accounts Receivables and Inventory

In addition, the word "Collateral" also includes all the following,
whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:

(A) All accessions, attachments, accessories, replacements of
and additions to any of the collateral described herein, whether added
now or later.
(B)	All products and produce of any of the property described in
this Collateral section.
(C)	All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease,
consignment or other disposition of any of the property described in
this Collateral section.
(D)	All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a third
party who has damaged or destroyed the Collateral or from that
party's Insurer, whether due to judgment, settlement or other
process.
(E)	All records and data relating to any of the property described
in this Collateral section, whether in the form of a writing,
photograph, microfilm, microfiche, or electronic media, together
with all of Grantor's right, title, and Interest in and to all
computer software required to utilize, create, maintain, and process
any such records or data on electronic media.

Despite any other provision of this Agreement, Lender is not
granted, and will not have, a nonpurchase money security interest
in household goods, to the extent such a security interest would
be prohibited by applicable law. In addition, if because of the
type of any Property, Lender is required to give a notice of the
right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Collateral unless
and until such a notice is given.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Grantor's accounts with Lender
(whether checking, savings, or some other account). This includes
all accounts Grantor holds jointly with someone else and all
accounts Grantor may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which
setoff would be prohibited by law. Grantor authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all
sums owing on the Indebtedness against any and all such accounts.

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
COLLATERAL. With respect to the Collateral, Grantor represents
and promises to Lender that:

Perfection of Security Interest. Grantor agrees to take whatever
actions are requested by Lender to perfect and continue Lender's
security interest in the Collateral. Upon request of Lender, Grantor
will deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Grantor will note Lender's interest
upon any and all chattel paper and instruments if not delivered to
Lender for possession by Lender. This is a continuing Security
Agreement and will continue in effect even though all or any part
of the Indebtedness is paid in full and even though for a period of
time Grantor may not be indebted to Lender.

Notices to Lender. Grantor will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's
name; (2) change in Grantor's assumed business name(s); (3) change
in the management of the Corporation Grantor; (4) change in the
authorized signer(s); (5) change in Grantor's principal office
address; (6) change in Grantor's state of organization;
(7) conversion of Grantor to a new or different type of business
entity; or (8) change in any other aspect of Grantor that directly
or indirectly relates to any agreements between Grantor and Lender.
No change in Grantor's name or state of organization will take
effect until after Lender has received notice.

No Violation. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor
is a party, and its certificate or articles of incorporation and
bylaws do not prohibit any term or condition of this Agreement.

Enforceability of Collateral. To the extent the Collateral consists
of accounts, chattel paper, or general intangibles, as defined by
the Uniform Commercial Code, the Collateral is enforceable in
accordance with its terms, is genuine, and fully complies with all
applicable laws and regulations concerning form, content and
manner of preparation and execution, and all persons appearing to
be obligated on the Collateral have authority and capacity to
contract and are in fact obligated as they appear to be on the
Collateral. There shall be no setoffs or counterclaims against
any of the Collateral, and no agreement shall have been made
under which any deductions or discounts may be claimed
concerning the Collateral except those disclosed to Lender
in writing.

Location of the Collateral. Except in the ordinary course of
Grantor's business, Grantor agrees to keep the Collateral at
Grantor's address shown above or at such other locations as are
acceptable to Lender. Upon Lender's request, Grantor will deliver
to Lender in form satisfactory to Lender a schedule of real
properties and Collateral locations relating to Grantor's
operations, including without limitation the following: (1} all
real property Grantor owns or is purchasing; (2) all real
property Grantor is renting or leasing; (3) all storage facilities
Grantor owns, rents, leases, or uses; and (4) all other properties
where Collateral is or may be located.

Removal of the Collateral. Except in the ordinary course of
Grantor's business, Grantor shall not remove the Collateral from
its existing location without Lender's prior written consent.
Grantor shall, whenever requested, advise Lender of the exact
location of the Collateral.

