<SEC-DOCUMENT>0001144204-12-065333.txt : 20121128
<SEC-HEADER>0001144204-12-065333.hdr.sgml : 20121128
<ACCEPTANCE-DATETIME>20121128170132
ACCESSION NUMBER:		0001144204-12-065333
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20121221
FILED AS OF DATE:		20121128
DATE AS OF CHANGE:		20121128
EFFECTIVENESS DATE:		20121128

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DGSE COMPANIES INC
		CENTRAL INDEX KEY:			0000701719
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-JEWELRY STORES [5944]
		IRS NUMBER:				880097334
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11048
		FILM NUMBER:		121229624

	BUSINESS ADDRESS:	
		STREET 1:		11311 REEDER ROAD
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75229
		BUSINESS PHONE:		9724843662

	MAIL ADDRESS:	
		STREET 1:		11311 REEDER ROAD
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75229

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DALLAS GOLD & SILVER EXCHANGE INC /NV/
		DATE OF NAME CHANGE:	19930114

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN PACIFIC MINT INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CANYON STATE CORP
		DATE OF NAME CHANGE:	19860819
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>v329279_def14a.htm
<DESCRIPTION>FORM DEF 14A
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SCHEDULE 14A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Proxy Statement Pursuant to Section 14(a)
of the</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Filed by the Registrant&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">x</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Filed by a Party other than the
Registrant&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 5%; font-family: Wingdings">&uml;</TD>
    <TD STYLE="vertical-align: bottom; width: 95%">Preliminary Proxy Statement</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD STYLE="font-weight: bold">Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Wingdings">x</TD>
    <TD>Definitive Proxy Statement</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD>Definitive Additional Materials</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD>Soliciting Material Pursuant to &sect;240.14a-12</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="font-size: 12pt; font-weight: bold; text-align: center">DGSE COMPANIES, INC.</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(Name of Registrant as Specified In Its Charter)</TD></TR>
<TR>
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</TD></TR>
<TR>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="3">Payment of Filing Fee (Check the appropriate box):</TD></TR>
<TR>
    <TD COLSPAN="3">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Wingdings">x</TD>
    <TD COLSPAN="2">No fee required.</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD COLSPAN="2">Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.</TD></TR>
<TR>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 87%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">(1)</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">Title of each class of securities to which transaction applies:</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">(2)</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">Aggregate number of securities to which transaction applies:</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">(3)</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">(4)</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">Proposed maximum aggregate value of transaction:</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">(5)</TD>
    <TD STYLE="vertical-align: bottom">Total fee paid:</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Wingdings">&uml;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">Fee paid previously with preliminary materials.</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-family: Wingdings">&uml;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom">Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">(1)</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="color: black">Amount Previously Paid:</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">(2)</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="color: black">Form, Schedule or Registration Statement No.:</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">(3)</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="color: black">Filing Party:</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="color: black">(4)</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="color: black">Date Filed:</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>DGSE
Companies, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>11311
Reeder Road</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Dallas,
Texas 75229</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>TO
BE HELD December 21, 2012</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Stockholder:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">As a stockholder of DGSE Companies, Inc.,
you are hereby given notice of and invited to attend in person or by proxy our 2012 Annual Meeting of Stockholders to be held at
the DoubleTree&nbsp;Hotel, 11611 Luna Road, Farmers Branch, TX 75234 on <B>Friday, December 21, 2012 at 10am</B> (local time).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">At this year&rsquo;s stockholders&rsquo;
meeting, you will be asked to (i)&nbsp;elect five directors to serve until the next annual meeting of stockholders and until their
respective successors shall have been duly elected and qualified, (ii)&nbsp;ratify the appointment of Whitley Penn LLP (&ldquo;Whitley
Penn&rdquo;) as our independent registered public accountants for the fiscal year ending December&nbsp;31, 2012 and (iii)&nbsp;transact
such other business as may properly come before the meeting and any adjournment(s) thereof. Our Board of Directors unanimously
recommends that you vote FOR the directors nominated and FOR the ratification of Whitley Penn. Accordingly, please give careful
attention to these proxy materials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">Only holders of record of our Common Stock
as of the close of business on <B>November 16, 2012</B> are entitled to notice of and to vote at our annual meeting and any adjournment(s)
thereof. Our transfer books will not be closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt"><B>You are cordially invited to attend
the annual meeting. Whether you expect to attend the annual meeting or not, please vote, sign, date and return in the self-addressed
envelope provided the enclosed proxy card as promptly as possible. If you attend the annual meeting, you may vote your shares in
person, even though you have previously signed and returned your proxy.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">By Order of the Board of Directors,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; border-bottom: windowtext 1pt solid">/s/ C. Brett Burford</TD>
    <TD STYLE="width: 50%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>C. Brett Burford</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Secretary</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dallas, Texas</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">November 28, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>YOUR VOTE IS IMPORTANT.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PLEASE EXECUTE AND RETURN PROMPTLY THE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED
HEREIN.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>TABLE OF CONTENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%">PROXY STATEMENT</TD>
    <TD STYLE="width: 10%; text-align: right; vertical-align: bottom">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>VOTING PROCEDURES AND REVOCABILITY OF PROXIES</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>PROPOSAL I:&nbsp; ELECTION OF DIRECTORS</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">5</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>BOARD OF DIRECTORS AND COMMITTEES</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>EXECUTIVE OFFICERS</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">9</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>EXECUTIVE COMPENSATION</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">10</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">13</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>PROPOSAL 2:&nbsp; RATIFICATION OF THE APPOINTMENT OF WHITLEY PENN AS INDEPENDENT AUDITORS OF DGSE FOR THE FISCAL YEAR ENDING 2012</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">16</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>STOCKHOLDER COMMUNICATIONS AND PROPOSALS</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>PERSONS MAKING THE SOLICITATION</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">19</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>OTHER MATTERS</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">19</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>FINANCIAL STATEMENTS</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">19</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>DGSE
Companies, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>11311
Reeder Road</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Dallas,
Texas 75229</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROXY STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE ANNUAL MEETING OF STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>TO
BE HELD December 21, 2012</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>To Our Stockholders:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 23.1pt">This proxy statement
(this &ldquo;Proxy Statement&rdquo;) is furnished in connection with the solicitation of proxies by the Board of Directors (the&nbsp;&rdquo;Board
of Directors&rdquo; or &ldquo;Board&rdquo;) of DGSE Companies, Inc., a Nevada corporation (&ldquo;we,&rdquo; &ldquo;us&rdquo;,
&ldquo;our&rdquo;, &ldquo;the&nbsp;Company&rdquo; and &ldquo;DGSE&rdquo;), to be used at our Annual Meeting of Stockholders to
be held at the DoubleTree&nbsp;Hotel, 11611 Luna Road, Farmers Branch, TX 75234 on <B>Friday, December 21, 2012 at 10am</B> (local
time), or at any adjournment or adjournments thereof. Our stockholders of record as of the close of business on <B>November 16,
2012</B> are entitled to vote at our annual meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 23.1pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 23.1pt"><B>Important Notice
of Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on December 21, 2012.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 23.1pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 23.1pt"><B>Our proxy materials,
including our Proxy Statement for the 2012 Annual Meeting, 2012 Annual Report on Form 10-K for the year ended December&nbsp;31,
2011 and proxy card, were first sent to security holders on or about December 1, 2012 and are available on the Internet at www.DGSE.com.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VOTING PROCEDURES AND REVOCABILITY OF
PROXIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying proxy card is designed
to permit each of our stockholders as of the record date to vote on each of the proposals properly brought before the annual meeting.
