Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 21, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | DGSE COMPANIES INC | |
Entity Central Index Key | 0000701719 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,924,381 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 1,674,329 | $ 1,453,941 |
Trade receivables, net of allowances | 1,451,039 | 94,345 |
Inventories | 11,112,806 | 9,765,094 |
Prepaid expenses | 388,925 | 81,094 |
Total current assets | 14,627,099 | 11,394,474 |
Property and equipment, net | 1,472,590 | 1,320,863 |
Goodwill | 4,723,110 | |
Intangible assets, net | 235,600 | 234,350 |
Right-of -use assets from operating leases | 4,016,743 | |
Other assets | 241,822 | 68,411 |
Total assets | 25,316,964 | 13,018,098 |
Current Liabilities: | ||
Accounts payable - trade | 1,074,342 | 838,624 |
Accounts payable - trade, related party | 3,088,973 | |
Notes payable, related party | 272,587 | |
Current operating lease liabilities | 1,140,852 | |
Accrued expenses | 959,173 | 579,203 |
Customer deposits and other liabilities | 28,972 | 97,837 |
Total current liabilities | 3,475,926 | 4,604,637 |
Notes payable, related party, less current portion | 9,501,760 | |
Long-term operating lease liabilities, less current portion | 2,981,655 | |
Total liabilities | 15,959,341 | 4,604,637 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value; 60,000,000 shares authorized; 26,924,381 shares issued and outstanding | 269,244 | 269,244 |
Additional paid-in capital | 40,172,677 | 40,172,677 |
Accumulated deficit | (31,084,298) | (32,028,460) |
Total stockholders' equity | 9,357,623 | 8,413,461 |
Total liabilities and stockholders' equity | $ 25,316,964 | $ 13,018,098 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 26,924,381 | 26,924,381 |
Common stock, shares outstanding | 26,924,381 | 26,924,381 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | ||||
Sales | $ 20,937,437 | $ 12,733,262 | $ 36,956,967 | $ 26,789,135 |
Cost of goods sold | 17,572,122 | 10,542,784 | 31,373,170 | 22,096,650 |
Gross margin | 3,365,315 | 2,190,478 | 5,583,797 | 4,692,485 |
Expenses: | ||||
Selling, general and administrative expenses | 2,676,240 | 1,773,912 | 4,417,581 | 3,813,947 |
Depreciation and amortization | 85,348 | 87,732 | 159,672 | 177,484 |
Total expenses | 2,761,588 | 1,861,644 | 4,577,253 | 3,991,431 |
Operating income | 603,727 | 328,834 | 1,006,544 | 701,054 |
Other (income) expense: | ||||
Other (income) expense, net | (56,728) | 3,030 | (53,330) | (52,295) |
Interest expense | 57,509 | 45,648 | 92,058 | 92,530 |
Total other expense (income) | 781 | 48,678 | 38,728 | 40,235 |
Income before income taxes | 602,946 | 280,156 | 967,816 | 660,819 |
Income tax expense | 13,419 | 5,977 | 23,654 | 40,433 |
Net income | $ 589,527 | $ 274,179 | $ 944,162 | $ 620,386 |
Basic net income per common share: | $ 0.02 | $ 0.01 | $ 0.04 | $ 0.02 |
Diluted net income per common share: | $ 0.02 | $ 0.01 | $ 0.04 | $ 0.02 |
Weighted-average number of common shares | ||||
Basic | 26,924,381 | 26,924,381 | 26,924,381 | 26,924,381 |
Diluted | 26,924,381 | 27,091,298 | 26,924,381 | 27,167,620 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning Balance at Dec. 31, 2017 | $ 269,244 | $ 40,172,677 | $ (32,686,145) | $ 7,755,776 |
Beginning Balance, shares at Dec. 31, 2017 | 26,924,381 | |||
Net Income | 620,386 | 620,386 | ||
Ending Balance at Jun. 30, 2018 | $ 269,244 | 40,172,677 | (32,065,759) | 8,376,163 |
Ending Balance, shares at Jun. 30, 2018 | 26,924,381 | |||
Beginning Balance at Mar. 31, 2018 | $ 269,244 | 40,172,677 | (32,339,937) | 8,101,984 |
Beginning Balance, shares at Mar. 31, 2018 | 26,924,381 | |||
Net Income | 274,179 | 274,179 | ||
Ending Balance at Jun. 30, 2018 | $ 269,244 | 40,172,677 | (32,065,759) | 8,376,163 |
Ending Balance, shares at Jun. 30, 2018 | 26,924,381 | |||
Beginning Balance at Dec. 31, 2018 | $ 269,244 | 40,172,677 | (32,028,460) | 8,413,461 |
Beginning Balance, shares at Dec. 31, 2018 | 26,924,381 | |||
Net Income | 944,162 | 944,162 | ||
Ending Balance at Jun. 30, 2019 | $ 269,244 | 40,172,677 | (31,084,298) | 9,357,623 |
Ending Balance, shares at Jun. 30, 2019 | 26,924,381 | |||
Beginning Balance at Mar. 31, 2019 | $ 269,244 | 40,172,677 | (31,673,825) | 8,768,096 |
Beginning Balance, shares at Mar. 31, 2019 | 26,924,381 | |||
Net Income | 589,527 | 589,527 | ||
Ending Balance at Jun. 30, 2019 | $ 269,244 | $ 40,172,677 | $ (31,084,298) | $ 9,357,623 |
Ending Balance, shares at Jun. 30, 2019 | 26,924,381 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows From Operating Activities | ||
Net income | $ 944,162 | $ 620,386 |
Adjustments to reconcile income from operations to net cash used in operating activities: | ||
Depreciation and amortization | 159,672 | 177,484 |
Loss on sale of equipment | 40,045 | |
Bad debt expense | 30,000 | |
Changes in operating assets and liabilities: | ||
Trade recivables, net | (361,079) | 70,837 |
Trade receivables, net of allowances, related party | 39,215 | |
Inventories | (138,509) | (824,941) |
Note receivable | 11,166 | |
Prepaid expenses | (248,178) | (56,228) |
Operating leases | 105,764 | |
Other assets | (55,700) | 31,665 |
Accounts payable and accrued expenses | (949,957) | (333,674) |
Accounts payable - trade, related party | (3,074,021) | (523,333) |
Customer deposits and other liabilities | (74,322) | 520,593 |
Net cash used in operating activities | (3,662,168) | (226,785) |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (91,441) | (118,825) |
Intangile asssets | (30,000) | (27,000) |
Acquisition of the Echo Entities, net of cash acquired | (5,770,350) | |
Net cash used in investing activities | (5,891,791) | (145,825) |
Cash Flows From Financing Activities: | ||
Financing for the acquisition of the Echo Entities | 6,925,979 | |
Financing to pay off accounts payable, related party | 3,074,021 | |
Payments on notes payable, related party | (225,653) | |
Payments on capital lease obligations | (2,352) | |
Net cash provided by (used) in financing activities | 9,774,347 | (2,352) |
Net change in cash and cash equivalents | 220,388 | (374,962) |
Cash and cash equivalents, beginning of period | 1,453,941 | 1,272,208 |
Cash and cash equivalents, end of period | 1,674,329 | 897,246 |
Cash paid during the period for: | ||
Interest | 92,058 | 92,530 |
Income taxes | 43,578 | 20,025 |
Non cash activities: | ||
Transfer of fixed assets to intangible assets | $ 204,000 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (1) Basis of Presentation The consolidated interim financial statements of DGSE Companies, Inc., a Nevada corporation, and its subsidiaries (the “Company” or “DGSE”), included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). 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 Commission’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, 2018 (such fiscal year, “Fiscal 2018” and such Annual Report on Form 10-K, the “Fiscal 2018 10-K”). 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. |
Principles of Consolidation and
