Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 03, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | ENVELA CORPORATION | |
Entity Central Index Key | 0000701719 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 26,924,631 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-11048 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 88-0097334 | |
Entity Address Address Line 1 | 1901 GATEWAY DRIVE | |
Entity Address City Or Town | IRVING | |
Entity Address Address Line 2 | STE 100 | |
Entity Address State Or Province | TX | |
Entity Address Postal Zip Code | 75038 | |
City Area Code | 972 | |
Local Phone Number | 587-4049 | |
Security 12b Title | COMMON STOCK, par value $0.01 per share | |
Trading Symbol | ELA | |
Security Exchange Name | NYSEAMER | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue: | ||||
Sales | $ 33,724,006 | $ 20,545,607 | $ 59,214,447 | $ 46,374,750 |
Cost of goods sold | 26,596,116 | 16,074,349 | 45,782,293 | 36,602,212 |
Gross margin | 7,127,890 | 4,471,258 | 13,432,154 | 9,772,538 |
Expenses: | ||||
Selling, General & Administrative Expenses | 4,831,225 | 3,616,670 | 8,984,454 | 7,441,870 |
Depreciation and Amortization | 216,219 | 179,706 | 421,131 | 359,435 |
Total operating expenses | 5,047,444 | 3,796,376 | 9,405,585 | 7,801,305 |
Operating income | 2,080,446 | 674,882 | 4,026,569 | 1,971,233 |
Other income, net | 283,055 | 51,866 | 554,996 | 93,556 |
Interest expense | 177,704 | 144,297 | 356,726 | 289,612 |
Income before income taxes | 2,185,797 | 582,451 | 4,224,839 | 1,775,177 |
Income tax expense | 32,685 | 16,277 | 63,455 | 34,854 |
Net income | $ 2,153,112 | $ 566,174 | $ 4,161,384 | $ 1,740,323 |
Basic earnings per share: | ||||
Net income | $ 0.08 | $ 0.02 | $ 0.15 | $ 0.06 |
Diluted earnings per share: | ||||
Net income | $ 0.08 | $ 0.02 | $ 0.15 | $ 0.06 |
Weighted average shares outstanding: | ||||
Basic | 26,924,631 | 26,924,381 | 26,924,631 | 26,924,381 |
Diluted | 26,939,631 | 26,924,381 | 26,939,631 | 26,924,381 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 8,131,112 | $ 9,218,036 |
Trade receivables, net of allowances | 6,244,445 | 2,846,619 |
Notes receivable | 1,254,958 | 0 |
Inventories | 12,586,889 | 10,006,897 |
Current right-of-use assets from operating leases | 962,907 | 1,157,077 |
Prepaid expenses | 453,688 | 281,719 |
Total current assets | 29,633,999 | 23,510,348 |
Notes receivable, less current portion | 0 | 2,100,000 |
Property and equipment, net | 7,183,559 | 6,888,601 |
Goodwill | 3,258,586 | 1,367,109 |
Intangible assets, net | 2,791,673 | 2,992,473 |
Operating lease right-of-use assets | 3,124,608 | 3,522,923 |
Other long-term assets | 343,680 | 197,638 |
Total assets | 46,336,105 | 40,579,092 |
Current liabilities: | ||
Accounts payable-Trade | 3,612,320 | 1,510,697 |
Notes payable, related party | 315,672 | 307,032 |
Notes payable | 1,832,646 | 1,813,425 |
Current operating lease liabilities | 961,873 | 1,148,309 |
Accrued expenses | 793,202 | 844,324 |
Customer deposits and other liabilities | 770,236 | 428,976 |
Total current liabilities | 8,285,949 | 6,052,763 |
Notes payable, related party, less current portion | 8,899,383 | 9,052,810 |
Notes payable, less current portion | 4,142,084 | 4,240,658 |
Long-term operating lease liabilities, less current portion | 3,268,863 | 3,654,419 |
Total liabilities | 24,596,279 | 23,000,650 |
Stockholders equity: | ||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 60,000,000 shares authorized; 26,924,631 shares issued and outstanding | 269,246 | 269,246 |
Additional paid-in capital | 40,173,000 | 40,173,000 |
Accumulated deficit | (18,702,420) | (22,863,804) |
Total stockholders equity | 21,739,826 | 17,578,442 |
Total liabilities and stockholders equity | $ 46,336,105 | $ 40,579,092 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 26,924,631 | 26,924,631 |
Common stock, shares outstanding | 26,924,631 | 26,924,631 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operations | ||
Net income | $ 4,161,384 | $ 1,740,323 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation, amortization, and other | 421,131 | 359,435 |
Bad debt expense | 6,249 | 0 |
Changes in operating assets and liabilities: | ||
Trade receivables | (3,365,999) | 140,228 |
Inventories | (2,579,991) | 145,381 |
Prepaid expenses | (169,373) | (1,269,517) |
Other assets | (146,042) | (95,695) |
Accounts payable and accrued expenses | 1,574,520 | (831,398) |
Operating leases | 20,493 | (16,782) |
Customer deposits and other liabilities | 341,260 | 369,511 |
Net cash provided by operations | 263,632 | 541,486 |
Investing | ||
Investment in note receivable | (654,958) | (1,500,000) |
Purchase of property and equipment | (484,594) | (29,046) |
Acquisition of CExchange assets and liabilities, net of cash acquired | 13,136 | 0 |
Net cash used in investing | (1,126,416) | (1,529,046) |
Financing | ||
Payments on notes payable, related party | (144,787) | (138,683) |
Payments on notes payable | (79,353) | 0 |
Proceeds from Paycheck Protection Program Note | 0 | 1,668,200 |
Net cash provided by (used in) financing | (224,140) | 1,529,517 |
Net change in cash and cash equivalents | (1,086,924) | 541,957 |
Cash and cash equivalents, beginning of period | 9,218,036 | 4,510,660 |
Cash and cash equivalents, end of period | 8,131,112 | 5,052,617 |
Supplemental Disclosures | ||
Interest | 359,253 | 291,845 |
Income taxes | 56,900 | 0 |
Non cash activites: | ||
Acquisition of CExchange assets and liabilities | $ 1,555,892 | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited) - USD ($) | Total | Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 26,924,381 | ||||
Balance, amount at Dec. 31, 2019 | $ 11,194,174 | $ 269,244 | $ 0 | $ 40,172,677 | $ (29,247,747) |
Net Income | 1,740,323 | $ 0 | 0 | 0 | 1,740,323 |
Balance, shares at Jun. 30, 2020 | 26,924,381 | ||||
Balance, amount at Jun. 30, 2020 | 12,934,497 | $ 269,244 | 0 | 40,172,677 | (27,507,424) |
Balance, shares at Mar. 31, 2020 | 26,924,381 | ||||
Balance, amount at Mar. 31, 2020 | 12,368,323 | $ 269,244 | 0 | 40,172,677 | (28,073,598) |
Net Income | 566,174 | $ 0 | 0 | 0 | 566,174 |
Balance, shares at Jun. 30, 2020 | 26,924,381 | ||||
Balance, amount at Jun. 30, 2020 | 12,934,497 | $ 269,244 | 0 | 40,172,677 | (27,507,424) |
Balance, shares at Dec. 31, 2020 | 26,924,631 | ||||
Balance, amount at Dec. 31, 2020 | 17,578,442 | $ 269,246 | 0 | 40,173,000 | (22,863,804) |
Net Income | 4,161,384 | $ 0 | 0 | 0 | 4,161,384 |
Balance, shares at Jun. 30, 2021 | 26,924,631 | ||||
Balance, amount at Jun. 30, 2021 | 21,739,826 | $ 269,246 | 0 | 40,173,000 | (18,702,420) |
Balance, shares at Mar. 31, 2021 | 26,924,631 | ||||
Balance, amount at Mar. 31, 2021 | 19,586,714 | $ 269,246 | 0 | 40,173,000 | (20,855,532) |
Net Income | 2,153,112 | $ 0 | 0 | 0 | 2,153,112 |
Balance, shares at Jun. 30, 2021 | 26,924,631 | ||||
Balance, amount at Jun. 30, 2021 | $ 21,739,826 | $ 269,246 | $ 0 | $ 40,173,000 | $ (18,702,420) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2021 | |
BASIS OF PRESENTATION | |
NOTE 1 - Basis of Presentation | NOTE 1 — BASIS OF PRESENTATION The interim condensed consolidated financial statements of Envela Corporation, a Nevada corporation, and its subsidiaries (together with its subsidiaries, the “Company” or “Envela”), included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), including under the Securities Act of 1933, as amended (the “Securities Act”) and the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC’s rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The Company suggests that these financial statements be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 23, 2021 (as amended, the “2020 Annual Report”). In the opinion of the management of the Company, the accompanying unaudited interim financial statements contain all adjustments, consisting only of those of a normal recurring nature, necessary to present fairly its results of operations and cash flows for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. 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. |
PRINCIPLES OF CONSOLIDATION AND
PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2021 | |
PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS | |
NOTE 2 - Principles of Consolidation and Nature of Operations | NOTE 2 — PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS Envela and its subsidiaries engage in diverse business activities within the recommerce sector. These activities include being one of the nation's premier authenticated recommerce retailers of luxury hard assets; providing end-of-life asset recycling and resale to businesses, organization and retail consumers; offering data destruction and IT asset management; and providing products, services and solutions to industrial and commercial companies. 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”) 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 six jewelry stores at both the retail and wholesale levels throughout the United States via its facilities in Texas and South Carolina. Buying and selling items for their precious-metals content is a major method by which DGSE markets itself. DGSE also offers jewelry repair services, custom-made jewelry and consignment items, and maintains relationships with refiners for precious-metal items that are not appropriate for resale. The Company also maintains a presence in the retail market through its websites, www.dgse.com and www.cgdeinc.com. ECHG owns and operates Echo, ITAD USA and Teladvance. 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. 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. CExchange helped retailers provide in-store trade-in programs designed to allow retail consumers to exchange their old technology for cash in minutes. The Company believes the acquisition of CExchange’s business fits well with ECHG’s existing core business of refurbishing and reusing electronics, particularly cellular telephones. Based on the terms of the purchase, ECHG has concluded the CExchange Transaction represents a business combination pursuant to Financial Accounting Standards Board (“FASB”). 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, 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. In addition, following the Cexchange Transaction, ECHG also conducts such recycling and resale at the retail level. Echo focuses on end-of-life electronics recycling and sustainability and ITAD USA provides IT equipment disposition, including compliance and data sanitization services. Teladvance operates as a value-added reseller by providing offerings and services to companies looking either to upgrade capabilities or dispose of equipment. Like DGSE, ECHG also maintains relationships with refiners or recyclers to which it sells valuable materials it extracts from electronics and IT equipment that are not appropriate for resale or reuse. ECHG’s customers are companies and organizations that are based domestically and internationally. For additional information on the businesses of both DGSE and ECHG, see “Item 1. Business – Operating Segments” in the Company’s 2020 Annual Report. The interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its subsidiaries. All material intercompany transactions and balances have been eliminated. |
ACCOUNTING POLICIES AND ESTIMAT
ACCOUNTING POLICIES AND ESTIMATES | 6 Months Ended |
Jun. 30, 2021 | |
ACCOUNTING POLICIES AND ESTIMATES | |
NOTE 3 - Accounting Policies and Estimates | NOTE 3 — ACCOUNTING POLICIES AND ESTIMATES Financial Instruments The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, trade receivables, accounts payable, accrued expenses and notes payable approximate fair value because of the immediate or short-term nature of these financial instruments. Notes receivable, notes payable and notes payable, related party approximate fair value due to the market interest rate charged. Earnings Per Share Basic earnings per share of our common stock, par value $0.01 per share (our “Common Stock”), is computed by dividing net earnings available to holders of the Company’s Common Stock by the weighted average number of shares of Common Stock outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts requiring the Company to issue Common Stock were exercised or converted into Common Stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and warrants outstanding determined using the treasury stock method. Goodwill Goodwill is not amortized but evaluated for impairment on an annual basis during the fourth quarter of our fiscal year, or earlier if events or circumstances indicate the carrying value may be impaired. The Company’s goodwill is related to ECHG only and not the entire Company. 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. For tax purposes, goodwill is amortized and deductible over fifteen years. ECHG goodwill was allocated in connection with the two acquisitions (the “Echo Transaction”) of the assets now held by Echo and ITAD USA (the “Echo Entities”) on May 20, 2019 and the CExchange Transaction on June 9, 2021. There has been a preliminary addition to goodwill with the CExchange Transaction of $1,891,477. 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. Recent Accounting Pronouncements In June 2016, the FASB issued a new credit loss accounting standard ASU 2016-13. The new accounting standard introduces the current expected credit losses methodology for estimating allowances for credit losses which will be based on expected losses rather than incurred losses. We will be required to use a forward-looking expected credit loss methodology for accounts receivable, loans and other financial instruments. The standard will be adopted upon the effective date for us beginning January 1, 2023 by using a modified retrospective transition approach to align our credit loss methodology with the new standard. The Company is evaluating the financial statement implications of ASU 2016-13. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2021 | |
INVENTORIES | |
NOTE 4 - Inventories | NOTE 4 — INVENTORIES A summary of inventories is as follows: June 30, December 31, 2021 2020 DGSE Resale $ 9,700,829 $ 8,971,815 Recycle - 191,677 Subtotal 9,700,829 9,163,492 ECHG Resale 2,655,776 557,959 Recycle 230,284 285,446 Subtotal 2,886,060 843,405 $ 12,586,889 $ 10,006,897 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 6 Months Ended |
Jun. 30, 2021 | |
NOTES RECEIVABLE | |
NOTE 5 - Notes Receivable | 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 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 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. 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. |
ACQUISITION
ACQUISITION | 6 Months Ended |
Jun. 30, 2021 | |
ACQUISITION | |
NOTE 6 - Acquisition | 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. 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. Goodwill is not amortized but evaluated for impairment on an annual basis during the fourth quarter of our fiscal year or earlier if events or circumstances indicate the carrying value may be impaired. The Company’s goodwill is related to the ECHG segment only and not the whole Company. ECHG has its own separate financial information to perform goodwill impairment testing. The Company will evaluate goodwill based on cash flows for the ECHG segment. For tax purposes, goodwill is amortized and deductible over fifteen (15) years. The purchase price allocation listed below is considered to be a preliminary allocation and is subject to change. The preliminary purchase price is allocated as follows: Description Amount Assets Cash $ 13,136 Account receivables 93,970 Prepaids 2,594 Fixed assets - net 30,697 Liabilities Account payables (474,043 ) Accrued liabilities (1,939 ) Net assets (335,585 ) Goodwill 1,891,477 Total Purchase Price $ 1,555,892 |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2021 | |
GOODWILL | |
NOTE 7 - Goodwill | NOTE 7 — GOODWILL The changes in goodwill is as follows: June 30, December 31, 2021 2020 Opening balance $ 1,367,109 $ 1,367,109 Additions (1) 1,891,477 - Impairment adjustment - - Goodwill $ 3,258,586 $ 1,367,109 (1) Addition is in the connection with the CExchange Transaction on June 9, 2021. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2021 | |
PROPERTY AND EQUIPMENT | |
NOTE 8 - Property and Equipment | NOTE 8 — PROPERTY AND EQUIPMENT Property and equipment consist of the following: June 30, December 31, 2021 2020 DGSE Land $ 720,786 $ 720,786 Building and improvements 1,331,887 1,317,906 Leasehold improvements 1,450,694 1,435,742 Machinery and equipment 1,056,315 1,056,315 Furniture and fixtures 526,249 504,430 Vehicles 22,859 22,859 5,108,790 5,058,038 Less: accumulated depreciation (2,199,287 ) (2,054,294 ) Sub-Total 2,909,503 3,003,744 ECHG Building and improvements 74,162 81,149 Machinery and equipment 588,120 220,417 Furniture and fixtures 101,494 93,827 Vehicles 86,609 - 850,385 395,393 Less: accumulated depreciation (113,869 ) (71,058 ) Sub-Total 736,516 324,335 Envela Land 1,106,664 1,106,664 Building and improvements 2,456,324 2,456,324 Machinery and equipment 14,951 5,407 3,577,939 3,568,395 Less: accumulated depreciation (40,399 ) (7,873 ) Sub-Total 3,537,540 3,560,522 $ 7,183,559 $ 6,888,601 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. 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. The note has monthly interest and principal payments of $10,507. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2021 | |
GOODWILL | |
NOTE 9 - Intangible Assets | NOTE 9 — INTANGIBLE ASSETS Intangible assets consist of the following: June 30, December 31, 2021 2020 DGSE Domain names $ 41,352 $ 41,352 Point of sale system 330,000 330,000 371,352 371,352 Less: accumulated amortization (236,502 ) (203,502 ) Subtotal 134,850 167,850 ECHG Trademarks 1,483,000 1,483,000 Customer Contracts 1,873,000 1,873,000 3,356,000 3,356,000 Less: accumulated amortization (699,177 ) (531,377 ) Subtotal 2,656,823 2,824,623 $ 2,791,673 $ 2,992,473 The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2021: DGSE ECHG Total 2021 (excluding the six months ending June 30, 2021) $ 33,000 $ 167,800 $ 200,800 2022 66,000 335,600 401,600 2023 30,350 335,600 365,950 2024 5,500 335,600 341,100 2025 - 335,600 335,600 Thereafter - 1,146,623 1,146,623 $ 134,850 $ 2,656,823 $ 2,791,673 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2021 | |
ACCRUED EXPENSES | |
NOTE 10 - Accrued Expenses | NOTE 10— ACCRUED EXPENSES Accrued expenses consist of the following: June 30, December 31, 2021 2020 DGSE Accrued interest $ 10,291 $ 10,057 Board member fees - 7,500 Payroll 78,132 155,635 Property taxes 117,032 26,435 Sales tax 63,376 180,609 Other administrative expenss 8,537 13,525 Subtotal 277,368 393,761 ECHG Accrued interest 15,771 17,086 Payroll 134,780 119,327 Property tax 20,500 20,500 Other accrued expenses 67,418 10,574 Subtotal 238,469 167,487 Envela Accrued interest 7,482 7,884 Payroll 23,495 10,745 Professional fees 112,654 142,635 Property Tax 43,800 - Other administrative expenses - 8,433 State income tax 89,934 113,379 Subtotal 277,365 283,076 $ 793,202 $ 844,324 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT INFORMATION | |