As of the record date, there were 12,175,584 shares of our common stock, par value $.01 per share (our &ldquo;Common Stock&rdquo;),
issued and outstanding and entitled to vote at the annual meeting. Each outstanding share of our common stock is entitled to one
vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of a majority of our outstanding
shares of common stock, present in person or by proxy, will constitute a quorum for the transaction of business at the annual meeting.
If a quorum is not present, the annual meeting may be adjourned from time to time until a quorum is obtained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Abstentions and broker non-votes will be
counted for the purpose of determining whether a quorum is present. Abstentions, but not broker non-votes, are treated as shares
present and entitled to vote, and will be counted as a &ldquo;no&rdquo; vote on all other matters. Broker non-votes are treated
as not entitled to vote, and so reduce the absolute number, but not the percentage of votes needed for approval of a matter. Broker
non-votes occur when nominees, such as banks and brokers holding shares on behalf of beneficial owners, do not receive voting instructions
from the beneficial holders at least ten days before the meeting. If that happens, the nominees may vote those shares only on matters
deemed &ldquo;routine&rdquo; by the NYSE MKT Exchange (the &ldquo;Exchange&rdquo;), such as the ratification of auditors. Nominees
cannot vote on non-routine matters unless they receive voting instructions from beneficial holders, resulting in so-called &ldquo;broker
non-votes.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Assuming that a quorum is present, directors
will be elected by a plurality vote and the five nominees who receive the most votes will be elected. There is no right to cumulative
votes in the election of directors. As a result, abstentions and &ldquo;broker non-votes&rdquo; (see below), if any, will not affect
the outcome of the vote on this proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Assuming that a quorum is present, the
ratification of the appointment of Whitley Penn, LLP (&ldquo;Whitley Penn&rdquo;) as our independent registered public accountants
for the fiscal year ending December&nbsp;31, 2012 and approval of any other matter that may properly come before the annual meeting,
the affirmative vote of a majority of the total votes cast on these proposals, in person or by proxy, is required to approve these
proposals. As a result, abstentions will have the same practical effect as a negative vote on these proposals, and &ldquo;broker
non-votes&rdquo;, if any, will not affect the outcome of the vote on these proposals. The Company believes that the proposal for
the ratification of our independent registered public accounting firm is considered to be a &ldquo;routine&rdquo; matter, and hence
the Company does not expect that there will be a significant number of broker non-votes on such proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the record date, November 16, 2012,
NTR Metals, LLC, a Texas limited liability company (&ldquo;NTR&rdquo;) had advised the Company that NTR has filed, on November
16, 2012, a Form 4 with the Securities and Exchange Commission (&ldquo;SEC&rdquo;) stating that, as of the filing date, NTR owns
5,026,442 shares of our Common Stock. NTR had previously filed, on October 31, 2012, a Schedule 13D/A with SEC stating that, as
of the filing date, NTR has been granted a proxy by Dr. L.S. Smith to vote his 1,628,014 shares until May 25, 2014, and holds options
to purchase up to 5,000,000 shares of our Common Stock, which if exercised would result in ownership of 67.85% of the outstanding
shares of our Common Stock. On November 11, 2011, as a result of the transactions more fully described in Item 5.01 of our Current
Report on Form 8-K, as filed with the Securities and Exchange Commission on November 15, 2011, NTR gained control over a majority
of our Common Stock. Prior to November 11, 2011, Dr. L. S. Smith, our former Chief Executive Officer and Chairman of the Board,
exercised voting control over a majority of our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying proxy card provides space
for you to vote in favor of, against or to withhold voting for: (i)&nbsp;the nominees for the Board of Directors identified herein
and (ii)&nbsp;the ratification of the appointment of Whitley Penn as independent registered public accountants of DGSE for the
fiscal year ending December&nbsp;31, 2012. The Company&rsquo;s Board of Directors urges you to complete, sign, date and return
the proxy card in the accompanying envelope, which is postage prepaid for mailing in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When a signed proxy card is returned with
choices specified with respect to voting matters, the proxies designated on the proxy card will vote the shares in accordance with
the stockholder&rsquo;s instructions. The Company has designated James D. Clem and C. Brett Burford as proxies for the stockholders.
