Horizon Kinetics Holding Corp 10-K for FY2021

About this 10-K

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Horizon Kinetics Holding Corp (HKHC)

10-K 2022-03-31 For: 2021-12-31

Added on April 04, 2026

Horizon Kinetics Holding Corp filed this 10-K on March 31, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $33.08M; up 14.2% from $28.96M a year earlier
Net loss: $11.09M; compared with a net loss of $1.55M a year earlier

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Colorado	84-0920811
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8400 E. Crescent Parkway, Suite 450, Greenwood Village, CO	80111
(Address of principal executive offices)	(Zip Code)


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

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	4
Item 1B.	Unresolved Staff Comments	8
Item 2.	Properties	8
Item 3.	Legal Proceedings	8
Item 4.	Mine Safety Disclosures	8
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 6.	RESERVED	9
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 8.	Financial Statements and Supplementary Data	16
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	38
Item 9A.	Controls and Procedures	38
Item 9B.	Other Information	38
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	38
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	39
Item 11.	Executive Compensation	39
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	39
Item 13.	Certain Relationships and Related Transactions, and Director Independence	39
Item 14.	Principal Accounting Fees and Services	39
PART IV
Item 15.	Exhibits and Financial Statement Schedules	39
Item 16.	Form 10-K Summary	41

	% of Net Sales
	2021			2020
Household		42.8	%		43.9	%

Health and beauty care
Distributed		21.5	%		22.8	%
Manufactured		35.7	%		33.3	%
Total health and beauty care		57.2	%		56.1	%

Three Months Ended	2021				2020
	High		Low		High		Low
March 31	$	3.03	$	1.78	$	2.50	$	1.25
June 30		3.00		2.28		2.05		1.28
September 30		3.00		2.00		1.82		1.51
December 31		2.08		1.00		1.84		1.52

	For the Year Ended December 31, (in thousands)
							Increase / (Decrease)
	2021			2020			$			%
Net sales	$	33,081		$	28,958		$	4,123			14.2	%
Cost of sales		19,082			16,433			2,649			16.1	%
Impairment of inventories		404			876			(472	)		(53.9	%)
Total cost of sales		19,486			17,309			2,177			12.6	%
Gross profit		13,595			11,649			1,946			16.7	%
Gross margin		41.1	%		40.2	%

Operating expenses:
Advertising		639			702			(63	)		(9.0	%)
Selling		9,797			7,546			2,251			29.8	%
General and administrative		4,611			4,724			(113	)		(2.4	%)
Intangible asset amortization		1,111			1,005			106			10.5	%
Impairment of goodwill and intangible assets		6,294			-			6,294			100.0	%
Impairment of property and equipment		-			107			(107	)		(100.0	%)
Total operating expenses		22,452			14,084			8,368			59.4	%
Loss from operations		(8,857	)		(2,435	)		(6,422	)		(263.7	%)

Interest expense		(373	)		(216	)		(157	)		(72.7	%)
Other income		-			350			(350	)		(100.0	%)
Loss before income taxes and discontinued operations		(9,230	)		(2,301	)		(6,929	)		(301.1	%)
Income tax (expense) benefit		(1,008	)		707			(1,715	)		(242.6	%)
Loss from continuing operations		(10,238	)		(1,594	)		(8,644	)		(542.3	%)
(Loss) income from discontinued operations, net of taxes		(853	)		43			(896	)		(2,083.7	%)
Net loss	$	(11,091	)	$	(1,551	)	$	(9,540	)		(615.1	%)

	Intangible Assets		Goodwill		Total
Detergent	$	1,085	$	593	$	1,678
Shampoo		2,966		1,520		4,486
All-Purpose		130		-		130
	$	4,181	$	2,113	$	6,294

	Year Ended
	December 31,
	2021			2020
Net sales	$	33,081		$	28,958
Cost of sales		19,082			16,433
Impairment of inventories		404			876
Total cost of sales		19,486			17,309
Gross Profit		13,595			11,649

Operating expenses:
Advertising		639			702
Selling		9,797			7,546
General and administrative		4,611			4,724
Intangible asset amortization		1,111			1,005
Impairment of goodwill and intangible assets		6,294			-
Impairment of property and equipment		-			107
Total operating expenses		22,452			14,084
Loss from operations		(8,857	)		(2,435	)

Interest expense		(373	)		(216	)
Other income		-			350
Loss before income taxes and discontinued operations		(9,230	)		(2,301	)
Income tax (expense) benefit		(1,008	)		707
Loss from continuing operations		(10,238	)		(1,594	)
(Loss) income from discontinued operations, net of taxes		(853	)		43
Net loss	$	(11,091	)	$	(1,551	)

