What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 129 added, 104 removed, 446 unchanged (34% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of goods sold

3 unchanged sentences

Operating income

Other income, net

Interest expense

Other income (expense):

Gain on forgiveness of Federal Loan

Write-off of notes receivable and accrued interest receivable

Income before income taxes

6 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

1 unchanged sentence

Trade receivables, net of allowances

Notes receivable

Current right-of-use assets from operating leases

36 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Adjustments to reconcile net income to net cash provided by operations:

1 unchanged sentence

Bad debt expense

Gain on forgiveness of Federal Loan

( 1,668,200 )

Write-off of note receivables and accrued interest receivable

Changes in operating assets and liabilities:

2 unchanged sentences

( 1,661,332 )

Prepaid expenses

( 2,647,432 )

( 1,108,062 )

Prepaid expenses

Accounts payable and accrued expenses

5 unchanged sentences

Purchase of property and equipment

( 3,064,277 )

( 1,882,591 )

Acquisition of CExchange assets and liabilities, net of cash acquired

3 unchanged sentences

Payments on notes payable, related party

Payments on notes payable

Payments on notes payable, retail buildings

Payments on notes payable, office building

Proceeds from notes to purchase property

Proceeds from Paycheck Protection Program Note

Net cash provided by (used in) financing

Net cash provided by financing

Net change in cash and cash equivalents

( 1,086,924 )

Cash and cash equivalents, beginning of period

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months ended June 30, 2020 and 2021

For the Three Months ended September 30, 2020 and 2021

Preferred Stock

Stockholders’

Balances at March 31, 2020

$ ( 28,073,598 )

Balances at June 30, 2020

$ ( 27,507,424 )

Preferred Stock

Stockholders'

Balances at March 31, 2021

Balances at September 30, 2020

$ ( 24,522,600 )

Preferred Stock

Balances at June 30, 2021

$ ( 18,702,420 )

Balances at September 30, 2021

$ ( 15,596,019 )

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months ended June 30, 2020 and 2021

For the Nine Months ended September 30, 2020 and 2021

Preferred Stock

2 unchanged sentences

$ ( 29,247,747 )

Balances at June 30, 2020

Balances at September 30, 2020

$ ( 24,522,600 )

3 unchanged sentences

$ (22,863,804 )

Balances at June 30, 2021

Balances at September 30, 2021

$ ( 15,596,019 )

9 unchanged sentences

Certain reclassifications were made to the prior year’s consolidated financial statements to conform to the current year presentation.

The information provided as of June 30, 2021 in these notes to the interim condensed consolidated financial statements is unaudited.

The information provided as of September 30, 2021 in these notes to the interim condensed consolidated financial statements is unaudited.

NOTE 2 — PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS

15 unchanged sentences

ECHG, through its wholly owned holding company CEX Holdings, LLC (“CEX”), purchased substantially all the assets, together with certain liabilities which exceeded the purchased assets by $ 335,585 , of CExchange LLC (“CExchange”) pursuant to an asset purchase agreement (the “CExchange Asset Purchase Agreement”) on June 9, 2021 (the “CExchange Transaction”) in exchange for forgiving $ 1,500,000 in debt plus accrued interest owed to ECHG.

Following the CExchange Tranaction, the purchased assets and liabilities were then transferred and assigned to Teladvance.

Following the CExchange Transaction, the purchased assets and liabilities were then transferred and assigned to Teladvance.

CExchange was a leader in electronics-trade-in services for retailers, providing in-store and online solutions for many of the major consumer electronics retailers in the United States.

3 unchanged sentences

Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”).

ECHG has determined that the assets purchased and the liabilities assumed, through the CExchnage Transaction, have an approximate fair value due to the their short-term nature.

ECHG has determined that the assets purchased and the liabilities assumed, through the CExchange Transaction, have an approximate fair value due to the their carrying value.

ECHG, through its subsidiaries, primarily buys electronic components from business and other organizations, such as school districts, for end-of-life recycling and resale, or to add life to electronic devices by data destruction and refurbishment for reuse.

20 unchanged sentences

ECHG has its own, separate financial information to perform goodwill impairment testing at least annually or if events indicate that those assets may be impaired.

As a result of the current market and economic conditions related to COVID-19, in accordance with step 1 of the guidelines set forth in ASC 350-20-35-3A, the Company concluded there were no impairments of goodwill that resulted from triggering events due to COVID-19 as of June 30, 2021.

