Equibles

10-Q/A

Horizon Kinetics Holding Corp (HKHC)

10-Q/A 2025-03-31 For: 2024-09-30
View Original
Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)

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

For the quarterly period ended September 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

HORIZON KINETICS HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware 84-0920811
(State or other jurisdiction of<br>incorporation or organization) (I.R.S. Employer <br>Identification No.)
470 Park Ave S., New York, New York 10016
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (646) 291-2300

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 February 28, 2025 the registrant had 18,635,321 shares of its common stock, $0.10 par value per share, outstanding.

EXPLANATORY NOTE

This amendment (Form 10-Q/A) is being provided for the sole purpose of amending the original Form 10-Q for the period ended September 30, 2024, as filed on November 12, 2024, to include financial information related to certain proprietary funds that should be consolidated pursuant to ASC 810, Consolidation, as a result of our evaluation of these funds following the variable interest entity (“VIE”) model. With this restatement, the assets and liabilities of the consolidated funds are now presented on the Company’s consolidated balance sheet. Additionally, an amount that represents client interests in these consolidated funds is presented as the redeemable noncontrolling interests on the Company’s consolidated balance sheet. The investment income (losses), other income (losses) and the expenses of the consolidated investment products are now presented within the Company’s statement of operations. Additionally, an amount that represents the net income attributable to redeemable noncontrolling interests as well as the net income (loss) attributable to Horizon Kinetics Holding Corporation is also presented on the Company’s statement of operations.

No other changes have been made to the Form 10-Q. This Form 10-Q/A does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update any related disclosures made in the Form 10-Q. For convenience, the entire Form 10-Q, as amended, is being re-filed.

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:

  • Unfavorable market conditions could adversely affect our business in many ways, including by reducing the fees revenue and distributions received from its funds.
  • Certain investments represent a material portion of our total assets. If these investments’ operating or market performance deteriorates for any reason, then the Company’s resulting advisory fees and reputation could be negatively impacted.
  • The Company and our employees may invest in other companies or funds in which its clients also invest, which may create conflicts of interest. Conflicts of interests are also present when the Company receives performance fees.
  • The Company, and the funds and SMAs managed by its subsidiary, are exposed to risks relating to cryptocurrencies and related investments, either directly or through cryptocurrency-linked ETFs.
  • Our success depends highly on its senior executives, and the loss of their services would have a material adverse effect on its business, results and financial condition.
  • Poor performance of our funds would cause a decline in its revenue, income and cash flow and could adversely affect its ability to raise capital for future funds.
  • Our investment philosophy makes a rebalancing of portfolios unlikely, which could result in concentrated positions, adversely impacting our business and reputation if those positions decline.
  • The asset management business is intensely competitive.
  • The capital markets are currently in a period of disruption and economic uncertainty. Such market conditions have materially and adversely affected debt and equity capital markets, which have had, and may continue to have, a negative impact on our business and operations.

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 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31
Item 3. Qualitative and Quantitative Disclosure About Market Risk 39
Item 4. Controls and Procedures 39
PART II
Item 1A. Risk Factors 40
Item 6. Exhibits 40

ITEM 1. FINANCIAL STATEMENTS.

HORIZON KINETICS HOLDING CORPORATION

Condensed Consolidated Statements of Financial Condition

(in thousands)

December 31,
2023
As Restated
Assets
Cash and cash equivalents 18,071 $ 10,477
Fees receivable, net 5,255 3,304
Investments, at fair value 74,852 37,620
Assets of consolidated investment products
Cash and cash equivalents 31,115 59,117
Investments, at fair value 1,354,405 903,435
Other assets 42,116 19,903
Other investments 11,029 6,990
Operating lease right-of-use assets 5,593 5,651
Property and equipment, net 114 200
Prepaid expenses and other assets 3,037 1,882
Due from affiliates 116 2,660
Digital assets 9,029 1,829
Intangible assets, net 45,019 43,876
Goodwill 24,425 19,273
Total assets 1,624,176 $ 1,116,217
Liabilities, Noncontrolling Interests, and Shareholders’ Equity
Liabilities:
Accounts payable, accrued expenses and other 8,056 $ 3,839
Accrued third party distribution expenses 427 1,022
Deferred revenue 191 70
Liabilities of consolidated investment products
Accounts payable and accrued expenses 8,428 5,840
Other liabilities 406 160
Deferred tax liability, net 73,640 617
Due to affiliates 9,429 9,966
Operating lease liability 8,001 7,281
Total liabilities 108,578 28,795
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests 1,250,226 878,334
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 18,635 shares (2024) and 17,984 shares (2023), net of treasury stock; 1 and 0 shares at September 30, 2024 and December 31, 2023, respectively 1,863 1,798
Additional paid-in capital 39,217 -
Retained earnings 224,292 207,290
Total shareholders’ equity 265,372 209,088
Total liabilities, noncontrolling interests, and shareholders’ equity 1,624,176 $ 1,116,217

All values are in US Dollars.

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

HORIZON KINETICS HOLDING CORPORATION

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
As Restated As Restated As Restated As Restated
Revenue:
Management and advisory fees $ 13,036 $ 11,735 $ 37,277 $ 36,313
Other income and fees 435 37 700 385
Total revenue 13,471 11,772 37,977 36,698
Operating expenses:
Compensation, related employee benefits, and cost of goods sold 7,616 6,555 20,299 20,823
Sales, distribution and marketing 3,097 2,479 8,006 7,822
Depreciation and amortization 496 453 1,415 1,368
General and administrative expenses 2,780 1,601 7,433 5,674
Expenses of consolidated investment products 590 385 1,651 1,200
Total operating expenses 14,579 11,473 38,804 36,887
Operating (loss) income (1,108 ) 299 (827 ) (189 )
Other income (expense):
Equity earnings (losses), net 1,617 1,644 3,683 (1,632 )
Interest and dividends 891 181 1,261 468
Other income (expense) (2,676 ) 2 (2,857 ) 27
Investment and other income (losses) of consolidated investment products, net 142,620 105,342 442,469 (17,362 )
Interest and dividend income of consolidated investment products 8,888 3,540 17,494 10,357
Unrealized (loss) gain on digital assets, net (95 ) - 2,792 -
Realized gain on investments, net 23 1,340 342 1,409
Unrealized gain (loss) on investments net 11,321 8,660 24,942 (10,738 )
Total other income (expense), net 162,589 120,709 490,126 (17,471 )
Income (loss) before provision for income taxes 161,481 121,008 489,299 (17,660 )
Income tax (expense) benefit (69,257 ) (133 ) (70,735 ) 707
Net income (loss) $ 92,224 $ 120,875 $ 418,564 $ (16,953 )
Less: net income attributable to redeemable noncontrolling interests $ (130,391 ) $ (95,404 ) $ (401,852 ) $ 10,032
Net (loss) income attributable to Horizon Kinetics Holding Corporation $ (38,167 ) $ 25,471 $ 16,712 $ (6,921 )
Basic and diluted net (loss) income per common shares:
Net income (loss) $ (2.07 ) $ 1.42 $ 0.92 $ (0.38 )
Weighted average shares outstanding:
Basic and diluted 18,415 17,984 18,129 17,984

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

HORIZON KINETICS HOLDING CORPORATION

Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited)

(in thousands)

Common Stock
Shares Amount Capital in Excess of Par Retained Earnings Total
Balance at December 31, 2023 17,984 $ 1,798 $ - $ 207,290 $ 209,088
Cumulative effect of the adoption of ASU 2023-08, net of income taxes - - - 4,369 4,369
Distributions - - - (1,700 ) (1,700 )
Net income - - - 40,841 40,841
Balance at March 31, 2024 17,984 $ 1,798 $ - $ 250,800 $ 252,598
Distributions - - - (2,379 ) (2,379 )
Net income - - - 14,038 14,038
Balance at June 30, 2024 17,984 $ 1,798 $ - $ 262,459 $ 264,257
Contributions of investment securities, net - - 25,512 - 25,512
Shares issued for acquisition, net 650 65 13,705 - 13,770
Net loss - - - (38,167 ) (38,167 )
Balance at September 30, 2024 18,634 $ 1,863 $ 39,217 $ 224,292 $ 265,372
Balance at December 31, 2022 17,984 $ 1,798 $ - $ 221,402 $ 223,200
Distributions - - - (4,900 ) (4,900 )
Net loss - - - (19,883 ) (19,883 )
Balance at March 31, 2023 17,984 $ 1,798 $ - $ 196,619 $ 198,417
Distributions - - - (3,520 ) (3,520 )
Net loss - - - (12,509 ) (12,509 )
Balance at June 30, 2023 17,984 $ 1,798 $ - $ 180,590 $ 182,388
Distributions - - - (1,200 ) (1,200 )
Net income - - - 25,471 25,471
Balance at September 30, 2023 17,984 $ 1,798 $ - $ 204,861 $ 206,659

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

HORIZON KINETICS HOLDING CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Nine Months Ended September 30,
2024 2023
As Restated As Restated
Operating activities:
Net cash (used in) provided by operating activities $ (11,183 ) $ 23,742
Investing activities:
Proceeds from sale of investments 395 2,460
Purchases of property and equipment (43 ) (95 )
Purchases of investments (593 ) (959 )
Cash acquired from acquisition 2,823 -
Net cash provided by investing activities 2,582 1,406
Financing activities:
Distributions paid (4,079 ) (9,620 )
Cash contributions from affiliates 2,666 -
Contributions from redeemable noncontrolling interests in consolidated investment products 15,613 11,602
Redemptions of redeemable noncontrolling interests in consolidated investment products (26,007 ) (10,840 )
Net cash used in financing activities (11,807 ) (8,858 )
Net (decrease) increase in cash and cash equivalents (20,408 ) 16,290
Cash and cash equivalents of HKHC and consolidated investment products, beginning of year 69,594 58,729
Cash and cash equivalents of HKHC and consolidated investment products, end of period $ 49,186 $ 75,019
Supplemental disclosure of non-cash investing activities:
Net assets acquired in acquisition $ 10,969 $ -
Supplemental disclosure of non-cash financing activities:
Net contributions of investment securities from affiliates $ 22,846 $ -

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements

HORIZON KINETICS HOLDING CORPORATION

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands, except per share data)

Note 1. General

The accompanying unaudited interim Condensed Consolidated Financial Statements of Horizon Kinetics Holding Corporation, a Delaware Company (along with its wholly-owned subsidiaries, collectively referred to as the “Company”, “HKHC” or in the first-person notations of “we”, “us” and “our”) were prepared in accordance with accounting principles generally accepted in the United States of America and the interim financial statement rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Condensed Consolidated Financial Statements. The interim operating results are not necessarily indicative of the results for a full year or for any interim period. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. The accompanying Condensed Consolidated Statement of Financial Condition as of December 31, 2023 has been derived from the Company's annual financial statements for the year ended December 31, 2023, as restated. The Condensed Consolidated Financial Statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes of Horizon Kinetics, LLC and Subsidiaries included in our Form DEF 14A filed with the SEC on May 13, 2024.