NOTE 11 - Segment Information | NOTE 11 — SEGMENT INFORMATION We determine our business segments based upon an internal reporting structure. Our financial performance is based on the following segments: 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. Pleasant, South Carolina. The ECHG segment includes Echo, ITAD USA and Teladvance. These three companies were added during 2019 and are involved in recycling and the reuse of electronic components. We allocate a portion of certain corporate costs and expenses, including information technology as well as rental income and expenses relating to our corporate headquarters, to our business segments. These income and expenses are included in selling, general and administrative (“SG&A”) expenses, depreciation and amortization, other income, interest expense and income tax expense. Our management team evaluates each segment and makes decisions about the allocation of resources according to each segment’s profit. 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, 2021 2020 DGSE ECHG Consolidated DGSE ECHG Consolidated Revenue: Sales $ 23,012,324 $ 10,711,682 $ 33,724,006 $ 14,349,029 $ 6,196,578 $ 20,545,607 Cost of goods sold 19,915,328 6,680,788 26,596,116 12,734,264 3,340,085 16,074,349 Gross profit 3,096,996 4,030,894 7,127,890 1,614,765 2,856,493 4,471,258 Expenses: Selling, general and administrative expenses 1,889,895 2,941,330 4,831,225 1,545,168 2,071,502 3,616,670 Depreciation and amortization 97,435 118,784 216,219 79,240 100,466 179,706 1,987,330 3,060,114 5,047,444 1,624,408 2,171,968 3,796,376 Operating income (loss) 1,109,666 970,780 2,080,446 (9,643 ) 684,525 674,882 Other income/expense: Other income, net 119,460 163,595 283,055 9,078 42,788 51,866 Interest expense 68,692 109,012 177,704 44,100 100,197 144,297 Income before income taxes 1,160,434 1,025,363 2,185,797 (44,665 ) 627,116 582,451 Income tax expense 14,185 18,500 32,685 4,262 12,015 16,277 Net income (loss) $ 1,146,249 $ 1,006,863 $ 2,153,112 $ (48,927 ) $ 615,101 $ 566,174 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, 2021 2020 DGSE ECHG Consolidated DGSE ECHG Consolidated Revenue: Sales $ 41,926,825 $ 17,287,622 $ 59,214,447 $ 34,712,613 $ 11,662,137 $ 46,374,750 Cost of goods sold 36,022,194 9,760,099 45,782,293 30,733,666 5,868,546 36,602,212 Gross profit 5,904,631 7,527,523 13,432,154 3,978,947 5,793,591 9,772,538 Expenses: Selling, general and administrative expenses 3,672,332 5,312,122 8,984,454 3,418,174 4,023,696 7,441,870 Depreciation and amortization 194,257 226,874 421,131 156,281 203,154 359,435 3,866,589 5,538,996 9,405,585 3,574,455 4,226,850 7,801,305 Operating income 2,038,042 1,988,527 4,026,569 404,492 1,566,741 1,971,233 Other income/expense: Other income, net 231,191 323,805 554,996 36,446 57,110 93,556 Interest expense 137,177 219,549 356,726 88,893 200,719 289,612 Income before income taxes 2,132,056 2,092,783 4,224,839 352,045 1,423,132 1,775,177 Income tax expense 27,890 35,565 63,455 12,547 22,307 34,854 Net income $ 2,104,166 $ 2,057,218 $ 4,161,384 $ 339,498 $ 1,400,825 $ 1,740,323 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 30, 2021 | |
REVENUE RECOGNITION | |
NOTE 12 - Revenue Recognition | NOTE 12 — REVENUE RECOGNITION ASC 606 provides guidance to identify performance obligations for revenue-generating transactions. The initial step is to identify the contract with a customer created with the sales invoice or a repair ticket. Secondly, we identify the performance obligations in the contract, as we promise to deliver the purchased item or promised repairs in return for payment or future payment as a receivable. The third step is determining the transaction price of the contract obligation, as in the full ticket price, negotiated price or a repair price. The next step is to allocate the transaction price to the performance obligations, as we designate a separate price for each item. The final step in the guidance is to recognize revenue as each performance obligation is satisfied. Beginning in fiscal year 2020, Envela disaggregated its revenue, within the operating segments, based on its resale and recycle presentation basis to more closely align with the Company’s activities. 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: CONSOLIDATED Three Months Ended June 30, 2021 2020 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Resale $ 20,893,838 $ 2,678,640 12.8 % $ 13,421,969 $ 1,444,814 10.8 % Recycled 2,118,486 418,356 19.7 % 927,060 169,951 18.3 % Subtotal 23,012,324 3,096,996 13.5 % 14,349,029 1,614,765 11.3 % ECHG Resale 8,595,910 3,019,685 35.1 % 4,257,032 2,022,090 47.5 % Recycled 2,115,772 1,011,209 47.8 % 1,939,546 834,403 43.0 % Subtotal 10,711,682 4,030,894 37.6 % 6,196,578 2,856,493 46.1 % $ 33,724,006 $ 7,127,890 21.1 % $ 20,545,607 $ 4,471,258 21.8 % The following disaggregation of total revenue is listed by sales category and segment for the six months ended June 30, 2021 and 2020: CONSOLIDATED Six Months Ended June 30, 2021 2020 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Resale $ 38,214,479 $ 5,135,784 13.4 % $ 31,963,866 $ 3,492,247 10.9 % Recycled 3,712,346 768,847 20.7 % 2,748,747 486,700 17.7 % Subtotal 41,926,825 5,904,631 14.1 % 34,712,613 3,978,947 11.5 % ECHG Resale 13,336,902 5,631,869 42.2 % 7,783,260 3,442,266 44.2 % Recycled 3,950,720 1,895,654 48.0 % 3,878,877 2,351,325 60.6 % Subtotal 17,287,622 7,527,523 43.5 % 11,662,137 5,793,591 49.7 % $ 59,214,447 $ 13,432,154 22.7 % $ 46,374,750 $ 9,772,538 21.1 % 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. We also recognize revenue upon the shipment of goods when retail and wholesale customers have fulfilled their obligation to pay, or promise to pay through e-commerce or phone sales. We have elected to account for shipping and handling costs as fulfillment costs after the customer obtains control of the goods. Crafted-precious-metal items at the end of their useful lives are sold to a refiner. Since the local refiner is located in the Dallas/Fort Worth area, we deliver the metal to the refiner. The metal is melted and assayed, price is determined from the assay and payment is made usually in a day or two. Revenue is recognized from the sale once payment is received. DGSE also offers a structured layaway plan. When a retail customer utilizes the layaway plan, we collect a minimum payment of 25% of the sales price, establish a payment schedule for the remaining balance and hold the merchandise as collateral as security against the customer’s deposit until all amounts due are paid in full. Revenue for layaway sales is recognized when the merchandise is paid in full and delivered to the retail customer. Layaway revenue is also recognized when a customer fails to pay in accordance with the sales contract and the sales item is returned to inventory with the forfeit of deposited funds, typically after 90 days. In limited circumstances, we exchange merchandise for similar merchandise and/or monetary consideration with both dealers and retail customers, for which we recognize revenue in accordance with ASC 845, Nonmonetary Transactions. When we exchange merchandise for similar merchandise and there is no monetary component to the exchange, we do not recognize any revenue. Instead, the basis of the merchandise relinquished becomes the basis of the merchandise received, less any indicated impairment of value of the merchandise relinquished. When we exchange merchandise for similar merchandise and there is a monetary component to the exchange, we recognize revenue to the extent of the monetary assets received and determines the cost of sale based on the ratio of monetary assets received to monetary and non-monetary assets received multiplied by the cost of the assets surrendered. The Company offers the option of third-party financing to customers wishing to borrow money for the purchase. The customer applies on-line with the financing company and upon going through the credit check will be approved or denied. If accepted, the customer is allowed to purchase according to the limits set by the financing company. Once the customer does purchase merchandise, based on their financing agreement, we record and recognize the sale at that point, based on the promise to pay by the finance company up to the customer’s approved limit. We have a return policy (money-back guarantee). The policy covers retail transactions involving jewelry, graded rare coins and currency only. Customers may return jewelry, graded rare coins and currency purchased within 30 days of the receipt of the items for a full refund as long as the items are returned in exactly the same condition as they were delivered. In the case of jewelry, graded rare coins and currency sales on account, customers may cancel the sale within 30 days of making a commitment to purchase the items. The receipt of a deposit and a signed purchase order evidences the commitment. Any customer may return a jewelry item or graded rare coins and currency if they can demonstrate that the item is not authentic, or there was an error in the description of a graded coin or currency piece. Returns are accounted for as a reversal of the original transaction, with the effect of reducing revenues and cost of sales, and returning the merchandise to inventory. 