Transactions Involving Collateral. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business,
or as otherwise provided for in this Agreement, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the
Collateral. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien,
security interest, encumbrance, or charge, other than the security
interest provided for in this Agreement, without the prior
written consent of Lender. This includes security interests even
if junior in right to the security interests granted under this
Agreement. Unless waived by Lender, all proceeds from any
disposition of the Collateral (for whatever reason) shall be held
in trust for Lender and shall not be commingled with any other
funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt,
Grantor shall immediately deliver any such proceeds to Lender.

Title. Grantor represents and warrants to Lender that Grantor
holds good and marketable title to the Collateral, free and clear
of all liens and encumbrances except for the lien of this Agreement.
No financing statement covering any of the Collateral is on file in
any public office other than those which reflect the security
interest created by this Agreement or to which Lender has
specifically consented. Grantor shall defend Lender's rights in
the Collateral against the claims and demands of all other persons.

Repairs and Maintenance. Grantor agrees to keep and maintain, and
to cause others to keep and maintain, the Collateral in good order,
repair and condition at all times while this Agreement remains in
effect. Grantor further agrees to pay when due all claims for work
done on, or services rendered or material furnished in connection
with the Collateral so that no lien or encumbrance may ever attach
to or be filed against the Collateral.

Inspection of Collateral Lender and Lender's designated
representatives and agents shall have the right at all reasonable
times to examine and inspect the Collateral wherever located.

Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation,
upon this Agreement, upon any promissory note or notes evidencing the
Indebtedness, or upon any of the other Related Documents. Grantor
may withhold any such payment or may elect to contest any lien if
Grantor is in good faith conducting an appropriate proceeding to
contest the obligation to pay and so long as Lender's interest in
the Collateral Is not jeopardized in Lender's sole opinion. If the
Collateral is subjected to a lien which is not Lender in an amount
adequate to provide for the discharge of the lien plus any interest,
costs, attorneys' fees or other charges that could accrue as a result
of foreclosure or sale of the Collateral. In any contest Grantor
shall defend itself and Lender and shall satisfy any final adverse
judgment before enforcement against the Collateral Grantor shall
name Lender as an additional obliges under any surety bond furnished
in the contest proceedings. Grantor further agrees to furnish Lender
with evidence that such taxes, assessments, and governmental and other
charges have been paid in full and in a timely manner. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral
is not jeopardized.

Compliance with Governmental Requirements. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable
to the ownership, production, disposition, or use of the Collateral,
including all laws or regulations relating to the undue erosion of
highly-erodible land or relating to the conversion of wetlands for
the production of an agricultural product or commodity. Grantor
may contest in good faith any such law, ordinance or regulation
and withhold compliance during any proceeding, including
appropriate appeals, so long as Lender's interest in the
Collateral, in Lender's opinion, is not jeopardized.

Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this
Agreement remains a lien on the Collateral, used in violation of
any Environmental Laws or for the generation, manufacture,
storage, transportation, treatment, disposal, release or threatened
release of any Hazardous Substance. The representations and
warranties contained herein are based on Grantor's due diligence
in investigating the Collateral for Hazardous Substances. Grantor
hereby (1) releases and waives any future claims against Lender
for indemnity or contribution in the event Grantor becomes liable
for cleanup or other costs under any Environmental Laws, and
(2) agrees to indemnify and hold harmless Lender against any and
all claims and losses resulting from a breach of this provision
of this Agreement. This obligation to indemnify shall survive the
payment of the Indebtedness and the satisfaction of this Agreement.

