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Item 1. Financial Statements

2022-08-03 compared with 2022-05-11 · 184 added, 94 removed, 403 unchanged (41% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of goods sold

52 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

Adjustments to reconcile net income to net cash provided by (used in) operations:

For the Six Months Ended June 30,

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

Depreciation, amortization, and other

3 unchanged sentences

( 3,365,999 )

( 3,755,662 )

( 2,579,991 )

Prepaid expenses

2 unchanged sentences

Customer deposits and other liabilities

Net cash provided by (used in) operations

Net cash provided by operations

Investment in note receivable

Purchase of property and equipment

Acquisition of CExchange assets and liabilities, net of cash acquired

Adjustment to the purchase price of the Avail Transaction

Net cash used in investing

( 1,126,416 )

Payments on notes payable, related party

5 unchanged sentences

Net change in cash and cash equivalents

( 1,086,924 )

Cash and cash equivalents, beginning of period

2 unchanged sentences

Cash paid during the period for:

Non cash activites:

Acquisition of CExchange assets and liabilities

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months ended March 31, 2021 and 2022

For the Three Months ended June 30, 2021 and 2022

Preferred Stock

Additional Paid-in

Total Stockholders'

Balances at January 1, 2021

Stockholders'

Balances at March 31, 2021

$ ( 20,855,532 )

Balances at June 30, 2021

$ ( 18,702,420 )

Preferred Stock

Stockholders'

Balances at March 31, 2022

$ ( 10,167,704 )

Balances at June 30, 2022

$ ( 6,319,846 )

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

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months ended June 30, 2021 and 2022

Preferred Stock

Total Stockholders'

Balances at January 1, 2022

Stockholders'

Balances at December 31, 2020

$ ( 22,863,804 )

Balances at March 31, 2022

Balances at June 30, 2021

$ ( 18,702,420 )

Preferred Stock

Stockholders'

Balances at December 31, 2021

$ ( 12,814,929 )

Balances at June 30, 2022

$ ( 6,319,846 )

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BASIS OF PRESENTATION

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

The information provided as of March 31, 2022 in these notes to the interim condensed consolidated financial statements is unaudited.

The information provided as of June 30, 2022 in these notes to the interim condensed consolidated financial statements is unaudited.

NOTE 2 — PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS

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Envela operates primarily via two operating and reportable segments.

Through DGSE, LLC (“DGSE”), it operates Dallas Gold & Silver Exchange, Charleston Gold & Diamond Exchange, and Bullion Express brands.

Through ECHG, LLC (“ECHG”), it operates Echo Environmental Holdings, LLC (“Echo”), ITAD USA Holdings, LLC (“ITAD USA”), Teladvance, LLC (“Teladvance”), CEX Holdings, LLC (“CEX”) and Avail Recovery Solutions, LLC (“Avail”).

Through DGSE, LLC (“DGSE”), the Company operates Dallas Gold & Silver Exchange, Charleston Gold & Diamond Exchange, and Bullion Express brands.

Through ECHG, LLC (“ECHG”), the Company operates Echo Environmental Holdings, LLC (“Echo”), ITAD USA Holdings, LLC (“ITAD USA”), CEX Holdings, LLC (“CEX”), Avail Recovery Solutions, LLC (“Avail”) and Teladvance, LLC (“Teladvance”).

Envela is a Nevada corporation, headquartered in Irving, Texas.

DGSE primarily buys and resells or recycles luxury hard assets like jewelry, diamonds, gemstones, fine watches, rare coins and related collectibles, precious-metal bullion products, gold, silver and other precious-metals.

DGSE operates seven jewelry stores at both the retail and wholesale levels throughout the United States via its facilities in Texas and South Carolina.

DGSE operates seven jewelry stores at both the retail and wholesale levels in Texas and South Carolina.

Buying and selling items for their precious-metals content is a major method by which DGSE markets itself.

9 unchanged sentences

Business – Operating Segments” in the Company’s 2021 Annual Report.

The escalating war between Russia and Ukraine presents instability and volatility in global markets.

Although there has been, and will be volatility, management feels the impact has been minimal to our operations to this point.

government has imposed sanctions and export controls against Russia and Russian interests and threatened additional sanctions and controls.

The impact of these sanctions are difficult to measure concerning DGSE and ECHG.

