UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-13458

SCOTT’S LIQUID GOLD-INC.

(Exact name of registrant as specified in its charter)

Colorado	84-0920811
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
720 S. Colorado Blvd., PH N, Denver, CO	80246
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 373-4860

Securities registered pursuant to Section 12(b) of the Exchange Act.

Title of each class	Trading Symbol	Name of exchange on which registered
None	None	None

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2024 the registrant had 13,011,545 shares of its common stock, $0.10 par value per share, outstanding.

CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, in addition to historical information. All statements, other than statements of historical facts, included in this Report that address activities, events, or developments with respect to our financial condition, results of operations, or economic performance that we expect, believe, or anticipate will or may occur in the future, or that address plans and objectives of management for future operations, are forward-looking statements. You can typically identify forward-looking statements by the use of words, such as “will,” “may,” “could,” “should,” “assume,” “project,” “believe,” “anticipate,” “expect,” “intend,” “estimate,” “potential,” “plan,” “target,” “is likely,” and other similar words. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

The forward-looking statements contained in this Report are based on management’s current expectations and are subject to uncertainty and changes in circumstances. We cannot assure you that future developments affecting us will be those that we have anticipated. Forward-looking statements and our 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:

•disruptions or inefficiencies in the supply chain, including any impact of availability or costs of materials and components;

•dependence on third-party vendors and on sales to major customers;

•competition from large consumer products companies in the United States;

•competitive factors, including any decrease in distribution of (i.e., retail stores carrying) our significant products;

•new competitive products and/or technological changes;

•the need for effective advertising of our products and limited resources available for such advertising;

•unfavorable economic conditions;

•changing consumer preferences and the continued acceptance of each of our significant products in the marketplace;

•the degree of success of any new product or product line introduction by us;

•the degree of success of the integration of product lines or businesses we may acquire;

•changes in the regulation of our products, including applicable environmental and U.S. regulations;

•the loss of any executive officer or other personnel;

•future losses which could affect our liquidity;

•ineffective internal controls over financial reporting caused by the existing material weakness;

•failure to complete or delay of the Merger;

•the combined company’s inability to realize all of the anticipated benefits of the Merger, the reincorporation or the reverse stock split;

•the combined company’s inability to manage its expanded operations following the Merger;

•the combined company’s failure to maintain an effective system of disclosure controls and internal control over financial reporting; and

•other matters discussed in this Report, including the risks described in the Risk Factors section of this Report and in our Annual Report on Form 10-K for the year ended December 31, 2023 and in the Risk Factors section in the Company's Definitive Proxy Statement on Schedule 14A filed on May 13, 2024.

We caution you that forward-looking statements are not guarantees of future performance and that actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this Report speak as of the filing date of this Report. Although we may from time to time voluntarily update our prior forward-looking statements, we undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this Report.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Qualitative and Quantitative Disclosure About Market Risk	16
Item 4.	Controls and Procedures	16
PART II
Item 1A.	Risk Factors	18
Item 6.	Exhibits	18

PART I

ITEM 1. FINANCIAL STATEMENTS.

SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net sales	$	718		$	849		$	1,577		$	1,701
Cost of sales		376			466			877			953
Gross profit		342			383			700			748
Operating expenses:
Advertising		22			111			39			220
Selling		172			482			360			888
General and administrative		634			629			1,308			1,251
Intangible asset amortization		-			45			-			90
Total operating expenses		828			1,267			1,707			2,449
Loss from operations		(486	)		(884	)		(1,007	)		(1,701	)
Interest income		40			-			69			-
Interest expense		-			39			-			(113	)
Loss before income taxes and discontinued operations		(446	)		(845	)		(938	)		(1,814	)
Income tax expense		(4	)		(6	)		(4	)		(2	)
Loss from continuing operations		(450	)		(851	)		(942	)		(1,816	)
Income from discontinued operations		-			398			-			1,732
Net loss	$	(450	)	$	(453	)	$	(942	)	$	(84	)
Basic and diluted net loss per common shares:
Loss from continuing operations	$	(0.03	)	$	(0.07	)	$	(0.07	)	$	(0.14	)
Income from discontinued operations	$	-		$	0.03		$	-		$	0.14
Net loss	$	(0.03	)	$	(0.04	)	$	(0.07	)	$	-
Weighted average shares outstanding:
Basic and diluted		13,009			12,908			13,007			12,853

See accompanying notes to these Condensed Consolidated Financial Statements.

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SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except par value amounts)

	June 30,			December 31,
	2024			2023
	(Unaudited)
Assets
Current assets:
Cash	$	2,916		$	3,677
Restricted cash		-			250
Accounts receivable, net		260			307
Due from buyers		38			145
Inventories		543			365
Prepaid expenses		177			207
Total current assets		3,934			4,951
Operating lease right-of-use assets		1,276			1,376
Other assets		39			40
Total assets	$	5,249		$	6,367
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	407		$	544
Accrued expenses		7			19
Due to buyers		83			-
Operating lease liabilities, current portion		302			291
Total current liabilities		799			854
Operating lease liabilities, net of current		2,067			2,221
Other liabilities		50			27
Total liabilities		2,916			3,102
Shareholders’ equity:
Preferred Stock, no par value, authorized 20,000 shares; no shares issued and outstanding		-			-
Common Stock; $0.10 par value, authorized 50,000 shares; issued and outstanding 13,012 shares (2024) and 13,006 shares (2023)		1,301			1,301
Capital in excess of par		7,966			7,956
Accumulated deficit		(6,934	)		(5,992	)
Total shareholders’ equity		2,333			3,265
Total liabilities and shareholders’ equity	$	5,249		$	6,367

See accompanying notes to these Condensed Consolidated Financial Statements.