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. 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. The revenue streams are as follows. · Outright sales are recorded when product is shipped. Once the price is established and the terms are agreed to and the product is shipped, the revenue is recognized. The Echo Entities have fulfilled their performance obligation with an agreed upon transaction price, payment terms and shipping the product. · Echo recognizes refining revenue when our inventory arrives at the destination port and the performance obligation is satisfied by transferring the control of the promised goods that are identified in the customer contract. Ninety percent (90%) of our refining revenue is generated from one refining partner that has an international refining facility. This refining partner pays us sixty percent (60%) of an Invoice within five working days upon the receipt of the Ocean Bill of Lading issued by the Ocean Carrier. Our initial Invoice is recognized in full when our performance obligation is satisfied, as stated in the first sentence. Under the guidance of ASC 606, an estimate of the variable consideration that we expect to be entitled is included in the transaction price stated at the current precious metal spot price and weight of the precious metal. An adjustment to revenue is made in the period once the underlying weight and any precious metal spot price movement is resolved, which is usually around six (6) weeks. Any adjustment from the resolution of the underlying uncertainty is netted with the remaining forty percent (40%) due from the original contract. · Hard drive sales by the Echo Entities are limited to customers who are required to prepay shipments. Once the commodity price is established and agreed upon by both parties, customers send payment in advance. The Company releases the shipment on the same day when payment receipt is confirmed, and revenue is recognized on day of shipment. If payment is received on the last day of the month and shipment goes out the following day the payment received is deferred revenue and recognized the following month when the shipment is made. · Echo also provides recycling services according to a Scope of Work and services are recognized when promised services are rendered. We have recycling services conducted at the Echo facility and another type of service is conducted at the client’s facility. The Scope of Work will determine the charges and whether it is completed on campus or off campus. Payment terms are also dictated in the Scope of Work. Accounts Receivable Notes Receivable: Income Taxes We account for our position in tax uncertainties in accordance with ASC 740, Income Taxes. The guidance establishes standards for accounting for uncertainty in income taxes. The guidance provides several clarifications related to uncertain tax positions. Most notably, a “more likely-than-not” standard for initial recognition of tax positions, a presumption of audit detection and a measurement of recognized tax benefits based on the largest amount that has a greater than 50 percent likelihood of realization. The guidance applies a two-step process to determine the amount of tax benefit to be recognized in the financial statements. First, we must determine whether any amount of the tax benefit may be recognized. 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 during fiscal years ended December 31, 2021 and 2020. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2021 | |
LEASES | |
NOTE 13 - Leases | NOTE 13 — LEASES In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the interest rate that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. 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 lease for DGSE’s Grand Prairie, Texas location expires June 30, 2022, and has no current renewal options. 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. ECHG’s Echo, located on W. 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. The lease expires December 31, 2021, and this location is under review as to whether to pursue a lease renewal. Pursuant to the assignment of the CExchange lease to CEX, the lease is considered short-term and therefore does not fall under the rules to be reported as a Right of Use asset. 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: Operating Leases DGSE 2021 (excluding the six months ending June 30, 2021) $ 217,670 2022 235,677 2023 212,855 2024 213,855 2025 64,087 2026 and thereafter - Total minimum lease payments 944,144 Less imputed interest (82,953 ) DGSE Subtotal 861,191 ECHG 2021 (excluding the six months ending June 30, 2021) 398,386 2022 784,599 2023 806,175 2024 828,345 2025 851,125 2026 and thereafter 72,878 Total minimum lease payments 3,741,508 Less imputed interest (371,963 ) ECHG Subtotal 3,369,545 Total 4,230,736 Less current portion (961,873 ) Long-term operating lease liability $ 3,268,863 |
BASIC AND DILUTED AVERAGE SHARE
BASIC AND DILUTED AVERAGE SHARES | 6 Months Ended |
Jun. 30, 2021 | |
BASIC AND DILUTED AVERAGE SHARES | |
NOTE 14 - Basic and Diluted Average Shares | 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: For the Three Months Ended June 30, 2021 2020 Basic weighted average shares 26,924,631 26,924,381 Effect of potential dilutive securities 15,000 15,250 Diluted weighted average shares 26,939,631 26,939,631 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 June 30, 2021 2020 Basic weighted average shares 26,924,631 26,924,381 Effect of potential dilutive securities 15,000 15,250 Diluted weighted average shares 26,939,631 26,939,631 For the three and six months ended June 30, 2021 and 2020, there were 15,000and 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. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2021 | |
LONG-TERM DEBT | |
NOTE 15 - Long-Term Debt | NOTE 15 — LONG-TERM DEBT Long-term debt consists of the following: Outstanding Balance June 30, December 31, Current 2021 2020 Interest Rate Maturity DGSE Note payable, related party (1) $ 2,819,206 $ 2,863,715 6.00 % May 16, 2024 Note payable, Truist Bank (2) 925,927 942,652 3.65 % July 9, 2030 Note payable, Texas Bank & Trust (3) 483,036 491,852 3.75 % September 14, 2025 DGSE Sub-Total 4,228,169 4,298,219 ECHG Note payable, related party (1) 6,395,849 6,496,127 6.00 % May 16, 2024 Envela Note payable, Texas Bank & Trust (4) 2,897,567 2,951,379 3.25 % November 4, 2025 Note payable (5) 1,668,200 1,668,200 1.00 % April 20, 2025 Envela Sub-Total 4,565,767 4,619,579 Sub-Total 15,189,785 15,413,925 Current portion 2,148,318 2,120,457 $ 13,041,467 $ 13,293,468 (1) On May 20, 2019, in connection with the Echo Transaction, the Company entered into two loan agreements with John R. Loftus, the Company’s CEO, President and Chairman of the Board of Directors of the Company (the “Board”), pursuant to which Mr. Loftus made two loans (the “Related Party Loans”) to the Company. ECHG executed a 5-year, $6,925,979 note for the Echo Transaction, amortized over 20 years at a 6% annual interest rate. DGSE executed a 5-year, $3,074,021 note to pay off the accounts payable – related party balance to a related person to the Company, as that term is defined in the instructions to item 404(a) of Regulation S-K, promulgated under the Securities Act (each such person, a “Related Party”). Such person was no longer a Related Party as of May 20, 2019. That promissory note is also amortized over 20 years at a 6% annual interest rate. On January 1, 2020, revisions were made on the original documents for both DGSE and ECHG notes. Originally, the DGSE note stated that the monthly interest and principal payment due was $41,866 and the ECHG note stated that the monthly interest and principal payment due was $94,327. The revised interest and principal payment due monthly on the note for DGSE is $22,203. The revised interest and principal payment due monthly on the note for ECHG is $49,646. The allocation between short-term and long-term notes payable, related party was revised accordingly starting with the three months ended March 31, 2020. (2) On July 9, 2020, DGSE closed the purchase of a new retail building located at 610 E. Round Grove Road in Lewisville, Texas for $1.195 million. The purchase was partly financed through a $956,000, 10 year loan (the “Truist Lewisville Loan”), bearing an annual interest rate of 3.65%, amortized over 20 years, payable to Truist Bank (f/k/a BB&T Bank). 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. 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 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 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. 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: Note payable, related party - DGSE Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 47,927 2022 100,752 2023 106,966 2024 2,563,561 Subtotal $ 2,819,206 Note payable, Truist Bank - DGSE Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 16,819 2022 34,682 2023 35,988 2024 37,342 2025 38,748 Thereafter 762,348 Subtotal $ 925,927 Note payable, Texas Bank & Trust - DGSE Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 8,632 2022 17,808 2023 18,488 2024 19,193 2025 418,915 Subtotal $ 483,036 Note payable, related party - ECHG Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 106,801 2022 224,536 2023 238,385 2024 5,826,127 Subtotal $ 6,395,849 Note payable, Texas Bank & Trust - Envela Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 53,128 2022 108,928 2023 112,591 2024 116,378 2025 2,506,542 Subtotal $ 2,897,567 Note payable - Envela Corporation Year Ending December 31, Amount 2021 $ 1,668,200 Subtotal $ 1,668,200 $ 15,189,785 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2021 | |