If you desire to name another person as your proxy, you may do so by crossing out the names of the designated proxies and inserting
the names of the other persons to act as your proxies. In that case, it will be necessary for you to sign the proxy card and deliver
it to the person named as your proxy and for the named proxy to be present and vote at the annual meeting. Proxy cards so marked
should not be mailed to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you sign your proxy card and return
it to the Company and you have made no specifications with respect to voting matters, your shares will be voted FOR: (i)&nbsp;the
election of the nominees for director identified herein and (ii)&nbsp;the ratification of the appointment of Whitley Penn as the
Company&rsquo;s independent registered public accountants for the fiscal year ending December 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You have the unconditional right to revoke
your proxy at any time prior to the voting of the proxy by taking any act inconsistent with the proxy. Acts inconsistent with the
proxy include notifying our Secretary in writing of your revocation, executing a subsequent proxy, or personally appearing at the
annual meeting and casting a contrary vote. However, no revocation shall be effective unless at or prior to the annual meeting
we have received notice of such revocation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At least ten (10)&nbsp;days before the
annual meeting, the Company will make a complete list of the stockholders entitled to vote at the annual meeting open to the examination
of any stockholder for any purpose germane to the meeting. The list will be open for inspection during ordinary business hours
at the Company&rsquo;s offices located at 11311 Reeder Road, Dallas, Texas 75229, and will also be made available to stockholders
present at the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL I: ELECTION OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Five directors are proposed to be elected
at the annual meeting. If elected, each director will hold office until the next annual meeting of stockholders or until his successor
is elected and qualified. The election of directors will be decided by a plurality vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The five nominees for election as directors
to serve until the next annual meeting of stockholders and until their successors have been duly elected and qualified are Craig
Alan-Lee, James D. Clem, William P. Cordeiro, David S. Rector and James J. Vierling. All of the nominees named in this proxy statement
are members of the Company&rsquo;s current Board of Directors. All nominees have consented to serve if elected and the Company
has no reason to believe that any of the nominees named will be unable to serve. If any nominee becomes unable to serve, (i)&nbsp;the
shares represented by the designated proxies will be voted for the election of a substitute as the Company&rsquo;s Board of Directors
may recommend, (ii)&nbsp;the Company&rsquo;s Board of Directors may reduce the number of directors to eliminate the vacancy or
(iii)&nbsp;the Company&rsquo;s Board of Directors may fill the vacancy at a later date after selecting an appropriate nominee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The current Board of Directors nominated
the individuals named below for election to our Board of Directors, and information regarding the background and qualifications
of each of the nominees is set forth below. See &ldquo;Security Ownership of Certain Beneficial Owners and Management&rdquo; for
additional information about the nominees, including their ownership of securities issued by DGSE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; border-bottom: black 1pt solid; font-weight: bold; text-align: center">Name</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 8%; border-bottom: black 1pt solid; font-weight: bold; text-align: center">Age</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 20%; border-bottom: black 1pt solid; font-weight: bold; text-align: center">Director Since</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 36%; border-bottom: black 1pt solid; font-weight: bold; text-align: center">Position</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>James J. Vierling</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">50</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">2012</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Chairman of the Board, Chief Executive Officer and President of DGSE Companies, Inc., President of SBT</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>James D. Clem</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">36</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director and Chief Operating Officer of DGSE Companies, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>William P. Cordeiro, Ph.D. (1)(2)</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">68</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">1999</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director and Chairman of the Audit Committee</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Craig Alan-Lee (1)(2)</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">55</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">2004</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>David S. Rector (1)(2)</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">66</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">2007</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director and Chairman of the Compensation Committee</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(1) Member of the Audit Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(2) Member of the Compensation Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following paragraphs summarize each
director&rsquo;s principal occupation, business affiliations and other information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>James J. Vierling</B> replaced William
Oyster as our Chief Executive Officer, President, Chairman of the Board and Principal Executive Officer on October 25, 2012.&nbsp;
Mr. Vierling was elected to the Board because of his extensive jewelry industry and other related experience. Mr. Vierling had
previously served as the President of Southern Bullion Trading, LLC (&ldquo;SBT&rdquo;) since 2009, a wholly-owned subsidiary of
DGSE Companies, Inc.&nbsp; SBT was acquired by us on September 14, 2011 in an acquisition from NTR, our largest vendor and largest
shareholder. Prior to joining SBT, from 2005 until 2009, Mr. Vierling was Chief Marketing Officer and Strategic Planner of A-1
Premium Acceptance, an installment loan company. Mr. Vierling holds a BA in economics from the University of Missouri.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>James D. Clem</B> has served as Director
and Chief Operating Officer of DGSE Companies, Inc. since December, 2012.&nbsp; Mr. Clem was elected to the Board because of his
extensive jewelry industry and other related experience. Prior to his current position, Mr. Clem had served as the Company's Vice
President of Sales and Marketing since 2008.&nbsp; &nbsp;Prior to 2008, Mr. Clem was with the Heritage Organization for seven years
as Vice President of Sales and Marketing and then Chief Operating Officer. Mr. Clem holds a B.B.A. in business from the University
of Texas at Arlington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>William P. Cordeiro, Ph.D.</B> has served
as a Director and an independent member and financial expert of our Audit Committee since 1999. He has been a professor in the
California State University system since 1988 and the director of the Martin V. Smith School of Business and Economics at CSU Channel
Islands since 2001. He has also been a partner of Bartik, Cordeiro &amp; Associates, Inc., a management consulting firm, since
1990. Dr. Cordeiro holds a B.S. in biology from the University of San Francisco, an M.B.A. in finance from University of Southern
California, an M.A. in management from Claremont Graduate School and a Ph.D. in executive management from Claremont Graduate School.
Mr. Cordeiro was elected to the Board because of his extensive financial experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Craig Alan-Lee</B> has served as a Director
and independent member of our Audit Committee since 2004. He has served as a senior loan consultant with Castle Funding, Inc.,
a mortgage loan company, since November 1994. Mr. Alan-Lee was elected to the Board based on his 30 years of experience in business
and management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>David S. Rector</B> has served as a
Director and independent member of our Audit Committee since 2007 and was elected as Chairman of the Company's Compensation Committee
in 2012.&nbsp; He also serves on the board of directors of Standard Drilling, Valor Gold Corp., American Strategic Minerals Corp.
and Pershing Gold Corp. (formerly Sagebrush Gold, Ltd.) and previously served as a director of Superior Galleries, Inc. from May
2003 until May 2007.&nbsp; Since 1985, he has served as a principal of David Stephen Group, which provides enterprise consulting
services to emerging and developing companies in a variety of industries. Prior to that, he served as president, chief executive
officer and chief operating officer of Nanoscience Technologies, Inc., a development stage company engaged in the development and
commercialization of DNA nanotechnology. Mr. Rector holds a B.S. in business and finance from Murray State University. Mr. Rector
was elected to the Board because of his extensive industry and other related experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<B>Family Relationships</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no family relationships among
the nominees for director, the officers and key employees of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Vote Required</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Directors will be elected by a plurality
of the votes cast by the holders of DGSE Common Stock voting in person or by proxy at the annual meeting. Abstentions and broker
non-votes will each be counted as present for purposes of determining the presence of a quorum, but will have no effect on the
vote for election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE BOARD OF DIRECTORS URGES YOU TO VOTE
&ldquo;FOR&rdquo;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EACH OF THE NOMINEES FOR DIRECTOR SET
FORTH ABOVE.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth, as of the
record date, November 16, 2012, the beneficial ownership each stockholder known by the Company to own beneficially more than 5%
of the Company&rsquo;s outstanding shares of Common Stock. Common Stock beneficially owned and percentage ownership as of November
16, 2012 was based on 12,175,584 shares outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="font-size: 8pt">
    <TD NOWRAP STYLE="width: 13%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 20%; font-weight: bold; text-align: center; font-size: 8pt">(2)</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center; font-size: 8pt">(3)</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="font-size: 8pt">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Name and</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Amount</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">(5)</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt"></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">(6)</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt"></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">(7)</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt"></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">(8)</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt"></TD></TR>