The Company will continue to evaluate goodwill for the ECHG segment.

3 unchanged sentences

There have been no other adjustments or impairment charges to goodwill, other than the CExchange Transaction, since the allocation on May 20, 2019.

As of June 30, 2021 and 2020, goodwill was $ 3,258,586 and $ 1,367,109 , respectively.

As of Septemeber 30, 2021 and 2020, goodwill was $ 3,258,586 and $ 1,367,109 , respectively.

Recent Accounting Pronouncements

6 unchanged sentences

A summary of inventories is as follows:

September 30,

NOTE 5 — NOTES RECEIVABLE

ECHG entered into an agreement with CExchange on February 15, 2020, to lend $ 1,500,000 bearing interest at eight and one-half percent ( 8.5 %) per annum with interest only payments due quarterly.

The loan matures on February 20, 2023.

The parties also agreed to warrant and call-option agreements to acquire all of CExchange’s equity interests upon the occurrence of certain events and on certain conditions.

On November 7, 2020, ECHG entered into an amended agreement to increase the loan from $1,500,000 to $2,100,000.

On April 14, 2021, ECHG entered into a second agreement with CExchange to lend an additional $ 300,000 bearing interest at four percent ( 4 %) per annum to be repaid, principal and accrued interest, upon the occurrence of certain events or upon demand by ECHG.

On April 14, 2021, ECHG entered into a second agreement with CExchange to lend an additional $ 300,000 bearing interest at four percent ( 4 %) per annum with interest only payments due quarterly, to be repaid, principal and accrued interest, upon the occurrence of certain events or upon demand by ECHG.

On June 9, 2021, ECHG, through CEX, exercised their rights under the warrant and call-option agreements and purchased substantially all of the assets and certain liabilities of CExchange in exchange for ECHG’s cancellation and forgiveness of $ 1,500,000 of the outstanding principal amount under the loan agreement originally dated February 15, 2020 and accrued and unpaid interest thereunder of $ 55,892 .

The remaining unpaid principal amount of $ 900,000 , and accrued and unpaid interest under the loans, collectively, remain as notes receivable and accrued interest receivable.

We expect to collect the remaining balance during the third or fourth fiscal quarters of 2021, and therefore ECHG is classifying the balance as a current asset.

We subsequently performed impairment evaluations on the two notes after management learned that the two notes may not be recoverable.

Using the guidance provided, management has concluded that ECHG should reserve the full amount of the outstanding and unpaid notes receivable of $ 900,000 , and write-off the outstanding and unpaid accrued interest associated with the notes receivable totaling $49,174.

The notes receivable of $900,000 and $ 49,174 of accrued interest receivable were written-off to other expense, write-off of notes receivable and accrued interest receivable as of September 30, 2021.

ECHG entered into an agreement with Committed Agency, LLC (“Committed Agency”) on February 4, 2021, pursuant to which it agreed (the “CA Facility Agreement”) to provide Committed Agency a line-of-credit not to exceed $ 1,000,000 (the “CA Facility”).

Committed Agency intends to, directly or indirectly, sell or dispose of electronic devices previously owned by major electronic carriers.

In addition to the CA Facility Agreement, ECHG has contracted with Committed Agency beginning February 4, 2021 to exclusively facilitate their sales through the Company’s warehousing and cleaning of electronic devices, wiping of existing data, and inspecting, packaging and shipping of devices to purchasers, in exchange for which ECHG will receive a per unit service fee (the “CA Service Agreement”).

The CA Service Agreement will terminate no later than July 30, 2021.

Under the terms of the agreement, the borrower cannot borrow any additional funds, under this facility, after May 31, 2021.

Committed Agency is required to pay back any principal and accrued interest no later than 60 days after withdrawing funds.

Amounts borrowed under the CA Facility bears an interest rate of 6 % per annum.

Principal and accrued interest are due and payable no later than 60 days after such advance and the CA Facility has a current maturity of July 30, 2021.

As of June 30, 2021, Committed Agency has drawn $ 354,958 on the CA Facility.

Committed Agency intended to, directly or indirectly, sell or dispose of electronic devices previously owned by major electronic carriers.

In addition to the CA Facility Agreement, ECHG contracted with Committed Agency beginning February 4, 2021 to exclusively facilitate their sales through the Company’s warehousing and cleaning of electronic devices, wiping of existing data, and inspecting, packaging and shipping of devices to purchasers, in exchange for which ECHG received a per unit service fee (the “CA Service Agreement”).

