LEASES

12 Months Ended

Dec. 31, 2021

LEASES

LEASES

NOTE 16 — LEASES

The Company has seven operating leases, five in the Dallas/Fort Worth Metroplex, one in Charleston, South Carolina and one in Chandler, Arizona. We have one lease expiring during Fiscal 2022.

DGSE leases – The Grand Prairie, Texas lease expires June 30, 2022, and has no current lease options. We are currently evaluating whether to continue to lease in the present location. The Charleston, South Carolina lease expires April 30, 2025, and has no current lease options. The Euless, Texas lease expires June 30, 2025, with an option for an additional five (5) year term. On August 24, 2021, we entered into a new lease agreement with the landlord of DGSE’s main flagship store located at 13022 Preston Road, Dallas, Texas. The new lease commenced on November 1, 2021 and expires January 31, 2027, with an option for an additional five (5) year term.

ECHG leases - The McKenzie, Carrollton ITAD lease expired July 31, 2021 with no current options. We evaluated the lease in the present location and decided to vacate the property as of July 31, 2021. The Echo Belt Line lease expires January 31, 2026, with one option period of an additional 60 months. ECHG was assigned CExchange’s lease, located at 2727 Realty Road, Carrollton, Texas, due to the CExchange Transaction on June 9, 2021, and expired December 31, 2021. The lease was amended on October 31, 2021, that commenced on January 1, 2022 and expires January 31, 2027. ECHG was also assigned Avail AZ’s lease, located at 120 E. Corporate Pl, Chandler, Arizona, due to the Avail Transaction, and expires on May 31, 2025.

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 Fiscal 2021 and Fiscal 2020 was $2,109,104 and $1,452,689, respectively. These lease costs consist of a combination of minimum lease payments and variable lease costs.

As of December 31, 2021, the weighted average remaining lease term and weighted average discount rate for operating leases was 2.81 years and 5.5%, respectively. The Company’s future operating lease obligations that have not yet commenced are immaterial. The cash paid for operating lease liabilities for Fiscal 2021 and Fiscal 2020 was $2,300,630 and $1,314,285, respectively.

Future annual minimum lease payments as of December 31, 2021:

	Operating
	Leases
DGSE
2022	$	516,456
2023		499,984
2024		507,414
2025		364,269
2026 and thereafter		333,114
Total minimum lease payments		2,221,237
Less imputed interest		(200,349	)
DGSE Sub-Total		2,020,888
ECHG
2022		1,321,353
2023		1,357,381
2024		1,396,129
2025		1,321,297
2026 and thereafter		507,780
Total minimum lease payments		5,903,940
Less imputed interest		(477,947	)
ECHG Sub-Total		5,425,993
Total		7,446,881
Current portion		1,573,824
	$	5,873,057