Principles of Consolidation and Nature of Operations | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Nature of Operations | (2) Principles of Consolidation and Nature of Operations DGSE, through it’s trade names Dallas Gold and Silver Exchange and Charleston Gold and Diamond Exchange (“DGSE”), buys and sells jewelry and bullion products to both retail and wholesale customers throughout the United States through its facilities in South Carolina and Texas The Company also, through an asset purchase on May 20, 2019 (the “Echo Transaction”), as initially reported on Form 8-K filed May 24, 2019 and subsequent 8-K/A filed August 5, 2019, formed two new companies, Echo Environmental Holdings, LLC and ITAD USA, LLC (the “Echo Entities”), to process, recycle and resell electronic components. Based on the terms of the purchase, the Company has concluded the Echo Transaction represents a business combination pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations, or ASC 805. The Company has determined that the assets purchased and the liabilities assumed, through the Echo Transaction, have an approximate fair value due to the their short-term nature. The Company now includes revenue, gross profit and net income for two different segments because each product line has a different income profile. In order to understand the Company’s financial results, we will report each segment. 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, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies and Estimates | ( 3) Accounting Policies and Estimates Financial Instruments The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, trade receivables, accounts payable, and accrued expenses approximate fair value because of the immediate or short-term nature of these financial instruments. Earnings Per Share Basic earnings per common share is computed by dividing net earnings available to holders of the Company’s common stock by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts 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 the Echo Entities only and not the whole Company. The Echo Entities’ have their own separate financial information to perform goodwill impairment testing going forward. The Company will evaluate goodwill based on cash flows for the Echo Entities’ segment. For tax purposes, goodwill is amortized and deductible over fifteen years. Recent Accounting Pronouncement On January 1, 2019 we adopted the new lease accounting standard in Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases The Company elected certain of the available transition practical expedients, including those that permit it to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. The Company did not elect the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment. The most significant impact of the new guidance was the recognition of right-of-use (“ROU”) assets and liabilities for operating leases. See Note 11 for additional information. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | (4) Inventories A summary of inventories is as follows: June 30, 2019 December 31, 2018 DGSE Jewelry $ 7,718,365 $ 7,001,477 Scrap gold/silver 1,010,669 1,205,111 Bullion 855,071 801,717 Rare coins and Other 420,155 756,789 Subtotal 10,004,260 9,765,094 Echo Entities Electronic components - resale 193,411 - Electronic components - recycle 915,135 - Subtotal 1,108,546 - $ 11,112,806 $ 9,765,094 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | (5) Property and Equipment Property and equipment consists of the following: June 30, 2019 December 31, 2018 DGSE Land $ 55,000 $ - Building and improvements 1,561,649 1,529,649 Machinery and equipment 1,039,013 1,039,013 Furniture and fixtures 453,699 453,699 3,109,361 3,022,361 Less: accumulated depreciation (1,821,579 ) (1,701,498 ) Sub-Total 1,287,782 $ 1,320,863 Echo Entities Building and improvements 81,149 - Machinery and equipment 20,732 - Furniture and fixtures 93,827 - 195,708 - Less: accumulated depreciation (10,900 ) - Sub-Total 184,808 - $ 1,472,590 $ 1,320,863 |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition | (6) Acquisition On May 20, 2019, Corrent Resources, LLC (“Corrent”), a wholly owned subsidiary of the Company, entered into an asset purchase agreement with each of Echo Environmental, LLC and its wholly owned subsidiary ITAD USA, LLC (collectively, the “Echo Entities”), pursuant to which the Echo Entities agreed to sell all of the assets, rights and interests of the Echo Entities (the “Acquired Assets”) for $6,925,979 (the “Echo Transaction”). The Echo Entities are wholly owned subsidiaries of Elemetal, LLC (“Elemetal”). John R. Loftus is the Company’s CEO, President and Chairman and owned approximately one-third of the equity interests of Elemetal prior to the Echo Transaction. On the same day, Mr. Loftus became the largest beneficial owner of the Company’s stock by purchasing all of the Company’s stock beneficially owned by Elemetal. As part of the transaction of acquiring the stock from Elemetal, Mr. Loftus no longer owns an equity interest in Elemetal, LLC. As an interested party, Mr. Loftus was familiar with the operations of the Echo Entities. In connection with the Echo Transaction, on May 20, 2019, Corrent executed and delivered to Mr. Loftus, a promissory note to which Corrent borrowed from Mr. Loftus $6,925,979, the proceds of which were used to purchase the Acquired Assets. 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 Echo Entities only and not the whole Company. The Echo Entities’ have their own separate financial information to perform goodwill impairment testing going forward. The Company will evaluate goodwill based on cash flows for the Echo Entities’ segment. For tax purposes, goodwill is amortized and deductible over fifteen years. Due to time constraints and other variables, the purchase price allocation listed below is considered a preliminary allocation and is subject to change. The preliminary purchase price is allocated as follows: Description Amount Assets Cash $ 1,049,462 Account receivables 1,025,615 Inventories 1,209,203 Prepaids 88,366 Fixed assets 191,208 Right-of-use assets 2,350,781 Other assets 88,998 Liabilities Account payables (723,043 ) Accrued liabilities (721,483 ) Operating lease liabilities (2,350,781 ) Other long-term liabilities (5,457 ) Net assets 2,202,869 Goodwill 4,723,110 Purchase Price $ 6,925,979 The following proforma combines the results of the Echo Entities and the Company’s results of operations for the three months ended June 30, 2019 and 2018 as if they were combined the whole quarter: Proforma Combined Proforma Combined For the Three Months Ended For the Three Months Ended June 30, 2019 June 30, 2018 (unaudited) (unaudited) Revenue $ 23,169,924 $ 24,325,768 Income from continuing operations $ 69,197 $ 1,593,361 Net income $ 69,197 $ 1,593,361 Basic net income per common share $ - $ 0.06 Diluted net income per common share $ - $ 0.06 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | (7) Intangible Assets Intangible assets consist of the following: June 30, 2019 December 31, 2018 DGSE Domain names $ 41,352 $ 41,352 Point of sale system 300,000 270,000 341,352 311,352 Less: accumulated amortization (105,752 ) (77,002 ) Subtotal 235,600 234,350 Echo Entities - - $ 235,600 $ 234,350 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | (8) Accrued Expenses Accrued expenses consist of the following: June 30, 2019 December 31, 2018 DGSE Professional fees $ 70,414 $ 149,000 Advertising - 52,590 Board member fees - 7,500 Employee benefits - 10,383 Insurance 136,667 - Payroll 143,540 205,112 Property taxes 114,000 - Sales tax 74,267 111,739 State income tax 33,191 42,879 Subtotal 572,079 579,203 Echo Entities Payroll 40,295 - Sales Tax 4,829 - Credit Card 48,712 - Professional Fees 20,000 State income tax 11,000 - Material & shipping costs (COGS) 262,258 - Subtotal 387,094 - $ 959,173 $ 579,203 |
Segments