The Condensed Consolidated Financial Statements include the accounts of HKHC and all of its wholly-owned subsidiaries (Horizon Kinetics Asset Management LLC, Kinetics Funds Distributor LLC, KBD Securities LLC and SLG Chemicals, Inc.). All intercompany balances and transactions have been eliminated in consolidation.

On August 1, 2024, the Company, formerly known as “Scott’s Liquid Gold-Inc.,” completed its previously announced merger in accordance with the terms and conditions of the Agreement and Plan of Merger, dated December 19, 2023, as amended (collectively, the “Merger Agreement”), by and among Scott’s Liquid Gold-Inc., a Colorado corporation (“SLGD”), Horizon Kinetics, LLC, a Delaware limited liability company (“Horizon Kinetics”), and HKNY One, LLC, a Delaware limited liability company and wholly owned subsidiary of SLGD (“Merger Sub”). In accordance with the Merger Agreement, Merger Sub merged with and into Horizon Kinetics, with Horizon Kinetics surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”).

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 are the historical financial statements following the completion of the Merger, and the results of operations of the post-merger company are included in our financial statements for all periods subsequent to August 1, 2024. For additional information related to the Merger, see Note 4 – Acquisitions.

The Company and its wholly owned subsidiaries manage or control certain entities that have been consolidated in the accompanying financial statements. These entities include our proprietary funds (collectively, “consolidated investment products”). Including the results of the consolidated investment products significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows within the accompanying consolidated financial statements. However, the consolidated investment products’ results included herein have no direct effect on the net income attributable to HKHC or to its Stockholders’ Equity. Instead, economic ownership of the investors in the consolidated investment products are reflected as redeemable non-controlling interests in consolidated investment products. Further, cash flows allocable to redeemable non-controlling interests in consolidated investment products are specifically identifiable within the Consolidated Statement of Cash Flows.

Note 2. Restatement of Prior Period Financial Statements and Information

The Company has determined certain proprietary funds should be consolidated pursuant to ASC 810, Consolidation, as a result of our evaluation of these funds following the variable interest entity (“VIE”) model. With this restatement, the assets and liabilities of the consolidated funds are now presented on the Company’s consolidated balance sheet. Additionally, an amount that represents client interests in these consolidated funds is presented as the redeemable noncontrolling interests on the Company’s consolidated balance sheet. The investment income (losses), other income (losses) and the expenses of the consolidated investment products are now presented within the Company’s statement of operations. Additionally, an amount that represents the net income attributable to redeemable noncontrolling interests as well as the net income (loss) attributable to Horizon Kinetics Holding Corporation is also presented on the Company’s statement of operations.

The following presents a reconciliation of the impacted financial statement line items as previously presented as of December 31, 2023 and for the year then ended. The previously presented amounts were reflected in the financial statements of Horizon Kinetics LLC and Subsidiaries (a private company), which were filed as Exhibit 99.1 within a Current Report on Form 8-K with the SEC on August 7, 2024 and filed in the Company’s Quarterly Report on Form 10-Q filed on November 12, 2024. These amounts are labeled as “As previously presented” in the tables below. The amounts labeled “Restatement Adjustments” represent the effects of this restatement due to the consolidation of certain proprietary funds.

As of September 30, 2024
As Previously Presented Restatement Adjustments As Restated
Consolidated Statements of Financial Condition
Assets
Fees receivable, net $ 6,948 $ (1,693 ) $ 5,255
Assets of consolidated investment products
Cash and cash equivalents - 31,115 31,115
Investments, at fair value - 1,354,405 1,354,405
Other assets - 42,116 42,116
Other investments 177,912 (166,883 ) 11,029
Total assets $ 365,116 $ 1,259,060 $ 1,624,176
Liabilities, Noncontrolling Interests, and Shareholders’ Equity
Liabilities:
Liabilities of consolidated investment products
Accounts payable and accrued expenses $ - $ 8,428 $ 8,428
Other liabilities - 406 406
Total liabilities 99,744 8,834 108,578
Redeemable Noncontrolling Interests - 1,250,226 1,250,226
Total liabilities, noncontrolling interests, and shareholders’ equity $ 365,116 $ 1,259,060 $ 1,624,176
As of December 31, 2023
--- --- --- --- --- --- --- ---
As Previously Presented Restatement Adjustments As Restated
Consolidated Statements of Financial Condition
Assets
Fees receivable $ 4,453 $ (1,149 ) $ 3,304
Assets of consolidated investment products
Cash and cash equivalents - 59,117 59,117
Investments, at fair value - 903,435 903,435
Other assets - 19,903 19,903
Other investments 103,962 (96,972 ) 6,990
Total assets $ 231,883 $ 884,334 $ 1,116,217
Liabilities, Noncontrolling Interests, and Shareholders’ Equity
Liabilities:
Liabilities of consolidated investment products
Accounts payable and accrued expenses $ - $ 5,840 $ 5,840
Other liabilities - 160 160
Total liabilities 22,795 6,000 28,795
Redeemable Noncontrolling Interests - 878,334 878,334
Total liabilities, noncontrolling interests, and shareholders’ equity $ 231,883 $ 884,334 $ 1,116,217
Three Months Ended September 30, 2024
--- --- --- --- --- --- --- --- --- ---
As Previously Presented Restatement Adjustments As Restated
Consolidated Statements of Operations
Revenue:
Management and advisory fees $ 14,933 $ (1,897 ) $ 13,036
Total revenue 15,368 (1,897 ) 13,471
Operating expenses:
General and administrative expenses 2,809 (29 ) 2,780
Expenses of consolidated investment products - 590 590
Total operating expenses 14,018 561 14,579
Operating income (loss) 1,350 (2,458 ) (1,108 )
Equity earnings, net 20,276 (18,659 ) 1,617
Investment and other income (losses) of consolidated investment products, net - 142,620 142,620
Interest and dividend income of consolidated investment products - 8,888 8,888
Total other income (expense), net 29,740 132,849 162,589
Income (loss) before provision for income taxes 31,090 130,391 161,481
Net income (loss) (38,167 ) 130,391 92,224
Less: net income attributable to redeemable noncontrolling interests - (130,391 ) (130,391 )
Net loss attributable to Horizon Kinetics Holding Corporation $ (38,167 ) $ - $ (38,167 )
Three Months Ended September 30, 2023
--- --- --- --- --- --- --- --- ---
As Previously Presented Restatement Adjustments As Restated
Consolidated Statements of Operations
Revenue:
Management and advisory fees $ 12,709 $ (974 ) $ 11,735
Total revenue 12,746 (974 ) 11,772
Operating expenses:
General and administrative expenses 1,618 (17 ) 1,601
Expenses of consolidated investment products - 385 385
Total operating expenses 11,105 368 11,473
Operating income (loss) 1,641 (1,342 ) 299
Equity earnings (losses), net 13,780 (12,136 ) 1,644
Investment and other income (losses) of consolidated investment products, net - 105,342 105,342
Interest and dividend income of consolidated investment products - 3,540 3,540
Total other income (expense), net 23,963 96,746 120,709
Income (loss) before provision for income taxes 25,604 95,404 121,008
Net income (loss) 25,471 95,404 120,875
Less: net income attributable to redeemable noncontrolling interests - (95,404 ) (95,404 )
Net loss attributable to Horizon Kinetics Holding Corporation $ 25,471 $ - $ 25,471
Nine Months Ended September 30, 2024
--- --- --- --- --- --- --- --- ---
As Previously Presented Restatement Adjustments As Restated
Consolidated Statements of Operations
Revenue:
Management and advisory fees $ 41,735 $ (4,458 ) $ 37,277
Total revenue 42,435 (4,458 ) 37,977
Operating expenses:
General and administrative expenses 7,500 (67 ) 7,433
Expenses of consolidated investment products - 1,651 1,651
Total operating expenses 37,220 1,584 38,804
Operating income (loss) 5,215 (6,042 ) (827 )
Equity earnings (losses), net 55,752 (52,069 ) 3,683
Investment and other income (losses) of consolidated investment products, net - 442,469 442,469
Interest and dividend income of consolidated investment products - 17,494 17,494
Total other income (expense), net 82,232 407,894 490,126
Income (loss) before provision for income taxes 87,447 401,852 489,299
Net income (loss) 16,712 401,852 418,564
Less: net income attributable to redeemable noncontrolling interests - (401,852 ) (401,852 )
Net loss attributable to Horizon Kinetics Holding Corporation $ 16,712 $ - $ 16,712
Nine Months Ended September 30, 2023
--- --- --- --- --- --- --- --- --- ---
As Previously Presented Restatement Adjustments As Restated
Consolidated Statements of Operations
Revenue:
Management and advisory fees $ 39,037 $ (2,724 ) $ 36,313
Total revenue 39,422 (2,724 ) 36,698
Operating expenses:
General and administrative expenses 5,730 (56 ) 5,674
Expenses of consolidated investment products - 1,200 1,200
Total operating expenses 35,743 1,144 36,887
Operating income (loss) 3,679 (3,868 ) (189 )
Equity earnings (losses), net (2,473 ) 841 (1,632 )
Investment and other income (losses) of consolidated investment products, net - (17,362 ) (17,362 )
Interest and dividend income of consolidated investment products - 10,357 10,357
Total other income (expense), net (11,307 ) (6,164 ) (17,471 )
Income (loss) before provision for income taxes (7,628 ) (10,032 ) (17,660 )
Net income (loss) (6,921 ) (10,032 ) (16,953 )
Less: net income attributable to redeemable noncontrolling interests - 10,032 10,032
Net loss attributable to Horizon Kinetics Holding Corporation $ (6,921 ) $ - $ (6,921 )

There was no impact of these correcting items to the Company’s cash and cash equivalents, Members’ equity or net loss applicable to Horizon Kinetics Members’.

In addition, applicable disaggregated revenue amounts were restated in Note 3, Summary of Significant Accounting Policies. The Company has also presented applicable financial information about the consolidated funds, including fair value measurements, in Note 5, Consolidated Investment Products, and Note 6, Investments, at fair value.