The CA Service Agreement terminated and the CA Facility matured on July 30, 2021.

Under the terms of the agreement, the borrower could not borrow any additional funds, under this facility, after May 31, 2021.

Committed Agency paid back all principal and accrued interest as of September 30, 2021.

Amounts borrowed under the CA Facility bore an interest rate of 6 % per annum.

NOTE 6 — ACQUISITION

On June 9, 2021, ECHG, entered into the CExchange Asset Purchase Agreement with CExchange, pursuant to which the seller agreed to sell the assets and certain liabilities of CExchange for ECHG’s cancellation and forgiveness of $ 1,500,000 of the outstanding principal amount under the loan agreement between ECHG and CExchange originally dated February 15, 2020 and accrued and unpaid interest thereunder of $ 55,892 .

The remaining $ 900,000 principal owed to ECHG by CExchange is not a part of the purchase price listed below and is expected to be repaid with any accrued and unpaid interest during the third fiscal quarter of 2021.

The remaining $900,000 principal owed to ECHG by CExchange is not a part of the purchase price listed below and is expected to be repaid with any accrued and unpaid interest during the third or fourth fiscal quarters of 2021.

As mentioned in Note 5 -- Notes Receivable, we subsequently performed impairment evaluations on the remaining $900,000 principal owed after management learned that the $900,000 may not be recoverable.

The notes receivable of $ 900,000 and $49,174 of accrued interest receivable were written-off to other expense, write-off of notes receivable and accrued interest receivable as of September 30, 2021.

As part of the CExchange Transaction, goodwill was preliminarily recorded as $ 1,891,477 , which is the purchase price less the approximate fair value of the net assets purchased, as shown in the purchase price allocation in the following table.

13 unchanged sentences

The changes in goodwill is as follows:

September 30,

Opening balance

4 unchanged sentences

Property and equipment consist of the following:

September 30,

Building and improvements

12 unchanged sentences

accumulated depreciation

On July 30, 2021, DGSE closed the purchase of a new retail building located at 9166 Gaylord Parkway in Frisco, Texas for $ 2,215,500 , pursuant to a purchase agreement entered into on May 6, 2021.

On July 30, 2021, DGSE closed the purchase of a new retail building located at 9166 Gaylord Parkway in Frisco, Texas for $ 2,215,500 .

The purchase was partly financed through a $ 1.772 million, 5 year loan, bearing an annual interest rate of 3.75 %, amortized over 20 years, payable to Texas Bank and Trust.

2 unchanged sentences

Intangible assets consist of the following:

September 30,

Point of sale system

2 unchanged sentences

accumulated amortization

The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2021:

2021 (excluding the six months ending June 30, 2021)

The following table outlines the estimated future amortization expense related to intangible assets held as of September 30, 2021:

2021 (excluding the nine months ending September 30, 2021)

NOTE 10— ACCRUED EXPENSES

Accrued expenses consist of the following:

September 30,

Accrued interest

12 unchanged sentences

DGSE and ECHG.

The DGSE segment includes Dallas Gold & Silver Exchange, which has five retail stores in the Dallas/Fort Worth Metroplex, and Charleston Gold & Diamond Exchange, which has one retail store in Mt.

The DGSE segment includes Dallas Gold & Silver Exchange, which has six retail stores in the Dallas/Fort Worth Metroplex, and Charleston Gold & Diamond Exchange, which has one retail store in Mt.

Pleasant, South Carolina.

5 unchanged sentences

Allocation amounts are generally agreed upon by management and may differ from arms-length allocations.

The following separates DGSE and ECHG’s financial results of operations for the three months ended June 30, 2021 and 2020:

For The Three Months Ended June 30,

The following separates DGSE and ECHG’s financial results of operations for the three months ended September 30, 2021 and 2020:

For The Three Months Ended September 30,

Cost of goods sold

1 unchanged sentence

Depreciation and amortization

Operating income (loss)

Other income/expense:

Other income, net

Operating income

Interest expense

Other income (expense):

Gain on forgiveness of Federal Loan

Write-off of notes receivable and accrued interest receivable

Income before income taxes

Income tax expense

Net income (loss)

The following separates DGSE’s and ECHG’s financial results of operations for the six months ended June 30, 2021 and 2020:

For The Six Months Ended June 30,

The following separates DGSE’s and ECHG’s financial results of operations for the nine months ended September 30, 2021 and 2020:

For The Nine Months Ended September 30,

Cost of goods sold

2 unchanged sentences

Operating income

Other income/expense:

Other income, net

Interest expense

Other income (expense):

Gain on forgiveness of Federal Loan

Write-off of notes receivable and accrued interest receivable

Income before income taxes

9 unchanged sentences

The Company’s historical disaggregation of revenue has been recast to conform to our current presentation.