Segments | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segments | (9) Segments The purchase of the Echo Entities has given us two separate lines of businesses, although we feel they are interrelated as businesses that recycle either gold and silver and electronic components we have separated them in into segments as follows: For The Three Months Ended June 30, 2019 DGSE Echo Entities Consolidated Revenue: Sales $ 18,578,637 $ 2,358,800 $ 20,937,437 Cost of goods sold 16,308,809 1,263,313 17,572,122 Gross profit 2,269,828 1,095,487 3,365,315 Expenses: Selling, general and administrative expenses 1,874,598 801,642 2,676,240 Depreciation and amortization 74,449 10,899 85,348 1,949,047 812,541 2,761,588 Operating income 320,781 282,946 603,727 Other (income) expense: Other (income) expense, net (56,728 ) - (56,728 ) Interest expense 25,657 31,852 57,509 Income before income taxes 351,852 251,094 602,946 Income tax expense 7,783 5,636 13,419 Net income per segment $ 344,069 $ 245,458 $ 589,527 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | (10) Revenue Recognition Revenue is recognized when we transfer promised goods, jewelry and watch repair services to customers in an amount that reflects the consideration to which the Company expects to be paid in exchange for those goods and services. The Company’s revenue is primarily generated from the sale of finished goods, recycled goods, recycled raw materials, scrap, jewelry and watch repair services through wholesale contracts, retail and e-commerce. The Company’s performance obligations underlying such revenue, and the timing of revenue recognition, remains substantially unchanged following the adoption of ASC 606. ASC 606 provides guidance to identify performance obligations for revenue-generating transactions. The initial guide is to identify the contract with a customer created with the sales invoice or a repair ticket. Secondly, to 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 guide 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. The following disaggregation of total revenue is listed by sales category and segment: Three Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 4,093,488 $ 1,240,299 30.3 % $ 4,525,109 $ 1,020,470 22.6 % Bullion/Rare Coin 10,937,998 509,628 4.7 % 6,608,590 847,585 12.8 % Scrap 1,748,028 256,914 14.7 % 1,181,941 233,887 19.8 % Other 1,799,123 262,987 14.6 % 417,622 88,536 21.2 % Subtotal 18,578,637 2,269,828 12.2 % 12,733,262 2,190,478 17.2 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 20,937,437 $ 3,365,315 16.1 % $ 12,733,262 $ 2,190,478 17.2 % The following disaggregation of revenue is listed by sales category, segment and state: TEXAS Three Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 3,863,109 $ 1,139,043 29.5 % $ 4,169,364 $ 908,970 21.8 % Bullion/Rare Coin 10,773,197 481,379 4.5 % 6,514,586 830,976 12.8 % Scrap 1,748,028 256,914 14.7 % 1,181,941 233,887 19.8 % Other 1,459,655 175,553 12.0 % 331,507 32,381 9.8 % Subtotal 17,843,989 2,052,889 11.5 % 12,197,398 2,006,214 16.4 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 20,202,789 $ 3,148,376 15.6 % $ 12,197,398 $ 2,006,214 16.4 % SOUTH CAROLINA Three Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 230,379 $ 101,256 44.0 % $ 355,745 $ 111,500 31.3 % Bullion/Rare Coin 164,801 28,249 17.1 % 94,004 16,882 18.0 % Other 339,468 87,434 25.8 % 86,115 56,155 65.2 % Subtotal 734,648 216,939 29.5 % 535,864 184,537 34.4 % Echo Entities 5/20/19 - 6/30/2019 - - - - - - Subtotal - - - - - - $ 734,648 $ 216,939 29.5 % $ 535,864 $ 184,537 34.4 % The following disaggregation of revenue is listed by sales category and segment: Six Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 8,395,236 $ 2,565,957 30.6 % $ 9,825,072 $ 2,617,091 26.6 % Bullion/Rare Coin 20,922,144 1,025,785 4.9 % 13,708,341 1,401,366 10.2 % Scrap 2,966,179 441,961 14.9 % 2,465,585 443,371 18.0 % Other 2,314,608 454,607 19.6 % 790,137 230,657 29.2 % Subtotal 34,598,167 4,488,310 13.0 % 26,789,135 4,692,485 17.5 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 36,956,967 $ 5,583,797 15.1 % $ 26,789,135 $ 4,692,485 17.5 % The following disaggregation of revenue is listed by sales category, segment and state: TEXAS Six Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin Jewelry $ 7,757,744 $ 2,267,076 29.2 % $ 8,874,175 $ 2,270,136 25.6 % Bullion/Rare Coin 20,553,475 982,971 4.8 % 13,404,768 1,348,718 10.1 % Scrap 2,966,179 441,961 14.9 % 2,465,585 443,371 18.0 % Other 1,971,378 365,027 18.5 % 647,343 149,981 23.2 % Subtotal 33,248,776 4,057,035 12.2 % 25,391,871 4,212,206 16.6 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 35,607,576 $ 5,152,522 14.5 % $ 25,391,871 $ 4,212,206 16.6 % SOUTH CAROLINA Six Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin Jewelry $ 637,493 $ 298,881 46.9 % $ 950,897 $ 346,955 36.5 % Bullion/Rare Coin 368,669 42,814 11.6 % 303,573 52,648 17.3 % Other 343,229 89,580 26.1 % 142,794 80,676 56.5 % Subtotal 1,349,391 431,275 32.0 % 1,397,264 480,279 34.4 % Echo Entities 5/20/19 - 6/30/2019 - - - - - - Subtotal - - - - - - $ 1,349,391 $ 431,275 32.0 % $ 1,397,264 $ 480,279 34.4 % Revenues for monetary transactions (i.e., cash and receivables) with commercial dealers and the retail public are recognized when the merchandise is delivered and payment has been made either by immediate payment or through a receivable obligation. We also recognize revenue upon the shipment of goods when retail or 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. Our scrap is sold to a local refiner that was a related party before the purchase of the Echo Entities on May 20, 2019. Since the refiner is local we deliver the scrap to the refiner. The metal is assayed, price is determined from the assay and payment is made usually in one to two days. Revenue is recognized from the sale once payment is received. The retail portion of the Company 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 our retail operations, 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 Accounting Standards Codification (“ASC”) 845, Nonmonetary Transactions The Company offers our retail customers the option of third party financing for customers wishing to borrow money for the purchase. The customer applies on-line with the third party 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. We recognize the revenue of the sale upon the promise of the financing company to pay. 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 Fiscal 2018 sales, which is based on our review of historical returns experience, and reduces our reported revenues and cost of sales accordingly. As of June 30, 2019 and December 31, 2018, our allowance for returns remained the same at $28,402 and $28,402, respectively. The Echo Entities are large-scale processors of circuit boards and electronic waste. We are committed to fast and cost-efficient service to many different industries that need to recycle electronic components. There are three main revenue streams within our product mix. The first category is recycling fees, whereby we will receive electronic components and other material to process from a vendor. Upon the determination of the makeup of the materials we charge a processing fee to the vendor and also pay them for items we can sell. Revenue is recognized when service charges are determined after waste materials are sorted and processed. The second revenue stream is outright sales, which is the sale of processed material to a customer after we have sorted material, charged recycling fees and paid our vendors for that material. The sale is recognized when delivery has occurred and title and risk of loss has passed to the buyer upon the notice of bill of sale ending with a cash transaction or evidence of credit extended producing a trade accounts receivable. The third revenue stream is the settlement of precious metals processed from our recycling services. The precious metal we extract is sent to a refiner and is assayed. We recognize revenue when we receive the settlement from the refiner, except at quarter and year end when we accrue any outstanding settlements received after the end of a quarter or year. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | (11) Leases On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842). We adopted ASC 842 on January 1, 2019, by applying its provisions prospectively. The financial results reported in periods prior to January 1, 2019 are unchanged. Upon adoption, we recognized all of our leases on the balance sheet as right-of-use assets and lease liabilities. For income statement purposes, the FASB retained a duel model, requiring leases to be classified as either operating of finance. Classification is based on certain criteria and we have determined that all of our retail building leases fall into the operating lease category. Our leases are included in our consolidated balance sheet as right-of-use assets along with the the current operating lease liabilities and long-term operating lease liabilities. We have also applied the ASC 842 provisions to the two leases purchased by the Company related to the Echo Transaction. When the provision was first adopted by the Company on January 1, 2019, we recognized $1,994,840 of operating lease right-of-use assets, $446,462 in short-term operating lease liabilities and $1,609,891 in long-term operating lease liabilities on the consolidated balance sheet. The operating lease liabilities were determined based on the present value of the remaining minimum rental payments and the operating lease right-of-use asset was determined based on the value of the lease liabilities, adjusted for deferred rent balances of $61,500, which were previously included in other liabilities. Due to the acquisition, referred in note (6), we recognized an additional $2,350,781 of operating lease right-of-use assets, $703,523 in short-term operating lease liabilities and $1,647,258 in long-term operating lease liabilities on the consolidated balance sheet. The operating lease liabilities were determined based on the present value of the remaining minimum rental payments and the operating lease right-of-use asset was determined based on the value of the lease liabilities. 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 rate of interest 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 the lease agreement, we utilize our incremental borrowing rate. The Company has seven operating leases, six in the Dallas/Fort Worth Metroplex and one in Charleston South Carolina. We have four leases expiring next year. Our Euless, Texas lease expires March 31, 2020, with an option for an additional five years which we are reasonably certain to exercise. Our Southlake, Texas location expires July 31, 2020, and with no current options. We will evaluate whether to continue to lease in the present location. Our lease on the main flagship store located at 13022 Preston Road, Dallas, Texas will be expiring October 31, 2021 with no current lease options. The Grand Prairie, Texas lease expires June 30, 2022, and has no current lease options. On April 19, 2018, we entered into an agreement with the landlord in Charleston, South Carolina, to increase the rental space by 2,104 square feet by taking over the vacant suite next door. The lease was amended to include the new space and extended to April 30, 2025. Our two new additional leases were the product of the Echo Tranaction. Both leases are located in Carrollton, Texas. The Belt Line Echo lease expires on December 31, 2020 with an initial option period of 24 months and a second option period of an additional 60 months. A portion of the building is sublet and the rent received is applied against the rental expense for the building. The McKenzie ITAD lease expires July 31, 2021 with no current lease options. All seven leases are triple net leases that we pay our proportionate amount of common area maintenance, property taxes and property insurance. Leasing costs for the three months ending June 30, 2019 and 2018 was $319,975 and $157,969, respectively. These lease costs consist of a combination of minimum lease payments and variable lease costs. As of June 30, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases was 2.4 years and 5.5%, respectively. The Company’s future operating lease obligations that have not yet commenced are immaterial. For the three months ending June 30, 2019 and 2018, the Company’s cash paid for operating lease liabilities was $331,923 and $124,221, respectively. Future annual minimum lease payments as of June 30, 2019: Operating Leases DGSE 2019 (excluding the six months ending June 30, 2019) $ 274,367 2020 550,623 2021 491,540 2022 247,040 2023 223,045 2024 and thereafter 289,327 Total minimum lease payments 2,075,942 Less imputed interest (239,599 ) Subtotal 1,836,343 Echo Entities 2019 (excluding the six months ending June 30, 2019) 330,430 2020 803,661 2021 785,240 2022 582,195 Total minimum lease payments 2,501,526 Less imputed interest (215,362 ) Subtotal 2,286,164 $ 4,122,507 |
Basic and Diluted Average Share
Basic and Diluted Average Shares | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Average Shares | (12) Basic and Diluted Average Shares A reconciliation of basic and diluted weighted average common shares for the three months and six months ended June 30, 2019 and 2018 is as follows: For the Three Months Ended June 30, 2019 2018 Basic weighted average shares 26,924,381 26,924,381 Effect of potential dilutive securities - 166,917 Diluted weighted average shares 26,924,381 27,091,298 For the Six Months Ended June 30, 2019 2018 Basic weighted average shares 26,924,381 26,924,381 Effect of potential dilutive securities - 243,239 Diluted weighted average shares 26,924,381 27,167,620 For the three and six months ended June 30, 2019, there were approximately 15,000 stock options excluded from the earnings per share calculation because their impact is antidilutive. For the three and six months ended June 30, 2018 there were 1,015,000 of common share option, warrants and Restricted Stock Units (RSU’s) unexercised respectively. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | (13) Long-Term Debt Outstanding Balance Current June 30, 2019 December 31, 2018 Interest Rate Maturity DGSE Note payable, related party $ 2,907,719 $ - 6.00 % May 16, 2024 Echo Entities Note payable, related party 6,594,041 - 6.00 % May 16, 2024 Sub-Total 9,501,760 - Current portion 272,587 - $ 9,774,347 $ - |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | (14) Stock-Based Compensation The Company accounts for share-based compensation by measuring the cost of the 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. Stock-based compensation expense for the three months and six months ended June 30, 2019 and 2018 was $0 and $0, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (15) Related Party Transactions Through a series of transactions beginning in 2010, Elemetal, NTR and Truscott (“Related Entities”) became the largest shareholders of our common stock, par value $0.01 per share. A certain Related Entity has been DGSE’s primary refiner and bullion trading partner. For the six months ended June 30, 2019, 6% of sales and 2% of purchases were transactions with a certain Related Entity, and in the same period of 2018, these tranactions represented 13% of DGSE’s sales and 3% of DGSE’s purchases. On December 9, 2016, DGSE and a certain Related Entity closed the transactions contemplated by the Debt Exchange Agreement whereby DGSE issued a certain Related Entity 8,536,585 shares of its common stock and a warrant to purchase an additional 1,000,000 shares to be exercised within two years after December 9, 2016, in exchange for the cancellation and forgiveness of $3,500,000 of trade payables owed to a certain Related Entity as a result of bullion-related transactions. The warrant for the additional 1,000,000 expired in December 2018. As of June 30, 2019, the Company was obligated to pay $0 to the certain Related Entity as a trade payable. As of June 30, 2018, the Company was obligated to pay $3,378,960 to the certain Related Entity as a trade payable. For the six months ended June 30, 2019 and 2018, the Company paid the Related Entities $46,068 and $92,530 respectively, in interest on the Company’s outstanding payable. On May 20, 2019, John Loftus, CEO and President of DGSE Companies, Inc., became the largest beneficial shareholder of our common stock, par value $0.01 per share, as reported on Form 13 D/A filed on May 24, 2019. On the same day, Mr. Loftus loaned a wholly owned subsidiary, Corrent Resource Holdings, LLC $6,925,979 to complete the Echo Transaction. Interest and principal payments totaling $49,620 are paid monthly and the loan matures May 16, 2024. Also on the same day, Mr. Loftus loaned the Company $3,074,021 to pay off the certain Related Entities outstanding payable, related party. Interest and principal payments totaling $22,023 are paid monthly and the loan matures May 16, 2024. As of June 30, 2019 and 2018, the Company was obligated to pay Mr. Loftus, as note payable, related party $9,774,347 and $0 respectively. For the six months ended June 30, 2019 and 2018, the Company paid Mr. Loftus $45,990 and $0 respectively, in interest on the Company’s note payable, related party. |