Note 3. Summary of Significant Accounting Policies

(a) Consolidation

In addition to its wholly-owned subsidiaries, generally accepted accounting principles in the United States of America (“GAAP”) requires that the assets, liabilities and results of operations of a variable interest entity (“VIE”) be consolidated into the financial statements of the enterprise that has a controlling interest in the VIE. The determination as to whether an entity qualifies as a VIE depends on the facts and circumstances surrounding each entity, and therefore certain of the investment vehicles managed by the Company may qualify as VIEs under the variable interest model, whereas others may qualify as voting interest entities

(“VOEs”) under the voting interest model. The granting of substantive kick-out rights is a key consideration in determining whether a limited partnership or similar entity is a VIE and whether or not that entity should be consolidated. The Company first evaluates whether it holds a variable interest in an entity. Fees that are customary and commensurate with the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests including proportionate interests through related parties, to determine if such interests are considered a variable interest. As the Company’s interests in many of these entities are solely associated with market rate fees and/or insignificant indirect interests through related parties, the Company is not considered to have a variable interest in many of these entities. For entities where the Company has determined that it does hold a variable interest, the Company performs an assessment to determine whether each of those entities qualify as a VIE.

The Company holds equity investments in certain of its proprietary funds. While the Company and other related-party owners own a significant portion of the entities in some instances, the Company has determined that it is not the ultimate primary beneficiary. The Company’s maximum exposure to loss is the potential loss of its investment, it can redeem its investment at any time (in accordance with the redemption provisions of the specific funds) and does not have in place any liquidity arrangements or other commitments with third parties on behalf of the funds. Accordingly, the underlying assets and liabilities related to these entities are not consolidated with the Company’s condensed consolidated financial statements.

(b) Use of estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

(c) Liquidity

The Company believes that its cash and cash equivalents will be sufficient to fund operations past one year from the issuance of these condensed consolidated financial statements.

(d) Digital assets

Through December 31, 2023, the Company accounted for digital assets in accordance with the AICPA’s practice aid “Accounting for and auditing of digital assets.” In accordance with this practice aid, digital assets are accounted for as an indefinite-lived intangible asset and are initially valued based on the current price of the digital asset at the time the digital asset was received. During 2023, the Company evaluated digital assets for impairment on a daily basis or when events or changes indicate the carrying value may not be recoverable by using the daily low price. The Company has evaluated its digital assets for impairment and did not record any impairments for the three and nine months ended September 30, 2023.

Effective January 1, 2024, the Company measures digital assets at fair value with changes recognized in earnings in each reporting period. The Company tracks its cost basis of digital assets in accordance with first-in-first-out method of accounting.

The Company’s digital assets are all Level 1 within the fair value hierarchy, except for certain other assets with a fair value of $8 that are Level 2.

The following tables present additional information about the Company’s digital assets as of September 30, 2024 and December 31, 2023, respectively:

September 30, 2024 December 31, 2023
Units Held Cost Basis Fair Value Units Held Cost Basis Fair Value
Bitcoin 131 $ 1,673 $ 8,287 130 $ 1,555 $ 5,488
Litecoin 1,209 137 81 1,209 137 88
Ethereum 176 53 457 176 53 401
Bitcoin Cash 226 67 76 193 55 50
All others 34 128 29 73
$ 1,964 $ 9,029 $ 1,829 $ 6,100
Balance at December 31, 2023 Revenue recognized Purchases Proceeds from sale Unrealized gain (loss) Balance at September 30, 2024
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Bitcoin
Units 130 1 - - - 131
Amount $ 5,488 $ 125 $ - $ - $ 2,674 $ 8,287
Litecoin
Units 1,209 - - - - 1,209
Amount $ 88 $ - $ - $ - $ (7 ) $ 81
Ethereum
Units 176 - - - - 176
Amount $ 401 $ - $ - $ - $ 56 $ 457
Bitcoin Cash
Units 193 33 - - - 226
Amount $ 50 $ 12 $ - $ - $ 14 $ 76
All others
Amount $ 73 $ - $ - $ - $ 55 $ 128

The following tables present additional information about digital assets held in CIPs as of September 30, 2024 and December 31, 2023, respectively:

September 30, 2024 December 31, 2023
Units Held Cost Basis Fair Value Units Held Cost Basis Fair Value
Bitcoin 1,936 $ 11,374 $ 122,576 1,936 $ 11,374 $ 81,389
Bitcoin Cash 15,120 6,624 5,098 5,514 2,345 1,412
Ethereum 18,923 403 973 18,923 403 956
Litecoin 45,196 3,569 3,020 8,797 609 655
Ripple 516,187 240 316 516,187 240 321
All others 559 130 559 214
$ 22,769 $ 132,113 $ 15,530 $ 84,947
Balance at December 31, 2023 Revenue recognized Purchases Proceeds from sale Unrealized gain (loss) Balance at September 30, 2024
--- --- --- --- --- --- --- --- --- --- --- --- --- ---
Bitcoin
Units 1,936 - - - - 1,936
Amount $ 81,389 $ - $ - $ - $ 41,187 $ 122,576
Bitcoin Cash
Units 5,514 - 9,606 - - 15,120
Amount $ 1,412 $ - $ 4,278 $ - $ (592 ) $ 5,098
Ethereum
Units 18,923 - - - - 18,923
Amount $ 956 $ - $ - $ - $ 17 $ 973
Litecoin
Units 8,797 - 36,399 - - 45,196
Amount $ 655 $ - $ 2,960 $ - $ (595 ) $ 3,020
Ripple
Units 516,187 - - - - 516,187
Amount $ 321 $ - $ - $ - $ (5 ) $ 316
All others
Amount $ 214 $ - $ - $ - $ (84 ) $ 130

(e) Investments, at fair value

The Company invests in securities which are valued at fair value with unrealized gains and losses included in the condensed consolidated statement of operations. Realized gains and losses are determined on the basis of specific identification.

(f) Other Investments

For investments in entities over which the Company exercises significant influence, but which do not meet the requirements for consolidation and for which the Company has not elected the fair value option, the Company uses the equity method of accounting, whereby the Company records its share of the underlying income or loss of such entities. The Company’s share of the underlying net income or loss of such entities is recorded in equity in earnings of affiliated investments on the condensed consolidated statement of operations. As the underlying entities that the Company manages and invests in are, for U.S. GAAP purposes, primarily investment companies accounted for under Accounting Standards Codification (“ASC”) Topic 946 which reflect their investments at fair value, the carrying value of the Company’s equity method investments in such entities approximates fair value.

We account for other investments that are not accounted for under the equity method that do not have a readily determinable fair value under the fair value measurement alternative. Under the fair value measurement alternative, these investments are based on our original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar interests of the same issuer. Under this method, our share of the income or losses of such companies is not included in our Consolidated Statements of Operations, however, the result of observable price changes, if any, are reflected in Other income (loss), net. We include the carrying value of these investments in Investments in proprietary funds on the Condensed Consolidated Balance sheets.

(g) Fair value measurements:

The Company values certain of its financial assets and liabilities based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance emphasizes that fair value is a market-based measurement that should be determined based on the assumptions market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, accounting guidance establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) the reporting entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). Valuation techniques used to measure fair value shall maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:

Level 1 Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments are not applied to Level 1 investments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these investments does not entail a significant degree of judgment.

Level 2 Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The fair value hierarchy guidance gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

(h) Revenue Recognition

The Company recognizes revenue under Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) 2014-09, Revenue From Contracts With Customers (Topic 606). The Company recognizes revenue when the performance obligation is satisfied, which is the point at which control of the promised goods or services are transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services.

Management fees, which are generally calculated as a percentage of assets under management, are recognized when earned and collection is probable. Certain contracts for management services also provide for performance-based fees (“Incentive Fees”).

Incentive Fee revenue is recorded when earned by the fund managers of those managed funds to the extent that Return Thresholds have been met and it is probable that a significant reversal of revenue will not occur. These customer contracts require the Company to provide investment management services over a period of time, which represents a performance obligation that the Company satisfies over time. Management fees are a form of variable consideration because the fees that the Company is entitled to vary based on fluctuations in the basis for the management fee. The amount recorded as revenue is generally determined at the end of the period because these management fees are payable on a regular basis (typically monthly) and are not subject to claw back once paid. Management and advisory fees, including Incentive Fees, from consolidated proprietary funds are eliminated in consolidation.

The following table disaggregates our management services revenue by type:

Three months ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
As Restated As Restated As Restated As Restated
Mutual fund management fees $ 6,378 $ 5,194 $ 16,748 $ 15,715
ETF management fees 1,877 2,180 4,817 7,291
Separately managed account management fees 4,739 4,313 14,737 13,020
Proprietary fund management fees 42 48 975 287
Total management and advisory fees $ 13,036 $ 11,735 $ 37,277 $ 36,313

The following table presents balances of management fees receivable by type:

September 30, 2024 December 31, 2023
As Restated As Restated
Mutual fund management fees $ 2,089 $ 1,688
ETF management fees 626 138
Separately managed account management fees 1,983 53
Proprietary fund management fees 66 70
Other 491 1,355
$ 5,255 $ 3,304

(i) Other revenue

The Company produces investment research reports for individual and institutional research clients. In addition, the Company retains a third-party marketing firm to market and distribute its research reports. Clients subscribe at a monthly, annual or multi-annual level. Income is accrued monthly based on current subscription base.

The Company also generates revenue from sales of consumer products. Consumer product 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, and are recorded net of expected customer allowances and promotional programs. Net revenues are recorded at the time that control of the products is transferred to customers.

(j) Third party distribution

The Company has agreements in place with several third-party distribution firms and individual marketers (“Marketers”). Generally, each party to the agreement may terminate the agreement in a short notice period. Third party distribution expenses are earned by the Marketers based on revenue earned from some of the Company’s investment products generated by the respective Marketers. Accrued third party distribution expenses represent expenses that have been accrued but not paid. In the event that related fees receivable are deemed uncollectible, both related fees receivable and accrued third party distribution expenses will be written off.

(k) Income taxes

Income taxes reflect the tax effects of transactions reported in the Condensed Consolidated Financial Statements and consist of taxes currently payable plus deferred income taxes related to certain income and expenses recognized in different periods for

financial and income tax reporting purposes. Deferred income tax assets and liabilities are recognized for the future income tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. A valuation allowance is established 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.

Taxes are reported based on tax positions that meet a more-likely-than-not standard and that are measured at the amount that is more-likely-than-not to be realized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits or expense. We classify penalty and interest expense related to income tax liabilities as an income tax expense. There are no significant interest and penalties recognized in the Consolidated Statements of Operations or accrued on the Consolidated Balance Sheets.

(l) Recently adopted accounting pronouncements

In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Topic 350-60). ASU No. 2023-08 requires that an entity measure crypto assets at fair value with changes recognized in net income at each reporting period and present crypto assets separately from other intangible assets in the balance sheet and changes from the remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement. ASU No. 2023-08 is effective for annual periods beginning after December 15, 2024 and interim periods within annual periods beginning after December 15, 2024. The Company adopted ASU 2023-08 as of January 1, 2024 resulting in certain expanded disclosures about digital assets and recorded an increase to our digital assets and shareholders’ equity of approximately $4.4 million.