<TR STYLE="font-size: 8pt">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">(1)</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">address of</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">and nature</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">(4)</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt"></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Sole</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Shared</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Sole</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Shared</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="font-size: 8pt">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Title of</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">beneficial</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">of beneficial</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Percent</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Voting</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Voting</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Investment</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">Investment</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="font-size: 8pt">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">class</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">owner</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">ownership</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">of class</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">Power</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">Power</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">Power</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt">Power</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">Common</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">NTR (1)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt"></TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt"></TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt"></TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt"></TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt"></TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt"></TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">Stock</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">10720 Composite Dr.</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">11,654,456</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">67.85</TD><TD STYLE="text-align: left; font-size: 8pt">%</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">11,654,456</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">-</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">10,003,242</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">-</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">Dallas, TX 75220</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">Common</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">Dr. L.S. Smith (2)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">Stock</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">519 I-30, Suite 243</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">1,628,014</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">13.37</TD><TD STYLE="text-align: left; font-size: 8pt">%</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">-</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">-</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">1,628,014</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">-</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">Rockwall, TX 75087</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">Common</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">David W. Berry (3)</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">Stock</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">4200 Montrose Blvd., Suite 400</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">988,279</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">8.12</TD><TD STYLE="text-align: left; font-size: 8pt">%</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">944,288</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">43,991</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">944,288</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">43,991</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: center; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-size: 8pt">Houston, TX 77006</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="font-size: 8pt">&nbsp;</TD>
    <TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: right; font-size: 8pt">&nbsp;</TD><TD STYLE="text-align: left; font-size: 8pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">1</TD><TD>NTR owns 5,026,442 shares, has been granted a proxy by Dr. L.S. Smith to vote his 1,628,014 shares until May 25, 2014, and
has 5,000,000 options which if exercised would results in 67.85% of the common stock.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">2</TD><TD>Dr. L.S. Smith has granted NTR a proxy to vote his 1,628,014 shares until May 25, 2014.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">3</TD><TD>In the Schedule 13G/A, filed with the SEC on January 27, 2012, pursuant to a Joint Filing Agreement, by Select Contrarian Value
Partners, L.P. (&ldquo;Select Contrarian&rdquo;), Kaizen Management, L.P., the general partner and investment advisor of Select
Contrarian (&ldquo;Kaizen Management&rdquo;), Kaizen Capital, LLC, the general partner of Kaizen Management (&ldquo;Kaizen Capital&rdquo;),
and David W. Berry, the manager of Kaizen Management, Mr. Berry was reported to hold sole voting and investment power over 944,288
shares and shared voting and investment power over 43,991 shares, Kaizen Capital was reported to hold sole voting and investment
power over 900,288 shares and shared voting and investment power over 43,991 shares, Kaizen Management was reported to hold sole
voting and investment power over 900,288 shares and shared voting and dispositive power over 43,991 shares, and Select Contrarian
was reported to hold sole voting and investment power over 900,288 shares. No information was provided by the filers as to the
nature of the shared voting or investment power of Kaizen Management, Kaizen Capital or Mr. Berry.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.1pt; text-align: justify; text-indent: -1.1pt">The following
table sets forth information with respect to beneficial ownership of our Common Stock at the record date November 16, 2012 by our
principal executive officers; by each of our Directors; and by all executive officers and Directors as a group. Except as otherwise
noted, the address of each of the following beneficial owners is c/o DGSE Companies, Inc., 11311 Reeder Road, Dallas, Texas 75229.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.1pt; text-align: justify; text-indent: -1.1pt">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR>
    <TD NOWRAP STYLE="width: 13%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 20%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center">(3)</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center">(7)</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center"></TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="width: 8%; font-weight: bold; text-align: center">(8)</TD><TD NOWRAP STYLE="width: 1%; font-weight: bold; text-align: center"></TD></TR>
<TR>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">(2)</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Amount and</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><B>(4)</B></TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><B>(5)</B></TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><B>(6)</B></TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Sole</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Shared</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">(1)</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">Name and address of</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">nature of</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Percent of</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Sole Voting</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Shared Voting</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Investment</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">Investment</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Title of class</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">beneficial owner</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">beneficial</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">class</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Power</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Power</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Power</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Power</TD><TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">William Cordeiro (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.39</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Craig Alan-Lee (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">345,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.83</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">345,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">345,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">David S. Rector (3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,150</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.20</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,150</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,150</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">James J. Vierling (4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">147,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.21</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">147,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">147,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">James D. Clem (5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,925</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.39</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,925</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,925</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">C. Brett Burford (6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">All Directors and</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Executive Officers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">613,575</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.02</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">613,575</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">613,575</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">(1)</TD>
    <TD STYLE="width: 97%; text-align: justify">William Cordeiro is an outside director, owns 10,000 shares directly and has options to purchase 32,500 shares of our Common Stock. Beneficial ownership also includes 5,000 shares owned by Bartik, Cordeiro &amp; Associates, as to which Mr. Cordeiro has shared voting and investment powers.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD STYLE="text-align: justify">Craig Alan-Lee is an outside director, owns 330,000 shares and has options to purchase 15,000 shares of our Common Stock.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(3)</TD>
    <TD STYLE="text-align: justify">David S. Rector is an outside director, owns 14,150 shares and has options to purchase 10,000 shares of our Common Stock.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(4)</TD>
    <TD STYLE="text-align: justify">James J. Vierling was elected as the Company's Chairman of the Board, CEO and President on October&nbsp;25, 2012, owns 147,000 shares of our Common Stock and has no options to purchase shares of our Common Stock.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(5)</TD>
    <TD STYLE="text-align: justify">James D. Clem was named elected as a Director and COO on December 20, 2011 and owns 47,925 shares and has no options to purchase shares of our Common Stock.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(6)</TD>
    <TD STYLE="text-align: justify">C. Brett Burford was named as CFO on August 31, 2012, owns 2,000 shares of Common Stock and has no options to purchase shares of our Common Stock.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>BOARD OF DIRECTORS AND COMMITTEES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Board of Directors and Committees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Board Composition</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board is currently composed of five
directors. Our Board has determined that William P. Cordeiro, Ph.D., Craig Alan-Lee and David S. Rector are &ldquo;independent&rdquo;
under the standards of the SEC and the Exchange. Under applicable SEC and Exchange rules, the existence of certain &ldquo;related
person&rdquo; transactions above certain thresholds between a director and the company are required to be disclosed and preclude
a finding by our Board that the director is independent. In addition to transactions required to be disclosed under SEC rules,
our Board considered certain other relationships in making its independence determinations, and determined in each case that such
other relationships did not impair the director&rsquo;s ability to exercise independent judgment on our behalf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our directors are elected at an annual
meeting of our shareholders by the holders of shares entitled to vote in the election of directors, except in the case of vacancy,
which can be filled by an affirmative vote of a majority of the remaining directors. Each director is elected to serve until the
annual meeting of shareholders following his election or until he chooses to resign from his position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Board Meetings</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board meets as often as necessary to
perform its duties and responsibilities. During the fiscal year ended December 31, 2011 (&ldquo;Fiscal 2011&rdquo;), the Board
met six times in person or telephonically. All members of our Board were present at and participated in all six meetings. In addition,
our Board acted by written consent one time. Management also periodically conferred with directors between meetings regarding affairs
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Audit Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee, consisting of three
independent directors of our Board, is chaired by William P. Cordeiro, PhD, who is also an &ldquo;audit committee financial expert,&rdquo;
as that term is defined in Item 407(d)(5)(ii) of Regulation S-K, promulgated under the Securities Act. Dr. Cordeiro is &ldquo;independent,&rdquo;
as defined by the listing standards of the Exchange. The other members of the Audit Committee are David S. Rector and Craig Alan-Lee.