Accounting Policies and Estim_2
Accounting Policies and Estimates (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Financial Instruments | Financial Instruments The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, trade receivables, accounts payable, and accrued expenses approximate fair value because of the immediate or short-term nature of these financial instruments. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is computed by dividing net earnings available to holders of the Company’s common stock by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts 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 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 Echo Entities only and not the whole Company. The Echo Entities’ have their own separate financial information to perform goodwill impairment testing going forward. The Company will evaluate goodwill based on cash flows for the Echo Entities’ segment. For tax purposes, goodwill is amortized and deductible over fifteen years. |
Recent Accounting Pronouncement | Recent Accounting Pronouncement On January 1, 2019 we adopted the new lease accounting standard in Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases The Company elected certain of the available transition practical expedients, including those that permit it to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. The Company did not elect the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment. The most significant impact of the new guidance was the recognition of right-of-use (“ROU”) assets and liabilities for operating leases. See Note 11 for additional information. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | A summary of inventories is as follows: June 30, 2019 December 31, 2018 DGSE Jewelry $ 7,718,365 $ 7,001,477 Scrap gold/silver 1,010,669 1,205,111 Bullion 855,071 801,717 Rare coins and Other 420,155 756,789 Subtotal 10,004,260 9,765,094 Echo Entities Electronic components - resale 193,411 - Electronic components - recycle 915,135 - Subtotal 1,108,546 - $ 11,112,806 $ 9,765,094 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following: June 30, 2019 December 31, 2018 DGSE Land $ 55,000 $ - Building and improvements 1,561,649 1,529,649 Machinery and equipment 1,039,013 1,039,013 Furniture and fixtures 453,699 453,699 3,109,361 3,022,361 Less: accumulated depreciation (1,821,579 ) (1,701,498 ) Sub-Total 1,287,782 $ 1,320,863 Echo Entities Building and improvements 81,149 - Machinery and equipment 20,732 - Furniture and fixtures 93,827 - 195,708 - Less: accumulated depreciation (10,900 ) - Sub-Total 184,808 - $ 1,472,590 $ 1,320,863 |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired of Purchase Price | The preliminary purchase price is allocated as follows: Description Amount Assets Cash $ 1,049,462 Account receivables 1,025,615 Inventories 1,209,203 Prepaids 88,366 Fixed assets 191,208 Right-of-use assets 2,350,781 Other assets 88,998 Liabilities Account payables (723,043 ) Accrued liabilities (721,483 ) Operating lease liabilities (2,350,781 ) Other long-term liabilities (5,457 ) Net assets 2,202,869 Goodwill 4,723,110 Purchase Price $ 6,925,979 |
Schedule of Pro Forma Information | The following proforma combines the results of the Echo Entities and the Company’s results of operations for the three months ended June 30, 2019 and 2018 as if they were combined the whole quarter: Proforma Combined Proforma Combined For the Three Months Ended For the Three Months Ended June 30, 2019 June 30, 2018 (unaudited) (unaudited) Revenue $ 23,169,924 $ 24,325,768 Income from continuing operations $ 69,197 $ 1,593,361 Net income $ 69,197 $ 1,593,361 Basic net income per common share $ - $ 0.06 Diluted net income per common share $ - $ 0.06 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following: June 30, 2019 December 31, 2018 DGSE Domain names $ 41,352 $ 41,352 Point of sale system 300,000 270,000 341,352 311,352 Less: accumulated amortization (105,752 ) (77,002 ) Subtotal 235,600 234,350 Echo Entities - - $ 235,600 $ 234,350 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: June 30, 2019 December 31, 2018 DGSE Professional fees $ 70,414 $ 149,000 Advertising - 52,590 Board member fees - 7,500 Employee benefits - 10,383 Insurance 136,667 - Payroll 143,540 205,112 Property taxes 114,000 - Sales tax 74,267 111,739 State income tax 33,191 42,879 Subtotal 572,079 579,203 Echo Entities Payroll 40,295 - Sales Tax 4,829 - Credit Card 48,712 - Professional Fees 20,000 State income tax 11,000 - Material & shipping costs (COGS) 262,258 - Subtotal 387,094 - $ 959,173 $ 579,203 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | The purchase of the Echo Entities has given us two separate lines of businesses, although we feel they are interrelated as businesses that recycle either gold and silver and electronic components we have separated them in into segments as follows: For The Three Months Ended June 30, 2019 DGSE Echo Entities Consolidated Revenue: Sales $ 18,578,637 $ 2,358,800 $ 20,937,437 Cost of goods sold 16,308,809 1,263,313 17,572,122 Gross profit 2,269,828 1,095,487 3,365,315 Expenses: Selling, general and administrative expenses 1,874,598 801,642 2,676,240 Depreciation and amortization 74,449 10,899 85,348 1,949,047 812,541 2,761,588 Operating income 320,781 282,946 603,727 Other (income) expense: Other (income) expense, net (56,728 ) - (56,728 ) Interest expense 25,657 31,852 57,509 Income before income taxes 351,852 251,094 602,946 Income tax expense 7,783 5,636 13,419 Net income per segment $ 344,069 $ 245,458 $ 589,527 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following disaggregation of total revenue is listed by sales category and segment: Three Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 4,093,488 $ 1,240,299 30.3 % $ 4,525,109 $ 1,020,470 22.6 % Bullion/Rare Coin 10,937,998 509,628 4.7 % 6,608,590 847,585 12.8 % Scrap 1,748,028 256,914 14.7 % 1,181,941 233,887 19.8 % Other 1,799,123 262,987 14.6 % 417,622 88,536 21.2 % Subtotal 18,578,637 2,269,828 12.2 % 12,733,262 2,190,478 17.2 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 20,937,437 $ 3,365,315 16.1 % $ 12,733,262 $ 2,190,478 17.2 % Six Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 8,395,236 $ 2,565,957 30.6 % $ 9,825,072 $ 2,617,091 26.6 % Bullion/Rare Coin 20,922,144 1,025,785 4.9 % 13,708,341 1,401,366 10.2 % Scrap 2,966,179 441,961 14.9 % 2,465,585 443,371 18.0 % Other 2,314,608 454,607 19.6 % 790,137 230,657 29.2 % Subtotal 34,598,167 4,488,310 13.0 % 26,789,135 4,692,485 17.5 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 36,956,967 $ 5,583,797 15.1 % $ 26,789,135 $ 4,692,485 17.5 % |