(m) Recently issued accounting pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU No. 2023-07 requires disclosures about significant segment expenses and additional interim disclosure requirements. This standard also requires a single reportable segment to provide all disclosures required by Accounting Standards Codification Topic 280. This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively for all prior periods presented in the consolidated financial statements. We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2024. We are currently evaluating the potential impact of adopting this standard on our disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU No. 2023-09 establishes incremental disaggregation of income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid. This standard is effective for fiscal years beginning after December 15, 2024, and requires prospective application with the option to apply it retrospectively. We intend to adopt this standard in our Annual Report on Form 10-K for the year ending December 31, 2025. We are currently evaluating the potential impact of adopting this standard on our disclosures.

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.

Note 5. Investments, at Fair Value

As of September 30, 2024 the Company owned investments in marketable securities with a fair value of $74,852 and a cost of $24,884.

The following summarizes the Company’s investments accounted for at fair value at September 30, 2024 using the fair value hierarchy:

September 30, 2024
Total Level 1 Level 2 Level 3
Investments:
Texas Pacific Land Corporation $ 51,046 $ 51,046 $ - $ -
Kinetics Market Opportunities Fund 6,676 - 6,676 -
Kinetics Mutual Funds and ETFs 6,160 - 6,160 -
Kinetics Spin-Off and Corporate Restructuring Fund-Institutional Class 3,203 - 3,203 -
All other market traded equity securities 2,518 2,518 - -
CBOE Global Markets 2,016 2,016 - -
FRMO Corporation 1,630 - 1,630 -
Grayscale Bitcoin Trust 1,617 1,617 - -
Totals $ 74,866 $ 57,197 $ 17,669 $ -
Liabilities:
Market traded equity securities - sold short (14 ) (14 ) - -
Total Liabilities (14 ) (14 ) - -
Total $ 74,852 $ 57,183 $ 17,669 $ -

The following summarizes the Company’s investments accounted for at fair value at December 31, 2023 using the fair value hierarchy:

December 31, 2023
Total Level 1 Level 2 Level 3
Money market cash equivalents $ 6,214 $ 6,214 $ - $ -
Investments:
Texas Pacific Land Corporation $ 30,084 $ 30,084 $ - $ -
Kinetics Spin-Off and Corporate Restructuring Fund-Institutional Class 2,015 - 2,015 -
All other market traded equity securities 1,679 1,679 - -
FRMO Corporation 1,259 - 1,259 -
Horizon Kinetics SPAC Active ETF 1,256 - 1,256 -
Grayscale Bitcoin Trust 1,105 1,105 - -
Kinetics Mutual Funds and ETFs 224 - 224 -
Totals $ 37,622 $ 32,868 $ 4,754 $ -
Liabilities:
Market traded equity securities - sold short $ (2 ) $ (2 ) $ - $ -
Total Liabilities $ (2 ) $ (2 ) $ - $ -
Total $ 37,620 $ 32,866 $ 4,754 $ -

The following summarizes CIPs measured at fair value on a recurring basis were as follows as of September 30, 2024 using the fair value hierarchy:

September 30, 2024
Total Level 1 Level 2 Level 3 NAV as a practical expedient
Money market cash equivalents $ 30,675 $ 30,675 $ - $ - $ -
Investments:
Common stocks $ 649,262 $ 649,262 $ - $ - $ -
Debt securities 1,132 - - 1,132 -
Digital asset related exchange-traded and mutual funds 374,209 367,007 7,202 - -
Preferred stocks 1,749 1,749 - - -
Preferred equity and other private investments 23,193 - - 23,193 -
Private equity funds 190 - - - 190
Private placements 172,995 1,150 - 171,842 3
Digital assets 132,113 132,113 - - -
Total investments $ 1,354,843 $ 1,151,281 $ 7,202 $ 196,167 $ 193
Liabilities:
Securities sold short $ (438 ) $ (438 ) $ - $ - $ -
Total liabilities $ (438 ) $ (438 ) $ - $ - $ -
Total investments, at fair value $ 1,354,405 $ 1,150,843 $ 7,202 $ 196,167 $ 193

The following summarizes CIPs measured at fair value on a recurring basis were as follows as of December 31, 2023 using the fair value hierarchy:

December 31, 2023
Total Level 1 Level 2 Level 3 NAV as a practical expedient
Money market cash equivalents $ 32,239 $ 32,239 $ - $ - $ -
Investments:
Common stocks $ 394,889 $ 394,889 $ - $ - $ -
Debt securities 765 - - 765 -
Digital asset related exchange-traded and mutual funds 242,696 237,810 4,886 - -
Preferred stocks 1,389 1,389 - - -
Preferred equity and other private investments 22,240 - - 22,240 -
Private equity funds 204 - - - 204
Private placements 156,651 - - 156,648 3
Digital assets 84,947 84,947 - - -
Total investments $ 903,781 $ 719,035 $ 4,886 $ 179,653 $ 207
Liabilities:
Securities sold short $ (346 ) $ (346 ) $ - $ - $ -
Total liabilities $ (346 ) $ (346 ) $ - $ - $ -
Total investments, at fair value $ 903,435 $ 718,689 $ 4,886 $ 179,653 $ 207

Changes in Level 3 Assets were as follows:

for the nine months ended September 30, 2024 Debt securities Preferred equity and other private investments Private placements Total Level 3 Assets
Balance at December 31, 2023 $ 765 $ 22,240 $ 156,648 $ 179,653
Change in unrealized appreciation (depreciation), net 367 - 2,766 3,133
Purchases - 4,267 58,528 62,795
Sales - (3,314 ) (46,100 ) (49,414 )
Balance at September 30, 2024 $ 1,132 $ 23,193 $ 171,842 $ 196,167
Change in unrealized gains (losses) included in net income relating to assets held at end of period $ 367 $ - $ 2,766 $ 3,133
for the nine months ended September 30, 2023 Debt securities Preferred equity and other private investments Private placements Total Level 3 Assets
--- --- --- --- --- --- --- --- --- --- --- ---
Balance at December 31, 2022 $ 325 $ 20,297 $ 115,566 $ 136,188
Change in unrealized appreciation (depreciation), net 177 - (828 ) (651 )
Purchases - 4,550 722 5,272
Sales - (1,946 ) - (1,946 )
Balance at September 30, 2023 $ 502 $ 22,901 $ 115,460 $ 138,863
Change in unrealized gains (losses) included in net income relating to assets held at end of period $ 177 $ - $ (828 ) $ (651 )

Valuation techniques and significant unobservable inputs used in Level 3 fair value measurements were as follows:

as of September 30, 2024 Fair Value Valuation Technique Significant Unobservable Inputs
Debt securities $ 1,132
Preferred equity and other private investments $ 23,193
13,820 Amortized Cost Initial investment less principal recovered
8,982 Market Approach Offered quotes
391 Income Approach Capitalization rate range (7.3% - 7.5%)
Private placements $ 171,842
955 Market Approach - Most recent transaction price Unit price/cost of latest round of financing
20,805 Discounted Cash Flow Method, Market Approach and Subject Company Transaction Method Projected Future Cash Flows<br>Revenue Multiples (range 3.8x - 5.5x)<br>EBITDA Multiples (range 12.5x - 14.5x)
7,540 Market Approach - Most recent transaction price Unit price/cost of latest round of financing
142,344 Discounted Cash Flow Method and Market Approach Projected Future Cash Flows<br>Revenue Multiples (range 4.0x - 6.8x)
198 Market Approach - Most recent transaction price Unit price/cost of latest round of financing
as of December 31, 2023 Fair Value Valuation Technique Significant Unobservable Inputs
--- --- --- --- ---
Debt securities $ 765
Preferred equity and other private investments $ 22,240
17,154 Amortized Cost Initial investment less principal recovered
4,695 Market Approach Offered quotes
391 Income Approach Capitalization rate range (7.3% - 7.5%)
Private placements $ 156,648
8,698 Market Approach - Most recent transaction price Unit price/cost of latest round of financing
25,863 Discounted Cash Flow Method, Market Approach and Subject Company Transaction Method Projected Future Cash Flows<br>Revenue Multiples (range 5.0x - 5.5x)<br>EBITDA Multiples (range 18.0x - 20.0x)
54,452 Discounted Cash Flow Method and Market Approach Projected Future Cash Flows<br>Discount Rate (18.4%)<br>Interest Rate (10.0%)<br>Volatility (15.0%)<br>Risk Free Rate (5.3%)<br>Holding Period (0.6)
67,635 Discounted Cash Flow Method and Market Approach Projected Future Cash Flows<br>Revenue Multiples (range 5.3x - 6.3x)<br>EBITDA Multiples (range 8.5x - 10.5x)
1   Based on the relative fair value of the investments

Note 6. Consolidated Investment Products

Consolidated Investment Products (“CIPs”) consist primarily of private proprietary investment funds which are sponsored by the Company. The Company has no right to the CIPs assets, other than its direct equity investments in them and investment management and other fees earned from them. The liabilities of the CIPs have no recourse to the Company’s assets beyond the level of its direct investment, therefore the Company bears no other risks associated with the CIPs liabilities.

The following supplemental condensed financial information illustrates the consolidating effects of the CIPs on the Company’s financial condition and results of operations as of and for the nine months ended September 30, 2024 and 2023, respectively:

September 30, 2024
Consolidated Company Entities Consolidated Investment Products Eliminations Consolidated
Assets
Cash and cash equivalents $ 18,071 $ - $ - $ 18,071
Fees receivable 6,949 - (1,694 ) 5,255
Investments, at fair value 74,852 - - 74,852
Assets of consolidated investment products
Cash and cash equivalents - 31,115 - 31,115
Investments, at fair value - 1,354,405 - 1,354,405
Other assets - 42,116 - 42,116
Other investments 177,911 - (166,882 ) 11,029
Digital assets 9,029 - - 9,029
Intangible assets, net 45,019 - - 45,019
Goodwill 24,425 - - 24,425
Other assets 8,860 - - 8,860
Total assets $ 365,116 $ 1,427,636 $ (168,576 ) $ 1,624,176
Liabilities, Noncontrolling Interests, and Shareholders’ Equity
Liabilities:
Accounts payable, accrued expenses and other $ 8,056 $ - $ - $ 8,056
Accrued third party distribution expenses 427 - - 427
Deferred revenue 191 - - 191
Liabilities of consolidated investment products
Accounts payable and accrued expenses - 8,428 8,428
Due to affiliates - 1,694 (1,694 ) -
Other liabilities - 406 - 406
Deferred tax liability, net 73,640 - - 73,640
Due to affiliates 9,429 - - 9,429
Operating lease liability 8,001 - - 8,001
Total liabilities 99,744 10,528 (1,694 ) 108,578
Commitments and contingencies
Redeemable noncontrolling interests - 1,278,217 (27,991 ) 1,250,226
Equity interests 265,372 138,891 (138,891 ) 265,372
Total liabilities, noncontrolling interests, and shareholders’ equity $ 365,116 $ 1,427,636 $ (168,576 ) $ 1,624,176
Nine months ended September 30, 2024
--- --- --- --- --- --- --- --- --- --- --- --- ---
Consolidated Company Entities Consolidated Investment Products Eliminations Consolidated
Revenue:
Management and advisory fees $ 41,735 $ - $ (4,458 ) $ 37,277
Other income and fees 700 - 700
Total revenue 42,435 - (4,458 ) 37,977
Operating expenses:
Compensation, related employee benefits, and cost of goods sold 20,299 - - 20,299
Sales, distribution and marketing 8,006 - - 8,006
Depreciation and amortization 1,415 - - 1,415
General and administrative expenses 7,500 - (67 ) 7,433
Expenses of consolidated investment products - 1,584 67 1,651
Total operating expenses 37,220 1,584 - 38,804
Operating income 5,215 (1,584 ) (4,458 ) (827 )
Other income (expense):
Equity in earnings of proprietary funds, net 55,752 - (52,069 ) 3,683
Interest and dividends 1,261 - - 1,261
Other income (expense) (2,857 ) - - (2,857 )
Investment and other income (losses) of consolidated investment products, net - 442,469 - 442,469
Interest and dividend income of consolidated investment products - 17,494 - 17,494
Unrealized (loss) gain on digital assets, net 2,792 - - 2,792
Realized gain on investments, net 342 - - 342
Unrealized gain (loss) on investments net 24,942 - - 24,942
Total other income (expense), net 82,232 459,963 (52,069 ) 490,126
Income (loss) before provision for income taxes 87,447 458,379 (56,527 ) 489,299
Income tax (expense) benefit (70,735 ) - - (70,735 )
Net income (loss) $ 16,712 $ 458,379 $ (56,527 ) $ 418,564
Less: net income attributable to redeemable noncontrolling interests - (401,852 ) - (401,852 )
Net income (loss) attributable to Horizon Kinetics Holding Corporation $ 16,712 $ 56,527 $ (56,527 ) $ 16,712
December 31, 2023
--- --- --- --- --- --- --- --- --- ---
Consolidated Company Entities Consolidated Investment Products Eliminations Consolidated
Assets
Cash and cash equivalents $ 10,477 $ - $ - $ 10,477
Fees receivable 4,453 - (1,149 ) 3,304
Investments, at fair value 37,620 - - 37,620
Assets of consolidated investment products - - - -
Cash and cash equivalents - 59,117 - 59,117
Investments, at fair value - 903,435 - 903,435
Other assets - 19,903 - 19,903
Other investments 103,962 - (96,972 ) 6,990
Digital assets 1,829 - - 1,829
Intangible assets, net 43,876 - - 43,876
Goodwill 19,273 - - 19,273
Other assets 10,393 - - 10,393
Total assets 231,883 982,455 (98,121 ) 1,116,217
Liabilities, Noncontrolling Interests, and Shareholders’ Equity
Liabilities:
Accounts payable, accrued expenses and other $ 3,839 $ - $ - $ 3,839
Accrued third party distribution expenses 1,022 - - 1,022
Deferred revenue 70 - - 70
Liabilities of consolidated investment products - - - -
Accounts payable and accrued expenses - 5,840 - 5,840
Due to affiliates - 1,149 (1,149 ) -
Other liabilities - 160 - 160
Deferred tax liability, net 617 - - 617
Due to affiliates 9,966 - - 9,966
Operating lease liability 7,281 - - 7,281
Total liabilities 22,795 7,149 (1,149 ) 28,795
Commitments and contingencies
Redeemable noncontrolling interests - 882,648 (4,314 ) 878,334
Equity interests 209,088 92,658 (92,658 ) 209,088
Total liabilities, noncontrolling interests, and shareholders’ equity $ 231,883 $ 982,455 $ (98,121 ) $ 1,116,217
Nine months ended September 30, 2023
--- --- --- --- --- --- --- --- --- --- --- --- ---
Consolidated Company Entities Consolidated Investment Products Eliminations Consolidated
Revenue:
Management and advisory fees $ 39,037 $ - $ (2,724 ) $ 36,313
Other income and fees 385 - - 385
Total revenue 39,422 - (2,724 ) 36,698
Operating expenses:
Compensation, related employee benefits, and cost of goods sold 20,823 - - 20,823
Sales, distribution and marketing 7,822 - - 7,822
Depreciation and amortization 1,368 - - 1,368
General and administrative expenses 5,730 - (56 ) 5,674
Expenses of consolidated investment products - 1,144 56 1,200
Total operating expenses 35,743 1,144 - 36,887
Operating income 3,679 (1,144 ) (2,724 ) (189 )
Other income (expense):
Equity in earnings of proprietary funds, net (2,473 ) - 841 (1,632 )
Interest and dividends 468 - - 468
Other income (expense) 27 - - 27
Investment and other income (losses) of consolidated investment products, net - (17,362 ) - (17,362 )
Interest and dividend income of consolidated investment products - 10,357 - 10,357
Realized gain on investments, net 1,409 - - 1,409
Unrealized gain (loss) on investments net (10,738 ) - - (10,738 )
Total other income (expense), net (11,307 ) (7,005 ) 841 (17,471 )
Income (loss) before provision for income taxes (7,628 ) (8,149 ) (1,883 ) (17,660 )
Income tax (expense) benefit 707 - - 707
Net income (loss) $ (6,921 ) $ (8,149 ) $ (1,883 ) $ (16,953 )
Less: net income attributable to redeemable noncontrolling interests - 10,032 - 10,032
Net income (loss) attributable to Horizon Kinetics Holding Corporation $ (6,921 ) $ 1,883 $ (1,883 ) $ (6,921 )

Note 7. Related Party Transactions

As of September 30, 2024 and December 31, 2023, amounts due to or due from the Company to related party affiliates is summarized as follows:

September 30, 2024 December 31, 2023
Receivable Payable Receivable Payable
Horizon Common Inc. $ - $ (6,949 ) $ 17 $ (6,899 )
Kinetics Common Inc. - - 66 -
Kinetics Holding Corporation - - 42 -
Proprietary funds 116 - 120 (7 )
FRMO Corporation - (2,480 ) - (3,040 )
HM Tech - - 2,089 -
Other affiliated entities - - 326 (20 )
$ 116 $ (9,429 ) $ 2,660 $ (9,966 )

For the three and nine months ended September 30, 2024 and 2023, amounts recognized from related party affiliates is summarized as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Revenues Expenses Revenues Expenses Revenues Expenses Revenues Expenses
Proprietary funds $ 10,194 $ - $ 8,377 $ - $ 26,997 $ - $ 25,996 $ -
FRMO Corporation 2 642 - 547 9 1,802 - 1,752
Consensus Mining & Seigniorage Corp 3 - 3 - 9 - 9 -
HM Tech - 3 - 6 - 10 - 23
$ 10,199 $ 645 $ 8,380 $ 553 $ 27,015 $ 1,812 $ 26,005 $ 1,775

Certain co-founders of HK LLC are also shareholders of FRMO Corporation (“FRMO”). FRMO has a right to a 4.2% share of the Company’s gross revenue (prior to any commission sharing agreements) and a 4.95% ownership interest. The Company’s expenses under this agreement are included with Sales, distribution and marketing expenses in the condensed consolidated statement of operations.

The Company has waived, or provides discounted management and advisory fees, for assets under management in proprietary funds or separately managed accounts for Shareholders’ and their direct families, FRMO, Horizon Common Inc., Kinetics Holding Corporation and employees of the Company.

The Company owns an equity interest and has advanced funds in exchange for notes receivable to HM Tech, a service provider for digital asset mining operations. The Company has also recently agreed to guarantee a $0.3 million Promissory Note receivable from HM Tech LLC issued to Consensus Mining & Seigniorage Corporation in the event of default.

Note 8. Stock-Based Compensation and Shareholders’ Equity

No restricted stock units (“RSUs”) or stock options were granted during the three and nine months ended September 30, 2024, respectively. The Company has a de minimis amount of compensation cost and unrecognized compensation cost related to RSUs as of and for the nine months ended September 30, 2024.

Prior to the Merger, as defined in the Horizon Kinetics amended limited liability agreement dated as of May 1, 2011, each of two class memberships (Class A-1 and Class A-2) had certain voting rights, and profits, losses, and distributions were allocated to members as determined by the board of managers in accordance with the amended limited liability agreement. Horizon Kinetics made distributions to members on a quarterly basis, based on their ownership percentage of the respective units outstanding. Horizon Kinetics also authorized the issuance of Class B membership units, but none were issued prior to the Merger.

On July 1, 2024, the Company issued 801,932 Class A-2 membership units in exchange for $25.5 million of assets, net of a $6.8 million deferred tax liability. The assets consisted primarily of cash, investment securities, and proprietary funds contributed by Kinetics Common Inc. and Kinetics Holding Corporation.

Note 9. 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.

Common stock equivalents that have been excluded from the calculation of earnings per share because they would have been anti-dilutive are de minimis for the three and nine months ended September 30, 2024 and 2023, respectively, and have no impact on diluted earnings per share.

Note 10. Segment Information

We operate in two different segments; asset management and consumer products. We have chosen to organize our business around these segments based on 1) differences in the products and services sold, 2) the availability of discrete financial information, and 3) the reports that are regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources. Accounting policies for our segments are the same as those described in Note 3. We evaluate segment performance based on several factors, including income or loss before the provision for income taxes.

The following provides information on our segments for the three and nine months ended September 30:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023
Asset Management Consumer Products Reconciling Amounts Total Asset Management Consumer Products Reconciling Amounts Total
Revenue $ 14,826 $ 542 $ (1,897 ) $ 13,471 $ 12,746 $ - $ (974 ) $ 11,772
Income (loss) before provision for income taxes 31,232 (142 ) 130,391 161,481 25,604 - 95,404 121,008
Depreciation and amortization 455 41 - 496 453 - - 453
Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Asset Management Consumer Products Reconciling Amounts Total Asset Management Consumer Products Reconciling Amounts Total
Revenue $ 41,893 $ 542 $ (4,458 ) $ 37,977 $ 39,422 $ - $ (2,724 ) $ 36,698
Income (loss) before provision for income taxes 87,447 (142 ) 401,994 489,299 (7,629 ) - (10,031 ) (17,660 )
Depreciation and amortization 1,374 41 - 1,415 1,368 - - 1,368
Identifiable assets 356,978 5,767 1,261,869 1,624,614 231,379 - 884,838 1,116,217

As of September 30, 2024 and December 31, 2023, all of the Company’s assets were located in the United States of America.