The following disaggregation of total revenue is listed by sales category and segment for the three months ended June 30, 2021 and 2020:

Three Months Ended June 30,

The following disaggregation of total revenue is listed by sales category and segment for the six months ended June 30, 2021 and 2020:

Six Months Ended June 30,

The following disaggregation of total revenue is listed by sales category and segment for the three months ended September 30, 2021 and 2020:

Three Months Ended September 30,

The following disaggregation of total revenue is listed by sales category and segment for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

DGSE’s over-the-counter sales with the retail public and wholesale dealers are recognized when merchandise is delivered, and payment has been made either by immediate payment or through a receivable obligation at one of our retail locations.

25 unchanged sentences

We have established an allowance for estimated returns related to sales based on historical returns and reduced our reported revenues and cost of sales accordingly.

Our return allowance as of June 30, 2021 and 2020 remained the same for both periods, at approximately $ 28,000 .

Our return allowance as of September 30, 2021 and 2020 remained the same for both periods, at approximately $ 28,000 .

ECHG has several revenue streams and recognize revenue according to ASC 606 at an amount that reflects the consideration to which the entities expect to be entitled in exchange for transferring goods or services to the customer.

26 unchanged sentences

Trade receivables are considered delinquent when payment has not been made within contract terms.

DGSE had no allowance for doubtful accounts balance for the quarter ended June 30, 2021 and 2020.

DGSE had no allowance for doubtful accounts balance for the quarter ended September 30, 2021 and 2020.

Some of ECHG’s customers are on payment terms, and although low risk, occasionally the need arises to record an allowance for receivables that are deemed high risk to collect.

We have established an allowance for estimated uncollectable receivables related to sales based on historical collections.

Our allowance as of June 30, 2021 and 2020 was $ 6,249 and $ 0 , respectively.

Our allowance as of September 30, 2021 and 2020 was $ 0 and $ 0 , respectively.

Notes Receivable:

The First Amendment to the original loan agreement between CExchange and ECHG, dated February 20, 2020, of which $ 600,000 remained outstanding as of June 30, 2021, is expected to be paid during the third or fourth fiscal quarters of 2021, and therefore ECHG is classifying the balance as a current asset.

The second note of $ 300,000 , dated April 14, 2021, is a demand payment note or if certain events happen is classified as a current asset.

Amounts drawn under the CA Facility is listed as a current loan due to the CA Facility’s maturity of July 30, 2021 .

As of June 30, 2021, Committed Agency has drawn $ 354,958 on the CA Facility.

We perform impairment evaluations on the note on December 31 of each year, or whenever business conditions or events indicate that the note receivable may be impaired.

We originally recorded ECHG’s notes receivable as current assets as of June 30, 2021 due to the CExchange notes maturity dates.

See Note 5 above for additional information.

We perform impairment evaluations on the note on December 31 of each year, or whenever business conditions or events indicate that the notes receivable may be impaired.

As of December 31, 2020, based on our evaluation, no impairment was required.

We subsequently performed impairment evaluations on the two notes totaling $900,000, as of September 30, 2021, after management learned that the two notes may not be recoverable.

Using the guidance provided, management has concluded that ECHG should reserve the full amount of the outstanding and unpaid notes receivable of $900,000, and write-off the outstanding and unpaid accrued interest associated with the notes receivable totaling $ 49,174 .

The notes receivable of $ 900,000 and $49,174 of accrued interest receivable were written-off to other expense, write-off of notes receivable and accrued interest receivable as of September 30, 2021.

Income Taxes :

16 unchanged sentences

If we cannot readily determine the discount rate implicit in lease agreements, we utilize our incremental borrowing rate.

The Company has seven operating leases as of June 30, 2021—six in the Dallas/Fort Worth Metroplex and one in Charleston, South Carolina.