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SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

(in thousands)

	Common Stock
	Shares		Amount		Capital in Excess of Par		(Accumulated Deficit) Retained Earnings			Total
Balance, December 31, 2023		13,006	$	1,301	$	7,956	$	(5,992	)	$	3,265
Stock-based compensation		-		-		5		-			5
Net loss		-		-		-		(492	)		(492	)
Balance, March 31, 2024 (unaudited)		13,006		1,301		7,961		(6,484	)		2,778
Stock-based compensation		-		-		5		-			5
Restricted stock units vesting		6		-		-		-			-
Net loss		-		-		-		(450	)		(450	)
Balance, June 30, 2024 (unaudited)		13,012	$	1,301	$	7,966	$	(6,934	)	$	2,333
Balance, December 31, 2022		12,797	$	1,280	$	7,912	$	(6,372	)	$	2,820
Stock-based compensation		-		-		7		-			7
Net income		-		-		-		369			369
Balance, March 31, 2023 (unaudited)		12,797		1,280		7,919		(6,003	)		3,196
Stock-based compensation		200		20		30		-			50
Net loss		-		-		-		(453	)		(453	)
Balance, June 30, 2023 (unaudited)		12,997	$	1,300	$	7,949	$	(6,456	)	$	2,793

See accompanying notes to these Condensed Consolidated Financial Statements.

3

SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Six Months Ended
	June 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(942	)	$	(84	)
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
Depreciation and amortization		-			224
Gain on disposal of discontinued operations		-			(787	)
Stock-based compensation		10			57
Change in operating assets and liabilities:
Accounts receivable		47			651
Inventories		(178	)		958
Prepaid expenses and other assets		138			(59	)
Income taxes receivable		-			239
Accounts payable, accrued expenses, and other liabilities		(86	)		(292	)
Total adjustments to net loss		(69	)		991
Net cash (used in) provided by operating activities		(1,011	)		907
Cash flows from investing activities:
Proceeds from sale of discontinued operations		-			1,936
Net cash provided by investing activities		-			1,936
Cash flows from financing activities:
Proceeds from term loans		-			250
Repayments on term loans		-			(30	)
Proceeds from revolving credit facility		-			2,795
Repayments of revolving credit facility		-			(5,299	)
Net cash used in financing activities		-			(2,284	)
Net (decrease) increase in cash and restricted cash		(1,011	)		559
Cash and restricted cash, beginning of period		3,927			49
Cash and restricted cash, end of period	$	2,916		$	608
Supplemental disclosures:
Cash paid during the period for interest	$	-		$	109

See accompanying notes to these Condensed Consolidated Financial Statements.

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SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands, except per share data)

Note 1. Organization and 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,” “we,” “our,” or “us”) develop, market and sell high quality products. Our business is comprised of one household products segment.

On December 19, 2023, Scott’s Liquid Gold-Inc. (the “Company”), Horizon Kinetics LLC (“Horizon Kinetics”) and HKNY ONE, LLC, a wholly-owned subsidiary of the Company (“Merger Sub”) entered into an Agreement and Plan of Merger, as amended by the First Amendment to Agreement and Plan of Merger dated May 10, 2024 (as so amended, the “Merger Agreement”), providing for the acquisition of Horizon Kinetics by the Company. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, upon obtaining the requisite shareholder approval, (i) the Company will convert from a Colorado to a Delaware corporation, effectuate a 1-for-20 reverse stock split, and change its name and (ii) Merger Sub will be merged with and into Horizon Kinetics, with Horizon Kinetics being the surviving entity (collectively, the “Merger”).

On June 20, 2024, the Company held a special meeting of its shareholders (the “Special Meeting”). At the Special Meeting, the Company’s shareholders voted on the following proposals: (i) to effect a reverse stock split of the Company’s outstanding shares of common stock, par value $0.10 per share, at a ratio of 1-for-20 (the “Reverse Stock Split”), (ii) to approve the reincorporation of the Company in the state of Delaware (the “Reincorporation”) and change the name of the Company to “Horizon Kinetics Holding Corporation” (the “Name Change”), and (iii) to approve any adjournment of the Special Meeting, for any reason, including, if necessary, to solicit additional proxies if there are not sufficient votes to approve one or more of the proposals. All proposals were approved.

(b) Principles of Consolidation

Our Condensed Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

(c) Basis of Presentation

The unaudited Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets, and Condensed Consolidated Statements of Cash Flows included in this Report have been prepared by the Company. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at June 30, 2024 and results of operations and cash flows for all periods have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements should be read in conjunction with our financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for the period ended June 30, 2024 are not necessarily indicative of the operating results for the full year and are unaudited.

(d) Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts in our financial statements of assets and liabilities, the 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. Significant estimates include, but are not limited to, the realization of deferred tax assets, reserves for slow moving and obsolete inventory, customer returns and allowances, operating lease right-of-use assets and operating lease liabilities, and stock-based compensation. Actual results could differ from our estimates.