Note 11. Income Taxes

Prior to July 1, 2024, the Company was not subject to federal or state income taxes as its income and losses are includable in the tax returns of its members. The Company was required to file returns and pay tax in various state and local jurisdictions as a result of its operations or residency. Accordingly, the Company was subject to New York City unincorporated business income tax (“UBT”) and annual limited liability company fees in New York and Delaware. For the nine months ended September 30, 2023, the provision

(benefit) for income taxes was $(707). The deferred tax liabilities consisted primarily of unrealized gains on investments in marketable securities, proprietary funds, and digital assets.

On July 1, 2024, the Company filed to convert from an LLC to a C-Corp for federal and state income taxes. As a result, the Company recognized a deferred income tax expense of $59.7 million related to deferred taxes associated with the basis differences for certain assets, principally unrealized gains in various marketable securities, proprietary funds and digital assets. The provision for income tax for the nine months ended September 30, 2024 is as follows:

Nine Months Ended September 30, 2024
Current provision:
Federal $ 375
State 230
Total current provision 605
Deferred provision:
Federal 46,987
State 23,143
Total deferred provision 70,130
Provision:
Federal 47,362
State 23,373
Total provision $ 70,735

Income tax expense at the statutory tax rate is reconciled to the overall income tax expense for the nine months ended September 30, 2024 as follows:

Nine Months Ended September 30, 2024
Federal income tax from continuing operations at statutory rates 21.0 %
Income prior to C-Corporation conversion (2.0 )%
Income passed through to noncontrolling interests (17.2 )%
State income taxes, net of federal tax effect 0.6 %
Permanent differences 0.0 %
Conversion to C-Corporation status 12.2 %
Other (0.1 )%
Provision for income taxes 14.5 %

The net deferred tax assets and liabilities as of September 30, 2024 are comprised of the following:

September 30, 2024
Deferred tax assets:
Net operating loss carryforwards $ 3,853
Operating lease liabilities 1,734
Other 1,054
Total deferred tax assets 6,641
Deferred tax liabilities:
Digital assets 2,192
Operating lease right-of-use assets 2,480
Investments, at fair value 15,517
Investments in proprietary funds 48,031
Intangible assets and goodwill 12,061
Total deferred tax liabilities 80,281
Deferred tax liability, net $ 73,640

The net deferred tax liability of $617 as of December 31, 2023 relates to deferred tax liabilities arising from investments at fair value, investments in proprietary funds, and digital assets.

Note 12. Lease Liabilities

The Company leases office space in primarily four locations, principally the company’s corporate headquarters. As part of the Merger, the Company acquired an operating lease and sublease agreement with third parties. The Company’s operating leases have remaining lease terms of three to seven years.

The Company’s expected future minimum annual lease payments are as follows:

2024 (remainder) $ 699
2025 2,834
2026 2,834
2027 994
2028 441
Thereafter 864
Total minimum lease payments $ 8,666
Less: imputed interest (665 )
Total operating lease liability $ 8,001

The discount rates used to calculate the Company’s initial lease liability ranged from 0.69% - 5.1%, which were the present value of the lease payments and were equal to the treasury bond rates on the dates the respective leases were signed or acquired. The treasury bond rate used was based on the number of years on the lease including any potential extensions included in the agreements. This risk-free rate applied is a permitted practical expedient under ASC 842.

The Company recognized amortization expense related to all their operating leases in the condensed consolidated statements of operations for the periods ending September 30, 2024 and 2023. This expense represents the amortization of the right-of-use asset associated with the operating leases.

Note 13. Commitments and Contingencies

Mutual and proprietary fund expense reimbursement

The Company has voluntarily agreed to certain expense reimbursement agreements in place with Kinetics Mutual Funds Inc. (“Kinetics Funds”) that are renewed annually by the Investment Adviser at its discretion. Each Kinetics Fund has an agreed upon expense percentage cap (“Cap”) with the Company. When the overall expenses of the Kinetics Funds for the month reach an agreed upon level, any expenses incurred above the Cap are reimbursed by the Company to the Kinetics Funds. In accordance with the private placement memorandums of certain hedge funds the Company manages (the “Funds”), the Investment Adviser has agreed to reimburse any expenses incurred above a predetermined Cap to the Funds. For the three months ended September 30, 2024 and 2023, the Company reimbursed to the Kinetics Funds $488 and $314, respectively. For the nine months ended September 30, 2024 and 2023, the Company reimbursed to the Kinetics Funds $1,181 and $1,206, respectively. These reimbursements are included on the condensed consolidated statement of operations as a reduction of revenue.

Contingencies

The Company and the companies in which it holds ownership interests may be involved in various claims and legal actions in the ordinary course of business. Currently there are no material pending claims or legal actions against the Company or the companies in which it holds ownership interests. The Company records the costs associated with legal fees as such services are rendered.

Note 14. Subsequent events

On November 5, 2024, the Company's Board of Directors declared a cash dividend of $0.053 per share, payable on December 16, 2024 to shareholders of record as of the close of business on November 25, 2024.

The Company has evaluated subsequent events through March 31, 2025, which is the date the condensed consolidated financial statements were available to be issued.

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

The following discussion and analysis should be read in conjunction with the historical consolidated financial statements of HKHC and the related notes included elsewhere in this current report. The historical consolidated financial data discussed below reflect its historical results of operations and financial position. The following discussion and analysis contains forward-looking statements that are subject to known and unknown risks and uncertainties. Actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements due to a number of factors, including those included in the section entitled “Risk Factors” contained elsewhere in this current report describing key risks associated with the business, operations and industry of HKHC. Amounts and percentages presented throughout this section may reflect rounding adjustments and consequently totals may not appear to sum. The items discussed below have had significant effects on many items within HKHC’s consolidated financial statements and affect the comparison of the current period’s activity with those of prior periods.

Overview

HKHC is a research driven, fundamentals-oriented asset manager serving institutions, individuals and financial professionals. It provides investment management services through its wholly-owned subsidiary and registered investment adviser, Horizon Kinetics Asset Management LLC. Through this subsidiary, it manages a number of strategies, most of which are focused on publicly-traded equity securities, but also private investments and digital assets. To accommodate different investing preferences, HKHC’s offerings can be accessed in a variety of ways, including through mutual funds, ETFs, a closed end fund, separately managed accounts that can be customized to the unique investment objectives and risk tolerances of individual clients, and, for qualified investors, via private proprietary partnerships typically known as alternative investments. HKHC raises capital for and manages these strategies, and it earns a management fee that varies among products. In certain instances, the fee it earns is tied to the performance of the account. HKHC also produces a number of research reports and compendia that are sold mainly to institutions, as it believes that the discipline required to produce written research encourages thorough qualitative and quantitative analysis. As of September 30, 2024, the Company had regulatory assets under management ("AUM") of $8.3 billion.

HKHC also manages a portfolio of investment securities for its own benefit, which has historically impacted and is expected to impact future results of operations, often significantly so. As of September 30, 2024, we held investment securities (at fair value) of $74.9 million, which represented 4.6% of total assets. In addition, we have devoted capital to a variety of the proprietary alternative investment funds it manages. As of September 30, 2024, HKHC’s investments in these proprietary funds are $11.0 million, which represented 0.7% of total assets.

In addition to investment management and research activities, HKHC operates two wholly-owned, limited purpose broker-dealers, KBD Securities LLC and Kinetics Funds Distributor LLC, both of which are only used for the marketing and promotion of its investment products. We pay a portion of the fee it earns to these and other third-party firms who assist it in marketing.

Along with investing on behalf of clients, HKHC also uses its own capital to invest along with its clients in many of its proprietary products and makes direct investments in public and private instruments including digital assets. Certain employees do, from time to time, serve as management or as a member of the board of directors of the companies in which we invest.

Primary Sources of Revenue

Management or advisory fees are our primary source of revenue, most of which are based on a specified percentage of clients’ average assets under management. A majority of our expenses, including most of our compensation expense, vary directly with changes in revenue.

The management fees for separately managed accounts are generally calculated on the basis of a percentage of the value of each client’s assets (assets under management) and are charged using either an average daily balance or monthly or quarterly ending balance, and either in arrears or advance.

The Company also earns management fees in its proprietary funds (mutual funds, ETFs, closed-end funds and proprietary partnerships) as compensation for internal fund management and advisory services. The management fees for the proprietary funds vary by fund and investment strategy and are typically approximately between 0.25% and 2.00% of the net asset value of the funds’ underlying investments.

The Company is also entitled to receive incentive fees on proprietary partnerships if certain performance returns have been achieved as stipulated in the governing documents of the applicable fund. Incentive fees are generated when certain returns exceed a previously established high water mark. The incentive fees are calculated as a percentage of the gains experienced, typically 20%, based on the agreement with each partner in the respective fund. Incentive fees are not subject to claw back as a result of performance declines in subsequent periods to the most recent measurement date. Incentive fees, if earned, are recognized upon completion of the contractually determined measurement period, which are generally annually, or when a client redeems their interest. Incentive fees are subject to the uncertainty of market volatility, and as a result, the entire amount of the variable consideration related to incentive fees is constrained until the end of each measurement period when the uncertainty has been resolved. Management and incentive fees earned from consolidated investment products are eliminated from revenue upon consolidation, however the economic benefit to the HKHC shareholders’ is retained through lower amounts attributable to the redeemable noncontrolling interests. Unearned incentive fees resulting from the performance of the Company’s proprietary funds for the nine months ended September 30, 2024 are approximately $23.3 million. These unearned incentive fees are subject to change based on market prices and generally expected to be resolved during the fourth quarter of 2024 once it is probable that a significant reversal of revenue will not occur.

A small number of clients with certain separately managed accounts may pay incentive fees in addition to or in lieu of management fees, if their portfolio achieves positive investment returns, in certain cases, in excess of an agreed benchmark or hurdle rate. Typically, such fees are paid annually upon crystallization or when a client closes their investment and are not accrued prior to being earned. These unearned performance fees are subject to change based on market prices and generally expected to be resolved during the fourth quarter of 2024 once it is probable that a significant reversal of revenue will not occur.

As a result of our merger transaction in August 2024, the Company also earned revenues of $1.4 million from sales of consumer products during the year ended December 31, 2024.

Business Highlights in the third quarter of 2024

Total revenue

  • HKHC’s total revenues continued to grow this quarter as a result of increasing AUM at our proprietary funds, separately managed accounts and mutual funds due to their favorable 2024 performance. Total revenues were also positively impacted by two months of product sales following the acquisition of Scott’s Liquid Gold. These increases were partially offset by lower management and advisory fees due to declines in AUM at our INFL ETF products.