STOCK-BASED COMPENSATION | |
NOTE 16 - Stock-Based Compensation | NOTE 16 — STOCK-BASED COMPENSATION The Company accounts for share-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments, including grants of stock options, based on the fair value of the award at the date of grant. In addition, to the extent that the Company receives an excess tax benefit upon exercise of an award, such benefit is reflected as cash flow from financing activities in the consolidated statement of cash flows. There was no stock-based compensation expense for the six months ended June 30, 2021 and 2020. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
NOTE 17 - Related Party Transactions | NOTE 17 — RELATED PARTY TRANSACTIONS The Company has a corporate policy governing the identification, review, consideration and approval or ratification of transactions with related persons, as that term is defined in the Instructions to Item 404(a) of Regulation S-K, promulgated under the Securities Act (each such person a Related Party”). Under this policy, all Related Party transactions are identified and approved prior to consummation of the transaction to ensure they are consistent with the Company’s best interests and the best interests of its stockholders. Among other factors, the Company’s Board considers the size and duration of the transaction, the nature and interest of the of the Related Party in the transaction, whether the transaction may involve a conflict of interest, and if the transaction is on terms that are at least as favorable to the Company as would be available in a comparable transaction with an unaffiliated third party. The Company’s Board reviews all Related Party transactions at least annually to determine if it is in the best interest of the Company and the Company’s stockholders to continue, modify, or terminate any of the Related Party transactions. Envela’s Related Person Transaction Policy is available for review in its entirety under the “Investors” menu of the Company’s corporate relations website at www.envela.com. On May 20, 2019, the Company entered into two loan agreements with John R. Loftus, the Company’s CEO, President and Chairman of the Board. ECHG executed a 5-year, $6,925,979 note in connection with the Echo Transaction, amortized over 20 years at a 6% annual interest rate. DGSE executed a 5-year, $3,074,021 note to pay off the accounts payable – related party balance to a former Related Party as of May 20, 2019. That promissory note is also amortized over 20 years at a 6% annual interest rate. Both notes are being serviced by operational cash flow. On January 1, 2020, revisions were made on the original documents for both DGSE and ECHG notes. Originally, the DGSE note stated the monthly interest and principal payment due was $41,866 and the ECHG note stated the monthly interest and principal payment due was $94,327. The revised interest and principal payment due monthly on the note for DGSE is $22,203. The revised interest and principal payment due monthly on the note for ECHG is $49,646. For the three months ended June 30, 2021 and 2020, the Company paid Mr. Loftus $142,144 and $143,852, respectively, in interest on the Company’s outstanding notes payable, related party. For the six months ended June 30, 2021 and 2020, the Company paid Mr. Loftus $285,353 and $289,167, respectively, in interest on the Company’s outstanding notes payable, related party. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 18 - Subsequent Events | NOTE 18 — SUBSEQUENT EVENTS The coronavirus disease 2019 (COVID-19) pandemic has adversely affected global economic business conditions. Future sales on products like ours could decline due to increased commodities prices, particularly gold. Although we are continuing to monitor and assess the effects of the COVID-19 pandemic, the ultimate impact is highly uncertain and subject to change. The duration of any such impact cannot be predicted, nor can the timing of the development and distribution of an effective vaccine or treatments for potential COVID-19 divergent strains, including the Delta variant. The CA Service Agreement terminated and the CA Facility matured on July 30, 2021. As of that date, Committed Agency had drawn $778,883 on the CA Facility. Committed Agency has repaid $423,925 plus accrued interest as of June 30, 2021. They paid an additional $234,250 against the principal, plus accrued interest on July 22, 2021, leaving an outstanding principal balance of $120,708 plus accrued interest. |
ACCOUNTING POLICIES AND ESTIM_2
ACCOUNTING POLICIES AND ESTIMATES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
ACCOUNTING POLICIES AND ESTIMATES | |
Financial Instruments | The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, trade receivables, accounts payable, accrued expenses and notes payable approximate fair value because of the immediate or short-term nature of these financial instruments. Notes receivable, notes payable and notes payable, related party approximate fair value due to the market interest rate charged. |
Earnings Per Share | Basic earnings per share of our common stock, par value $0.01 per share (our “Common Stock”), is computed by dividing net earnings available to holders of the Company’s Common Stock by the weighted average number of shares of Common Stock outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts requiring the Company to issue Common Stock were exercised or converted into Common Stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and warrants outstanding determined using the treasury stock method. |
Goodwill | Goodwill is not amortized but evaluated for impairment on an annual basis during the fourth quarter of our fiscal year, or earlier if events or circumstances indicate the carrying value may be impaired. The Company’s goodwill is related to ECHG only and not the entire Company. 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. For tax purposes, goodwill is amortized and deductible over fifteen years. ECHG goodwill was allocated in connection with the two acquisitions (the “Echo Transaction”) of the assets now held by Echo and ITAD USA (the “Echo Entities”) on May 20, 2019 and the CExchange Transaction on June 9, 2021. There has been a preliminary addition to goodwill with the CExchange Transaction of $1,891,477. 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. |
Recent Accounting Pronouncements | In June 2016, the FASB issued a new credit loss accounting standard ASU 2016-13. The new accounting standard introduces the current expected credit losses methodology for estimating allowances for credit losses which will be based on expected losses rather than incurred losses. We will be required to use a forward-looking expected credit loss methodology for accounts receivable, loans and other financial instruments. The standard will be adopted upon the effective date for us beginning January 1, 2023 by using a modified retrospective transition approach to align our credit loss methodology with the new standard. The Company is evaluating the financial statement implications of ASU 2016-13. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
INVENTORIES | |
Schedule of inventories | June 30, December 31, 2021 2020 DGSE Resale $ 9,700,829 $ 8,971,815 Recycle - 191,677 Subtotal 9,700,829 9,163,492 ECHG Resale 2,655,776 557,959 Recycle 230,284 285,446 Subtotal 2,886,060 843,405 $ 12,586,889 $ 10,006,897 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
ACQUISITION | |
Schedule of Assets Acquired of Purchase Price | Description Amount Assets Cash $ 13,136 Account receivables 93,970 Prepaids 2,594 Fixed assets - net 30,697 Liabilities Account payables (474,043 ) Accrued liabilities (1,939 ) Net assets (335,585 ) Goodwill 1,891,477 Total Purchase Price $ 1,555,892 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
GOODWILL | |
Schedule of Goodwill | June 30, December 31, 2021 2020 Opening balance $ 1,367,109 $ 1,367,109 Additions (1) 1,891,477 - Impairment adjustment - - Goodwill $ 3,258,586 $ 1,367,109 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | June 30, December 31, 2021 2020 DGSE Land $ 720,786 $ 720,786 Building and improvements 1,331,887 1,317,906 Leasehold improvements 1,450,694 1,435,742 Machinery and equipment 1,056,315 1,056,315 Furniture and fixtures 526,249 504,430 Vehicles 22,859 22,859 5,108,790 5,058,038 Less: accumulated depreciation (2,199,287 ) (2,054,294 ) Sub-Total 2,909,503 3,003,744 ECHG Building and improvements 74,162 81,149 Machinery and equipment 588,120 220,417 Furniture and fixtures 101,494 93,827 Vehicles 86,609 - 850,385 395,393 Less: accumulated depreciation (113,869 ) (71,058 ) Sub-Total 736,516 324,335 Envela Land 1,106,664 1,106,664 Building and improvements 2,456,324 2,456,324 Machinery and equipment 14,951 5,407 3,577,939 3,568,395 Less: accumulated depreciation (40,399 ) (7,873 ) Sub-Total 3,537,540 3,560,522 $ 7,183,559 $ 6,888,601 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
GOODWILL | |