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(e) Cash and Restricted Cash

Cash and restricted cash consist of the following:

	June 30, 2024		December 31, 2023
Cash	$	2,916	$	3,677
Restricted Cash		-		250
	$	2,916	$	3,927

As part of the Stock Purchase Agreement with the Neoteric buyer, we agreed to maintain at least $250 in accounts at our primary bank for a period of nine months following closing. This condition was satisfied during the second quarter of 2024 and, as a result, alleviated the requirement to present restricted cash on the Condensed Consolidated Balance Sheets as of June 30, 2024.

(f) Discontinued Operations

As discussed in Note 3, during 2023 the Company disposed of several brands that represented reporting units. Disposal groups that meet the discontinued operations criteria by the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 205-20-45 are classified as discontinued operations and are excluded from continuing operations and segment results for all periods presented.

(g) Financial Instruments

Financial instruments which potentially subject us to concentrations of credit risk include cash and cash equivalents and accounts receivable. We maintain our cash balances in the form of bank demand deposits with financial institutions that we believe are creditworthy. We establish an allowance for doubtful accounts, which is generally not material to our financial statements, based upon factors surrounding the credit risk of specific customers, historical trends and other information. We have no significant financial instruments with off-balance sheet risk of accounting loss, such as foreign exchange contracts, option contracts or other foreign currency hedging arrangements.

The recorded amounts for cash and cash equivalents, restricted cash, receivables, other current assets, accounts payable, and accrued expenses approximate fair value due to the short-term nature of these financial instruments.

(h) Revenue Recognition

Our revenue recognition policy is significant because the amount and timing of revenue is a key component of our results of operations. Certain criteria are required to be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until it is met. When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Our revenue contracts are identified when purchase orders are received and accepted from customers and represent a single performance obligation to sell our products to a customer.

Net sales reflect the transaction prices for contracts, which include products shipped at selling list prices reduced by variable consideration. Variable consideration includes estimates for expected customer allowances, promotional programs for consumers, and sales returns. Based on our customer-by-customer history, our variable consideration estimates are generally accurate and subsequent adjustments are generally immaterial.

Variable consideration is primarily comprised of customer allowances. Customer allowances primarily include reserves for trade promotions to support price features, displays, slotting fees, and other merchandising of our products to our customers. Promotional programs for consumers primarily include coupons, rebates, and certain other promotional programs, and do not represent a significant portion of variable consideration. The costs of customer allowances and promotional programs for consumers are estimated using either the expected value or most likely amount approach, depending on the nature of the allowance, using all reasonably available information, including our historical experience and current expectations. Customer allowances and promotional programs for consumers are reflected in the transaction price when sales are recorded. We may adjust our estimates based on actual results and consideration of other factors that cause allowances. In the event that actual results differ from our estimates, the results of future periods may be impacted.

Sales returns are generally not material to our financial statements, and do not comprise a significant portion of variable consideration. Estimates for sales returns are based on, among other things, an assessment of historical trends, information from customers, and anticipated returns related to current sales activity. These estimates are established in the period of sale and reduce our revenue in that period.

Sales are recorded at the time that control of the products is transferred to customers. In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including significant risks and rewards of products, our right to

6

payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to customers.

We have also established an allowance for doubtful accounts. We estimate this allowance based upon, among other things, an assessment of the credit risk of specific customers and historical trends. We believe our allowance for doubtful accounts is adequate to absorb any losses which may arise. In the event that actual losses differ from our estimates, the results of future periods may be impacted.

Customer allowances for trade promotions and allowance for doubtful accounts were as follows:

	June 30, 2024		December 31, 2023
Trade promotions	$	21	$	41
Allowance for doubtful accounts		8		9
	$	29	$	50

(i) Stock-Based Compensation

We account for share based payments by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. We determine the estimated grant-date fair value of stock options with only service conditions using the Black-Scholes option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding the components of the model, including the estimated fair value of underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to the valuation. We recognize compensation costs ratably over the vesting period using the straight-line method, which approximates the service period.

The Company issues restricted stock unit (“RSUs”) awards with restrictions that lapse upon the passage of time (service vesting) and satisfaction of market conditions targeted to our Company’s stock price. For those RSU awards with only service vesting, the Company recognizes compensation cost on a straight-line basis over the service period. For awards with both market and service conditions, the Company starts recognizing compensation cost over the requisite service period, with the effect of the market conditions reflected in the calculation of the award's fair value at grant date. The Company values awards with only service vesting requirements based on the grant date share price. The Company values awards with market and service conditions using a Monte Carlo simulation. The Company determines the requisite service period for awards with both market and service conditions based on the longer of the explicit service period and the derived service period. Stock awards that contain market vesting conditions are included in the computations of diluted earnings per share reflecting the average number of shares that would be issued based on the highest 30-day average market price at the end during the reporting periods, if their effect is dilutive. If the condition is based on an average of market prices over some period of time, the corresponding average for the period is used.

(j) Recently Issued Accounting Standards

Other recent accounting pronouncements and guidance issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

Note 2. Liquidity

The accompanying Condensed Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

Primarily due to a decline in net sales, disruption of our international sales to China, and increases in costs associated with the manufacture and distribution of our products, the Company sustained significant losses from operations in several reporting periods since 2019, had experienced cash used in operations in excess of its current cash position, and had an accumulated deficit as of December 31, 2022. As such, the Company previously believed at December 31, 2022 that it would require additional liquidity to continue its operations over the next 12 months.