The Audit Committee is primarily tasked with overseeing our financial reporting process, evaluation of independent auditors and,
where appropriate, exercising its duty to replace our independent auditors. Management is responsible for preparing<STRIKE> </STRIKE>our
financial statements, and the independent auditors are responsible for auditing those financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to their regular activities,
the Audit Committee is available to meet with the independent auditors, the Chief Executive Officer or the Chief Financial Officer
whenever a special situation arises and meets as often as necessary to perform their duties and responsibilities. The charter for
the Audit Committee is available under the &ldquo;Investor Relations&rdquo; menu in the &ldquo;DGSE Companies&rdquo; section of
our website at www.DGSE.com. We certify that we have adopted a formal written audit committee charter and that the Audit Committee
reviews and reassesses the adequacy of the charter annually.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Audit Committee Report</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee has reviewed and discussed
the audited financial statements with management and Whitley Penn, our independent registered accounting firm, and all matters
required to be discussed by the American Institute of Certified Public Accountants, Professional Standards, Vol. 1, AU Section
380, as adopted by the Public Company Accounting Oversight Board (&ldquo;PCAOB&rdquo;) in Rule 3200T.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -1.5pt">The Audit Committee
has received written disclosures and the letter from Whitley Penn required by applicable rules of the PCAOB regarding Whitley Penn&rsquo;s
communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Whitley Penn its independence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -1.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -1.5pt">The Audit Committee
acts pursuant to our Audit Committee Charter. Each of the members of the Audit Committee qualifies as an independent director under
the current listing standards of the Exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Compensation Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At the end of Fiscal 2011, we were classified
as a &ldquo;controlled company,&rdquo; as that term is defined by the Exchange, and as of that date, we did not have a Compensation
Committee or any committee performing similar functions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">However, as of the date of the filing of
this Proxy Statement, we have adopted a more formalized process for determining compensation for<STRIKE> </STRIKE>our named executive
officers, including the creation of a Compensation Committee comprised of our independent directors. The Compensation Committee
is chaired by David S. Rector and is primarily concerned with reviewing, approving and determining the compensation of our executive
officers to ensure that we employ ethical compensation standards and that our executive officers are fairly compensated based upon
their performance and contribution to us. The Compensation Committee meets as often as necessary to perform their duties and responsibilities.
The charter for the Compensation Committee is available under the &ldquo;Investor Relations&rdquo; menu in the &ldquo;DGSE Companies&rdquo;
section of our website at www.DGSE.com. We have adopted a formal written Compensation Committee Charter, and the Audit Committee
reviews and reassesses the adequacy of the charter annually.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Leadership</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to our bylaws, the Chairman of
our Board shall be and is our Chief Executive Officer. Pursuant to our bylaws, he presides, when present, at all meetings of the
shareholders and at all meetings of our Board, and he has general supervision over our affairs, shall have general and active control
of all of our business and shall see that all orders and resolutions of our Board and our shareholders are carried into effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Risk Oversight</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Like other companies, we face a variety
of risks, including investment risk, liquidity risk<STRIKE>,</STRIKE> and operational risk. Our Board believes an effective risk
management system should (i) timely identify the material risks that we face, (ii) communicate necessary information with respect
to material risks to senior executives and, as appropriate, to the Board or the relevant committee of our Board of Directors, (iii)
implement appropriate and responsive risk management strategies consistent with our risk profile, and (iv) integrate risk management
into decision-making. Our Board is tasked with overseeing risk oversight, and periodically meets with management and advisors regarding
the adequacy and effectiveness of our risk management processes and to analyze the most likely areas of future risk for us. In
addition to the formal compliance program, our Board encourages management to promote a corporate culture that incorporates risk
management into our corporate strategy and day-to-day business operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Code of Business Conduct &amp; Ethics
and Related Party Transaction Policy</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have adopted a Code of Business Conduct
&amp; Ethics, as well as a Related Person Transaction Policy, each of which applies to our directors, executive officers (or persons
performing similar functions), employees and certain of our other affiliates, associates and/or related persons. The latest copies
of our Code of Business Conduct &amp; Ethics and Related Person Transaction Policy are available under the &ldquo;Investor Relations&rdquo;
menu in the &ldquo;DGSE Companies&rdquo; section of our website at www.DGSE.com. Any transactions between us and our officers,
directors, principal shareholders<STRIKE>,</STRIKE> or other affiliates have been and will be on terms no less favorable to us
than the Board believes could be obtained from unaffiliated third parties on an arms-length basis. We intend to disclose future
amendments to these policies, or waivers of such provisions, at the same location on our website and also in public filings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Shareholder Communication</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Shareholders may send communications to
our Board, individual directors or officers through our Investor Relations Department, Attn: Mr. C. Brett Burford, Chief Financial
Officer and Secretary, c/o DGSE Companies, Inc., 11311 Reeder Road, Dallas Texas 75229, or by phone at 972-484-3662. Mr. Burford
will forward our shareholders all communications that, in his judgment, are appropriate for consideration by members of our Board.
