Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2014

Long-Term Debt [Abstract]

Schedule of Long-Term Debt

	Outgoing Balance
	June 30, 2014		December 31, 2013		Current Interest Rate		Maturity
NTR line of credit (1)	$	2,303,359	$	2,383,359	2.0%		August 1, 2015
Mortgage payable		1,782,817		1,843,061	6.7%		August 1, 2016
Capital leases (2)		42,906		48,393		Various	Various
Sub-Total		4,129,082		4,274,813
Less: Capital leases		11,328		11,091
Less: Current maturities		126,699		122,536
Long-term debt		3,991,055		4,141,186
Less: Line of credit (1)		2,303,359		2,383,359
Long term debt, less current maturities	$	1,687,696	$	1,757,827

(1) On July 19, 2012, DGSE entered into a loan agreement with NTR Metals, LLC (“NTR”), an affiliate of DGSE's majority stockholder Elemetal, LLC (“Elemetal”), pursuant to which NTR, agreed to provide the Company a guidance line of revolving credit in an amount up to $7,500,000 (the “Loan Agreement”). The Loan Agreement anticipated termination–at which point all amounts outstanding thereunder would be due and payable (such amounts, the “Obligations”)–upon the earlier of: (i) August 1, 2014; (ii) the date that is twelve months after the Company receives notice from NTR demanding the repayment of the Obligations; (iii) the date the Obligations are accelerated in accordance with the terms of the Loan Agreement; or (iv) the date on which the commitment terminates under the Loan Agreement. In connection with the Loan Agreement, the Company granted a security interest in the respective personal property of each of its subsidiaries. The loan carries an interest rate of two percent (2%) per annum for all funds borrowed pursuant to the Loan Agreement. Proceeds received by the Company pursuant to the terms of the Loan Agreement were used for repayment of all outstanding financial obligations incurred in connection with that certain Loan Agreement, dated as of December 22, 2005, between the Company and Texas Capital Bank, and additional proceeds are expected to be used as working capital in the ordinary course of business. The Company incurred debt issuance costs associated with the Loan Agreement totaling $56,150. The debt issuance costs are included in other assets in the accompanying consolidated balance sheet and are being amortized to interest expense on a straight-line basis over two years. On February 25, 2014, the Company and NTR entered into a one-year extension of the Loan Agreement, extending the termination date to August 1, 2015. All other terms of the agreement remain the same. As of June 30, 2014 and December 31, 2013, we had outstanding balances of $2,303,359 and $2,383,359, respectively, drawn on the NTR credit facility.

(2) On November 23, 2010, DGSE entered into a capital lease for $78,450 with Direct Capital Corporation for an inventory management solution. The non-cancelable lease agreement required an advanced payment of $5,169 and monthly payments of $2,584 for 36 months at an interest rate of 11.5% beginning in January 2011. At the end of the lease in December 2013, the equipment was purchased for $1. On April 3, 2013, DGSE entered into a capital lease for $58,563 with Graybar Financial Services for phones at the new corporate headquarters.  The non-cancelable lease agreement required an advanced payment of $2,304 and monthly payments of $1,077 for 60 months at an interest rate of 4.2% beginning in May 2013.  At the end of the lease in May 2018, the equipment can be purchased for $1.