Schedule of intangible assets | June 30, December 31, 2021 2020 DGSE Domain names $ 41,352 $ 41,352 Point of sale system 330,000 330,000 371,352 371,352 Less: accumulated amortization (236,502 ) (203,502 ) Subtotal 134,850 167,850 ECHG Trademarks 1,483,000 1,483,000 Customer Contracts 1,873,000 1,873,000 3,356,000 3,356,000 Less: accumulated amortization (699,177 ) (531,377 ) Subtotal 2,656,823 2,824,623 $ 2,791,673 $ 2,992,473 |
Schedule of estimated amortization expense | DGSE ECHG Total 2021 (excluding the six months ending June 30, 2021) $ 33,000 $ 167,800 $ 200,800 2022 66,000 335,600 401,600 2023 30,350 335,600 365,950 2024 5,500 335,600 341,100 2025 - 335,600 335,600 Thereafter - 1,146,623 1,146,623 $ 134,850 $ 2,656,823 $ 2,791,673 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | June 30, December 31, 2021 2020 DGSE Accrued interest $ 10,291 $ 10,057 Board member fees - 7,500 Payroll 78,132 155,635 Property taxes 117,032 26,435 Sales tax 63,376 180,609 Other administrative expenss 8,537 13,525 Subtotal 277,368 393,761 ECHG Accrued interest 15,771 17,086 Payroll 134,780 119,327 Property tax 20,500 20,500 Other accrued expenses 67,418 10,574 Subtotal 238,469 167,487 Envela Accrued interest 7,482 7,884 Payroll 23,495 10,745 Professional fees 112,654 142,635 Property Tax 43,800 - Other administrative expenses - 8,433 State income tax 89,934 113,379 Subtotal 277,365 283,076 $ 793,202 $ 844,324 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
SEGMENT INFORMATION | |
Schedule of segment reporting | For The Three Months Ended June 30, 2021 2020 DGSE ECHG Consolidated DGSE ECHG Consolidated Revenue: Sales $ 23,012,324 $ 10,711,682 $ 33,724,006 $ 14,349,029 $ 6,196,578 $ 20,545,607 Cost of goods sold 19,915,328 6,680,788 26,596,116 12,734,264 3,340,085 16,074,349 Gross profit 3,096,996 4,030,894 7,127,890 1,614,765 2,856,493 4,471,258 Expenses: Selling, general and administrative expenses 1,889,895 2,941,330 4,831,225 1,545,168 2,071,502 3,616,670 Depreciation and amortization 97,435 118,784 216,219 79,240 100,466 179,706 1,987,330 3,060,114 5,047,444 1,624,408 2,171,968 3,796,376 Operating income (loss) 1,109,666 970,780 2,080,446 (9,643 ) 684,525 674,882 Other income/expense: Other income, net 119,460 163,595 283,055 9,078 42,788 51,866 Interest expense 68,692 109,012 177,704 44,100 100,197 144,297 Income before income taxes 1,160,434 1,025,363 2,185,797 (44,665 ) 627,116 582,451 Income tax expense 14,185 18,500 32,685 4,262 12,015 16,277 Net income (loss) $ 1,146,249 $ 1,006,863 $ 2,153,112 $ (48,927 ) $ 615,101 $ 566,174 For The Six Months Ended June 30, 2021 2020 DGSE ECHG Consolidated DGSE ECHG Consolidated Revenue: Sales $ 41,926,825 $ 17,287,622 $ 59,214,447 $ 34,712,613 $ 11,662,137 $ 46,374,750 Cost of goods sold 36,022,194 9,760,099 45,782,293 30,733,666 5,868,546 36,602,212 Gross profit 5,904,631 7,527,523 13,432,154 3,978,947 5,793,591 9,772,538 Expenses: Selling, general and administrative expenses 3,672,332 5,312,122 8,984,454 3,418,174 4,023,696 7,441,870 Depreciation and amortization 194,257 226,874 421,131 156,281 203,154 359,435 3,866,589 5,538,996 9,405,585 3,574,455 4,226,850 7,801,305 Operating income 2,038,042 1,988,527 4,026,569 404,492 1,566,741 1,971,233 Other income/expense: Other income, net 231,191 323,805 554,996 36,446 57,110 93,556 Interest expense 137,177 219,549 356,726 88,893 200,719 289,612 Income before income taxes 2,132,056 2,092,783 4,224,839 352,045 1,423,132 1,775,177 Income tax expense 27,890 35,565 63,455 12,547 22,307 34,854 Net income $ 2,104,166 $ 2,057,218 $ 4,161,384 $ 339,498 $ 1,400,825 $ 1,740,323 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue listed by sales category and segment | CONSOLIDATED Three Months Ended June 30, 2021 2020 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Resale $ 20,893,838 $ 2,678,640 12.8 % $ 13,421,969 $ 1,444,814 10.8 % Recycled 2,118,486 418,356 19.7 % 927,060 169,951 18.3 % Subtotal 23,012,324 3,096,996 13.5 % 14,349,029 1,614,765 11.3 % ECHG Resale 8,595,910 3,019,685 35.1 % 4,257,032 2,022,090 47.5 % Recycled 2,115,772 1,011,209 47.8 % 1,939,546 834,403 43.0 % Subtotal 10,711,682 4,030,894 37.6 % 6,196,578 2,856,493 46.1 % $ 33,724,006 $ 7,127,890 21.1 % $ 20,545,607 $ 4,471,258 21.8 % CONSOLIDATED Six Months Ended June 30, 2021 2020 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Resale $ 38,214,479 $ 5,135,784 13.4 % $ 31,963,866 $ 3,492,247 10.9 % Recycled 3,712,346 768,847 20.7 % 2,748,747 486,700 17.7 % Subtotal 41,926,825 5,904,631 14.1 % 34,712,613 3,978,947 11.5 % ECHG Resale 13,336,902 5,631,869 42.2 % 7,783,260 3,442,266 44.2 % Recycled 3,950,720 1,895,654 48.0 % 3,878,877 2,351,325 60.6 % Subtotal 17,287,622 7,527,523 43.5 % 11,662,137 5,793,591 49.7 % $ 59,214,447 $ 13,432,154 22.7 % $ 46,374,750 $ 9,772,538 21.1 % |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
LEASES | |
Schedule of future annual minimum lease payments | Operating Leases DGSE 2021 (excluding the six months ending June 30, 2021) $ 217,670 2022 235,677 2023 212,855 2024 213,855 2025 64,087 2026 and thereafter - Total minimum lease payments 944,144 Less imputed interest (82,953 ) DGSE Subtotal 861,191 ECHG 2021 (excluding the six months ending June 30, 2021) 398,386 2022 784,599 2023 806,175 2024 828,345 2025 851,125 2026 and thereafter 72,878 Total minimum lease payments 3,741,508 Less imputed interest (371,963 ) ECHG Subtotal 3,369,545 Total 4,230,736 Less current portion (961,873 ) Long-term operating lease liability $ 3,268,863 |
BASIC AND DILUTED AVERAGE SHA_2
BASIC AND DILUTED AVERAGE SHARES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
BASIC AND DILUTED AVERAGE SHARES | |
Schedule of reconciliation of basic and diluted weighted average common shares | For the Three Months Ended June 30, 2021 2020 Basic weighted average shares 26,924,631 26,924,381 Effect of potential dilutive securities 15,000 15,250 Diluted weighted average shares 26,939,631 26,939,631 For the Six Months Ended June 30, 2021 2020 Basic weighted average shares 26,924,631 26,924,381 Effect of potential dilutive securities 15,000 15,250 Diluted weighted average shares 26,939,631 26,939,631 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
LONG-TERM DEBT | |
Schedule of long-term debt | Outstanding Balance June 30, December 31, Current 2021 2020 Interest Rate Maturity DGSE Note payable, related party (1) $ 2,819,206 $ 2,863,715 6.00 % May 16, 2024 Note payable, Truist Bank (2) 925,927 942,652 3.65 % July 9, 2030 Note payable, Texas Bank & Trust (3) 483,036 491,852 3.75 % September 14, 2025 DGSE Sub-Total 4,228,169 4,298,219 ECHG Note payable, related party (1) 6,395,849 6,496,127 6.00 % May 16, 2024 Envela Note payable, Texas Bank & Trust (4) 2,897,567 2,951,379 3.25 % November 4, 2025 Note payable (5) 1,668,200 1,668,200 1.00 % April 20, 2025 Envela Sub-Total 4,565,767 4,619,579 Sub-Total 15,189,785 15,413,925 Current portion 2,148,318 2,120,457 $ 13,041,467 $ 13,293,468 |
Schedule of long-term debt maturities of principal payments | Note payable, related party - DGSE Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 47,927 2022 100,752 2023 106,966 2024 2,563,561 Subtotal $ 2,819,206 Note payable, Truist Bank - DGSE Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 16,819 2022 34,682 2023 35,988 2024 37,342 2025 38,748 Thereafter 762,348 Subtotal $ 925,927 Note payable, Texas Bank & Trust - DGSE Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 8,632 2022 17,808 2023 18,488 2024 19,193 2025 418,915 Subtotal $ 483,036 Note payable, related party - ECHG Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 106,801 2022 224,536 2023 238,385 2024 5,826,127 Subtotal $ 6,395,849 Note payable, Texas Bank & Trust - Envela Year Ending December 31, Amount 2021 (excluding the six months ended June 30, 2021) $ 53,128 2022 108,928 2023 112,591 2024 116,378 2025 2,506,542 Subtotal $ 2,897,567 Note payable - Envela Corporation Year Ending December 31, Amount 2021 $ 1,668,200 Subtotal $ 1,668,200 $ 15,189,785 |
PRINCIPLES OF CONSOLIDATION A_2
PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS (Details Narrative) - ECHG [Member] - CExchange Purchase Asset Agreement [Member] | Jun. 09, 2021USD ($) |
Assets purchased | $ 335,585 |
Exchange transaction of assets | $ 1,500,000 |
ACCOUNTING POLICIES AND ESTIM_3
ACCOUNTING POLICIES AND ESTIMATES (Details Narrative) - USD ($) | Jun. 09, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
ACCOUNTING POLICIES AND ESTIMATES | |||||
Goodwill | $ 3,258,586 | $ 1,367,109 | $ 1,367,109 | $ 1,367,109 | |
Common stock, par value | $ 0.01 | $ 0.01 | |||
Exchange transaction of goodwill | $ 1,891,477 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Inventories | $ 12,586,889 | $ 10,006,897 |
DGSE [Member] | ||
Inventories | 9,700,829 | 9,163,492 |
DGSE [Member] | Resale | ||
Inventories | 9,700,829 | 8,971,815 |
DGSE [Member] | Recycle | ||
Inventories | 0 | 191,677 |
ECHG [Member] | ||
Inventories | 2,886,060 | 843,405 |
ECHG [Member] | Resale | ||
Inventories | 2,655,776 | 557,959 |
ECHG [Member] | Recycle | ||
Inventories | $ 230,284 | $ 285,446 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | Jun. 09, 2021 | Apr. 14, 2021 | Nov. 07, 2020 | Feb. 15, 2020 | Jun. 30, 2021 | Feb. 04, 2021 | Dec. 31, 2020 |
Notes receivable | $ 1,254,958 | $ 0 | |||||
ECHG [Member] | |||||||
Proceeds from loan | $ 300,000 | $ 1,500,000 | |||||
Notes receivable | 900,000 | ||||||
Accrued interest receivable | $ 55,892 | ||||||