As a result of the sales of our various brands as disclosed in Note 3 to the Condensed Consolidated Financial Statements, we fully repaid all long-term debt during 2023. As of June 30, 2024, we have a cash balance of $2,916, working capital of $3,135, and shareholders’ equity of $2,333. While, absent any other actions, our operating activities are still expected to result in negative cash flows, we now expect to have enough liquidity to finance operations for the next 12 months. Management has implemented actions to reduce the Company’s operating expenses through asset sales, consolidation of vendors, personnel reductions, and will continue to pursue additional actions to further reduce operating losses. In addition, the Company has entered into the Merger Agreement with Horizon Kinetics, which is expected to significantly change the nature of our operations.

The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future or raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they

7

come due. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing, or grant unfavorable terms in licensing future licensing agreements.

Note 3. Discontinued Operations

Neoteric Cosmetics, Inc.

On September 15, 2023, we entered into and consummated a Stock Purchase Agreement with a buyer, pursuant to which the Company agreed to sell 100% of the outstanding stock of Neoteric Cosmetics, Inc. Neoteric Cosmetics, Inc. owned and operated the Denorex®, Zincon®, and Neoteric Diabetic Skin Care® brands. The closing consideration paid to the Company was $1,750, with an initial deposit of $175 paid on September 5, 2023. The operations of the Neoteric Cosmetic, Inc. brands have been classified as income from discontinued operations for all periods presented. As part of the Stock Purchase Agreement, we agreed to maintain at least $250 in accounts at our primary bank for a period of nine months following closing which is designated as restricted cash on the Condensed Consolidated Balance Sheets as of December 31, 2023. This condition was satisfied during the second quarter of 2024 and, as a result, alleviated the requirement to present restricted cash on the Condensed Consolidated Balance Sheets as of June 30, 2024. Concurrent with the entry into the Stock Purchase Agreement, the Company entered into a transition services agreement with the buyer where both parties would perform certain identified services related to the operations of the brands contemplated in the Stock Purchase Agreement. This transition services agreement originally had a term of 90 days which could be extended by the buyer for up to an additional 90 days. Both parties have consented to an extension in 2024.

Alpha® Skin Care

Effective June 30, 2023, we entered into, and in July 2023 we closed, a purchase agreement with a buyer, pursuant to which we agreed to sell all of our right, title and interest in and to certain assets of the Alpha® Skin Care brand. The Company received payments of $2,500 and $200 in July 2023 and August 2023, respectively, representing total consideration for the sale of the Alpha Skin Care brand in the amount of $2,700. The operations of Alpha® have been classified as income from discontinued operations for all periods presented. Concurrent with the entry into the Alpha® Purchase Agreement, the Company entered into a transition services agreement with the buyer where both parties would perform certain identified services related to the operations of the brands contemplated in the Alpha® Purchase Agreement. This transition services agreement had a term of 90 days which could be extended by the buyer for up to three additional 30 day periods or extended as consented by both parties. This transition services agreement concluded in accordance with the end of its term with all open transactions being settled during the first quarter of 2024.

BIZ®

Effective June 30, 2023, we entered into, and in July 2023 we closed, a purchase agreement with a buyer, pursuant to which we agreed to sell all of our right, title and interest in and to certain assets of the BIZ® brand. The transactions contemplated by the BIZ® Purchase Agreement were consummated on July 7, 2023. The total consideration paid to us was $1,000, plus an amount equal to the value of the BIZ® inventory, valued at $946 as of the effective date of the agreement, subject to post-close adjustment. The operations of BIZ® have been classified as income from discontinued operations for all periods presented. Concurrent with the entry into the BIZ® Purchase Agreement, the Company entered into a transition services agreement with the buyer where both parties would perform certain identified services related to the operations of the brands contemplated in the BIZ® Purchase Agreement. This transition services agreement had a term of 90 days which could be extended by the buyer for up to three additional 30 day periods or extended as consented by both parties. This transition services agreement concluded in accordance with the end of its term on December 31, 2023 with remaining minimal open transactions expected to settle throughout 2024.

Scott's Liquid Gold® Wood Care and Scott's Liquid Gold® Floor Restore

On January 23, 2023, we entered into an asset purchase agreement with a buyer, pursuant to which we agreed to sell all of our right, title and interest in and to certain assets of the Scott's Liquid Gold® Wood Care and Scott's Liquid Gold® Floor Restore product lines. The total consideration paid to us was $800, plus an amount equal to the value of the Scott's Liquid Gold® Wood Care and Scott's Liquid Gold® Floor Restore inventory of $1,136, subject to post-close adjustment. The Company may continue to use the name “Scott’s Liquid Gold” and “SLG” in a manner consistent with all past and current practices for a period of eighteen months following the closing date of the asset purchase agreement, at which point the Company may only use the aforementioned names in connection with retaining records and other historical documentation. Concurrent with the entry into the asset purchase agreement, the Company entered into a transition services agreement with the buyer where both parties would perform certain identified services related to the operations of the brands contemplated in the asset purchase agreement. This transition services agreement concluded in accordance with the end of its term on July 22, 2023.

Additionally, the buyer will pay a royalty equal to 2% of gross sales for two years after the closing date (the “Scott's Liquid Gold® Royalty”). The Scott's Liquid Gold® Royalty resulted in recognition of a gain upon the sale of assets. Because the Scott's Liquid

8

Gold® Royalty is variable consideration and is contingent on the outcome of future events that are largely outside of the Company’s control, the variable consideration from the Scott's Liquid Gold® Royalty was initially fully constrained and no amount was included in the results from discontinued operations. During the six months ended June 30, 2024, we assessed the variable consideration and concluded that the volatility of external factors continues to exist and, as a result, consideration for the Scott's Liquid Gold® Royalty continues to be recognized as received from the buyer. The constraint on the variable consideration will be reassessed at each subsequent reporting period. We have reflected the operations of the Scott's Liquid Gold® product lines as discontinued operations.