Maintenance of Casualty Insurance. Grantor shall procure and
maintain all risks insurance, including without limitation fire,
theft and liability coverage together with such other insurance
as Lender may require with respect to the Collateral, in form,
amounts, coverages and basis reasonably acceptable to Lender and
issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time
to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will
not be cancelled or diminished without at least ten (10) days'
prior written notice to Lender and not including any disclaimer of
the insurer's liability for failure to give such a notice. Each
insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any
act, omission or default of Grantor or any other person. In
connection with all policies covering assets in which Lender holds
or is offered a security interest, Grantor will provide Lender with
such loss payable or other endorsements as Lender may require. If
Grantor at any time fails to obtain or maintain any insurance as
required under this Agreement, Lender may (but shall not be obligated
to) obtain such insurance as Lender deems appropriate, including if
Lender so chooses "single interest insurance," which will cover only
Lender's interest in the Collateral.

Application of Insurance Proceeds. Grantor shall promptly notify
Lender of any loss or damage to the Collateral. Lender may make
proof of loss if Grantor fails to do so within fifteen (15) days
of the casualty. All proceeds of any insurance on the Collateral,
including accrued proceeds thereon, shall be held by Lender as
part of the Collateral. If Lender consents to repair or replacement
of the damaged or destroyed Collateral, Lender shall, upon
satisfactory proof of expenditure, pay or reimburse Grantor from
the proceeds for the reasonable cost of repair or restoration. If
Lender does not consent to repair or replacement of the Collateral,
Lender shall retain a sufficient amount of the proceeds to pay all
of the Indebtedness, and shall pay the balance to Grantor. Any
proceeds which have not been disbursed within six (6) months after
their receipt and which Grantor has not committed to the repair
or restoration of the Collateral shall be used to prepay the
Indebtedness.

Insurance Reserves. Lender may require Grantor to maintain with
Lender reserves for payment of insurance premiums, which reserves
shall be created by monthly payments from Grantor of a sum
estimated by Lender to be sufficient to produce, at least fifteen
(15) days before the premium due date, amounts at least equal to
 the insurance premiums to be paid. If fifteen (15) days before
payment is due, the reserve funds are insufficient, Grantor shall
upon demand pay any deficiency to Lender. The reserve funds shall
be held by Lender as a general deposit and shall constitute a
non-interest-bearing account which Lender may satisfy by payment
of the insurance premiums required to be paid by Grantor as they
become due. Lender does net hold the reserve funds in trust for
Grantor, and Lender is not the agent of Grantor for payment of
the insurance premiums required to be paid by Grantor. The
responsibility for the payment of premiums shall remain Grantor's
sole responsibility.

Insurance Reports. Grantor, upon request of Lender, shall furnish
to Lender reports on each existing policy of insurance showing
such information as Lender may reasonably request including the
following: (1) the name of the insurer; (2) the risks insured;
(3) the amount of the policy; (4) the property insured; (5) the
then current value on the basis of which insurance has been
obtained and the manner of determining that value; and (6) the
expiration date of the policy. In addition, Grantor shall upon
request by Lender (however not more often than annually) have an
independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the Collateral.

Financing Statements. Grantor authorizes Lender to file a UCC
financing statement, or alternatively, a copy of this Agreement
to perfect Lender's security interest. At Lender's request, Grantor
additionally agrees to sign all other documents that are necessary
to perfect, protect, and continue Lender's security interest in the
properly. Grantor will pay all filing fees, title transfer fees,
and ether fees and costs involved unless prohibited by law or
unless Lender is required by law to pay such fees and costs.
Grantor irrevocably appoints Lender to execute documents necessary
to transfer title if there is a default. Lender may file a copy
of this Agreement as a financing statement. If Grantor changes
Grantor's name or address, or the name or address of any person
granting a security interest under this Agreement changes, Grantor
will promptly notify the Lender of such change.

GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have
possession of the tangible personal property and beneficial use
of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents,
provided that Grantor's right to possession and beneficial use
shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's
security interest in such Collateral. If Lender at any time has
possession of any Collateral, whether before or alter an Event
of Default, Lender shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral if Lender
takes such action for that purpose as Grantor shall request or as
Lender, in Lender's sole discretion, shall deem appropriate under
the circumstances, but failure to honor any request by Grantor
shall not of itself be deemed to be a failure to exercise
reasonable care. Lender shall not be required to take any steps
necessary to preserve any rights in the Collateral against prior
parties, nor to protect, preserve or maintain any security
interest given to secure the Indebtedness.