Basic and diluted net loss per common shares:
Loss from continuing operations	$	(0.81	)	$	(0.13	)
Loss from discontinued operations	$	(0.07	)	$	0.00
Net loss	$	(0.88	)	$	(0.13	)

Weighted average shares outstanding:
Basic and diluted		12,678			12,635

	Common Stock
	Shares		Amount		Capital in Excess of Par			Retained Earnings			Total
Balance, January 1, 2020		12,462	$	1,246	$	7,250		$	15,121		$	23,617
Stock-based compensation		-		-		176			-			176
Stock options exercised		51		5		62			-			67
Restricted stock unit vesting		105		11		145			-			156
Net loss		-		-		-			(1,551	)		(1,551	)
Balance, December 31, 2020		12,618	$	1,262	$	7,633		$	13,570		$	22,465
Stock-based compensation		-		-		(9	)		-			(9	)
Stock options exercised		45		4		53			-			57
Restricted stock unit vesting		64		7		112			-			119
Net loss		-		-		-			(11,091	)		(11,091	)
Balance, December 31, 2021		12,727	$	1,273	$	7,789		$	2,479		$	11,541

	December 31, 2021		December 31, 2020
Cash	$	770	$	5
Restricted Cash		500		-
	$	1,270	$	5

	December 31, 2021		December 31, 2020
Trade promotions	$	1,242	$	2,153
Allowance for doubtful accounts		14		183
	$	1,256	$	2,336

	2021		2020
Assets
Current assets:
Inventories	$	-	$	180

Goodwill		-		1,457
Intangible assets, net		-		4,719
Total assets	$	-	$	6,356

Customer relationships	$	2,663
Trade names		1,064
Formulas and batching processes		488
Non-compete		12
Goodwill		1,457
	$	5,684

Proceeds from sale of Dryel		4,850
Loss on sale	$	(834	)

	2021			2020
Finished goods	$	5,499		$	3,583
Raw materials		1,186			1,151
Impairment of raw materials		(1,008	)		(746	)
	$	5,677		$	3,988

	2021			2020
Office furniture and equipment	$	151		$	151
Other	-				34
		151			185
Less accumulated depreciation		(144	)		(167	)
	$	7		$	18

Inventories	$	1,279
Intangible assets		7,235
Goodwill		2,050
Total assets acquired	$	10,564

	Intangible Assets		Useful Life
Customer relationships	$	4,500		9 years
Trade names		1,780		20 years
Formulas and batching processes		930		8 years
Non-compete		25		5 years
	$	7,235

	As of December 31, 2021						As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Intangible assets:
Customer relationships	$	2,103	$	329	$	1,774	$	7,655	$	2,118	$	5,537
Trade names		1,850		151		1,699		3,872		781		3,091
Formulas and batching processes		1,370		452		918		1,369		319		1,050
Internal-use software (not placed in service)		756		-		756		286		-		286
Non-compete agreement		48		35		13		48		28		20
	$	6,127	$	967	$	5,160	$	13,230	$	3,246	$	9,984

2022	$	420
2023		420
2024		419
2025		416
2026		416
Thereafter		2,313
Total	$	4,404

	Revolving Credit Facility		Term Loan		Total
2022	$	-	$	1,000	$	1,000
2023		214		2,000		2,214
Total minimum principal payments	$	214	$	3,000	$	3,214

	2021			2020
Operating lease information:
Operating lease cost	$	411		$	355
Operating cash flows from operating leases		411			61
Net assets obtained in exchange for new operating lease liabilities		-			3,156

Weighted average remaining lease term in years		8.91			9.86
Weighted average discount rate		5.1	%		5.1	%

	2021			2020
Current provision (benefit):
Federal	$	60		$	(458	)
State		(21	)		(28	)
Total current provision (benefit)		39			(486	)
Deferred provision (benefit):
Federal		740			(141	)
State		229			(80	)
Total deferred provision (benefit)		969			(221	)
Provision (benefit):
Federal		800			(599	)
State		208			(108	)
Total provision (benefit)	$	1,008		$	(707	)

	2021			2020
Federal income tax at statutory rates	$	(1,939	)	$	(480	)
State income taxes, net of federal tax effect		(179	)		(75	)
Permanent differences		(6	)		2
Nondeductible stock-based compensation		-			5
Rate difference in NOL Carryback		11			(167	)
Other		3			8
Change in valuation allowance		3,118			-
Provision (benefit) for income taxes	$	1,008		$	(707	)

	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	531		$	42
Accounts receivable		30			176
Inventories		410			238
Accrued vacation and bonus		161			60
Intangibles and Goodwill		1,771			322
Operating lease liabilities		697			801
Other		168			59
Total deferred tax assets		3,768			1,698
Deferred tax liabilities:
Operating lease right-of-use assets		(629	)		(729	)
Prepaid expenses		(21	)		-
Total deferred tax liabilities		(650	)		(729	)
Net deferred tax asset, before allowance		3,118			969