Prell®

On December 15, 2022, we entered into an asset purchase agreement with a buyer, pursuant to which we agreed to sell to all of our right, title and interest in and to certain assets of the Prell® product line. The total consideration paid to us was $150, plus an amount equal to the value of the Prell® inventory of $330, subject to post-close adjustment. Additionally, the buyer will pay a royalty equal to 3% of collections on net sales for four years after the closing date (the “Prell® Royalty”). The Prell® Royalty resulted in recognition of a gain upon the sale of assets. Because the Prell® Royalty is variable consideration and is contingent on the outcome of future events that are largely outside of the Company’s control, the variable consideration from the Prell® Royalty was initially fully constrained and no amount was included in the results from discontinued operations. During the six months ended June 30, 2024, we assessed the variable consideration and concluded that the volatility of external factors continues to exist and, as a result, consideration continues to be recognized as received from the buyer. The constraint on the variable consideration will be reassessed at each subsequent reporting period. We have reflected the operations of the Prell® product line as discontinued operations. Concurrent with the entry into the asset purchase agreement, the Company entered into a transition services agreement with the buyer where both parties would perform certain identified services related to the operations of the brands contemplated in the asset purchase agreement. This transition services agreement concluded in accordance with the end of its term on June 15, 2023.

Our Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations report discontinued operations separate from continuing operations. Our Condensed Consolidated Statements of Equity and Statements of Cash Flows combine the results of continuing and discontinued operations. A summary of financial information related to our discontinued operations is as follows:

Reconciliation of the Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations in the Condensed Consolidated Statements of Operations for the three and six months ended June 30:

	Three Months Ended June 30, 2023
	Neoteric		Alpha®		BIZ®			Scott's Liquid Gold®			Prell®		Total
Net sales	$	653	$	513	$	1,010		$	12		$	25	$	2,213
Cost of sales		291		186		603			(38	)		7		1,049
Gross profit		362		327		407			50			18		1,164
Operating expenses:
Advertising		-		9		1			-			-		10
Selling		178		98		333			10			-		619
General and administrative		-		22		12			-			-		34
Intangible asset amortization		9		-		6			-			-		15
Operating income from discontinued operations		175		198		55			40			18		486
Interest expense		-		-		(88	)		-			-		(88	)
Income (loss) from discontinued operations	$	175	$	198	$	(33	)	$	40		$	18	$	398

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	Six Months Ended June 30, 2023
	Neoteric		Alpha®		BIZ®			Scott's Liquid Gold®			Prell®			Total
Net sales	$	1,553	$	878	$	2,164		$	185		$	17		$	4,797
Cost of sales		820		273		1,510			76			70			2,749
Gross profit		733		605		654			109			(53	)		2,048
Operating expenses:
Advertising		-		54		1			-			-			55
Selling		257		141		437			28			-			863
General and administrative		-		22		12			22			-			56
Intangible asset amortization		11		-		12			-			-			23
Operating income (loss) from discontinued operations		465		388		192			59			(53	)		1,051
Gain on sale of discontinued operations		-		-		-			787			-			787
Interest expense		-		-		(88	)		(18	)		-			(106	)
Income (loss) from discontinued operations	$	465	$	388	$	104		$	828		$	(53	)	$	1,732

There was no activity constituting pretax loss from discontinued operations to the after-tax loss from discontinued operations in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024.

The following table presents the cash flows from discontinued operations for the six months ended June 30:

	2024		2023
Net cash provided by operating activities - discontinued operations	$	-	$	1,471
Net cash provided by investing activities - discontinued operations	$	-	$	1,936

There were no capital expenditures or significant operating and investing noncash items related to discontinued operations during the six months of June 30, 2024 and 2023, respectively.

There were no major classes of assets and liabilities of the discontinued operations as of June 30, 2024 or December 31, 2023.

Note 4. Stock-Based Compensation

On May 11, 2023, we granted 200 shares of restricted stock to two directors all of which vested on the grant date with a fair value of $40.

No RSUs or stock options were granted during the three and six months ended June 30, 2024, respectively.

Compensation cost related to RSUs vesting during the period totaled $10 and $37 for the six months ended June 30, 2024 and 2023, respectively. Approximately $7 of total unrecognized compensation costs related to un-vested RSUs is expected to be recognized throughout the balance of the year.

Note 5. Earnings per Share

Per share data is determined by using the weighted average number of common shares outstanding. Common equivalent shares are considered only for diluted earnings per share, unless considered anti-dilutive. Common equivalent shares, determined using the treasury stock method, result from stock options with exercise prices that are below the average market price of the common stock.

Basic earnings per share include no dilution and are computed by dividing income available to common shareholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential of securities that could share in our earnings.

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Common stock equivalents (in thousands) that have been excluded from the calculation of earnings per share because they would have been anti-dilutive:
 

	Three and Six Months Ended June 30,
	2024		2023
Stock options		8		60
Restricted stock units		12		31

Note 6. Segment Information

We previously operated in two different segments: household products and health and beauty care products. We chose to organize our business around these segments based on differences in the products sold. Accounting policies for our segments were the same as those described in Note 1. We evaluated segment performance based on segment income or loss from operations.