Comments or questions regarding our accounting, internal controls or auditing matters will be referred to members of the Audit
Committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred
to all members of our Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXECUTIVE OFFICERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">The following table sets forth certain
information regarding the current executive officers of DGSE:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 23.1pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 21%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 18%; font-weight: bold; text-align: center">Employee or</TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 47%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center">Name</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center">Age</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center">Director Since</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center">Position</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>James J. Vierling</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">50</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">2009</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Chairman of the Board, Chief Executive Officer and President of DGSE Companies, Inc., President of SBT</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>C. Brett Burford</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">45</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">2012</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Chief Financial Officer and Secretary of DGSE Companies, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>James D. Clem</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">36</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">2008</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director and Chief Operating Officer of DGSE Companies, Inc.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>James J. Vierling</B> replaced William
Oyster as our Chief Executive Officer, President, Chairman of the Board and Principal Executive Officer on October 25, 2012.&nbsp;
Mr. Vierling was elected to the Board because of his extensive jewelry industry and other related experience. Mr. Vierling had
previously served as the President of SBT since 2009, a wholly-owned subsidiary of DGSE Companies, Inc.&nbsp; SBT was acquired
by us on September 14, 2011 in an acquisition from NTR, our largest vendor and largest shareholder. Prior to joining SBT, from
2005 until 2009, Mr. Vierling was Chief Marketing Officer and Strategic Planner of A-1 Premium Acceptance, an installment loan
company. Mr. Vierling holds a BA in economics from the University of Missouri.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: black"><B>C. Brett
Burford</B> was appointed as our Chief </FONT>Financial Officer, Principal Financial Officer and Chief Accounting Officer on August
31, 2012.&nbsp; Mr. Burford replaced Matthew Auger, who, until the date of Mr. Burford&rsquo;s appointment, had served as our Interim
Chief Financial Officer since November 17, 2011. The Board chose Mr. Burford for these positions because of Mr. Burford&rsquo;s
extensive 22 years of experience in finance, strategic planning, regulatory compliance and corporate governance. From 2008 to 2011,
Mr. Burford served as Chief Financial Officer of Craftmade International, Inc., a publicly-traded producer of home d&eacute;cor
items, where Mr. Burford helped lead negotiations of the sale of Craftmade to a strategic buyer in late 2011. Prior to that, Mr.
Burford worked at Cadbury Schweppes Americas Beverages, the U.S. soft-drink division of London-based Cadbury Schweppes, PLC, which
is now separately-traded on the NYSE as Dr. Pepper Snapple Group. Mr. Burford served in a variety of positions at Dr. Pepper Snapple
Group from 1997 to 2008, including as Vice President, Finance from 2006 to 2008, and as Vice President, Strategic Planning from
2003 to 2005. Mr. Burford received a B.S. in Finance with Minors in Accounting and Management Information Systems from Oklahoma
State University in 1989, a Masters of Business Administration from the University of Texas<FONT STYLE="color: black"> at Dallas
in 1996 and a Masters of Liberal Arts from Southern Methodist University in 2004. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>James D. Clem</B> has served as Director
and Chief Operating Officer of DGSE Companies, Inc. since December, 2012.&nbsp; Mr. Clem was elected to the Board because of his
extensive jewelry industry and other related experience. Prior to his current position, Mr. Clem had served as the Company's Vice
President of Sales and Marketing since 2008.&nbsp; &nbsp;Prior to 2008, Mr. Clem was with the Heritage Organization for seven years
as Vice President of Sales and Marketing and then Chief Operating Officer. Mr. Clem holds a B.B.A. in business from the University
of Texas at Arlington.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXECUTIVE COMPENSATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Summary Compensation Table</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following tables and discussion sets
forth the compensation paid or accrued to our Chief Executive Officer (or person acting in a similar capacity), and our two most
highly compensated executive officers other than our Chief Executive Officer, for all services rendered to us by these individuals
in all capacities for Fiscal 2011 and the fiscal year ended December 31, 2010 (&ldquo;Fiscal 2010&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">Name and</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">All Other</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Total</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Principal Position</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Fiscal Year</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Salary($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Bonus($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Compensation($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Compensation ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 25%; text-align: left">Dr. L.S. Smith</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: center">2010</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">425,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">212,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">9,000</TD><TD STYLE="width: 1%; text-align: left">(5)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">646,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9.9pt">CEO(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">395,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">(5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">403,250</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">John Benson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9.9pt">CFO(2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">172,020</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">172,020</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">William H Oyster</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">112,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,400</TD><TD STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">367,900</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9.9pt">CEO, President &amp; COO(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">284,519</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">106,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,400</TD><TD STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">396,169</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">James D Clem</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">130,291</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">130,291</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9.9pt">COO(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152,331</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,331</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>(1)</TD>
    <TD COLSPAN="2">Dr. L.S. Smith resigned from his position as Chairman of the Board and CEO on October 31, 2011.</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 3%">(2)</TD>
    <TD STYLE="vertical-align: top; width: 82%">John Benson resigned from his position as CFO on November 17, 2011.</TD>
    <TD STYLE="width: 15%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(3)</TD>
    <TD COLSPAN="2">William H. Oyster was elected by the Board to the role of Chairman of the Board and CEO upon the resignation of Dr. L.S. Smith on October 31, 2011. Prior to this election, Mr. Oyster served as the Company's President and COO.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(4)</TD>
    <TD COLSPAN="2">James D. Clem was appointed the position of COO and Secretary on December 20, 2011.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(5)</TD>
    <TD COLSPAN="2">This amount represents the value of the compensation paid to Dr. L.S. Smith for automobile expense reimbursement ($750 per month).</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(6)</TD>
    <TD COLSPAN="2">This amount represents the value of the compensation paid to Mr. Oyster for country club dues ($450 per month).</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Employment Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During Fiscal 2012, the Company entered
into employment agreements with certain of its named executive officers, each of which is described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: black"><I>James J.
Vierling</I>. On October 25, 2012, DGSE and Mr. Vierling entered into that certain </FONT>Employment Agreement, dated October 25,
2012, by and between DGSE and Mr. Vierling, which has an initial term of three years, and in consideration for Mr. Veirling&rsquo;s
service, (i) DGSE will pay Mr. Vierling a salary of $535,000 per year; (ii) beginning in 2013, Mr. Vierling shall be eligible for
a performance bonus in an amount equal to 25% of his annual salary if certain performance targets are met and (iii) Mr. Vierling
shall be entitled, so long as he remains an employee of DGSE, to receive grants of an option to purchase 50,000 shares of our Common
Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>C. Brett Burford</I>. Pursuant to a
written offer letter, and in consideration for Mr. Burford&rsquo;s service, DGSE (i) shall pay Mr. Burford a salary of $220,000
per year; (ii) may pay Mr. Burford a performance bonus for the 2012 fiscal year of up to $40,000, based upon the achievement of
mutually-agreed upon goals with respect to the restatement of our financial statements; (iii) may pay Mr. Burford a performance
bonus for the 2013 fiscal year and future fiscal years of up to twenty-five percent (25%) of Mr. Burford&rsquo;s annual salary,
based upon the achievement of goals which shall be mutually-agreed upon annually; and (iv) shall grant to Mr. Burford options to
purchase shares of our Common Stock insofar as such option grants are commensurate with those granted to other senior-level management.
Mr. Burford is an at-will employee of DGSE, and we may reassign Mr. Burford, terminate Mr. Burford&rsquo;s employment or change
Mr. Burford&rsquo;s compensation at any time with or without cause.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>James D. Clem</I>. Pursuant to that
certain Employment Agreement, dated January 1, 2012, by and between Mr. Clem and DGSE, as amended by First Amendment to Employment
Agreement, dated September 25, 2012 and effective September 1, 2012, by and between DGSE and Mr. Clem, we have agreed to pay Mr.