Valuation allowance		(3,118	)		-
Net deferred tax asset	$	-		$	969

			Expiration Years
Net operating losses, state (After December 31, 2017)	$	2,198	Do not expire
Tax credits, federal	$	4	2042

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
2015 Plan
Maximum number of shares under the plan		2,000
Outstanding, December 31, 2019		675		$	1.66	3.3 years	$	231
Granted		-		$	-
Exercised		(51	)	$	1.31
Cancelled/Expired		(154	)	$	1.33
Outstanding, December 31, 2020		470		$	1.80	3.3 years	$	125
Exercisable, December 31, 2020		389		$	1.71	3.4 years	$	125
Available for issuance, December 31, 2020		1,530
Granted		-		$	-
Exercised		(45	)	$	1.26
Cancelled/Expired		(118	)	$	2.17
Outstanding, December 31, 2021		307		$	1.80	2.6 years	$	45
Exercisable, December 31, 2021		289		$	1.76	2.7 years	$	45
Available for issuance, December 31, 2021		1,693

Range of Exercise Prices	Number of Options (in thousands)		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price
2015 Plan
$1.20-$1.25		94	3.7 years	$	1.25
$1.26-$1.38		40	4.9 years	$	1.26
$1.80-$2.25		173	1.5 years	$	2.15
Total		307	2.6 years	$	1.66

	2021		2020
Common shares outstanding, beginning of the period		12,618		12,462
Weighted average common shares issued		60		173
Weighted average number of common shares outstanding		12,678		12,635
Dilutive effect of common share equivalents		-		-
Diluted weighted average number of common shares outstanding		12,678		12,635

	2021
	Household Products			Health and Beauty Care Products			Corporate		Total
Net sales	$	14,152		$	18,929		$	-	$	33,081
Loss from continuing operations		(3,963	)		(4,894	)		-		(8,857	)
Identifiable assets		13,207			6,398			1,264		20,869
Capital and intangible asset expenditures		-			-			469		469
Depreciation and amortization		1,202			618			-		1,820

	2020
	Household Products			Health and Beauty Care Products			Corporate		Total
Net sales	$	12,003		$	16,955		$	-	$	28,958
Income (loss) from operations		52			(2,487	)		-		(2,435	)
Identifiable assets		20,413			11,068			2,075		33,556
Capital and intangible asset expenditures		10,529			-			17		10,546
Depreciation and amortization		802			628			-		1,430

SCOTT’S LIQUID GOLD-INC., a Colorado corporation

By:		/s/ Tisha Pedrazzini
		Tisha Pedrazzini, President (Principal Executive Officer)

By:		/s/ David M. Arndt
		David M. Arndt, Chief Financial Officer
		(Principal Financial and Chief Accounting Officer)
Date:		March 31, 2022

Date	Name and Title	Signature
March 31, 2022	Tisha Pedrazzini,
	Director and President	/s/ Tisha Pedrazzini
March 31, 2022	Leah S. Bailey, Director	Tisha Pedrazzini for herself and as
March 31, 2022	Rimmy R. Malhotra, Director	Attorney-in-Fact for the named directors
March 31, 2022	Daniel J. Roller, Director	who constitute all of the members of the
		the Board of Directors and for the named officers


with a copy to:	Holland & Hart LLP 555 17th Street Denver, CO 80202 E-mail: abowler@hollandhart.com Attention: Amy L. Bowler
If to Buyer:	Iron Out, Inc. d/b/a Summit Brands 6714 Pointe Inverness Way, Suite 200 Fort Wayne, Indiana 46804 Facsimile: 260-483-2070 E-mail: jharter@summitbrands.com Attention: Joel E. Harter, CEO
with a copy to:	Carson LLP 301 W. Jefferson Blvd., Suite 200 Fort Wayne, Indiana 46802 Facsimile: 260-423-4329 E-mail: senk@carsonllp.com & gabrys@carsonllp.com Attention: Jeremy V. Senk & Janelle E. Gabrys

Signature	Title	Date
/s/ Tisha Pedrazzini
Tisha Pedrazzini	President	March 31, 2022
/s/ Leah S. Bailey
Leah S. Bailey	Director	March 31, 2022
/s/ Rimmy R. Malhotra
Rimmy R. Malhotra	Director	March 31, 2022
/s/ Daniel J. Roller
Daniel J. Roller	Director	March 31, 2022

Dated: March 31, 2022		/s/ Tisha Pedrazzini
		Tisha Pedrazzini
		President