In the third quarter of 2023, in conjunction with the divestitures of brands, the Company determined it has one reportable segment. These divestitures are described in Note 3. All balances and results of operations related to our health and beauty care segment have been reclassified as discontinued operations for all periods presented in the Condensed Consolidated Financial Statements.

Note 7. Long-Term Debt and Line-of-Credit

UMB Loan Agreement

On July 1, 2020, we entered into a Loan and Security Agreement (as amended, the “UMB Loan Agreement”) with UMB Bank, N.A. Under the UMB Loan Agreement we obtained a $3,000 term loan, with equal monthly payments fully amortized over three years which was repaid in full in the second quarter of 2022, and a revolving credit facility, with a maximum commitment of $4,000 bearing interest at the one-month term SOFR rate + 6.83% with a floor of 7.75%.

The UMB Loan Agreement was terminated on February 27, 2023 and the revolving credit facility was paid in full on February 28, 2023. The loans were secured by all of the assets of the Company and its subsidiaries. Unamortized loan costs were $0 as of June 30, 2024 and December 31, 2023, respectively. There was no amortization of loan costs for the six months ended June 30, 2024. Amortization of loan costs for the six months ended June 30, 2023 was $100, including $83 that were expensed as a result of the termination of the UMB Loan Agreement.

La Plata Loan Agreement

On November 9, 2021, we entered into a loan and security agreement (as amended, the “La Plata Loan Agreement”) with La Plata Capital, LLC (“La Plata”). Under the La Plata Loan Agreement, we obtained a $2,000 term loan bearing interest at 14% and a $250 term loan bearing interest at 15%. We repaid $1,000 of principal against the La Plata Loan Agreement during the first quarter of 2022.

Unamortized loan costs were $0 and $9 for the six months ended June 30, 2024 and 2023, respectively. Amortization of loan costs for the six months ended June 30, 2024 and 2023 were $0 and $11, respectively.

On July 7, 2023, the La Plata term loans were paid in full and the La Plata Loan Agreement was terminated.

Note 8. Leases

We have entered into a lease for our corporate headquarters with a remaining lease term of 6 years. This lease includes both lease and non-lease components, which are accounted for as a single lease component as we have elected the practical expedient to combine these components for all leases. As the lease does not provide an implicit rate, we calculated the right-of-use assets and lease liabilities using our secured incremental borrowing rate at the lease commencement date. We currently do not have any finance leases outstanding.

As part of our continued cost savings initiative in response to negative future recurring cash flows, on November 29, 2023, the Company entered into a sublease agreement with a third party, effective April 1, 2024 through March 31, 2027, with an option to extend through the remainder of the lease term to November 2030. The sublease calls for annual base rent of $280 for the first year with increases of approximately 2.5% each year thereafter. This action caused us to assess the carrying value of our operating lease right-of-use asset compared to the undiscounted cash flows of the sublease and resulted in recording an impairment expense during the fourth quarter of 2023 in the amount of $858. The operating lease impairment charges reduce the carrying value of the associated right of use asset to the estimated fair value.

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Payments received under the sublease agreement are reflected as sublease income and are offset against our operating lease cost in general and administrative expenses on the Condensed Consolidated Statements of Operations. We recognized $71 of sublease income for the three and six months ended June 30, 2024. There was no sublease income during the three and six months ended June 30, 2023.

Information related to leases was as follows:

	Three Months Ended June 30, 2024			Six Months Ended June 30, 2024
Operating lease information:
Operating lease cost	$	103		$	206
Operating cash flows from operating leases		103			206
Net assets obtained in exchange for new operating lease liabilities		-			-
Weighted average remaining lease term in years		6.42			6.42
Weighted average discount rate		5.1	%		5.1	%

Future

	Three Months Ended June 30, 2023			Six Months Ended June 30, 2023
Operating lease information:
Operating lease cost	$	101		$	203
Operating cash flows from operating leases		101			203
Net assets obtained in exchange for new operating lease liabilities		-			-
Weighted average remaining lease term in years		7.42			7.42
Weighted average discount rate		5.1	%		5.1	%

Future minimum annual lease payments are as follows:

Future

Remainder of 2024	$	207
2025		420
2026		427
2027		434
2028		441
Thereafter		864
Total minimum lease payments	$	2,793
Less imputed interest		(424	)
Total operating lease liability	$	2,369

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s Condensed Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. This Item 2 contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from those made, projected, or implied in the forward-looking statements. Please refer to the section “Cautionary Note on Forward Looking Information” in this Report as well as “Item 1A. Risk Factors” in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2023, as well as in the section “Risk Factors” in the Company’s Definitive Proxy Statement on Schedule 14A filed on May 13, 2024 for a discussion of the uncertainties, risks and assumptions associated with these statements.

Executive Overview

Our Business

Scott’s Liquid Gold-Inc. exists to positively impact consumers’ lives in the markets we serve while creating shareholder value. We have developed, marketed, and sold high-quality, high-value household products nationally and internationally to mass merchandisers, supermarkets, hardware stores, e-commerce retailers, other retail outlets, and to wholesale distributors.

Primarily due to increases in costs associated with the manufacture and distribution of our products, the Company has experienced negative cash flows from operations for several reporting periods. In efforts to improve our financial position and liquidity, the Company has pursued asset sales of certain brands where management has determined that the brand(s) are not aligned with our long-term goals for growth and profitability.