LENDER'S EXPENDITURES. If any action or proceeding is commenced
that would materially affect Lender's interest in the Collateral
or if Grantor fails to comply with any prevision of this Agreement
or any Related Documents, including but not limited to Grantor's
failure to discharge or pay when due any amounts Grantor is
required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be
obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes,
liens, security interests, encumbrances and other claims, at any
time levied or placed on the Collateral and paying all costs for
insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will
then

bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor.
All such expenses will become a part of the Indebtedness and, at
Lender's option, will (A) be payable on demand; (B) be added to
the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the
 term of any applicable insurance policy; or (2) the remaining
term of the Note; or (C) be treated as a balloon payment which
will be due and payable at the Note's maturity. The Agreement also
will secure payment of these amounts. Such right shall be in
addition to all other rights and remedies to which Lender may be
entitled upon Default.

DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

Payment Default. Grantor fails to make any payment when due under
the Indebtedness.

Other Defaults. Grantor fails to comply with or to perform any
other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or to comply with
or to perform any term, obligation, covenant or condition
contained in any other agreement between Lender and Grantor.

Default in Favor of Third Parties. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of
any other creditor or person that may materially affect any of
Grantor's property or Grantor's or any Grantor's ability to repay
the Indebtedness or perform their respective obligations under
this Agreement or any of the Related Documents.

False Statements. Any warranty, representation or statement made
or furnished to Lender by Grantor or on Grantor's behalf under this
Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.

Defective Collateralization This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure
of any collateral document to create a valid and perfected security
interest or lien) at any time and for any reason.

Insolvency. The dissolution or termination of Grantor's existence
as a going business, the insolvency of Grantor, the appointment of
a receiver for any part of Grantor's property, any assignment for
the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency
laws by or against Grantor.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
and if Grantor gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs
with respect to any guarantor, endorser, surety, or accommodation
party of any of the Indebtedness or guarantor, endorser, surety,
or accommodation party dies or becomes incompetent or revokes or
disputes the validity of, or liability under, any Guaranty of the
Indebtedness.

Adverse Change. A material adverse change occurs in Grantor's
financial condition, or Lender believes the prospect of payment
or performance of the indebtedness is impaired.

Insecurity. Lender in good faith believes itself insecure.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under
this Agreement, at any time thereafter, Lender shall have all the
rights of a secured party under the Colorado Uniform Commercial
Code. In addition and without limitation, Lender may exercise any
one or more of the following rights and remedies:

Accelerate Indebtedness. Lender may declare the entire indebtedness,
including any prepayment penalty which Grantor would be required
to pay, immediately due and payable, without notice of any kind
to Grantor.

Assemble Collateral. Lender may require Grantor to deliver to
Lender all or any portion of the Collateral and any and all
certificates of title and other documents relating to the
Collateral. Lender may require Grantor to assemble the Collateral
and make it available to Lender at a place to be designated by
Lender. Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the
Collateral. If the Collateral contains other goods not covered
by this Agreement at the time of repossession, Grantor agrees
Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after repossession.

Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds
thereof in Lender's own name or that of Grantor. Lender may sell
the Collateral at public auction or private sale. Unless the
Collateral threatens to decline speedily in value or is of a type
customarily sold on e recognized market, Lender will give Grantor,
and other persons as required by law, reasonable notice of the
time and place of any public sale, or the time after which any
private sale or any other disposition of the Collateral is to be
made. However, no notice need be provided to any person who, after
Event of Default occurs, enters into and authenticates an agreement
waiving that person's right to notification of sale. The
requirements of reasonable notice shall be met if such notice is
given at least ten (10) days before the time of the sale or
disposition. All expenses relating to the disposition of the
Collateral, including without limitation the expenses of retaking,
holding, insuring, preparing for sale and selling the Collateral,
shall become a part of the Indebtedness secured by this Agreement
and shall be payable on demand, with interest at the Note rate from
date of expenditure until repaid.

