Acquisitions

9 Months Ended

Sep. 30, 2024

Note 4. Acquisitions

On August 1, 2024, the Company completed its previously announced merger in accordance with the terms and conditions of the Merger Agreement, by and among SLGD, Horizon Kinetics, and Merger Sub.

In the Merger, all of the ownership interests in Horizon Kinetics were converted into an aggregate of 17,984,253 shares of the Company’s common stock (representing 96.5% of the shares of the Company’s common stock outstanding immediately after the effective time of the Merger). The number of shares was calculated in accordance with the formula in the Merger Agreement based on

(a) the sum of Horizon Kinetics' tangible net assets of approximately $250 million and the value of Horizon Kinetics' operating business of $200 million, (b) divided by 25. These shares were issued to the members of Horizon Kinetics. As a result, immediately after the effective time of the Merger, SLGD legacy shareholders collectively held approximately 3.5% of the shares of the Company’s common stock outstanding at such time.

The Company accounted for the Merger as a reverse acquisition. As such, Horizon Kinetics is considered the accounting acquirer. Therefore, Horizon Kinetics’ historical financial statements replace SLGD’s historical financial statements following the completion of the Merger, and the results of operations of both companies will be included in our financial statements for all periods subsequent to August 1, 2024.

Because the Merger is considered a reverse acquisition for accounting purposes, the fair value of the purchase consideration is calculated based on the Company’s stock price as it is considered to be a more reliable determination than the fair value of Horizon Kinetics’ private stock. Consideration is estimated based on the Company’s closing stock price on August 1, 2024. The purchase price was finalized based on the stock price on the closing date.


Shares of Scott's Liquid Gold-Inc.		13,012
Share price on August 1, 2024	$	1.06
Fair value of consideration	$	13,792

The preliminary purchase price as shown in the table above is allocated to the tangible and intangible assets acquired and liabilities assumed by the Company based on their preliminary estimated fair values. The fair value assessments are preliminary and are based upon available information and certain assumptions which the Company believes are reasonable, and therefore are subject to revisions that may result in adjustments to the values presented below:


Description	Amount
Cash and cash equivalents	$	2,823
Other current assets		935
Other non-current assets		1,298
Intangible assets, net		2,465
Goodwill		5,151
Deferred tax asset		3,871
Current liabilities		(406	)
Non-current liabilities		(2,345	)
Preliminary purchase price	$	13,792

The following table presents the unaudited pro forma information assuming the Merger occurred on January 1, 2023. The unaudited pro forma information is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on that date:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net revenues	$	13,752	$	12,679	$	39,756	$	39,321
Net income (loss)	$	21,493	$	24,417	$	75,310	$	(69,839	)

Basic and diluted earnings (loss) per share	$	1.15	$	1.31	$	4.04	$	(3.75	)
Basic and diluted weighted average shares outstanding		18,634		18,634		18,634		18,634

These calculations reflect the increased amortization expense of intangible assets and the consequential income tax effects that would have resulted had the Merger closed on January 1, 2023.

Horizon Kinetics Holding Corp 10-Q/A