Looking forward, we are focused on both short- and long-term strategies that we believe will enhance our financial health and deliver shareholder value. The Company entered into the Merger Agreement with the purpose of creating meaningful shareholder value for all shareholders of the combined entity and to alleviate negative operating trends. The Merger is currently expected to close during the third quarter of 2024.

Divestitures

On September 15, 2023, we entered into and consummated a Stock Purchase Agreement with a buyer to sell 100% of the outstanding stock of our wholly owned subsidiary Neoteric Cosmetics, Inc. (“Neoteric”). Effective June 30, 2023, and closed in July 2023, we sold the Alpha® Skin Care product line to a company that markets and distributes skin care products. Effective June 30, 2023, and closed in July 2023, we sold the BIZ® product line to a company that markets and distributes laundry products. On January 23, 2023, we sold the Scott's Liquid Gold® Wood Care and Scott's Liquid Gold® Floor Restore product lines to a company that markets and distributes wood care products. On December 15, 2022, we sold the Prell® brand to a company that markets and distributes natural hair and skincare products. We have reflected the operations of Neoteric, Alpha® Skin Care, BIZ®, Scott's Liquid Gold® and Prell® as discontinued operations for all periods presented.

See Note 3 - “Discontinued Operations” in the Notes to Condensed Consolidated Financial Statements for further information on the sale of these brands.

In conjunction with the sale of the Scott’s Liquid Gold® brand, as discussed below, the Company may continue to use names “Scott’s Liquid Gold” and “SLG” for up to twenty-one months following the closing date of the agreement on January 23, 2023. Following this transitional name period, the Company will only be able to use the aforementioned names in connection with retaining records and other historical or archived documents and any use required by or permitted as a fair use or otherwise under applicable law.

Our Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations report discontinued operations separate from continuing operations. Our Condensed Consolidated Statements of Equity and Statements of Cash Flows combine the results of continuing and discontinued operations. A summary of financial information related to our discontinued operations is as follows:

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Results of Operations

Three months ended June 30, 2024 compared to three months ended June 30, 2023

	Three Months Ended June 30, (in thousands)
							Increase / (Decrease)
	2024			2023			$			%
Net sales	$	718		$	849		$	(131	)		(15.4	%)
Cost of sales		376			466			(90	)		(19.3	%)
Gross profit		342			383			(41	)		(10.7	%)
Gross margin		47.6	%		45.1	%
Operating expenses:
Advertising		22			111			(89	)		(80.2	%)
Selling		172			482			(310	)		(64.3	%)
General and administrative		634			629			5			0.8	%
Intangible asset amortization		-			45			(45	)		(100.0	%)
Total operating expenses		828			1,267			(439	)		(34.6	%)
Loss from operations		(486	)		(884	)		398			45.0	%
Interest income		40			-			40			100.0	%
Interest expense		-			39			(39	)		(100.0	%)
Loss before income taxes and discontinued operations		(446	)		(845	)		399			47.2	%
Income tax expense		(4	)		(6	)		2			33.3	%
Loss from continuing operations		(450	)		(851	)		401			47.1	%
Income from discontinued operations		-			398			(398	)		(100.0	%)
Net loss	$	(450	)	$	(453	)	$	3			0.7	%

Our operating results were primarily impacted by the following:

•Decrease in advertising expenses is primarily due to a reduction in personnel costs related to the creation of advertising materials due to asset divestitures.

•Decrease in selling expenses is primarily due to lower personnel costs related to asset divestitures.

•Decreased intangible asset amortization from reduced carrying amounts related to impairment of internal-use software during the year ended December 31, 2023.

•Increase in interest income from investment of proceeds from asset divestitures into cash equivalents.

•Decrease in interest expense due to the termination of the La Plata loan in July 2023 and from the termination of our credit facility with UMB in February 2023.

•Results from discontinued operations, which are disclosed in Note 3 to the Condensed Consolidated Financial Statements.

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Six months ended June 30, 2024 compared to six months ended June 30, 2023

	Six Months Ended June 30, (in thousands)
							Increase / (Decrease)
	2024			2023			$			%
Net sales	$	1,577		$	1,701		$	(124	)		(7.3	%)
Cost of sales		877			953			(76	)		(8.0	%)
Gross profit		700			748			(48	)		(6.4	%)
Gross margin		44.4	%		44.0	%
Operating expenses:
Advertising		39			220			(181	)		(82.3	%)
Selling		360			888			(528	)		(59.5	%)
General and administrative		1,308			1,251			57			4.6	%
Intangible asset amortization		-			90			(90	)		(100.0	%)
Total operating expenses		1,707			2,449			(742	)		(30.3	%)
Loss from operations		(1,007	)		(1,701	)		694			40.8	%
Interest income		69			-			69			100.0	%
Interest expense		-			(113	)		113			100.0	%
Loss before income taxes and discontinued operations		(938	)		(1,814	)		876			48.3	%
Income tax expense		(4	)		(2	)		(2	)		(100.0	%)
Loss from continuing operations		(942	)		(1,816	)		874			48.1	%
Income from discontinued operations		-			1,732			(1,732	)		(100.0	%)
Net loss	$	(942	)	$	(84	)	$	(858	)		(1,021.4	%)

Our operating results were primarily impacted by the following:

•Decrease in advertising expenses is primarily due to a reduction in personnel costs related to the creation of advertising materials due to asset divestitures.

•Decrease in selling expenses is primarily due to lower personnel costs related to asset divestitures.

•Increase in general and administrative due to professional related costs related to the Merger Agreement.