The lease for DGSE’s flagship-store at 13022 Preston Road, Dallas, Texas will expire October 31, 2021, with no current renewal options.

This location is under review as to whether to pursue a lease renewal.

The Company has six operating leases as of September 30, 2021—five in the Dallas/Fort Worth Metroplex and one in Charleston, South Carolina.

In anticipation of the expiration of the new lease for DGSE’s flagship store at 13022 Preston Road, Dallas, Texas on October 31, 2021, a new lease has been executed and will commence on November 1, 2021.

The new lease will expire on January 31, 2027, with an option for DGSE to extend the lease for an additional five years, at market rate as determined by the prevailing market rate for comparable space in comparable buildings in the vicinity.

The lease for DGSE’s Grand Prairie, Texas location expires June 30, 2022, and has no current renewal options.

3 unchanged sentences

Belt Line Road, in Carrollton, Texas, renewed their lease starting January 1, 2021 for 61 months, expiring January 31, 2026.

ECHG’s lease for ITAD USA’s location on McKenzie Drive in Carrollton, Texas was in effect on June 30, 2021 but expired July 31, 2021.

ITAD USA has recently moved its operations to the new CEX location on Realty Road in Carrollton Texas, the lease of which was assigned to CEX effective June 8, 2021 as part of the CExchange Transaction and under which ITAD USA is permitted to utilize the space.

ECHG’s lease for ITAD USA’s location on McKenzie Drive in Carrollton, Texas expired July 31, 2021 and was not renewed.

ITAD USA moved its operations to the new CEX location on Realty Road in Carrollton, Texas, the lease for which was assigned to CEX effective June 8, 2021 as part of the CExchange Transaction and under which ITAD USA is permitted to utilize the space.

The lease expires December 31, 2021, and this location is under review as to whether to pursue a lease renewal.

1 unchanged sentence

As such, it will be reported as an operating lease.

All of the Company’s seven leases as of June 30, 2021 are triple net, for which it pays its proportionate share of common area maintenance, property taxes and property insurance.

Leasing costs for the three months ended June 30, 2021 and 2020 were $ 588,896 and $ 342,740 , respectively.

Leasing costs for the six months ended June 30, 2021 and 2020 were $ 895,433 and $ 649,276 , respectively, comprised of a combination of minimum lease payments and variable lease costs.

As of June 30, 2021, the weighted average remaining lease term and weighted average discount rate for operating leases was 2.1 years and 5.5 %, respectively.

For the three months ended June 30, 2021 and 2020, the Company’s cash paid for operating lease liabilities was $ 588,026 and $ 327,608 respectively.

For the six months ended June 30, 2021 and 2020, the Company’s cash paid for operating lease liabilities was $ 923,253 and $ 672,039 , respectively.

Future annual minimum lease payments as of June 30, 2021:

2021 (excluding the six months ending June 30, 2021)

All of the Company’s seven leases as of September 30, 2021 are triple net, for which it pays its proportionate share of common area maintenance, property taxes and property insurance.

Leasing costs for the three months ended September 30, 2021 and 2020 were $ 620,829 and $ 421,790 , respectively.

Leasing costs for the nine months ended September 30, 2021 and 2020 were $ 1,516,262 and $ 1,071,066 , respectively, comprised of a combination of minimum lease payments and variable lease costs.

As of September 30, 2021, the weighted average remaining lease term and weighted average discount rate for operating leases was 3.5 years and 5.5 %, respectively.

For the three months ended September 30, 2021 and 2020, the Company’s cash paid for operating lease liabilities was $ 619,584 and $ 428,241 respectively.

For the nine months ended September 30, 2021 and 2020, the Company’s cash paid for operating lease liabilities was $ 1,496,524 and $ 1,100,280 , respectively.