Clem an annual salary of $325,000. Under the terms of Mr. Clem&rsquo;s Employment Agreement, as amended, Mr. Clem is not entitled
to any retention bonus; however, Mr. Clem is eligible to receive a performance bonus at the discretion of our Board of Directors
upon the completion of the fiscal year ending December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Outstanding Equity Awards at Fiscal Year End</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We granted no stock awards, stock option
awards, or non-equity incentive compensation awards (other than the above bonuses) to our named executive officers or directors
in Fiscal 2011 or Fiscal 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dr. L.S. Smith, our former Chief Executive
Officer and Chairman of the Board, exercised options to purchase 945,634 shares of our Common Stock in Fiscal 2011.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth information
concerning unexercised options, stock that has not vested for each named executive officer and director as of the end of Fiscal
2011.&nbsp; Other than what is listed on the table below, there were no equity incentive plan awards in Fiscal 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Number of Securities</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Option</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">Option</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Number of shares or</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">Name and</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Underlying Unexercised</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Exercise</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">Expiration</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">units of stock that</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Principal Position</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Options (#)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Price ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Date</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">have not vested (#)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left">William H Oyster</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">50,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">2.13</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 14%; text-align: center">(3)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9.9pt">CEO, President &amp; COO(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Scott Williamson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.43</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">11/4/2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9.9pt">Executive VP (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Craig Alan-Lee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.82</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9.9pt">Director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">David S. Rector</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9.9pt">Director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">William P. Cordeiro, PhD</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9.9pt">Director</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.82</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">(1)</TD>
    <TD STYLE="width: 97%">William H. Oyster was elected by the Board to the role of CHB and CEO upon the resignation of Dr. L.S. Smith on October 31, 2011. Prior to this election, Mr. Oyster served as the Company's President and COO.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD>S. Scott Williamson's position with the Company was terminated on May 8, 2012, and his options expired unexercised on November 4, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(3)</TD>
    <TD>Options expire 180 days after service to the Company ends.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Compensation of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our directors are responsible for guiding
and supervising our business and affairs. Recent developments in corporate governance and financial reporting have resulted in
an increased involvement of public company directors. Our board committees - Audit and Compensation - are composed exclusively
of independent directors. The many responsibilities and risks and the substantial time commitment of being a director of a public
company require that we provide adequate compensation to ensure our directors&rsquo; continued performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dr. Cordeiro received four quarterly payments
of $5,000 as Chairman of our audit committee in both Fiscal 2011 and Fiscal 2010. Mr. Rector and Mr. Alan-Lee received four quarterly
payments of $4,500 as independent directors in both Fiscal 2011 and Fiscal 2010. Our directors do not receive meeting fees for
Board or committee meeting attendance. We do not provide any health insurance, retirement or other benefit programs to our independent
directors. In addition to the quarterly payments, we reimburse our directors for their reasonable expenses incurred while attending
meetings of our Board and its Committees or conducting other Company business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We did not provide equity compensation
for our independent directors in Fiscal 2011 or Fiscal 2010. Our employee directors receive no separate compensation for their
services as directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the total
compensation paid to our directors for their service on our Board and committees of the Board during Fiscal 2011 and Fiscal 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">All Other</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Name</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Fiscal Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fees Paid($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Compensation ($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Total($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left">William P. Cordeiro, Ph.D.</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 14%; text-align: center">2011</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">20,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">20,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR>
    <TD>Craig Alan-Lee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">David S. Rector</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dr. L.S. Smith</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">William H. Oyster</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="text-align: left">James D. Clem (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">James J. Vierling (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 3%">(1)</TD>
    <TD STYLE="vertical-align: top; width: 94%">James D. Clem was named elected as a Director and COO on December 20, 2011.</TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD COLSPAN="2">James J. Vierling was elected as the Company's Chairman of the Board, CEO and President on October 25, 2012.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Equity Compensation Plan Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 27, 2006 our shareholders approved
the adoption of the 2006 Equity Incentive Plan (the &ldquo;2006 Plan&rdquo;) which reserved 750,000 shares for issuance upon exercise
of options to purchase our Common Stock. We subsequently granted options to purchase 150,000 shares of our Common Stock pursuant
to the 2006 Plan, of which 100,000 have been exercised, 20,000 have expired, and 30,000 remain outstanding. As a result, there
are 620,000 options to purchase our Common Stock available for future grants under the 2006 Plan, which excludes options that have
either been exercised or remain outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 21, 2004, our shareholders approved
the adoption of the 2004 Stock Option Plan (the &ldquo;2004 Plan&rdquo;) which&nbsp;reserved&nbsp;1,700,000&nbsp;shares of our
Common Stock for issuance upon exercise of&nbsp;options to purchase our Common Stock. &nbsp;We granted&nbsp;options&nbsp;to purchase
an aggregate of&nbsp;1,459,634<B> &nbsp;</B> shares of our Common Stock&nbsp;under&nbsp;the 2004 Plan to&nbsp;certain&nbsp;of our
officers, directors,&nbsp;key employees&nbsp;and certain other individuals who provided us with goods and services. &nbsp;Each
option&nbsp;vested&nbsp;on either January 1, 2004 or immediately upon issuance thereafter.&nbsp;The exercise price of&nbsp;each
option issued pursuant to&nbsp;the 2004 Plan&nbsp;is equal to the market value of our Common Stock on the date of grant, as determined
by the closing bid price for our Common Stock on the Exchange on the date of grant or, if no trading occurred on the date of grant,
on the last day prior to the date of grant on which our securities were listed and traded on the Exchange.&nbsp;Of the options
issued under the 2004 Plan, as of December 31,&nbsp;2011, 845,634&nbsp;have&nbsp;been exercised, 96,500 have expired, and 517,500
remain outstanding. &nbsp;We have determined not to make any further issuances pursuant to the 2004 Plan, and as a result there
are zero options to purchase our Common Stock available for future grants under the 2004 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes options