The price and supply of precious metals along with supply-chain issues will undoubtedly cause the Company concern if the war broadens beyond the borders of Ukraine.

The interim condensed consolidated financial statements have been prepared in accordance with U.S.

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Financial Instruments

The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, trade receivables, prepaid expenses, other current assets, accounts payable, accrued expenses, customer deposits and other liabilities approximate fair value because of the immediate or short-term nature of these financial instruments.

The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, trade receivables, prepaid expenses, other current assets, accounts payable, accrued expenses and customer deposits and other liabilities approximate fair value because of the immediate or short-term nature of these financial instruments.

Notes payable and line of credit approximate fair value due to the market interest rate charged.

6 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 the coronavirus pandemic (“COVID-19”) and the war between Ukraine and Russia, 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 and the war between Ukraine and Russia as of March 31, 2022.

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

1 unchanged sentence

ECHG goodwill was allocated in connection with three acquisitions of the assets now held by Echo on May 20, 2019 (the “Echo Transaction”), of the assets now held by Teladvance on June 9, 2021 (the “CExchange Transaction”) and of the assets now held by Avail on October 29, 2021 (the “Avail Transaction”).

There was a preliminary addition to goodwill with the Avail Transaction of $ 3,491,285 .

There has been no other adjustments or impairment charges to goodwill.

As of March 31, 2022 and December 31 2021, goodwill was $ 6,140,465 .

The preliminary goodwill associated with the Avail Transaction was $ 3,491,285 .

There was an adjustment made to goodwill concerning the Avail Transaction from an additional cash payment made during the three months ending June 30, 2022 of $ 216,988 , bringing the total goodwill for the Avail Transaction to $ 3,708,273 as of June 30, 2022.

There have been no other adjustments or impairment charges to goodwill.

As of June 30, 2022 and December 31 2021, goodwill was $ 6,357,453 and $ 6,140,465 , respectively.

Recent Accounting Pronouncements

4 unchanged sentences

The Company is evaluating the financial statement implications of ASU 2016-13.

There were no other new accounting standards that had a material impact on the Company’s consolidated financial statements during the six-month period ended June 30, 2022, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of June 30, 2022 that the Company expects to have a material impact on its consolidated financial statements.

NOTE 4 — INVENTORIES

A summary of inventories is as follows:

$ 12,282,472 $ 10,422,072

30,071 11,995

12,312,543 10,434,067

2,044,911 3,350,159

264,121 264,210

2,309,032 3,614,369

$ 14,621,575 $ 14,048,436

NOTE 5 — ACQUISITION

On October 29, 2021, ECHG entered into the Avail Transaction to purchase all of the assets, liabilities and rights and interests for $ 4,500,000 of Avail Recovery Solutions, an Arizona company.

On October 29, 2021, ECHG entered into the Avail Transaction to purchase all of the assets, liabilities and rights and interests of Avail for $ 4,500,000 .

The purchase was facilitated by an initial payment of $ 2,500,000 at closing, and the remaining $ 2,000,000 to be paid out by 12 quarterly payments starting April 1, 2022, of $ 166,667 each.

1 unchanged sentence

The installment note payable for the Avail Transaction imputed at 3.1 % interest.

As part of the Avail Transaction, goodwill was preliminarily recorded as $ 3,491,284 , which is the purchase price less the approximate fair value of the net assets and liabilities purchased, as shown in the purchase price allocation in the following table.

As part of the Avail Transaction, goodwill was preliminarily recorded as $ 3,491,284 , which is the purchase price less the approximate fair value of the net assets and liabilities purchased.

On May 31, 2022, an additional cash payment of $ 216,988 was made in connection with the Avail Transacton adjusting the goodwill and purchase price amount as shown in the preliminary purchase price allocation in the following table.

The additional payment is not part of the installment note payable of $2,000,000 from the initial Avail Transaction.

The Company’s goodwill is related to the ECHG segment.

2 unchanged sentences

For tax purposes, goodwill is amortized and deductible over 15 years.

The purchase price allocation listed below is considered to be a preliminary allocation and is subject to change.