Appoint Receiver. Lender shall have the right to have e receiver
appointed to take possession of all or any part of the Collateral,
with the power to protect and preserve the Collateral, to operate
the Collateral preceding foreclosure or sale, and to collect the
Rents from the Collateral and apply the proceeds, over and above
the cost of the receivership, against the Indebtedness. The
receiver may serve without bond if permitted by law. Lender's
right to the appointment of a receiver shall exist whether or not
the apparent value of the Collateral exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a
person from serving as a receiver. Receiver may be appointed by
a court of competent jurisdiction upon ex parte application and
without notice, notice being expressly waived.

Collect Revenues, Apply Accounts. Lender, either itself or through
a receiver, may collect the payments, rents, income, and revenues
from the Collateral. Lender may at any time in Lender's discretion
transfer any Collateral into Lender's own name or that of Lender's
nominee and receive the payments, rents, income, and revenues
therefrom and hold the same as security for the Indebtedness or
apply it to payment of the indebtedness in such order of preference
as Lender may determine. Insofar as the Collateral consists of
accounts, general intangibles, insurance policies, instruments,
chattel paper, chooses in action, or similar property, Lender may
demand, collect, receipt for, settle, compromise, adjust, sue for,
foreclose, or realize on the Collateral as Lender may determine,
whether or not Indebtedness or Collateral is then due. For these
purposes, Lender may, on behalf of and in the name of Grantor,
receive, open and dispose of mail addressed to Granter; change any
address to which mail and payments are to be sent; and endorse
notes, checks, drafts, money orders, documents of title, instruments
and items pertaining to payment, shipment, or storage of any
Collateral. To facilitate collection, Lender may notify account
debtors and obligors on any Collateral to make payments directly
to Lender.

Obtain Deficiency. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the indebtedness due to Lender after
application of all amounts received from the exercise of the
rights provided in this Agreement. Grantor shall be liable for a
deficiency even if the transaction described in this subsection
is a sale of accounts or chattel paper.

Other Rights and Remedies. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and
remedies it may have available at law, in equity, or otherwise.

Election of Remedies. Except as may be prohibited by applicable law,
all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall
be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor under this Agreement,
after Grantor's failure to perform, shall not affect Lender's right
to declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Agreement:

Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Agreement.  No alteration of or
amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.

Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
Lender's reasonable costs and expenses, including Lender's
attorneys' fees and Lender's legal expenses, incurred in connection
with the enforcement of this Agreement. Lender may hire or pay
someone else to help enforce this Agreement, and Grantor shall
pay the reasonable costs and expenses of such enforcement. Costs
and expenses include Lender's attorneys' fees and legal expenses
whether or not there is a lawsuit, including attorneys' fees and
legal expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgment collection services. Grantor also
shall pay all court costs and such additional fees as may be
directed by the court.

Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.

Governing Law. This Agreement will be governed by, construed and
enforced In accordance with federal law and the laws of the State
of Colorado. This Agreement has been accepted by Lender in the
State of Colorado.

No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor
any course of dealing between Lender and Grantor, shall constitute
a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such
consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole
discretion of Lender.

Notices. Any notice required to be given under this Agreement shall
be given in writing, end shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise
required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United
States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of
this Agreement. Any party may change its address for notices under
this Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's
address. For notice purposes, Grantor agrees to keep Lender
informed at all times of Grantor's current address. Unless otherwise
provided or required by law, if there is more than one Grantor, any
notice given by Lender to any Grantor is deemed to be notice given to
all Grantors.