Schedule of Disaggregation of Revenue Listed by Sales Category and State | The following disaggregation of revenue is listed by sales category, segment and state: TEXAS Three Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 3,863,109 $ 1,139,043 29.5 % $ 4,169,364 $ 908,970 21.8 % Bullion/Rare Coin 10,773,197 481,379 4.5 % 6,514,586 830,976 12.8 % Scrap 1,748,028 256,914 14.7 % 1,181,941 233,887 19.8 % Other 1,459,655 175,553 12.0 % 331,507 32,381 9.8 % Subtotal 17,843,989 2,052,889 11.5 % 12,197,398 2,006,214 16.4 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 20,202,789 $ 3,148,376 15.6 % $ 12,197,398 $ 2,006,214 16.4 % SOUTH CAROLINA Three Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin DGSE Jewelry $ 230,379 $ 101,256 44.0 % $ 355,745 $ 111,500 31.3 % Bullion/Rare Coin 164,801 28,249 17.1 % 94,004 16,882 18.0 % Other 339,468 87,434 25.8 % 86,115 56,155 65.2 % Subtotal 734,648 216,939 29.5 % 535,864 184,537 34.4 % Echo Entities 5/20/19 - 6/30/2019 - - - - - - Subtotal - - - - - - $ 734,648 $ 216,939 29.5 % $ 535,864 $ 184,537 34.4 % TEXAS Six Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin Jewelry $ 7,757,744 $ 2,267,076 29.2 % $ 8,874,175 $ 2,270,136 25.6 % Bullion/Rare Coin 20,553,475 982,971 4.8 % 13,404,768 1,348,718 10.1 % Scrap 2,966,179 441,961 14.9 % 2,465,585 443,371 18.0 % Other 1,971,378 365,027 18.5 % 647,343 149,981 23.2 % Subtotal 33,248,776 4,057,035 12.2 % 25,391,871 4,212,206 16.6 % Echo Entities 5/20/19 - 6/30/2019 - - - Recycle 1,588,084 747,819 47.1 % - - - Reuse 770,716 347,668 45.1 % Subtotal 2,358,800 1,095,487 46.4 % - - - $ 35,607,576 $ 5,152,522 14.5 % $ 25,391,871 $ 4,212,206 16.6 % SOUTH CAROLINA Six Months Ended June 30, 2019 2018 Revenues Gross Profit Margin Revenues Gross Profit Margin Jewelry $ 637,493 $ 298,881 46.9 % $ 950,897 $ 346,955 36.5 % Bullion/Rare Coin 368,669 42,814 11.6 % 303,573 52,648 17.3 % Other 343,229 89,580 26.1 % 142,794 80,676 56.5 % Subtotal 1,349,391 431,275 32.0 % 1,397,264 480,279 34.4 % Echo Entities 5/20/19 - 6/30/2019 - - - - - - Subtotal - - - - - - $ 1,349,391 $ 431,275 32.0 % $ 1,397,264 $ 480,279 34.4 % |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum lease payments as of June 30, 2019: Operating Leases DGSE 2019 (excluding the six months ending June 30, 2019) $ 274,367 2020 550,623 2021 491,540 2022 247,040 2023 223,045 2024 and thereafter 289,327 Total minimum lease payments 2,075,942 Less imputed interest (239,599 ) Subtotal 1,836,343 Echo Entities 2019 (excluding the six months ending June 30, 2019) 330,430 2020 803,661 2021 785,240 2022 582,195 Total minimum lease payments 2,501,526 Less imputed interest (215,362 ) Subtotal 2,286,164 $ 4,122,507 |
Basic and Diluted Average Sha_2
Basic and Diluted Average Shares (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Weighted Average Common Shares | A reconciliation of basic and diluted weighted average common shares for the three months and six months ended June 30, 2019 and 2018 is as follows: For the Three Months Ended June 30, 2019 2018 Basic weighted average shares 26,924,381 26,924,381 Effect of potential dilutive securities - 166,917 Diluted weighted average shares 26,924,381 27,091,298 For the Six Months Ended June 30, 2019 2018 Basic weighted average shares 26,924,381 26,924,381 Effect of potential dilutive securities - 243,239 Diluted weighted average shares 26,924,381 27,167,620 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Outstanding Balance Current June 30, 2019 December 31, 2018 Interest Rate Maturity DGSE Note payable, related party $ 2,907,719 $ - 6.00 % May 16, 2024 Echo Entities Note payable, related party 6,594,041 - 6.00 % May 16, 2024 Sub-Total 9,501,760 - Current portion 272,587 - $ 9,774,347 $ - |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory [Line Items] | ||
Jewelry | $ 7,718,365 | $ 7,001,477 |
Scrap gold/silver | 1,010,669 | 1,205,111 |
Bullion | 855,071 | 801,717 |
Rare coins and Other | 420,155 | 756,789 |
Subtotal | 10,004,260 | 9,765,094 |
Inventories | 11,112,806 | 9,765,094 |
Echo Environmental, LLC [Member] | ||
Inventory [Line Items] | ||
Electronic components - resale | 193,411 | |
Electronic components - recycle | 915,135 | |
Subtotal | 1,108,546 | |
Inventories | $ 1,209,203 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | $ 3,109,361 | $ 3,022,361 |
Less: accumulated depreciation | (1,821,579) | (1,701,498) |
Property, plant and equipment, sub-total | 1,287,782 | |
Total property and equipment | 1,472,590 | 1,320,863 |
Echo Environmental, LLC [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | 195,708 | |
Less: accumulated depreciation | (10,900) | |
Property, plant and equipment, sub-total | 184,808 | |
Total property and equipment | 191,208 | |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | 55,000 | |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | 1,561,649 | 1,529,649 |
Building and Improvements [Member] | Echo Environmental, LLC [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | 81,149 | |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | 1,039,013 | 1,039,013 |
Machinery and Equipment [Member] | Echo Environmental, LLC [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | 20,732 | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | 453,699 | 453,699 |
Furniture and Fixtures [Member] | Echo Environmental, LLC [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, total | $ 93,827 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) | May 20, 2019USD ($) |
Echo Environmental, LLC [Member] | |
Business acquired to purchase entities | $ 6,925,979 |
Acquisition - Schedule of Asset
Acquisition - Schedule of Assets Acquired of Purchase Price (Details) - USD ($) | May 20, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill | $ 4,723,110 | ||
Echo Environmental, LLC [Member] | |||
Cash | $ 1,049,462 | ||
Account receivables | 1,025,615 | ||
Inventories | 1,209,203 | ||
Prepaids | 88,366 | ||
Fixed assets | 191,208 | ||
Right-of-use assets | 2,350,781 | ||
Other assets | 88,998 | ||
Account payables | (723,043) | ||
Accrued liabilities | (721,483) | ||
Operating lease liabilities | (2,350,781) | ||
Other long-term liabilities | (5,457) | ||
Net assets | 2,202,869 | ||
Goodwill | 4,723,110 | ||
Purchase Price | $ 6,925,979 |
Acquisition - Schedule of Pro F
Acquisition - Schedule of Pro Forma Information (Details) - Echo Environmental, LLC [Member] - USD ($) | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | $ 23,169,924 | $ 24,325,768 |
Income from continuing operations | 69,197 | 1,593,361 |
Net income | $ 69,197 | $ 1,593,361 |
Basic net income per common share | $ 0.06 | |
Diluted net income per common share | $ 0.06 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Intangible assets, gross | $ 341,352 | $ 311,352 |
Less: accumulated amortization | (105,752) | (77,002) |
Intangible assets, subtotal | ||
Total intangibles | 235,350 | 234,350 |
Echo Environmental, LLC [Member] | ||
Intangible assets, gross | ||
Domain Names [Member] | ||
Intangible assets, gross | 41,352 | 41,352 |
Point of Sale System [Member] | ||
Intangible assets, gross | $ 300,000 | $ 270,000 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Professional fees | $ 70,414 | $ 149,000 |
Advertising | 52,590 | |
Board member fees | 7,500 | |
Employee benefits | 10,383 | |
Insurance | 136,667 | |
Payroll | 143,540 | 205,112 |
Property taxes | 114,000 | |
Sales tax | 74,267 | 111,739 |
State income tax | 33,191 | 42,879 |
Subtotal | 572,079 | 579,203 |
Total accrued expenses | 959,173 | 579,203 |
Echo Environmental, LLC [Member] | ||
Professional fees | 20,000 | |
Payroll | 40,295 | |
Sales tax | 4,829 | |
State income tax | 11,000 | |
Credit Card | 48,712 | |
Material & shipping costs (COGS) | 262,258 | |
Subtotal | $ 387,094 |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Sales | $ 20,937,437 | $ 12,733,262 | $ 36,956,967 | $ 26,789,135 |