Assets under management

  • AUM for the three months ended September 30, 2024 increased by approximately $0.9 billion, or 12%, to $8.3 billion, due primarily to market value changes of key holdings across the Company’s mutual funds, ETFs and separately managed accounts (SMAs). The market value of Texas Pacific Land Corporation (“TPL”), which is widely held across HKHC’s proprietary funds and SMAs, increased 21% during the quarter resulting in broad increases in AUM. Those increases were partially offset by declines in Grayscale Bitcoin Trust (“GBTC”), which is also widely held across HKHC’s proprietary funds, of 5% during the third quarter.

Investment performance

  • HKHC maintains a portfolio for investment purposes and has also invested substantial capital in its proprietary funds alongside client investors. For the quarter ended September 30, 2024 there was an increase of $11.3 million in the fair value of this portfolio primarily due to the 21% increase in the TPL securities held directly by HKHC. The increase in the fair value of HKHC’s investments is reported in unrealized gain (loss) on investments, net in the accompanying Consolidated Statement of Operations. For the three months ended September 30, 2024, HKHC’s equity in earnings (losses) in proprietary funds was $1.6 million. This equity earnings is the result of several proprietary funds holding primarily TPL assets (Polestar, Horizon Kinetics Hard Assets, Kinetics Institutional Partners and Kinetics Partners). This performance was partially offset by reductions in proprietary funds holding Bitcoin or related assets (Horizon Kinetics Equity Fund Opportunities and Horizon Kinetics Multi-Strategy funds).
  • The Company’s consolidated investment products experienced favorable performance thus far in 2024. Specifically, the Polestar Funds, Horizon Kinetics Equity Opportunities Fund and Horizon Multi-Strategy Fund were the largest contributors collectively representing approximately $387 million of net income for the nine months ended September 30, 2024.

Results of Operations for the three months ended September 30, 2024

Revenues

Management and advisory fees

The Company’s total management and advisory fees increased approximately $1.3 million, or 11%, for the three months ended September 30, 2024 compared to the prior year. The increase is primarily the result of higher management fees resulting from our mutual funds due to higher AUM during the quarter. However, the increase was partially offset from a decline of $0.3 million related to the INFL ETF as the AUM declined from approximately $1.2 billion in 2023 to $1.0 billion at September 30, 2024.

Other income and fees

Other income and fees during the three months ended September 30, 2024 includes primarily revenue from product sales resulting from the acquisition of Scott’s Liquid Gold. The quarter included two months of revenue from these product sales, which accounted for all of the quarterly revenue increase. Other income and fees also includes revenues resulting from the Company’s research services and digital asset mining activities.

Operating Expenses

Compensation, employee benefits, and cost of goods sold

The Company’s operating expenses include employee compensation for investment professionals and other management personnel as well as cost of goods sold for consumer products acquired in the Merger with SLGD. HKHC’s compensation costs for the three months ended September 30, 2024 increased by approximately $1.1 million, or 16%, compared to the prior year, due to higher internal commissions, additional personnel, and $0.4 million of cost of products sold in the current quarter.

Sales, distribution and marketing expenses

For the three months ended September 30, 2024, sales, distribution and marketing expenses increased $0.6 million, or 25%, compared to the prior quarter, as the result of higher amounts of $0.1 million due to FRMO pursuant to its revenue sharing agreement with HKHC, higher platform fees, incentive fee commissions and other management fee commissions earned due to generally increasing AUM and management fees during the quarter, and fulfillment costs associated with sales of consumer products.

Depreciation and amortization

Depreciation and amortization increased slightly for the three months ended September 30, 2024 as compared to the prior year due to additional amortization expense of intangible assets from the Merger with SLGD.

General and administrative expenses

For the three months ended September 30, 2024, general and administrative expenses increased by $1.2 million, or 74%, compared to the prior quarter. The Company continued to experience certain higher accounting, professional, and legal fees during the three months September 30, 2024 in preparation and as a result of the Merger with SLGD. The Company also began incurring Director fee costs and included a partial quarter of SLGD’s general and administrative expenses subsequent to the Merger date of $0.1 million.

Equity income, net

Equity earnings, net was $1.6 million for each of the three months ended September 30, 2024 compared to the prior year. The increase was due primarily to increases in the fair value of holdings at Horizon Kinetics Hard Assets, LLC as compared to the prior year that had declines in fair value.

Interest and dividend income

Interest and dividend income increased by $0.7 million for the three months ended September 30, 2024 as compared to the prior year due to a special dividend received during the quarter from TPL.

Unrealized loss on digital assets, net

Unrealized loss on digital assets, net decreased by $0.1 million for the three months ended September 30, 2024, compared to the prior year, primarily due to decreases in multiple of our smaller digital asset holdings.

Unrealized gain (loss) on investments, net

For the three months ended September 30, 2024, unrealized gains (losses) on investments increased by $2.7 million compared to the prior year. This increase was due primarily to the $8.9 million unrealized gain on TPL stock during the three months ended September 30, 2024 resulting from its approximately 21% increase in its fair value. The increase in unrealized gains during the third quarter of 2024 was higher than the third quarter of 2023 as a result of the higher investment value at the beginning of the quarter due to the KCI contribution as of July 1, 2024 as well as TPL’s 40% increase during the first six months of 2024.

Income tax benefit (expense)

On July 1, 2024, the Company filed to convert from an LLC to a C-Corp for federal and state income taxes. As a result, the Company recognized a deferred income tax expense of $59.7 million related to the tax basis differences for certain assets, principally unrealized gains in various investments, digital assets and indefinite lived intangible assets from the Company’s 2011 merger transaction. Due to primarily to additional unrealized gains of investment securities and proprietary funds during the quarter, the Company recorded an additional $8.9 million additional deferred tax expense.

Redeemable Non-Controlling Interests

Net income attributable to redeemable non-controlling interests in Consolidated Investment Products represents the income attributable to ownership interests that third parties hold in entities that are consolidated within our consolidated financial statements. During 2024 the amounts attributable to noncontrolling interests increased correspondingly to the performance of our proprietary funds, but also includes a reduction with respect to incentive fees earned by Horizon Kinetics as the advisor to the funds.

Consolidated Investment Products

Consolidated Investment Products represented a significant portion of our AUM as of September 30, 2024. The activity of the consolidated investment products is reflected within the consolidated financial statement line items indicated by reference thereto. The impact of consolidation will typically decrease management fees and incentive fees, if any, reported under GAAP to the extent these amounts are eliminated upon consolidation. The assets and liabilities of our Consolidated Investment Products are held within separate legal entities and, as a result, the liabilities of our consolidated investment products are typically non-recourse to us. Generally, the consolidation of our consolidated investment products has a significant gross-up effect on our assets, liabilities and cash flows but has no net effect on the net income attributable to us or our stockholders’ equity.

The following table presents the results of operations of the consolidated investment products:

Three Months Ended September 30,
2024 2023
Expenses of consolidated investment products $ (2,626 ) $ (1,336 )
Investment and other income (losses) of consolidated investment products, net 142,620 105,342
Interest and dividend income of consolidated investment products 8,888 3,540
Net income of consolidated investment products 148,882 107,546
Less: Incentive fees allocated to Horizon Kinetics Holding Corporation - -
Less: Income attributable to Horizon Kinetics Holding Corporation economic interests (18,491 ) (12,142 )
Net income attributable to redeemable non-controlling interests in consolidated funds $ 130,391 $ 95,404

The results of operations of the consolidated investment products primarily represent activities from certain funds that we are deemed to control. When a fund is consolidated, we reflect the revenues and expenses of the entity on a gross basis, subject to eliminations from consolidation. Substantially all of our results of operations related to the consolidated investment products are attributable to ownership interests that third parties hold in those funds. The consolidated investment products may not necessarily be the same funds in each year presented due to changes in ownership, changes in limited partners’ rights, and the creation or termination of funds and entities. Accordingly, such amounts may not be comparable for the periods presented, and in any event have no material impact on net income attributable to Horizon Kinetics Holding Corporation.

Segment Analysis

For segment reporting purposes, revenues and expenses are presented before giving effect to the results of our consolidated investment products and the results attributable to non-controlling interests that we consolidate. As a result, segment revenues from management fees, incentive fees and investment income are different than those presented on a consolidated basis in accordance with generally accepted accounting principles. Revenues recognized from consolidated investment products are eliminated in consolidation and those attributable to the non-controlling interests of joint ventures have been excluded by us. Furthermore, expenses and the effects of other income (expense) are different than related amounts presented on a consolidated basis in accordance with GAAP due to the exclusion of the results of consolidated investment products and the non-controlling interests.

Results of Operations for the nine months ended September 30, 2024

Revenues

Management and advisory fees

HKHC’s total revenues increased approximately $1.0 million, or increased, for the nine months ended September 30, 2024 compared to the prior year. The increase in AUM at certain funds managed by HKHC resulted in increases in the management fees from mutual funds, ETFs, proprietary funds and separately managed accounts. However, there was a decline of $2.3 million related to the INFL ETF as the AUM declined from approximately $1.2 billion in 2023 to $0.6 billion in 2024. Similarly, the Company experienced declines in the AUM at the Paradigm Fund and the Small Cap Opportunities Fund that result in lower management fees of $0.9 million as compared to the nine months ended September 30, 2023. These declines were partially offset by a $0.6 million increase in management fees related to incentive fees that were crystallized as part of investor redemptions from various proprietary funds during the nine months ended September 30, 2024.

Other income and fees

Other income and fees for the nine months ended September 30, 2024 includes primarily revenue from product sales resulting from the acquisition of Scott’s Liquid Gold. The quarter included two months of revenue from these product sales, which accounted for all of the quarterly revenue increase. Other income and fees also includes revenues resulting from the Company’s research services and digital asset mining activities.

Operating Expenses

Compensation, employee benefits, and cost of goods sold

The Company’s operating expenses include employee compensation for investment professionals and other management personnel as well as cost of goods sold for consumer products acquired in the Merger with SLGD. The Company’s compensation costs for the nine months ended September 30, 2024 decreased by approximately $0.5 million, or 3%, compared to the prior year, due to lower internal commissions and were partially offset by additional personnel and cost of products sold.

Sales, distribution and marketing expenses

For the nine months ended September 30, 2024, sales, distribution and marketing expenses increased $0.2 million, or 2%, compared to the prior year, principally the result of lower external commissions with respect to separately managed accounts. The Company also experienced higher mutual fund platform fees of $0.1 million during the period as the company changed certain funds to ETFs during 2023 and a lower residual commission expenses. These decreases were partially offset by increased sub-advisory and marketing expenses at various mutual funds and ETFs managed by HKHC and certain commissions payable for incentive fees earned during the period and fulfillment costs associated with sales of consumer products.

Depreciation and amortization

Depreciation and amortization increased slightly for the nine months ended September 30, 2024 as compared to the prior year due to additional amortization expense of intangible assets from the Merger with SLGD.