The preliminary purchase price for the Avail Transaction is allocated as follows:

The following table compares the results of Avail as part of the Company's financial results for the three months ended June 30, 2022, and the Company's results of operations as if they were combined for the three months ended June 30, 2021:

Consolidated Statement

For the Three Months Ended

Proforma Combined

For the Three Months Ended

June 30, 2022

June 30, 2021

Income from continuing operations

Basic net income per common share

Diluted net income per common share

The following table compares the results of Avail as part of the Company's financial results for the six months ended June 30, 2022, and the Company's results of operations as if they were combined for the six months ended June 30, 2021:

Consolidated Statement

For the Six Months Ended

Proforma Combined

For the Six Months Ended

June 30, 2022

June 30, 2021

Income from continuing operations

Basic net income per common share

Diluted net income per common share

The purchase price allocation of the Avail transaction is listed below and is considered to be a preliminary allocation and is subject to change.

The preliminary purchase price is allocated as follows:

Account receivables

6 unchanged sentences

Total Purchase Price

The following table compares the results of Avail as part of the Company’s financial results for the three months ended March 31, 2022, and the Company’s results of operations as if they were combined for the three months ended March 31, 2021:

Consolidated Statement of Income

Proforma Combined

For the Three Months Ended

March 31, 2022

March 31, 2021

Income from continuing operations

Basic net income per common share

Diluted net income per common share

NOTE 6 — GOODWILL

The change in goodwill is as follows:

The changes in goodwill is as follows:

Opening balance

Additions (1)

(1) Addition is in connection with the CExchange Transaction on June 9, 2021 of $ 1,282,072 and the preliminary purchase price allocation of the Avail Transaction of $ 3,491,284 .

(1) Additions ending December 31, 2021 totaling $ 4,773,356 are a combination of the CExchange Transaction on June 9, 2021, of $ 1,282,072 , and the Avail Transaction on October 29, 2021, of $ 3,491,284 .

The addition ending June 30, 2022 is the additional cash payment concerning the Avail Transaction made on May 31, 2022.

NOTE 7 — PROPERTY AND EQUIPMENT

23 unchanged sentences

accumulated amortization

( 1,083,355 )

(1) Intangibles relate to the Echo Transaction on May 20, 2019.

(2) Intangibles relate to the CExchange Transaction on June 9, 2021.

The following table outlines the estimated future amortization expense related to intangible assets held as of March 31, 2022:

2022 (excluding the three months ending March 31, 2022)

The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2022:

2022 (excluding the six months ending June 30, 2022)

NOTE 9— ACCRUED EXPENSES

1 unchanged sentence

Accrued interest

$ 12,079 $ 12,627

118,857 131,325

Property taxes

120,449 88,046

57,894 150,070

Other administrative expenss

339,279 382,068

Accrued interest

337,180 334,431

Unvouchered payables - inventory

252,020 461,481

Material & shipping costs (COGS)

500,326 78,647

Other accrued expenses

1,097,388 940,612

Accrued interest

25,642 25,175

Professional fees

125,617 220,101

43,400 84,920

Other administrative expenses

10,794 18,453

State income tax

92,226 109,682

305,127 466,686

$ 1,741,794 $ 1,789,366

NOTE 10 — SEGMENT INFORMATION

We determine our business segments based upon an internal reporting structure.

Our financial performance is based on the following segments:

Our financial performance is based on the following two segments:

DGSE and ECHG.

7 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 March 31, 2022 and 2021:

For The Three Months Ended March 31,

The following separates DGSE’s and ECHG’s financial results of operations for the three months ended June 30, 2022 and 2021:

For The Three Months Ended June 30,

$ 30,339,127 $ 12,300,591 $ 42,639,718 $ 23,012,324 $ 10,711,682 $ 33,724,006

Cost of goods sold

26,150,543 5,011,175 31,161,718 19,915,328 6,680,788 26,596,116

4,188,584 7,289,416 11,478,000 3,096,996 4,030,894 7,127,890

Selling, general and administrative expenses

2,194,494 4,889,409 7,083,903 1,889,895 2,941,330 4,831,225

Depreciation and amortization

101,434 178,082 279,516 97,435 118,784 216,219

2,295,928 5,067,491 7,363,419 1,987,330 3,060,114 5,047,444

Operating income

1,892,656 2,221,925 4,114,581 1,109,666 970,780 2,080,446

Other income/expense:

Other income (expense), net

( 49,018 ) ( 46,411 ) ( 95,429 ) 119,460 163,595 283,055

Interest expense

61,663 59,379 121,042 68,692 109,012 177,704

Income before income taxes

1,781,975 2,116,135 3,898,110 1,160,434 1,025,363 2,185,797

Income tax expense

15,391 34,861 50,252 14,185 18,500 32,685

$ 1,766,584 $ 2,081,274 $ 3,847,858 $ 1,146,249 $ 1,006,863 $ 2,153,112

The following separates DGSE’s and ECHG’s financial results of operations for the six months ended June 30, 2022 and 2021:

For The Six Months Ended June 30,

Cost of goods sold

Selling, general and administrative expenses

Depreciation and amortization

Operating income

Other income/expense:

Other income (expense), net

Interest expense

8 unchanged sentences

The final step in the guidance is to recognize revenue as each performance obligation is satisfied.

The following disaggregation of total revenue is listed by sales category and segment for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following disaggregation of total revenue is listed by sales category and segment for the three months ended June 30, 2022 and 2021:

Three Months Ended June 30,

$ 28,165,026 $ 3,719,954 13.2 % $ 20,893,838 $ 2,678,640 12.8 %

2,174,101 468,630 21.6 % 2,118,486 418,356 19.7 %

30,339,127 4,188,584 13.8 % 23,012,324 3,096,996 13.5 %

9,102,001 5,566,507 61.2 % 8,595,910 3,019,685 35.1 %

3,198,590 1,722,909 53.9 % 2,115,772 1,011,209 47.8 %

12,300,591 7,289,416 59.3 % 10,711,682 4,030,894 37.6 %

$ 42,639,718 $ 11,478,000 26.9 % $ 33,724,006 $ 7,127,890 21.1 %

The following disaggregation of total revenue is listed by sales category and segment for the six months ended June 30, 2022 and 2021:

Six Months Ended June 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 March 31, 2022 and December 31, 2021 remained the same for both periods, at approximately $ 28,000 .

Our return allowance as of June 30, 2022 and December 31, 2021 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 as of March 31, 2022 and December 31, 2021.

DGSE had no allowance for doubtful accounts balance as of June 30, 2022 and December 31, 2021.

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

Our allowance as of March 31, 2022 and December 31, 2021 was $ 1,582 .

Our allowance as of June 30, 2022 and December 31, 2021 was $ 26,582 and $ 1,582 , respectively.

Income Taxes :

11 unchanged sentences

Second, we determine how much of the tax benefit should be recognized (this would only apply to tax positions that qualify for recognition.) No additional liabilities have been recognized as a result of the implementation.

We have not taken a tax position that, if challenged, would have a material effect on the financial statements or the effective tax rate for the three months ended March 31, 2022 and 2021.

We have not taken a tax position that, if challenged, would have a material effect on the financial statements or the effective tax rate for the three and six months ended June 30, 2022 and 2021.

NOTE 12 — LEASES

2 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 March 31, 2022—five in the Dallas/Fort Worth Metroplex, one in Charleston, South Carolina and one in Chandler, Arizona.

The Company has seven operating leases as of June 30, 2022—five in the Dallas/Fort Worth Metroplex, one in Charleston, South Carolina and one in Chandler, Arizona.

The lease for DGSE’s flagship store located at 13022 Preston Road, Dallas, Texas expires on January 31, 2027, with an option 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.

The lease for DGSE’s Grand Prairie, Texas location was renewed starting July 1, 2022, expiring June 30, 2027, with an option to extend the lease for an additional five years.

The lease for DGSE’s Mt Pleasant, South Carolina location expires April 30, 2025, with no additional renewal options.

The lease for DGSE’s Euless, Texas location expires June 30, 2025, with an option for an additional five years.

The lease for DGSE’s Euless, Texas location expires June 30, 2025, with an option to extend the lease for an additional five years.

The lease for ECHG’s Echo location on W.

2 unchanged sentences

The lease for ECHG’s Avail location in Chandler, Arizona expires May 31, 2025.

All of the Company’s seven leases as of March 31, 2022 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 March 31, 2022 and 2021 was $ 622,863 and $ 449,486 , respectively, comprised of a combination of minimum lease payments and variable lease costs.

As of March 31, 2022, the weighted average remaining lease term and weighted average discount rate for operating leases was 3.3 years and 4.4 %, respectively.