Power of Attorney. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect, amend, or to continue the security
interest granted in this Agreement or to demand termination of
filings of other secured parties. Lender may at any time, and without
further authorization from Grantor, file a carbon, photographic or
other reproduction of any financing statement or of this Agreement
for use as a financing statement. Grantor will reimburse Lender for
all expenses for the perfection and the continuation of the
perfection of Lender's security interest in the Collateral.

Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or unenforceable
as to any circumstance, that finding shall not make the offending
provision illegal, invalid, or unenforceable as to any other
circumstance. If feasible, the of this Agreement shall not affect
the legality, validity or enforceability of any other provision
of this Agreement.

Successors and Assigns. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall
be binding upon and inure to the benefit of the parties, their
successors and assigns. If ownership of the Collateral becomes
vested in a person other than Grantor, Lender, without notice to
Grantor, may deal with Grantor's successors with reference to this
Agreement and the Indebtedness by way of forbearance or extension
without releasing Granter from the obligations of this Agreement
or liability under the Indebtedness.

Survival of Representations and Warranties. All representations,
warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be
continuing in nature, and shall remain in full force and effect
until such time as Grantor's Indebtedness shall be paid in full.

Time is of the Essence. Time is of the essence in the performance
of this Agreement.

DEFINITIONS. The following capitalized words and terms shall have
the following meanings when used in this Agreement. Unless
specifically stated to the contrary, all references to dollar
amounts shall mean amounts in lawful money of the United States
of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the
context may require. Words and terms not otherwise defined in
this Agreement shall have the meanings attributed to such terms
in the Uniform Commercial Code:

Agreement. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and
schedules attached to this Commercial Security Agreement from
time to time. Borrower. The word "Borrower" means Scott's Liquid
Gold-Inc. and includes all co-signers and co-makers signing the Note.

Collateral. The word "Collateral" means all of Grantor's right,
title and interest in and to all the Collateral as described in
the Collateral Description section of this Agreement.

Default. The word "Default" means the Default set forth in this
Agreement in the section titled "Default".

Environmental Laws. The words "Environmental Laws" mean any and all
state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended,
42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, et seq., or other applicable state or
federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words "Event of Default" mean any of the
events of default set forth in this Agreement in the default
section of this Agreement.

Grantor. The word "Grantor" means Scott's Liquid Gold-Inc..

Guaranty. The word "Guaranty" means the guaranty from guarantor,
endorser, surety, or accommodation party to Lender, including
without limitation a guaranty of all or part of the Note.

Hazardous Substances. The words "Hazardous Substances" mean
materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, may cause or
pose a present or potential hazard to human health or the
environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The
words "Hazardous Substances" are used in their very broadest sense
and include without limitation any and all hazardous or toxic
substances, materials or waste as defined by or listed under the
Environmental Laws. The term "Hazardous Substances" also includes,
without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.

Indebtedness. The word "Indebtedness" means the indebtedness
evidenced by the Note or Related Documents, including all principal
and interest together with all other indebtedness and costs and
expenses for which Grantor is responsible under this Agreement or
under any of the Related Documents.

Lender. The word "Lender" means Citywide Banks, its successors
and assigns.

Note. The word "Note" means the Note executed by Scott's Liquid
Gold-Inc. in the principal amount of $1,500,000.00 dated
August 10, 2004, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement. Property. The word
"Property" means all of Grantor's right, title and interest in
and to all the Property as described in the "Collateral Description"
section of this Agreement.

Related Documents. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements
and documents, whether now or hereafter existing, executed in
connection with the Indebtedness.

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS
AGREEMENT IS DATED AUGUST 10 2004.

GRANTOR:

SCOTT'S LIQUID GOLD-INC.


By:  /s/ Jeffry B. Johnson
      ----------------------------
      Jeffry B. Johnson, C.F.O. &
       Treasurer of Scott's Liquid Gold-Inc.