Future annual minimum lease payments as of September 30, 2021:

2021 (excluding the nini months ending September 30, 2021)

2026 and thereafter

2 unchanged sentences

DGSE Subtotal

2021 (excluding the six months ending June 30, 2021)

2021 (excluding the nine months ending September 30, 2021)

2026 and thereafter

3 unchanged sentences

Less current portion

( 1,092,996 )

Long-term operating lease liability

NOTE 14 — BASIC AND DILUTED AVERAGE SHARES

A reconciliation of basic and diluted weighted average common shares for the three months ended June 30, 2021 and 2020 is as follows:

A reconciliation of basic and diluted weighted average common shares for the three months ended September 30, 2021 and 2020 is as follows:

For the Three Months Ended

September 30,

Basic weighted average shares

1 unchanged sentence

Diluted weighted average shares

A reconciliation of basic and diluted weighted average common shares for the six months ended June 30, 2021 and 2020 is as follows:

For the Six Months Ended

A reconciliation of basic and diluted weighted average common shares for the nine months ended September 30, 2021 and 2020 is as follows:

For the Nine Months Ended

September 30,

Basic weighted average shares

1 unchanged sentence

Diluted weighted average shares

For the three and six months ended June 30, 2021 and 2020, there were 15,000 and 15,250 common stock options, warrants, and Restricted Stock Units (RSUs) unexercised, respectively.

For the three and six months ended June 30, 2021 and 2020, there were no anti-dilutive shares.

For the three and nine months ended September 30, 2021 and 2020, there were 15,000 and 15,250 common stock options, warrants, and Restricted Stock Units (RSUs) unexercised, respectively.

For the three and nine months ended September 30, 2021 and 2020, there were no anti-dilutive shares.

NOTE 15 — LONG-TERM DEBT

1 unchanged sentence

Outstanding Balance

September 30,

Interest Rate

3 unchanged sentences

September 14, 2025

Note payable, Texas Bank & Trust (6)

July 31, 2026

DGSE Sub-Total

1 unchanged sentence

Note payable, Texas Bank & Trust (4)

November 4, 2025

Novemeber 4, 2025

Note payable (5)

April 20, 2025

Envela Sub-Total

18 unchanged sentences

Northwest Highway in Grapevine, Texas for $ 620,000 .

The purchase was partly financed through a $ 496,000 , 5 year loan (the “TB&T Grapevine Loan”), bearing an annual interest rate of 3.75 %, amortized over 20 years, payable to Texas Bank & Trust.

The purchase was partly financed through a $ 496,000 , 5 year loan (the “TB&T Grapevine Loan”), bearing an annual interest rate of 3.75 %, amortized over 20 years, payable to Texas Bank and Trust.

The note has monthly interest and principal payments of $ 2,941 .

(4) On November 4, 2020, 1901 Gateway Holdings, LLC, a wholly owned subsidiary of the Company, closed on the purchase of a new office building located at 1901 Gateway Drive, Irving, Texas for $ 3.521 million.

The building was partially financed through a $ 2.96 million, 5 year loan (the “TB&T Irving Loan”), bearing an interest rate of 3.25 %, amortized over 20 years, payable to Texas Bank & Trust.

The building was partially financed through a $ 2.96 million, 5 year loan (the “TB&T Irving Loan”), bearing an interest rate of 3.25 %, amortized over 20 years, payable to Texas Bank and Trust.

The note has monthly interest and principal payments of $ 16,792 .

(5) The Company applied for and received, on April 20, 2020, approximately $ 1.67 million, 1 % interest, federally backed loan intended to pay employees and cover certain rent and utility-related costs during the COVID-19 pandemic (the “Federal Loan”), with Truist Bank (f/k/a BB&T Bank) as lender.

The Federal Loan is forgivable to the extent that certain criteria are met.

The Federal Loan was forgivable to the extent that certain criteria are met.

We applied to the Small Business Administration for the forgiveness of the Federal Loan during the fourth quarter ended December 31, 2020.

Our application for forgiveness is pending final approval from the Small Business Administration.

We are classifying the loan as short-term.

Future scheduled principal payments of our notes payable and notes payable, related party, as of June 30, 2021 are as follows:

The Federal Loan was forgiven effective April 1, 2021 but notification was not sent to the Company until the third quarter of 2021.

(6) On July 30, 2021, 9166 Gaylord Holdings, LLC, a wholly owned subsidiary of DGSE, closed the purchase of a new retail building located at 9166 Gaylord Parkway in Frisco, Texas for $ 2,215,500 .

The purchase was partly financed through a $ 1,772,000 , 5 year loan (the “TB&T Frisco Loan”), bearing an annual interest rate of 3.75 %, amortized over 20 years, payable to Texas Bank and Trust.

The note has monthly interest and principal payments of $ 10,509 .

Future scheduled principal payments of our notes payable and notes payable, related party, as of September 30, 2021 are as follows:

Note payable, related party - DGSE

Year Ending December 31,

2021 (excluding the six months ended June 30, 2021)