For the three months ended March 31, 2022 and 2021, the Company’s cash paid for operating lease liabilities was $ 616,097 and $ 501,907 respectively.

Future annual minimum lease payments as of March 31, 2022:

2022 (excluding the three months ending March 31, 2022)

All of the Company’s seven leases as of June 30, 2022 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, 2022 and 2021 was $ 659,860 and $ 588,896 respectively.

Leasing costs for the six months ended June 30, 2022 and 2021 was $ 1,282,723 and $ 895,433 , respectively, comprised of a combination of minimum lease payments and variable lease costs.

As of June 30, 2022, the weighted average remaining lease term and weighted average discount rate for operating leases was 3.75 years and 4.4 %, respectively.

For the three months ended June 30, 2022 and 2021, the Company’s cash paid for operating lease liabilities was $ 650,606 and $ 588,026 , respectively.

For the six months ended June 30, 2022 and 2021, the Company’s cash paid for operating lease liabilities was $ 1,266,703 and $ 923,253 , respectively.

Future annual minimum lease payments as of June 30, 2022:

2022 (excluding the six months ending June 30, 2022)

2026 and thereafter

2 unchanged sentences

DGSE Sub-Total

2022 (excluding the three months ending March 31, 2022)

2022 (excluding the six months ending June 30, 2022)

2026 and thereafter

4 unchanged sentences

NOTE 13 — BASIC AND DILUTED AVERAGE SHARES

A reconciliation of basic and diluted weighted average common shares for the three months ended March 31, 2022 and 2021 is as follows:

A reconciliation of basic and diluted weighted average common shares for the three months ended June 30, 2022 and 2021 is as follows:

For the Three Months Ended

2 unchanged sentences

Diluted weighted average shares

For the three months ended March 31, 2022 and 2021, there was a total of 15,000 common stock options, warrants, and Restricted Stock Units (RSUs) unexercised, respectively.

For the three months ended March 31, 2022 and 2021, there were no anti-dilutive shares.

A reconciliation of basic and diluted weighted average common shares for the six months ended June 30, 2022 and 2021 is as follows:

For the six Months Ended

Basic weighted average shares

Effect of potential dilutive securities

Diluted weighted average shares

For the three and six months ended June 30, 2022 and 2021, there were 15,000 common stock options, warrants, and Restricted Stock Units (RSUs) unexercised, respectively.

For the three and six months ended June 30, 2022 and 2021, there were no anti-dilutive shares.

NOTE 14 — LONG-TERM DEBT

27 unchanged sentences

The interest and principal payment due monthly on the note for DGSE was $ 22,203 .

On November 23, 2021, both notes were refinanced by Farmers State Bank of Oakley Kansas.

(2) On July 9, 2020, DGSE closed the purchase of a new retail building located at 610 E.

On November 23, 2021, the ECHG and DGSE notes, with remaining principal balances of $ 6,309,962 and $ 2,781,087 , respectively, were refinanced by Farmers State Bank of Oakley, Kansas with annual interest rates of 3.1%.

The ECHG and DGSE notes have monthly interest and principal payments of $ 35,292 and $ 15,555 , respectively.

(2) On July 9, 2020, DGSE closed the purchase of a retail building located at 610 E.

Round Grove Road in Lewisville, Texas for $ 1,195,000 .

1 unchanged sentence

The note has monthly interest and principal payments of $ 5,645 .

(3) On September 14, 2020, 1106 NWH Holdings, LLC, a wholly owned subsidiary of DGSE, closed on the purchase of a new retail building located at 1106 W.

(3) On September 14, 2020, 1106 NWH Holdings, LLC, a wholly owned subsidiary of DGSE, closed on the purchase of a retail building located at 1106 W.

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

1 unchanged sentence

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

(4) 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 .

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

The purchase was partly financed through a $ 1,772,000 , five-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.

4 unchanged sentences

The Installment note payable for the Avail Transaction imputed at 3.1%

(7) 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.

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

The building was partially financed through a $ 2,960,000 , 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 .

Future scheduled principal payments of our notes payable as of March 31, 2022 are as follows:

Future scheduled principal payments of our notes payable and notes payable, related party, as of June 30, 2022 are as follows:

Note payable, Farmers State Bank - DGSE

Year Ending December 31,