Interest rate per annum | 4.00% | 8.50% | |||||
Description of loan increase agreement | ECHG entered into an amended agreement to increase the loan from $1,500,000 to $2,100,000 | ||||||
Forgiveness of loan amount | $ 1,500,000 | ||||||
ECHG [Member] | CA Facility Agreement [Member] | |||||||
Interest rate per annum | 6.00% | ||||||
Line of credit, not exceeded | $ 1,000,000 | ||||||
LoansPayable , under ca facility | $ 354,958 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Goodwill | $ 3,258,586 | $ 1,367,109 | $ 1,367,109 | $ 1,367,109 |
CExchange Purchase Agreement [Member] | ||||
Cash | 13,136 | |||
Account receivables | 93,970 | |||
Prepaids | 2,594 | |||
Fixed assets - net | 30,697 | |||
Account payables | (474,043) | |||
Accrued liabilities | (1,939) | |||
Net assets | (335,585) | |||
Goodwill | 1,891,477 | |||
Total Purchase Price | $ 1,555,892 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | Jun. 09, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Feb. 15, 2020 |
Note receivable | $ 1,254,958 | $ 0 | ||
CExchange Purchase Agreement [Member] | ||||
Note receivable | 900,000 | |||
Forgiveness of loan amount | $ 1,500,000 | |||
Accrued interest receivable | 55,892 | $ 55,892 | ||
Goodwill | $ 1,891,477 | |||
Useful life | 15 years |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
GOODWILL | ||
Opening balance | $ 1,367,109 | $ 1,367,109 |
Additions | 1,891,477 | 0 |
Impairment adjustment | 0 | 0 |
Goodwill | $ 3,258,586 | $ 1,367,109 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Property and equipment, net | $ 7,183,559 | $ 6,888,601 |
DGSE [Member] | ||
Property and equipment, net | 2,909,503 | 3,003,744 |
Property and equipment, gross | 5,108,790 | 5,058,038 |
Less: accumulated depreciation | (2,199,287) | (2,054,294) |
DGSE [Member] | Buildings and Improvements | ||
Property and equipment, gross | 1,331,887 | 1,317,906 |
DGSE [Member] | Leasehold Improvements | ||
Property and equipment, gross | 1,450,694 | 1,435,742 |
DGSE [Member] | Machinery and Equipment | ||
Property and equipment, gross | 1,056,315 | 1,056,315 |
DGSE [Member] | Furniture and Fixtures | ||
Property and equipment, gross | 526,249 | 504,430 |
DGSE [Member] | Vehicles | ||
Property and equipment, gross | 22,859 | 22,859 |
DGSE [Member] | Land [Member] | ||
Property and equipment, gross | 720,786 | 720,786 |
ECHG [Member] | ||
Property and equipment, net | 736,516 | 324,335 |
Property and equipment, gross | 850,385 | 395,393 |
Less: accumulated depreciation | (113,869) | (71,058) |
ECHG [Member] | Buildings and Improvements | ||
Property and equipment, gross | 74,162 | 81,149 |
ECHG [Member] | Machinery and Equipment | ||
Property and equipment, gross | 588,120 | 220,417 |
ECHG [Member] | Furniture and Fixtures | ||
Property and equipment, gross | 101,494 | 93,827 |
ECHG [Member] | Vehicles | ||
Property and equipment, net | 86,609 | 0 |
Envela | ||
Property and equipment, net | 3,537,540 | 3,560,522 |
Property and equipment, gross | 3,577,939 | 3,568,395 |
Less: accumulated depreciation | (40,399) | (7,873) |
Envela | Buildings and Improvements | ||
Property and equipment, gross | 2,456,324 | 2,456,324 |
Envela | Machinery and Equipment | ||
Property and equipment, gross | 14,951 | 5,407 |
Envela | Land [Member] | ||
Property and equipment, gross | $ 1,106,664 | $ 1,106,664 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | Sep. 14, 2020 | Jul. 09, 2020 | Jan. 02, 2020 | Jul. 30, 2021 | May 20, 2019 | Apr. 20, 2020 |
Purchase partly financed | $ 496,000 | $ 956,000 | ||||
Annual interest rate | 3.75% | 3.65% | 1.00% | |||
Amortized period | 20 years | 20 years | ||||
Monthly interest payments | $ 5,645 | $ 5,645 | ||||
DGSE [Member] | ||||||
Annual interest rate | 6.00% | |||||
Amortized period | 20 years | |||||
Monthly interest payments | $ 41,866 | |||||
DGSE [Member] | Subsequent Event [Member] | ||||||
Purchase new retail building | $ 2,215,500 | |||||
Purchase partly financed | $ 1,772,000 | |||||
Loan period | 5 years | |||||
Annual interest rate | 3.75% | |||||
Amortized period | 20 years | |||||
Monthly interest payments | $ 10,507 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Intangible assets, net | $ 2,791,673 | $ 2,992,473 |
DGSE [Member] | ||
Intangible assets, net | 134,850 | 167,850 |
Intangible assets, gross | 371,352 | 371,352 |
Less: accumulated amortization | (236,502) | (203,502) |
DGSE [Member] | Domain Names | ||
Intangible assets, gross | 41,352 | 41,352 |
DGSE [Member] | Point of Sale System | ||
Intangible assets, gross | 330,000 | 330,000 |
ECHG [Member] | ||
Intangible assets, net | 2,656,823 | 2,824,623 |
Intangible assets, gross | 3,356,000 | 3,356,000 |
Less: accumulated amortization | (699,177) | (531,377) |
ECHG [Member] | Trademarks [Member] | ||
Intangible assets, gross | 1,483,000 | 1,483,000 |
ECHG [Member] | Customer Contracts | ||
Intangible assets, gross | $ 1,873,000 | $ 1,873,000 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
2021 (excluding the six months ended June 31, 2021) | $ 200,800 | |
2022 | 401,600 | |
2023 | 365,950 | |
2024 | 341,100 | |
2025 | 335,600 | |
Thereafter | 1,146,623 | |
Total | 2,791,673 | $ 2,992,473 |
DGSE [Member] | ||
2021 (excluding the six months ended June 31, 2021) | 33,000 | |
2022 | 66,000 | |
2023 | 30,350 | |
2024 | 5,500 | |
2025 | 0 | |
Thereafter | 0 | |
Total | 134,850 | 167,850 |
ECHG [Member] | ||
2021 (excluding the six months ended June 31, 2021) | 167,800 | |
2022 | 335,600 | |
2023 | 335,600 | |
2024 | 335,600 | |
2025 | 335,600 | |
Thereafter | 1,146,623 | |
Total | $ 2,656,823 | $ 2,824,623 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Total accrued expenses | $ 793,202 | $ 844,324 |
DGSE [Member] | ||
Total accrued expenses | 277,368 | 393,761 |
Accrued interest | 10,291 | 10,057 |
Board member fees | 0 | 7,500 |
Payroll | 78,132 | 155,635 |
Property taxes | 117,032 | 26,435 |
Sales tax | 63,376 | 180,609 |
Other | 8,537 | 13,525 |
ECHG [Member] | ||
Total accrued expenses | 238,469 | 167,487 |
Accrued interest | 15,771 | 17,086 |
Payroll | 134,780 | 119,327 |
Property taxes | 20,500 | 20,500 |
Other | 67,418 | 10,574 |
Envela | ||
Total accrued expenses | 277,365 | 283,076 |
Accrued interest | 7,482 | 7,884 |
Payroll | 23,495 | 10,745 |
Property taxes | 43,800 | 0 |
Other | 0 | 8,433 |
Professional fees | 112,654 | 142,635 |
State income tax | $ 89,934 | $ 113,379 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue | ||||
Sales | $ 33,724,006 | $ 20,545,607 | $ 59,214,447 | $ 46,374,750 |
Cost of goods sold | 26,596,116 | 16,074,349 | 45,782,293 | 36,602,212 |
Gross margin | 7,127,890 | 4,471,258 | 13,432,154 | 9,772,538 |
Expenses: | ||||
Selling, general and administrative expenses | 4,831,225 | 3,616,670 | 8,984,454 | 7,441,870 |
Depreciation and amortization | 216,219 | 179,706 | 421,131 | 359,435 |
Total operating expenses | 5,047,444 | 3,796,376 | 9,405,585 | 7,801,305 |
Operating income (loss) | 2,080,446 | 674,882 | 4,026,569 | 1,971,233 |
Other (income) expense: | ||||
Other income, net | 283,055 | 51,866 | 554,996 | 93,556 |
Interest expense | (177,704) | (144,297) | (356,726) | (289,612) |
Income before income taxes | 2,185,797 | 582,451 | 4,224,839 | 1,775,177 |
Income tax expense | 32,685 | 16,277 | 63,455 | 34,854 |
Net Income | 2,153,112 | 566,174 | 4,161,384 | 1,740,323 |
ECHG [Member] | ||||
Revenue | ||||
Sales | 10,711,682 | 6,196,578 | 17,287,622 | 11,662,137 |
Cost of goods sold | 6,680,788 | 3,340,085 | 9,760,099 | 5,868,546 |
Gross margin | 4,030,894 | 2,856,493 | 7,527,523 | 5,793,591 |
Expenses: | ||||
Selling, general and administrative expenses | 2,941,330 | 2,071,502 | 5,312,122 | 4,023,696 |
Depreciation and amortization | 118,784 | 100,466 | 226,874 | 203,154 |
Total operating expenses | 3,060,114 | 2,171,968 | 5,538,996 | 4,226,850 |
Operating income (loss) | 970,780 | 684,525 | 1,988,527 | 1,566,741 |
Other (income) expense: | ||||
Other income, net | 163,595 | 42,788 | 323,805 | 57,110 |
Interest expense | (109,012) | (100,197) | (219,549) | (200,719) |
Income before income taxes | 1,025,363 | 627,116 | 2,092,783 | 1,423,132 |
Income tax expense | 18,500 | 12,015 | 35,565 | 22,307 |
Net Income | 1,006,863 | 615,101 | 2,057,218 | 1,400,825 |
DGSE [Member] | ||||
Revenue | ||||
Sales | 23,012,324 | 14,349,029 | 41,926,825 | 34,712,613 |
Cost of goods sold | 19,915,328 | 12,734,264 | 36,022,194 | 30,733,666 |
Gross margin | 3,096,996 | 1,614,765 | 5,904,631 | 3,978,947 |
Expenses: | ||||
Selling, general and administrative expenses | 1,889,895 | 1,545,168 | 3,672,332 | 3,418,174 |
Depreciation and amortization | 97,435 | 79,240 | 194,257 | 156,281 |
Total operating expenses | 1,987,330 | 1,624,408 | 3,866,589 | 3,574,455 |
Operating income (loss) | 1,109,666 | (9,643) | 2,038,042 | 404,492 |
Other (income) expense: | ||||
Other income, net | 119,460 | 9,078 | 231,191 | 36,446 |
Interest expense | (68,692) | (44,100) | (137,177) | (88,893) |
Income before income taxes | 1,160,434 | (44,665) | 2,132,056 | 352,045 |
Income tax expense | 14,185 | 4,262 | 27,890 | 12,547 |
Net Income | $ 1,146,249 | $ (48,927) | $ 2,104,166 | $ 339,498 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues | $ 33,724,006 | $ 20,545,607 | $ 59,214,447 | $ 46,374,750 |
Gross margin | $ 7,127,890 | $ 4,471,258 | $ 13,432,154 | $ 9,772,538 |
Margin | 21.10% | 21.80% | 22.70% | 21.10% |
ECHG [Member] | ||||
Revenues | $ 10,711,682 | $ 6,196,578 | $ 17,287,622 | $ 11,662,137 |
