Announcement • Dec 26

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Horizon Kinetics LLC entered into an Agreement and Plan of Merger to acquire Scott's Liquid Gold-Inc. (OTCPK:SLGD) in a reverse merger transaction.

Horizon Kinetics LLC entered into an Agreement and Plan of Merger to acquire Scott's Liquid Gold-Inc. (OTCPK:SLGD) in a reverse merger transaction on December 19, 2023. 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) Scott's Liquid will convert from a Colorado to a Delaware corporation, increase its authorized shares of common stock and change its name and (ii) Merger Sub will be merged with and into Horizon Kinetics, with Horizon Kinetics being the surviving entity. Subject to the terms and conditions of the Merger Agreement, which has been unanimously approved by the Board of Directors (the “Board”) of Scott's Liquid, if the Merger is completed, all of the ownership interests that Horizon Kinetics’ members hold in Horizon Kinetics will be converted into an aggregate number of shares of the Company’s common stock (such number, the “Merger Shares”) equal to (a) the sum of (i) Horizon Kinetics’ net tangible assets plus (ii) the value of the Horizon Kinetics operating business, (b) divided by $1.25. Under the Merger Agreement, the value of the Horizon Kinetics operating business is (i) stipulated to be $200 million if and only if Horizon Kinetics’ regulatory assets under management (“AUM”) are between $6 billion and $8 billion, and (ii) otherwise is calculated by multiplying AUM by a factor of 0.03. The Company currently expects its legacy shareholder ownership to be between 2% and 4% of the pro forma combined company. However, the exact percentage may be different and will reflect the number of Merger Shares calculated in accordance with the Merger Agreement based on Horizon Kinetics’ financial position at closing. If the Merger is completed, the Company is obligated to expand its Board to seven members, with all but one of its existing directors resigning, and the remaining seats filled by candidates selected by Horizon Kinetics. Murray Stahl, Co-Founder and Chief Executive Officer of Horizon Kinetics, is expected to serve as Chief Executive Officer of the combined entity. Completion of the Merger is subject to certain conditions, including, among others: (i) receipt of the Required Approvals by the Company’s shareholders, (ii) the absence of any court order, law, or rule prohibiting the completion of the Merger, (iii) the parties having agreed on the number of Merger Shares to be issued calculated in accordance with the Merger Agreement, (iv) Horizon Kinetics’ security holders having entered into standard investor representation letters, (v) the Company’s delivery of certain directors’ signed resignations to Horizon Kinetics. The transaction is expected to close in the second quarter of 2024, subject to standard closing conditions. Horizon Kinetics is seeking approval of the transaction from all of its members, and Scott’s will be seeking approval from its shareholders of 1) its conversion from a Colorado to a Delaware corporation, 2) an amendment to its charter to increase authorized shares of Company common stock, and 3) a change in the name of the Company. Roland S. Chase of Hill Ward Henderson acted as legal advisor for Scott's Liquid.

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