•Decreased intangible asset amortization from reduced carrying amounts related to impairment of internal-use software during the year ended December 31, 2023.

•Increase in interest income from investment of proceeds from asset divestitures into cash equivalents.

•Decrease in interest expense due to the termination of the La Plata loan in July 2023 and from the termination of our credit facility with UMB in February 2023.

•Results from discontinued operations, which are disclosed in Note 3 to the Condensed Consolidated Financial Statements.

Liquidity and Capital Resources

Overview

Our primary sources of funds include cash from the sales of assets and cash from operating activities. Our principal uses of cash are to maintain inventories and fund planned operating expenditures. Working capital movements are influenced by the sourcing of materials related to the production of products.

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Financing Agreements

Please see Note 8 to our Condensed Consolidated Financial Statements for information on our La Plata Loan Agreement, which was satisfied and terminated in July 2023, and our UMB Loan Agreement, which was satisfied and terminated in February 2023.

Liquidity and Changes in Cash Flows

At June 30, 2024, we had approximately $2,916 in cash on hand, a decrease of $1,011 from December 31, 2023.

The following is a summary of cash provided by or (used in) each of the indicated types of activities:

	Six Months Ended June 30, (in thousands)
							Increase / (Decrease)
	2024			2023			$			%
Operating activities	$	(1,011	)	$	907		$	(1,918	)		(211.5	%)
Investing activities		-			1,936			(1,936	)		(100.0	%)
Financing activities		-			(2,284	)		2,284			100.0	%

•Net cash used in operating activities was primarily related to our loss from continuing operations and investment in finished goods inventories and partially offset by conversion of working capital from accounts receivable.

•Net cash provided by investing activities in the prior period was due to the sale of our Scott's Liquid Gold® brand.

•Net cash used by financing activities in the prior period was from repayments and termination of our UMB Loan Agreement and offset by proceeds from our La Plata Loan Agreement.

The cash received from the sales of our various brands in 2023 and 2022 was used to satisfy and terminate debt agreements and will be used to fund operations as we seek to grow our existing business while closing the Merger. While we believe that our current cash reserves represent sufficient cash to fund our operations, our liquidity has been affected by inflationary pressures at our customers which have caused sales decreases and higher costs on materials, logistics, and other purchases. We expect that our current cash reserves will be sufficient to meet operational cash needs during the next twelve months, but further economic impacts to our sales to customers or supply chain disruptions in the short-term could impact our liquidity.

Critical Accounting Estimates

See Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of June 30, 2024, we conducted an evaluation, under the supervision and with the participation of our President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2024 due to the material weakness in our internal control over financial reporting described below.

Notwithstanding the material weakness, which still existed as of June 30, 2024, the Company’s President and Chief Financial Officer has concluded that the consolidated financial statements included in this Quarterly Report present fairly, in all material respects, our financial position, results of operations and cash flows as of the dates, and for the periods presented, in conformity with accounting principles generally accepted in the United States.

Material Weakness

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s financial statements will not be prevented or detected on a timely basis. The material weakness that we previously reported was identified as of June 30, 2023 and relates to our finance

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department lacking a sufficient number of trained professionals with technical accounting expertise to process and account for complex, non-routine transactions in accordance with GAAP. The material weakness was detailed in Item 4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. This material weakness still existed as of June 30, 2024.

The Company is continuing the process of remediating its material weakness. However, the material weakness in internal control over financial reporting that has been identified will not be remediated until we are able to add a sufficient number of trained professionals to our finance department, who have technical accounting expertise to process and account for complex, non-routine transactions in accordance with GAAP, our control is implemented and operates for a period of time, is tested, and the Company is able to conclude that such internal controls are operating effectively. The Company cannot provide assurance that these procedures will be successful in identifying material errors that may exist in the financial statements. The Company cannot make assurances that it will not identify additional material weaknesses in its internal control over financial reporting in the future. Management plans, as capital becomes available to the Company, to increase the accounting and financial reporting staff and provide future investments in the continuing education and public company accounting training of our accounting and financial professionals. In this context, please consider also the risk factor titled “Both Horizon Kinetics and the Company have identified material weaknesses in their internal control over financial reporting, which make those controls ineffective. If the combined company fails to maintain an effective system of disclosure controls and internal control over financial reporting, its ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired,” in the “Risk Factors” section of the Company’s Definitive Proxy Statement on Schedule 14A filed on May 13, 2024, which is incorporated herein by reference.

Changes in Internal Control over Financial Reporting

Other than as identified above, there was no change in our internal control over financial reporting during the three months ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Report, including the “Cautionary Note on Forward-Looking Information,” you should carefully consider the factors discussed in Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent quarterly reports on Form 10-Q.

In addition, you should carefully consider the factors discussed in the section “Risk Factors” in the Company’s Definitive Proxy Statement on Schedule 14A filed on May 13, 2024, which is incorporated herein by reference.

All of the factors referenced above could materially affect our, or the combined company’s, business, financial condition, or future results.

ITEM 6. EXHIBITS

Exhibit Number	Document
10.1	First Amendment to Agreement and Plan of Merger (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on May 15, 2024).
31.1	Rule 13a-14(a) Certification of the President and Chief Financial Officer.
32.1*	Section 1350 Certification.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRLtags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Furnished, not filed.

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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., a Colorado corporation
By:	/s/ David M. Arndt
	David M. Arndt, President, Principal Executive Officer, and Chief Financial Officer
	(Principal Financial and Chief Accounting Officer)

Date: August 1, 2024

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