General and administrative expenses

For the nine months ended September 30, 2024, general and administrative expenses increased by $1.8 million, or 31%, compared to the prior year, as a result of legal and professional liability expenses associated with a lawsuit filed on November 23, 2022 by TPL against HKHC, Horizon Kinetics Asset Management, LLC and certain other parties to resolve a disagreement over a voting commitment contained in a stockholders’ agreement between the parties. The Company continued to experience certain higher accounting, professional, and legal fees during the three months September 30, 2024 in preparation and as a result of the Merger with SLGD.

Equity earnings, net

Equity earnings, net increased by $5.3 million for the nine months ended September 30, 2024 compared to the prior year. The increase was due primarily to increases in the fair value of holdings at Horizon Kinetics Hard Assets, LLC as compared to the prior year that had declines in fair value.

Interest and dividend income

Interest and dividend income increased by $0.8 for the nine months ended September 30, 2024 as compared to the prior year due to a special dividend received during the quarter from TPL.

Unrealized gain on digital assets, net

Unrealized gain on digital assets, net increased by $2.8 million for the nine months ended September 30, 2024, compared to the prior year, primarily due to the increase in the fair value of Bitcoin. In addition to the increase in the fair value of approximately 50% for the nine months ended September 30, 2024, the value of our digital assets also increased due to the adoption of ASU 2023-08, which resulted in certain expanded disclosures about cryptocurrencies and recording an increase to those digital assets and shareholders' equity of approximately $4.4 million.

Unrealized gain (loss) on investments, net

For the nine months ended September 30, 2024, unrealized gains (losses) on investments increased by $35.7 million compared to the prior year. This increase was due to the 69% unrealized gain on TPL stock during the nine months ended September 30, 2024 as compared to an unrealized loss for the nine months ended September 30, 2023 following TPL’s decrease in market value during the nine months ended September 30, 2023.

Income tax benefit (expense)

On July 1, 2024, the Company filed to convert from an LLC to a C-Corp for federal and state income taxes. As a result, the Company recognized a deferred income tax expense of $59.7 million related to deferred taxes associated with the basis differences for certain assets, principally unrealized gains in various investments, digital assets and indefinite lived intangible assets from the Company’s 2011 merger transaction. Due to primarily to additional unrealized gains of investment securities and proprietary funds during the quarter, the Company recorded an additional $8.9 million additional deferred tax expense. The provision for (benefit from) income taxes prior to the July 1, 2024 conversion to a C-Corp was not significant.

Redeemable Non-Controlling Interests

Net income attributable to redeemable non-controlling interests in Consolidated Investment Products represents the income attributable to ownership interests that third parties hold in entities that are consolidated within our consolidated financial statements. During 2024 the amounts attributable to noncontrolling interests increased correspondingly to the performance of our proprietary funds, but also includes a reduction with respect to incentive fees earned by Horizon Kinetics as the advisor to the funds.

Consolidated Investment Products

Consolidated Investment Products represented a significant portion of our AUM as of September 30, 2024. The activity of the consolidated investment products is reflected within the consolidated financial statement line items indicated by reference thereto. The impact of consolidation also typically will decrease management fees and incentive fees reported under GAAP to the extent these amounts are eliminated upon consolidation. The assets and liabilities of our Consolidated Investment Products are held within separate legal entities and, as a result, the liabilities of our consolidated investment products are typically non-recourse to us. Generally, the consolidation of our consolidated investment products has a significant gross-up effect on our assets, liabilities and cash flows but has no net effect on the net income attributable to us or our stockholders’ equity.

The following table presents the results of operations of the consolidated investment products:

Nine Months Ended September 30,
2024 2023
Expenses of consolidated investment products $ (6,617 ) $ (3,861 )
Investment and other income (losses) of consolidated investment products, net 442,469 (17,362 )
Interest and dividend income of consolidated investment products 17,494 10,357
Net income of consolidated investment products 453,346 (10,866 )
Less: Incentive fees allocated to Horizon Kinetics Holding Corporation - -
Less: Income attributable to Horizon Kinetics Holding Corporation economic interests (51,494 ) 834
Net income attributable to redeemable non-controlling interests in consolidated funds $ 401,852 $ (10,032 )

Regulated Subsidiaries

Many of our principal subsidiaries are subject to extensive regulation in the United States and elsewhere. Horizon Kinetics Asset Management LLC, a registered U.S. investment advisor, is regulated by the SEC. Kinetics Funds Distributors LLC and KBD Securities LLC, registered U.S. limited purpose broker dealers, are regulated by the Financial Industry Regulatory Authority. The Company may also be subject to regulation in other jurisdictions where it operates.

Liquidity and Capital Resources

At September 30, 2024, the Company had $18.1 million of cash and cash equivalents. We believe that our cash and cash equivalents at September 30, 2024 will be sufficient to fund operations for at least one year from the date of this report.

The Company also had $74.9 million of investments, at fair value. These investments include $51 million held in a single security, approximately 57,696 shares of TPL. During the nine months ended September 30, 2024 the fair value of HKHC’s TPL holdings increased due to the capital contribution on July 1 that included shares of TPL and due to the approximately 68.8% year-to-date increase in the fair value of TPL common shares. The Company may be limited in its ability to sell this security due to our status as an affiliate of TPL.

In the normal course of business, we may engage in off-balance sheet arrangements, including transactions in derivatives, guarantees, commitments, indemnifications, and potential contingent repayment obligations. We do not have any off-financial position arrangements that would require us to fund losses or guarantee target returns to clients.

The Company’s Board of Directors has determined an expected quarterly dividend policy that is based on the Company’s quarterly performance. The Board of Director’s may consider other relevant factors that are relevant to the final determination of a quarterly dividend, if any. On November 5 2024, the Company's Board of Directors declared a cash dividend of $0.053 per share, payable on December 16, 2024 to shareholders of record as of the close of business on November 25, 2024.

The following table and discussion summarize our Condensed Consolidated Statement of Cash Flows:

Nine Months Ended September 30,
2024 2023 Variance
As Restated As Restated As Restated
Net cash (used in) provided by operating activities $ (11,183 ) $ 23,742 $ (34,925 )
Net cash provided by investing activities 2,582 1,406 1,176
Net cash used in financing activities (11,807 ) (8,858 ) (2,949 )
$ (20,408 ) $ 16,290 $ (36,698 )

Operating cash flows

Net cash provided by operating activities decreased by $34.9 million for the nine months ended September 30, 2024 compared to the prior year. The decrease was primarily the result of earnings, net of and working capital changes during the period. The net income (loss) for each of the nine month periods were largely offset by non-cash adjustments related to deferred income tax expense related to the Company’s conversion from an LLC to a C-Corp, equity in earnings (losses) of affiliates, and net unrealized gains (losses) on investments or digital assets.

Investing cash flows

Net cash provided by investment activities increased by $1.2 million for the nine months ended September 30, 2024 as compared to the prior year. The increase was primarily the result of cash acquired from SLGD and offset by lower levels of investment purchases and lower proceeds from the sale of certain investments compared to the prior year.

Financing cash flows

The Company’s cash flows from financing activities were cash contributions from affiliates and were offset by distributions paid to members of Horizon Kinetics. The Company ceased payment of distributions subsequent to the closing of the Merger.

Contractual Cash Obligations and Other Commercial Commitments

The Company’s contractual cash obligations and other commercial commitments is limited to certain operating leases for office space as summarized below:

Payments Due by Period
Total 2024 (remainder) 2025 and<br>2026 2027 and 2028 After 2028
(dollars in thousands)
Contractual Cash Obligations:
Operating leases $ 8,666 $ 699 $ 5,668 $ 1,435 $ 864
Total contractual obligations $ 8,666 $ 699 $ 5,668 $ 1,435 $ 864

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of September 30, 2024, we conducted an evaluation, under the supervision and with the participation of our 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, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2024 due to the material weaknesses in our internal control over financial reporting described below.

Notwithstanding the material weaknesses, which still existed as of September 30, 2024, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the condensed 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 Weaknesses

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 was previously reported at Scott’s Liquid Gold was identified as of June 30, 2023 related to our finance 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. During 2024, management identified a material weakness with respect to the review and consolidation in the financial statements of certain proprietary funds that represent variable interest entities. In addition, Horizon Kinetics has previously identified material weaknesses related to (a) producing timely account reconciliations and valuations of certain significant accounts, including certain intercompany and related party accounts and related elimination entries, (b) a lack of segregation of duties in certain areas of the financial reporting process, including a lack of adequate supervisory review of technical accounting implementations, lack of IT general controls over certain third-party systems, conclusions over critical accounting estimates, and review of the consolidated financial statements, and (c) insufficient supervisory review and approval of key controls over disbursements and accounts payable. These material weaknesses still existed as of September 30, 2024.

During 2024, the Company hired a Chief Financial Officer and other trained professionals to our finance department, who have technical accounting expertise to process and account for complex, non-routine transactions in accordance with GAAP. The process of remediating these material weaknesses will continue until these staff and others operate for a period of time, our controls are 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.

Changes in Internal Control over Financial Reporting

During 2024, the Company hired a Chief Financial Officer and other trained professionals to our finance department who have technical accounting expertise to process and account for complex, non-routine transactions in accordance with GAAP.

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
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* Certification of Murray Stahl pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification of Mark Herndon pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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 Document.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Furnished, not filed.

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.

HORIZON KINETICS HOLDING CORPORATION
Date: March 31, 2025 By: /s/ Murray Stahl
Murray Stahl<br>Chief Executive Officer
Date: March 31, 2025 By: /s/ Mark A. Herndon
Mark A. Herndon<br>Chief Financial Officer

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Murray Stahl, certify that:

  1. I have reviewed this Quarterly Report on Form 10-Q of Horizon Kinetics Holding Corporation;

  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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) 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

d) 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

  1. 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 the 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: March 31, 2025 /s/ Murray Stahl
Chief Executive Officer and Chief Investment Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Mark Herndon, certify that:

  1. I have reviewed this Quarterly Report on Form 10-Q of Horizon Kinetics Holding Corporation;

  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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) 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

d) 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

  1. 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 the 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: March 31, 2025 /s/ Mark Herndon
Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Kinetics Holding Corporation (“HKHC”) on Form 10-Q for the nine months ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Murray Stahl, Chief Executive Officer and Chief Investment Officer of HKHC, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  1. The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, (15 U.S.C. 78m(a)); and

  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of HKHC.

Dated: March 31, 2025 /s/ Murray Stahl
Chief Executive Officer and Chief Investment Officer

EX-32.2

EXHIBIT 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Kinetics Holding Corporation (“HKHC”) on Form 10-Q for the nine months ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark Herndon, Chief Financial Officer of HKHC, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  1. The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, (15 U.S.C. 78m(a)); and

  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of HKHC.

Dated: March 31, 2025 /s/ Mark Herndon
Chief Financial Officer

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