Gross margin | $ 4,030,894 | $ 2,856,493 | $ 7,527,523 | $ 5,793,591 |
Margin | 37.60% | 46.10% | 43.50% | 49.70% |
ECHG [Member] | Resale | ||||
Revenues | $ 8,595,910 | $ 4,257,032 | $ 13,336,902 | $ 7,783,260 |
Gross margin | $ 3,019,685 | $ 2,022,090 | $ 5,631,869 | $ 3,442,266 |
Margin | 35.10% | 47.50% | 42.20% | 44.20% |
ECHG [Member] | Recycle | ||||
Revenues | $ 2,115,772 | $ 1,939,546 | $ 3,950,720 | $ 3,878,877 |
Gross margin | $ 1,011,209 | $ 834,403 | $ 1,895,654 | $ 2,351,325 |
Margin | 47.80% | 43.00% | 48.00% | 60.60% |
DGSE [Member] | ||||
Revenues | $ 23,012,324 | $ 14,349,029 | $ 41,926,825 | $ 34,712,613 |
Gross margin | $ 3,096,996 | $ 1,614,765 | $ 5,904,631 | $ 3,978,947 |
Margin | 13.50% | 11.30% | 14.10% | 11.50% |
DGSE [Member] | Resale | ||||
Revenues | $ 20,893,838 | $ 13,421,969 | $ 38,214,479 | $ 31,963,866 |
Gross margin | $ 2,678,640 | $ 1,444,814 | $ 5,135,784 | $ 3,492,247 |
Margin | 12.80% | 10.80% | 13.40% | 10.90% |
DGSE [Member] | Recycle | ||||
Revenues | $ 2,118,486 | $ 927,060 | $ 3,712,346 | $ 2,748,747 |
Gross margin | $ 418,356 | $ 169,951 | $ 768,847 | $ 486,700 |
Margin | 19.70% | 18.30% | 20.70% | 17.70% |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Return allowance | $ 28,000 | $ 28,000 |
Bad debt expense | 6,249 | $ 0 |
Credit facility | $ 354,958 | |
Maturity date | Jun. 30, 2021 | |
ECHG [Member] | ||
Maturity date | May 16, 2024 | |
ECHG [Member] | April 14, 2021 note [Member] | ||
Note receivable as current assets | $ 300,000 | |
Maturity date | Jul. 30, 2021 | |
ECHG [Member] | Feb 20, 2021 note [Member] | ||
Note receivable as current assets | $ 600,000 | |
Maturity date | Feb. 20, 2023 |
LEASES (Details)
LEASES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Operating lease liability | $ 4,230,736 | |
Less current portion | (961,873) | $ (1,148,309) |
Long term operating lease liability | 3,268,863 | $ 3,654,419 |
ECHG [Member] | ||
Operating lease liability | 3,369,545 | |
2021 (excluding the six months ended June 30, 2021) | 398,386 | |
2022 | 784,599 | |
2023 | 806,175 | |
2024 | 828,345 | |
2025 | 851,125 | |
2026 and thereafter | 72,878 | |
Total minimum lease payments | 3,741,508 | |
Less imputed interest | (371,963) | |
DGSE [Member] | ||
Operating lease liability | 861,191 | |
2021 (excluding the six months ended June 30, 2021) | 217,670 | |
2022 | 235,677 | |
2023 | 212,855 | |
2024 | 213,855 | |
2025 | 64,087 | |
2026 and thereafter | 0 | |
Total minimum lease payments | 944,144 | |
Less imputed interest | $ (82,953) |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
LEASES | ||||
Leasing costs | $ 588,896 | $ 342,740 | $ 895,433 | $ 649,276 |
Weighted average remaining lease term | 2 years 1 month 6 days | |||
Weighted average discount rate | 5.50% | 5.50% | ||
Cash paid for operating lease liabilities | $ 588,026 | $ 327,608 | $ 923,253 | $ 672,039 |
BASIC AND DILUTED AVERAGE SHA_3
BASIC AND DILUTED AVERAGE SHARES (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
BASIC AND DILUTED AVERAGE SHARES | ||||
Basic weighted average shares | 26,924,631 | 26,924,381 | 26,924,631 | 26,924,381 |
Effect of potential dilutive securities | 15,000 | 15,250 | 15,000 | 15,250 |
Diluted weighted average shares | 26,939,631 | 26,939,631 | 26,939,631 | 26,939,631 |
BASIC AND DILUTED AVERAGE SHA_4
BASIC AND DILUTED AVERAGE SHARES (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
BASIC AND DILUTED AVERAGE SHARES | ||||
Effect of potential dilutive securities | 15,000 | 15,250 | 15,000 | 15,250 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Subtotal | $ 15,189,785 | $ 15,413,925 |
Current portion | 2,148,318 | 2,120,457 |
Noncurrent portion | $ 13,041,467 | 13,293,468 |
Maturity | Jun. 30, 2021 | |
DGSE [Member] | ||
Subtotal | $ 4,228,169 | 4,298,219 |
Note payable, related party | $ 2,819,206 | 2,863,715 |
Interest rate | 6.00% | |
Maturity | May 16, 2024 | |
DGSE [Member] | Truist Bank | ||
Interest rate | 3.65% | |
Maturity | Jul. 9, 2030 | |
Note payable | $ 925,927 | 942,652 |
DGSE [Member] | Texas Bank & Trust | ||
Interest rate | 3.75% | |
Maturity | Sep. 14, 2025 | |
Note payable | $ 483,036 | 491,852 |
ECHG [Member] | ||
Note payable, related party | $ 6,395,849 | 6,496,127 |
Interest rate | 6.00% | |
Maturity | May 16, 2024 | |
Envela | ||
Subtotal | $ 4,565,767 | 4,619,579 |
Interest rate | 1.00% | |
Maturity | Apr. 20, 2025 | |
Note payable | $ 1,668,200 | 1,668,200 |
Envela | Texas Bank & Trust | ||
Interest rate | 3.25% | |
Maturity | Nov. 4, 2025 | |
Note payable | $ 2,897,567 | $ 2,951,379 |
LONG-TERM DEBT (Details 1)
LONG-TERM DEBT (Details 1) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Total | $ 15,189,785 | |
DGSE [Member] | Truist Bank | ||
Total | 925,927 | |
2021 (excluding the six months ended June 30, 2021) | 16,819 | |
2022 | 34,682 | |
2023 | 35,988 | |
2024 | 37,342 | |
2025 | 38,748 | |
Thereafter | 762,348 | |
Notes payable total | 925,927 | $ 942,652 |
DGSE [Member] | Texas Bank & Trust | ||
Total | 483,036 | |
2021 (excluding the six months ended June 30, 2021) | 8,632 | |
2022 | 17,808 | |
2023 | 18,488 | |
2024 | 19,193 | |
2025 | 418,915 | |
Notes payable total | 483,036 | 491,852 |
DGSE [Member] | Related Party | ||
Total | 2,819,206 | |
2021 (excluding the six months ended June 30, 2021) | 47,927 | |
2022 | 100,752 | |
2023 | 106,966 | |
2024 | 2,563,561 | |
Envela | ||
Notes payable total | 1,668,200 | 1,668,200 |
Envela | Texas Bank & Trust | ||
Total | 2,897,567 | |
2021 (excluding the six months ended June 30, 2021) | 53,128 | |
2022 | 108,928 | |
2023 | 112,591 | |
2024 | 116,378 | |
2025 | 2,506,542 | |
Notes payable total | 2,897,567 | $ 2,951,379 |
Envela | Note Payable | ||
2021 (excluding the six months ended June 30, 2021) | 1,668,200 | |
Notes payable total | 1,668,200 | |
ECHG [Member] | Related Party | ||
Total | 6,395,849 | |
2021 (excluding the six months ended June 30, 2021) | 106,801 | |
2022 | 224,536 | |
2023 | 238,385 | |
2024 | $ 5,826,127 |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) | Nov. 04, 2020 | Sep. 14, 2020 | Jul. 09, 2020 | Jan. 02, 2020 | May 20, 2019 | Apr. 20, 2020 |
Purchase partly financed | $ 496,000 | $ 956,000 | ||||
New retail building | $ 1,195,000 | |||||
Annual interest rate | 3.75% | 3.65% | 1.00% | |||
Loan | $ 1,670,000 | |||||
Monthly interest payments | $ 5,645 | $ 5,645 | ||||
Loan period | 5 years | 10 years | ||||
Amortized period | 20 years | 20 years | ||||
DGSE [Member] | ||||||
Annual interest rate | 6.00% | |||||
Monthly interest payments | $ 41,866 | |||||
Loan period | 5 years | |||||
Amortized period | 20 years | |||||
Purchase new retail building | $ 2,215,500 | |||||
Accounts payable - related party balance | $ 3,074,021 | |||||
Revised monthly interest payment due | 22,203 | |||||
ECHG [Member] | ||||||
Annual interest rate | 6.00% | |||||
Monthly interest payments | 94,327 | |||||
Loan period | 5 years | |||||
Amortized period | 20 years | |||||
Accounts payable - related party balance | $ 6,925,979 | |||||
Revised monthly interest payment due | 49,646 | |||||
NWH Holdings LLC [Member] | ||||||
Purchase partly financed | $ 496,000 | |||||
Annual interest rate | 3.75% | |||||
Monthly interest payments | $ 2,941 | |||||
Loan period | 5 years | |||||
Amortized period | 20 years | |||||
Purchase new retail building | $ 620,000 | |||||
Gateway Holdings [Member] | ||||||
Purchase partly financed | $ 2,960,000 | |||||
Annual interest rate | 3.25% | |||||
Monthly interest payments | $ 16,792 | $ 5,645 | $ 41,866 | |||
Loan period | 5 years | 5 years | ||||
Amortized period | 20 years | 20 years | ||||
Purchase new retail building | $ 3,521,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
STOCK-BASED COMPENSATION | |
Stock-based compensation expense | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Sep. 14, 2020 | Jul. 09, 2020 | Jan. 02, 2020 | May 20, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jan. 01, 2020 |
Loan expected term of payable | 5 years | 10 years | |||||||
Payments on notes payable, related party | $ 144,787 | $ 138,683 | |||||||
ECHG [Member] | |||||||||
Loan expected term of payable | 5 years | ||||||||
DGSE [Member] | |||||||||
Loan expected term of payable | 5 years | ||||||||
John Loftus | |||||||||
Payments on notes payable, related party | $ 142,144 | $ 143,852 | $ 285,353 | $ 289,167 | |||||
John Loftus | ECHG [Member] | |||||||||
Accounts payable related party | $ 6,925,979 | $ 94,327 | |||||||
Loan annual interest rate | 6.00% | ||||||||
Revised interest and principal payment due monthly | $ 49,646 | ||||||||
Amortiztion period of loan agreement | 20 years | ||||||||
Loan expected term of payable | 5 years | ||||||||
John Loftus | DGSE [Member] | |||||||||
Accounts payable related party | $ 3,074,021 | $ 41,866 | |||||||
Loan annual interest rate | 6.00% | ||||||||
Revised interest and principal payment due monthly | $ 22,203 | ||||||||
Amortiztion period of loan agreement | 20 years | ||||||||
Loan expected term of payable | 5 years |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Committed agency facility, amount | $ 778,883 |
Committed agency, repaid amount | 423,925 |
Additional principal, plus accrued interest amount paid | 234,250 |
Outstanding principal balance | $ 120,708 |
Maturity date of facility | Jun. 30, 2021 |
Envela | |
Maturity date of facility | Apr. 20, 2025 |
Envela | Note Payable | |
Notes payable total | $ 1,668,200 |