SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 31, 2008
SCOTT'S LIQUID GOLD-INC.
(Exact name of Registrant as specified in its charter)
Colorado 001-13458 84-0920811
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
4880 Havana Street, Denver, CO 80239
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 373-4860
Check the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
On October 31, 2008, Scott's Liquid Gold-Inc. entered into a Financing
Agreement with Summit Financial Resources, L.P. (the "Financing
Agreement") providing for a line of credit up to $1,200,000 secured
primarily by accounts receivable, inventory, any lease in which the
Company is a lessor, all investment property and guarantees by the
Company's active subsidiaries. Under the Financing Agreement, the
lender will make loans at the Company's request and in the lender's
discretion (a) based on purchases of Accounts of the Company by the
lender, with recourse against the Company and an advance rate of 70%
(or such other percentage determined by lender in its discretion),
and (b) based on Acceptable Inventory not to exceed certain amounts,
including an aggregate maximum of $250,000. The Company obtained
the line of credit to improve working capital.
The line of credit is for a term of one year, renewable for additional
one- year terms unless the Company or the lender provides written
notice of non-renewal at least 60 days prior to the end of the current
Financing Period. The Company may also elect to terminate a Financing
Period earlier and pay the lender a supplemental fee of the number of
months remaining in the financing period multiplied by a monthly
minimum fee which is $1,800 per month (based on the current maximum
credit line).
The line of credit bears interest at a rate of 1% over the prime rate
(as published in the Wall Street Journal) for the accounts receivable
portion of the line of credit and 3% over the prime rate for the
inventory portion of the line of credit. The prime rate adjusts with
changes to the rate. In addition, there are collateral management
fees of 0.28% for each 10-day period that an advance on an accounts
receivable invoice remains outstanding and a 1.35% collateral
management fee on the average monthly loan outstanding on the
inventory portion of any advance.
The Financing Agreement provides that no Change in Control of the
Company or any of its active subsidiaries shall occur except with the
prior written consent of the lender. Events of Default include, but
are not limited to, a failure to make a payment when due or to
perform an obligation under the Financing Agreement, or a default
occurring on any indebtedness of the Company or any guarantor.
The Financing Agreement and guarantees of the subsidiaries are
attached as exhibits to this Report. The above description of the
Financing Agreement and the guarantees is subject to, and is qualified
in its entirety by reference to, such exhibits.
Item 9.01. Financial Statements and Exhibits.
Exhibits.
The following exhibits accompany this Report.
Exhibit No. Document
10.1 Financing Agreement and Addendum to Financing
Agreement, both dated October 31, 2008, between Summit
Financial Resources, L.P. and the Company
10.2 Guarantees, dated October 31, 2008, by SLG Plastics,
Inc. Advertising Promotions Incorporated, Colorado
Product Concepts, Inc., Neoteric Cosmetics, Inc.,
and SLG Chemicals, Inc.
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 hereunto duly authorized.
SCOTT'S LIQUID GOLD-INC.
(Registrant)
Date: November 3, 2008 /s/ Jeffry B. Johnson
-----------------------------
By: Jeffry B. Johnson
Chief Financial Officer and
Treasurer