Cost of goods sold | 17,572,122 | 10,542,784 | 31,373,170 | 22,096,650 |
Gross profit | 3,365,315 | 2,190,478 | 5,583,797 | 4,692,485 |
Selling, general and administrative expenses | 2,676,240 | 1,773,912 | 4,417,581 | 3,813,947 |
Depreciation and amortization | 85,348 | 87,732 | 159,672 | 177,484 |
Total expenses | 2,761,588 | 1,861,644 | 4,577,253 | 3,991,431 |
Operating income | 603,727 | 328,834 | 1,006,544 | 701,054 |
Other (income) expense, net | (56,728) | 3,030 | (53,330) | (52,295) |
Interest expense | 57,509 | 45,648 | 92,058 | 92,530 |
Income before income taxes | 602,946 | 280,156 | 967,816 | 660,819 |
Income tax expense | 13,419 | 5,977 | 23,654 | 40,433 |
Net income per segment | 589,527 | $ 274,179 | $ 944,162 | $ 620,386 |
Echo Environmental, LLC [Member] | ||||
Sales | 2,358,800 | |||
Cost of goods sold | 1,263,313 | |||
Gross profit | 1,095,487 | |||
Selling, general and administrative expenses | 801,642 | |||
Depreciation and amortization | 10,899 | |||
Total expenses | 812,541 | |||
Operating income | 282,946 | |||
Other (income) expense, net | ||||
Interest expense | 31,852 | |||
Income before income taxes | 251,094 | |||
Income tax expense | 5,636 | |||
Net income per segment | 245,458 | |||
DGSE [Member] | ||||
Sales | 18,578,637 | |||
Cost of goods sold | 16,308,809 | |||
Gross profit | 2,269,828 | |||
Selling, general and administrative expenses | 1,874,598 | |||
Depreciation and amortization | 74,449 | |||
Total expenses | 1,949,047 | |||
Operating income | 320,781 | |||
Other (income) expense, net | (56,728) | |||
Interest expense | 25,657 | |||
Income before income taxes | 351,852 | |||
Income tax expense | 7,783 | |||
Net income per segment | $ 344,069 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Sales returns and allowances, goods, total | $ 28,402 | $ 28,402 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing receivable, percent past due | 25.00% |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 20,937,437 | $ 12,733,262 | $ 36,956,967 | $ 26,789,135 |
Gross Profit | $ 3,365,315 | $ 2,190,478 | $ 5,583,797 | $ 4,692,485 |
Margin | 16.10% | 17.20% | 15.10% | 17.50% |
Echo Environmental, LLC [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 2,358,800 | |||
Gross Profit | 1,095,487 | |||
Jewelry [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | 4,093,488 | $ 4,525,109 | $ 8,395,236 | $ 9,825,072 |
Gross Profit | $ 1,240,299 | $ 1,020,470 | $ 2,565,957 | $ 2,617,091 |
Margin | 30.30% | 22.60% | 30.60% | 26.60% |
Bullion/Rare Coin [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 10,937,998 | $ 6,608,590 | $ 20,922,144 | $ 13,708,341 |
Gross Profit | $ 509,628 | $ 847,585 | $ 1,025,785 | $ 1,401,366 |
Margin | 4.70% | 12.80% | 4.90% | 10.20% |
Scrap [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,748,028 | $ 1,181,941 | $ 2,966,179 | $ 2,465,585 |
Gross Profit | $ 256,914 | $ 233,887 | $ 441,961 | $ 443,371 |
Margin | 14.70% | 19.80% | 14.90% | 18.00% |
Other [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,799,123 | $ 417,622 | $ 2,314,608 | $ 790,137 |
Gross Profit | $ 262,987 | $ 88,536 | $ 454,607 | $ 230,657 |
Margin | 14.60% | 21.20% | 19.60% | 29.20% |
Subtotal [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 18,578,637 | $ 12,733,262 | $ 34,598,167 | $ 26,789,135 |
Gross Profit | $ 2,269,828 | $ 2,190,478 | $ 4,488,310 | $ 4,692,485 |
Margin | 12.20% | 17.20% | 13.00% | 17.50% |
Subtotal [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 2,358,800 | $ 2,358,800 | ||
Gross Profit | $ 1,095,487 | $ 1,095,487 | ||
Margin | 46.40% | 0.00% | 46.40% | 0.00% |
Recycle [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,588,084 | $ 1,588,084 | ||
Gross Profit | $ 747,819 | $ 747,819 | ||
Margin | 47.10% | 0.00% | 47.10% | 0.00% |
Reuse [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 770,716 | $ 770,716 | ||
Gross Profit | $ 347,668 | $ 347,668 | ||
Margin | 45.10% | 0.00% | 45.10% | 0.00% |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Disaggregation of Revenue Listed by Sales Category and State (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 20,937,437 | $ 12,733,262 | $ 36,956,967 | $ 26,789,135 |
Gross Profit | $ 3,365,315 | $ 2,190,478 | $ 5,583,797 | $ 4,692,485 |
Margin | 16.10% | 17.20% | 15.10% | 17.50% |
Echo Environmental, LLC [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 2,358,800 | |||
Gross Profit | 1,095,487 | |||
Texas [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | 20,202,789 | $ 12,197,398 | $ 35,607,576 | $ 25,391,871 |
Gross Profit | $ 3,148,376 | $ 2,006,214 | $ 5,152,522 | $ 4,212,206 |
Margin | 15.60% | 16.40% | 14.50% | 16.60% |
South Carolina [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 734,648 | $ 535,864 | $ 1,349,391 | $ 1,397,264 |
Gross Profit | $ 216,939 | $ 184,537 | $ 431,275 | $ 480,279 |
Margin | 29.50% | 34.40% | 32.00% | 34.40% |
South Carolina [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | ||||
Gross Profit | ||||
Margin | 0.00% | 0.00% | 0.00% | 0.00% |
Jewelry [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 4,093,488 | $ 4,525,109 | $ 8,395,236 | $ 9,825,072 |
Gross Profit | $ 1,240,299 | $ 1,020,470 | $ 2,565,957 | $ 2,617,091 |
Margin | 30.30% | 22.60% | 30.60% | 26.60% |
Jewelry [Member] | Texas [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 3,863,109 | $ 4,169,364 | $ 7,757,744 | $ 8,874,175 |
Gross Profit | $ 1,139,043 | $ 908,970 | $ 2,267,076 | $ 2,270,136 |
Margin | 29.50% | 21.80% | 29.20% | 25.60% |
Jewelry [Member] | South Carolina [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 230,379 | $ 355,745 | $ 637,493 | $ 950,897 |
Gross Profit | $ 101,256 | $ 111,500 | $ 298,881 | $ 346,955 |
Margin | 44.00% | 31.30% | 46.90% | 36.50% |
Bullion/Rare Coin [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 10,937,998 | $ 6,608,590 | $ 20,922,144 | $ 13,708,341 |
Gross Profit | $ 509,628 | $ 847,585 | $ 1,025,785 | $ 1,401,366 |
Margin | 4.70% | 12.80% | 4.90% | 10.20% |
Bullion/Rare Coin [Member] | Texas [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 10,773,197 | $ 6,514,586 | $ 20,553,475 | $ 13,404,768 |
Gross Profit | $ 481,379 | $ 830,976 | $ 982,971 | $ 1,348,718 |
Margin | 4.50% | 12.80% | 4.80% | 10.10% |
Bullion/Rare Coin [Member] | South Carolina [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 164,801 | $ 94,004 | $ 368,669 | $ 303,573 |
Gross Profit | $ 28,249 | $ 16,882 | $ 42,814 | $ 52,648 |
Margin | 17.10% | 18.00% | 11.60% | 17.30% |
Scrap [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,748,028 | $ 1,181,941 | $ 2,966,179 | $ 2,465,585 |
Gross Profit | $ 256,914 | $ 233,887 | $ 441,961 | $ 443,371 |
Margin | 14.70% | 19.80% | 14.90% | 18.00% |
Scrap [Member] | Texas [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,748,028 | $ 1,181,941 | $ 2,966,179 | $ 2,465,585 |
Gross Profit | $ 256,914 | $ 233,887 | $ 441,961 | $ 443,371 |
Margin | 14.70% | 19.80% | 14.90% | 18.00% |
Other [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,799,123 | $ 417,622 | $ 2,314,608 | $ 790,137 |
Gross Profit | $ 262,987 | $ 88,536 | $ 454,607 | $ 230,657 |
Margin | 14.60% | 21.20% | 19.60% | 29.20% |
Other [Member] | Texas [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,459,655 | $ 331,507 | $ 1,971,378 | $ 647,343 |
Gross Profit | $ 175,553 | $ 32,381 | $ 365,027 | $ 149,981 |
Margin | 12.00% | 9.80% | 18.50% | 23.20% |
Other [Member] | South Carolina [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 339,468 | $ 86,115 | $ 343,229 | $ 142,794 |
Gross Profit | $ 87,434 | $ 56,155 | $ 89,580 | $ 80,676 |
Margin | 25.80% | 65.20% | 26.10% | 56.50% |
Subtotal [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 18,578,637 | $ 12,733,262 | $ 34,598,167 | $ 26,789,135 |
