What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-16 compared with 2022-03-16 · 28 added, 26 removed, 124 unchanged (30% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021.

As required by rule 13a-15(b) and Rule 15d-15(b) under the Exchange Ace, our management, with the participation of our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2022.

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2021, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective to be provide the reasonable assurance of the foregoing.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2022, the Company’s principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective to be provide the reasonable assurance of the foregoing.

We believe, however, that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving their objectives, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management has the responsibility for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act, with respect to us as a process designed by, or under the supervision of, our principal executive and principal financial officer and effected by our Board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles that achieve certain specified controls over the records of business transactions.

Our management has the responsibility for establishing and maintaining adequate internal control over financial reporting and for our assessment of the effectiveness of internal control over financial reporting.

Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act, and with respect to us as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officer and effected by the Board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles that achieve certain specified controls over the records of business transactions.

Because of its inherent limitations, internal control over financial reporting only provides reasonable assurance with respect to financial statement presentation and preparation.

Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013).

Based on its assessments, management believes that, as of December 31, 2021, our internal control over financial reporting is effective.

We are not required to provide an attestation report of our registered public accounting firm pursuant to rules promulgated by the SEC.

Based on its assessments, management has concluded that, as of December 31, 2022, the internal control over financial reporting is effective.

The Company is not required to provide an attestation report of our registered public accounting firm pursuant to rules promulgated by the SEC.

Changes in Internal Control Over Financial Reporting

During the fiscal year ended December 31, 2021, no changes occurred that our management believes have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the fiscal year ended December 31, 2022, no changes occurred that the Company’s management believes have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.

OTHER INFORMATION

26 unchanged sentences

Description of the Matter

As discussed in Note 15 to the consolidated financial statements, the Company records a valuation allowance based on their assessment of the realizability of the Company’s deferred tax assets.

As of December 31, 2021 the Company had net deferred tax assets before a valuation allowance of approximately $4.5 million.

As discussed in Note 14 to the consolidated financial statements, the Company considers the need for a valuation allowance based on their assessment of the realizability of the Company’s deferred tax assets.

As of December 31, 2022, the balance of the Company’s net deferred tax assets was approximately $1.5 million.

A significant portion of the deferred tax assets are subject to future expiration.

1 unchanged sentence

This analysis involves a high degree of subjectivity and significant judgment.

The principal considerations for our procedures relating to the realizability of deferred tax assets as a critical audit matter is that there was significant judgment by management in evaluating how various uncertainties within the current economic environment could impact management’s projections of future taxable income.

The principal considerations for our procedures relating to the realizability of deferred tax assets as a critical audit matter is that there was significant judgment by management in evaluating how the current economic environment could impact management’s projections of future taxable income.

This required significant auditor judgment to evaluate management’s analysis of the overall realizability of deferred tax assets.

1 unchanged sentence

The primary procedures we performed included evaluating the quantitative and qualitative analysis management prepares to determine realizability of deferred tax assets.

This analysis includes projections of future taxable income as well as management’s consideration of how various uncertainties within the current economic environment could impact future operating results.

These uncertainties include, among other things, the ongoing COVID-19 pandemic, increases in national inflation rate, changing interest rate environment and stock market volatility.

In addition, this included the uncertainties associated with geo-political events that may cause supply chain interruptions.

This analysis includes consideration of past years income, taxable income as well as management’s consideration of how the current economic environment could impact future operating results.

/s/ Whitley Penn LLP

2 unchanged sentences

March 16, 2023

Item 10, 11, 12, 13, 14

Items 10, 11, 12, 13, 14

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

8 unchanged sentences

Information with respect to this Item will be included in our definitive Proxy Statement with respect to our 2023 Annual Meeting, which we intend to file with the SEC no later than 120 days after the end of the fiscal year covered by this annual report on Form 10-K.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

Documents filed as part of this report

10 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID 726 )

Incorporated by

Incorporated by Reference

Date Filed with SEC

Exhibit Number

Amended and Restated By-laws, dated March 23, 2021

20 unchanged sentences

October 5, 2020

Revised note payable, related party, dated January 1, 2020, between DGSE, LLC and John R.

October 5, 2020

Revised note payable, related party, dated January 1, 2020, between ECHG, LLC and John R.

October 5, 2020

Purchase Agreement Dated May 6, 2021, for The Frisco, Texas location, by and between DGSE, LLC and KMTHT Holding, LLC

Purchase Agreement Dated May 6, 2021, for The Frisco, Texas location,

by and between DGSE, LLC and KMTHT Holding, LLC

August 4, 2021

Business Conduct & Ethics Policy

2016 Long-Term Incentive Plan

March 27, 2014

Subsidiaries of the Registrant

4 unchanged sentences

Certification pursuant to 18 U.S.C.

Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John R.

Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 by John R.

Certification pursuant to 18 U.S.C.

Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Bret A.

Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 by Bret A.

XBRL Instance Document

8 unchanged sentences

March 16, 2023

Chairman of the Board, Chief Executive Officer, President (Principal Executive Officer)

Chairman of the Board,

Chief Executive Officer,

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

14 unchanged sentences

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 9A. Controls and Procedures