What changed in this filing

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Item 2. Properties

2023-03-16 compared with 2022-03-16 · 10 added, 45 removed, 1 unchanged (98% of the section changed)

We lease and own various properties across three markets in which DGSE and ECHG currently operate.

Nine leased and owned properties are in the DFW Metroplex, one in Charleston, South Carolina and one in Chandler, Arizona, a suburb of Phoenix.

The Company leases and owns various properties across three markets in which DGSE and ECHG currently operate.

Nine leased and owned properties are in DFW, one is in Mount Pleasant, South Carolina and one is in Chandler, Arizona, a suburb of Phoenix.

The leases have a wide variety of terms, rents and expiration dates.

See Note 16 to our consolidated financial statements for more information regarding our leases.

DGSE purchased two stand-alone retail buildings in Lewisville, Texas and Grapevine, Texas, both suburbs of Dallas, during fiscal year 2020, and DGSE purchased one stand-alone retail building in Frisco, Texas, also a suburb of Dallas, in Fiscal year 2021.

DGSE closed the Southlake, Texas retail location during fiscal year 2020 due to an expiring lease.

ECHG was assigned two leases through the assets purchased from the CExchange Transaction and the Avail Transaction.

During Fiscal 2020, the Company purchased an office building for Envela’s headquarters in Irving, Texas.

For a majority of Fiscal 2021, the Company had a third party tenant.

The tenant decided not to renew and currently Envela is looking to lease a portion of the corporate headquarters to other corporate tenants.

The Lewisville, Grapevine, Frisco and Irving locations were purchased using long-term financing.

For more information on this financing, see Note 10 to our consolidated financial statements.

We are constantly evaluating each of our locations in terms of profitability, effectiveness and fit with long-term strategy.

Our principal corporate offices are located at 1901 Gateway Drive, Suite 100, Irving, Texas 75038.

We consider whether to renew or renegotiate our leases based on a variety of factors, including whether current lease options are available.

On September 9, 2020, we entered into a new lease for Echo’s Carrollton warehouse location, the initial term for the new lease began January 1, 2021 and will expire on January 31, 2026.

The new lease omits provisions in the previous lease requiring a sublet of a portion of the warehouse to a third party and provides us an optional extension of an additional 60 months.

On August 24, 2021, we entered into a new lease for DGSE’s Dallas Flagship location, the initial term for which began October 1, 2021, and will expire January 31, 2027.

The new lease offers one renewal extension for an additional 60 months at market rate upon exercising the option.

ITAD’s Carrollton warehouse lease expired on July 31, 2021, and was not renewed.

A new ECHG warehouse lease was assigned to CEX in connection with the CExchange Transaction on June 9, 2021.

ITAD moved its operations to the building with Teladvance when ITAD’s lease expired on July 31, 2021.

Teladvance’s new assigned lease was set to expire December 31, 2021, but on October 31, 2021, we entered into an amended lease for Teladvance’s new Carrollton warehouse location.

The amended lease began January 1, 2022 and will expire January 31, 2027.

A new ECHG warehouse lease was assigned to Avail DE in connection with the Avail Transaction.

The new assigned warehouse lease expires on May 31, 2025.

We continue to evaluate options with respect to renegotiating leases or moving operations conducted at or centrally routed to these locations.

The following table provides a summary of all materially significant locations out of which we and our subsidiaries operate as of December 31, 2021:

Envela Corporation

Dallas Gold & Silver

Grand Prairie

Dallas Gold & Silver

Purchased July 30, 2021.

Mount Pleasant

Charleston Gold & Diamond

Echo Environmental Holdings, LLC

Lease assigned due to the

Cexchange Transaction.

Avail Recovery Solutions

Lease assigned due to the

Avail Transaction.

In our opinion, these properties have been well maintained, are in good operating condition and contain all necessary equipment and facilities for their intended purposes.

DGSE owns three of their retail locations and leases another four in DFW.

The four leased locations have leases expiring starting in 2025 through 2027 with rights of renewal for three of the properties.

ECHG leases all three of their locations, two of which are in DFW and the other being in Chandler, Arizona, with leases expiring starting in 2025 through 2027, with one lease having a right of renewal.

DGSE and ECHG are constantly evaluating each of their locations in terms of profitability, effectiveness and fit with long-term sustainability.

Our principal corporate office building is owned by the Company and is located at 1901 Gateway Drive, Irving, Texas 75038.

For addition information about encumbrances on properties the Company owns, see Note 9 to our consolidated financial statements.

For additional information about the nature of the Company’s leases, see Note 15 to the Company’s consolidated financial statements.

In management’s opinion, these properties have been well maintained, are in good operating condition and contain all necessary equipment and facilities for their intended purposes.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 2. Properties