Gross Profit | $ 2,269,828 | $ 2,190,478 | $ 4,488,310 | $ 4,692,485 |
Margin | 12.20% | 17.20% | 13.00% | 17.50% |
Subtotal [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 2,358,800 | $ 2,358,800 | ||
Gross Profit | $ 1,095,487 | $ 1,095,487 | ||
Margin | 46.40% | 0.00% | 46.40% | 0.00% |
Subtotal [Member] | Texas [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 17,843,989 | $ 12,197,398 | $ 33,248,776 | $ 25,391,871 |
Gross Profit | $ 2,052,889 | $ 2,006,214 | $ 4,057,035 | $ 4,212,206 |
Margin | 11.50% | 16.40% | 12.20% | 16.60% |
Subtotal [Member] | Texas [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 2,358,800 | $ 2,358,800 | ||
Gross Profit | $ 1,095,487 | $ 1,095,487 | ||
Margin | 46.40% | 0.00% | 46.40% | 0.00% |
Subtotal [Member] | South Carolina [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 734,648 | $ 535,864 | $ 1,349,391 | $ 1,397,264 |
Gross Profit | $ 216,939 | $ 184,537 | $ 431,275 | $ 480,279 |
Margin | 29.50% | 34.40% | 32.00% | 34.40% |
Subtotal [Member] | South Carolina [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | ||||
Gross Profit | ||||
Margin | 0.00% | 0.00% | 0.00% | 0.00% |
Recycle [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,588,084 | $ 1,588,084 | ||
Gross Profit | $ 747,819 | $ 747,819 | ||
Margin | 47.10% | 0.00% | 47.10% | 0.00% |
Recycle [Member] | Texas [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 1,588,084 | $ 1,588,084 | ||
Gross Profit | $ 747,819 | $ 747,819 | ||
Margin | 47.10% | 0.00% | 47.10% | 0.00% |
Reuse [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 770,716 | $ 770,716 | ||
Gross Profit | $ 347,668 | $ 347,668 | ||
Margin | 45.10% | 0.00% | 45.10% | 0.00% |
Reuse [Member] | Texas [Member] | Echo Environmental, LLC [Member] | 5/20/19 - 6/30/2019 [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Revenues | $ 770,716 | $ 770,716 | ||
Gross Profit | $ 347,668 | $ 347,668 | ||
Margin | 45.10% | 0.00% | 45.10% | 0.00% |
Leases (Details Narrative)
Leases (Details Narrative) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)Integer | Jan. 02, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 19, 2018ft² | |
Operating lease right-of-use assets | $ 4,016,743 | $ 4,016,743 | ||||
Short-term operating lease liabilities | 1,140,852 | 1,140,852 | ||||
Long-term operating lease liabilities | 2,981,655 | $ 2,981,655 | ||||
Number of operating lease | Integer | 7 | |||||
Lease cost | $ 319,975 | $ 157,969 | ||||
Weighted average remaining lease term | 2 years 4 months 24 days | 2 years 4 months 24 days | ||||
Weighted average discount rate | 5.50% | 5.50% | ||||
Operating lease expenses | $ 331,923 | $ 124,221 | ||||
Euless [Member] | ||||||
Lease expiration date | Mar. 31, 2020 | |||||
Southlake [Member] | ||||||
Lease expiration date | Jul. 31, 2020 | |||||
Dallas [Member] | ||||||
Lease expiration date | Oct. 31, 2021 | |||||
The Grand Prairie [Member] | ||||||
Lease expiration date | Jun. 30, 2022 | |||||
Charleston [Member] | ||||||
Lease expiration date | Apr. 30, 2025 | |||||
Increase in rental space | ft² | 2,104 | |||||
Echo Environmental, LLC [Member] | ||||||
Lease expiration date | Dec. 31, 2020 | |||||
Lease option term, description | Initial option period of 24 months and a second option period of an additional 60 months. | |||||
Accounting Standards Update 2016-02 [Member] | ||||||
Operating lease right-of-use assets | $ 1,994,840 | |||||
Short-term operating lease liabilities | 446,462 | |||||
Long-term operating lease liabilities | 1,609,891 | |||||
Deferred rent | 61,500 | |||||
Accounting Standards Update 2016-02 [Member] | Echo Environmental, LLC [Member] | ||||||
Operating lease right-of-use assets | 2,350,781 | |||||
Short-term operating lease liabilities | 703,523 | |||||
Long-term operating lease liabilities | $ 1,647,258 |
Leases - Schedule of Future Ann
Leases - Schedule of Future Annual Minimum Lease Payments (Details) | Jun. 30, 2019USD ($) |
2019 (excluding the three months ending March 31, 2019) | $ 274,367 |
2020 | 550,623 |
2021 | 491,540 |
2022 | 247,040 |
2023 | 223,045 |
2024 and thereafter | 289,327 |
Total minimum lease payments | 2,075,942 |
Less imputed interest | (239,599) |
Subtotal | 1,836,343 |
Operating lease liability | 4,122,507 |
Echo Environmental, LLC [Member] | |
2019 (excluding the three months ending March 31, 2019) | 330,430 |
2020 | 803,661 |
2021 | 785,240 |
2022 | 582,195 |
Total minimum lease payments | 2,501,526 |
Less imputed interest | (215,362) |
Subtotal | $ 2,286,164 |
Basic and Diluted Average Sha_3
Basic and Diluted Average Shares (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Stock options excluded from the earnings per share | 15,000 | 1,015,000 | 15,000 | 1,015,000 |
Basic and Diluted Average Sha_4
Basic and Diluted Average Shares - Schedule of Reconciliation of Basic and Diluted Weighted Average Common Shares (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares | 26,924,381 | 26,924,381 | 26,924,381 | 26,924,381 |
Effect of potential dilutive securities | 166,917 | 243,239 | ||
Diluted weighted average shares | 26,924,381 | 27,091,298 | 26,924,381 | 27,167,620 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Note payable, related party | $ 9,501,760 | |
Current portion | 272,587 | |
Total | $ 9,774,347 | |
Interest Rate | 6.00% | |
Maturity | May 16, 2024 | |
Echo Environmental, LLC [Member] | ||
Interest Rate | 6.00% | |
Maturity | May 16, 2024 | |
Note Payable Related Party [Member] | ||
Note payable, related party | $ 2,907,719 | |
Note Payable Related Party [Member] | Echo Environmental, LLC [Member] | ||
Note payable, related party | $ 6,594,041 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Stock based compensation expenses | $ 0 | $ 0 | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | May 20, 2019 | Dec. 09, 2016 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | |||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Concentration risk, percentage | 16.10% | 17.20% | 15.10% | 17.50% | |||
Payment of related parties | $ 225,653 | ||||||
Debt instrument maturity date | May 16, 2024 | ||||||
Note payable related parties | $ 9,774,347 | $ 9,774,347 | |||||
Related Entities [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Common stock, par value | $ 0.01 | $ 0.01 | |||||
Due to related parties | $ 0 | $ 3,378,960 | $ 0 | 3,378,960 | |||
Due from related parties | 0 | 0 | 0 | 0 | |||
Payment of related parties | $ 46,068 | $ 92,530 | |||||
Related Entities [Member] | Debt Exchange Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt conversion, converted instrument, shares issued | 8,536,585 | ||||||
Class of warrant or right, number of securities called by warrants or rights | 1,000,000 | ||||||
Debt cancellation and forgiveness | $ 3,500,000 | ||||||
Number of warrants issued | 1,000,000 | ||||||
Warrant expired date | Dec. 31, 2018 | ||||||
Related Entities [Member] | Sales [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Concentration risk, percentage | 6.00% | 13.00% | |||||
Related Entities [Member] | Purchases [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Concentration risk, percentage | 2.00% | 3.00% | |||||
John Loftus [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Common stock, par value | $ 0.01 | ||||||
Due to related parties | $ 3,074,021 | ||||||
Payment of related parties | $ 45,990 | $ 0 | |||||
Debt instrument monthly payments | $ 22,023 | ||||||
Debt instrument maturity date | May 16, 2024 | ||||||
Note payable related parties | $ 9,774,347 | $ 0 | $ 9,774,347 | $ 0 | |||
John Loftus [Member] | Corrent Resource Holdings, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Business acquired to purchase entities | $ 6,925,979 | ||||||
Debt instrument monthly payments | $ 49,620 | ||||||
Debt instrument maturity date | May 16, 2024 |