outstanding as of December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Number of securities<BR> remaining</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">available for future issuance</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Number of securities to be</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Weighted average exercise</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">under equity compensation</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">issued upon exercise of options,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">price of outstanding options,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">plans (excluding securities</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Plan Category</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">warrants &amp; rights (a)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">warrants &amp; rights (b)</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">reflected in column (a))</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 31%; text-align: left; padding-left: 6.6pt">Equity compensation plans approved by security holders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: right">547,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 20%; text-align: right">$ 2.42</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: right">620,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 6.6pt">Equity compensation plans not approved by security holders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">None</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">None</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 6.6pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">547,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">$ 2.42</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">620,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From time to time, we engage in business transactions with our
controlling shareholder, NTR. Set forth below in the section entitled &ldquo;Related Party Transactions&rdquo; is a summary of
such transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Controlling Shareholder</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the record date, November 16, 2012,
NTR had advised the Company that NTR has filed, on November 16, 2012, a Form 4 with the SEC stating that, as of the filing date,
NTR owns 5,026,442 shares of our Common Stock. NTR had previously filed, on October 31, 2012, a Schedule 13D/A with the SEC stating
that, as of the filing date, NTR has been granted a proxy by Dr. L.S. Smith to vote his 1,628,014 shares until May 25, 2014, and
holds options to purchase up to 5,000,000 shares of our Common Stock, which if exercised would result in ownership of 67.85% of
the outstanding shares of our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Related Party Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have 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 (&ldquo;Related Persons &ldquo;).&nbsp;
Under this policy, all Related Person transactions are identified and approved prior to consummation of the transaction to ensure
they are consistent with our best interests and the best interests of our stockholders.&nbsp; Among other factors, our board considers
the size and duration of the transaction, the nature and interest of the of the Related Person 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 us as would
be available in a comparable transaction with an unaffiliated third party.&nbsp; Our board reviews all Related Person transactions
at least annually to determine if it is in our best interests and the best interests of our stockholders to continue, modify, or
terminate the Related Person transactions.&nbsp; Our Related Person Transaction Policy is available for review in its entirety
under the &ldquo;Investor Relations&rdquo; menu in the &ldquo;DGSE Companies&rdquo; section of our website at www.DGSE.com.&nbsp;
&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NTR is our largest shareholder.&nbsp; In 2011, NTR was also
our primary refiner and bullion trading partner.&nbsp; In 2010, 27% of sales and 16% of purchases were transactions with NTR, and
in 2011 these transactions represented 41% of our sales and 23% of our purchases. As of December 31, 2011, we were obligated to
pay $677,000 to NTR as a trade payable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 25, 2010, we entered into a Closing
Agreement with NTR and Dr. L.S. Smith, our Chief Executive Officer at that time (the &ldquo;Closing Agreement &ldquo;).&nbsp;&nbsp;Pursuant
to the terms of the Closing Agreement, we assigned to NTR our right to repurchase 3,000,000 shares of our Common Stock (the &ldquo;
NTR Acquired Interest &ldquo;) that were held by SIBL, a right which we acquired pursuant to a Purchase and Sale Agreement (and
its subsequent amendments), dated January 27, 2010, by and among us and SIBL. Pursuant to the terms of the Closing Agreement, NTR
acquired the NTR Acquired Interest directly from SIBL for a cash purchase price of $3,600,000 paid to SIBL by NTR.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Simultaneously with the closing, NTR granted
to Dr. Smith a 4-year proxy (the &ldquo;NTR Proxy&rdquo;) on the shares constituting the NTR Acquired Interest.&nbsp;&nbsp;In exchange
for NTR&rsquo;s grant of the NTR Proxy, Dr. Smith granted to NTR an option (the &ldquo;Option&rdquo;) to acquire one million (1,000,000)
shares of our Common Stock owned by Dr. Smith, at an exercise price of $6.00 per share for the first two years following the anniversary
of the closing of the transactions contemplated by the Closing Agreement.&nbsp; The original terms of the Option required NTR to
exercise the option in full and not in part.&nbsp;&nbsp;On June 10, 2011, the terms of the Option were modified to allow NTR to
exercise the Option in increments of 100,000 shares from June 10, 2011 to July 15, 2011. The Option was subsequently modified to
extend the incremental exercise period to August 15, 2011.&nbsp;&nbsp;By August 15, 2011, NTR had completed its purchase pursuant
to the Option. Once this purchase was completed, the NTR Proxy terminated and Dr. Smith then granted NTR an irrevocable proxy on
his remaining 1,628,014 shares of our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 14, 2011, we announced that
we had completed our acquisition of 100 % of SBT, of which NTR was the majority owner. Under the terms of the acquisition, we acquired
SBT for 600,000 shares of our restricted Common Stock.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 14, 2011 NTR forgave $2,000,000
of payables owed by us, and received 400,000 of our restricted shares of Common Stock. This transaction resulted in a non-cash
expense of $1,720,000 recorded as a loss on debt settlement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 25, 2011, we entered into a
debt cancellation agreement with NTR, whereby NTR agreed to forgive $2,500,000 of payables owed to NTR by us. In consideration
for this debt forgiveness, NTR was granted options to purchase 5,000,000 shares of our Common Stock, at an exercise price of $15.00
per share (the &ldquo;NTR Options&rdquo;). The NTR Options vested immediately upon grant, and expire on October 25, 2016. We estimated
the fair value of the NTR Options using the Black-Scholes Option Pricing Model, which estimated a value of $5,140,713 for the NTR
Options. Accordingly, we took a non-cash charge of $2,640,713 to stock compensation expense in Fiscal 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 19, 2012, we entered into the Loan
Agreement with NTR, pursuant to which NTR agreed to provide us a guidance line of revolving credit in an amount up to $7,500,000.
The Loan Agreement provides that the Loan Agreement will terminate-and our Obligations will be due and payable- upon the earlier
of (i) August 1, 2014, (ii) the date that is twelve months after we receive 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, we 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 us pursuant to the terms of the Loan Agreement were used for&nbsp;repayment
of all outstanding financial obligations incurred in connection with that certain Loan Agreement, dated as of December 22, 2005,
between us and Texas Capital Bank, N.A., and additional proceeds are expected to be used as working capital in the ordinary course
of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Audit Committee has reviewed these
transactions and deemed them to be on terms no less favorable than terms generally available to an unaffiliated third-party under
the same or similar circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Legal Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 16, 2012, we filed a Current Report
on Form 8-K disclosing that our Board had determined the existence of the Accounting Irregularities beginning approximately during
the second calendar quarter of 2007 and continuing in periods subsequent thereto, which could affect financial information reported
since that time. On April 16, 2012, we also announced that we had engaged forensic accountants to analyze the Accounting Irregularities,
and that financial statements and information reported since the inception of the Accounting Irregularities, believed to begin
in the second calendar quarter of 2007, should not be relied upon.&nbsp; We brought the Accounting Irregularities to the attention
of the SEC in a letter dated April 16, 2012. On June 18, 2012, we received written notice that the SEC had initiated a private
investigation into the Accounting Irregularities, to determine whether any persons or entities had engaged in any possible violations
of the federal securities laws. We have cooperated fully, and continue to cooperate fully, with the SEC staff in the investigation.
This investigation is still pending as of the date of the distribution of this Proxy Statement, and there can be no certainty as
to the outcome of this investigation, or to the findings of the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Also, in connection with the Accounting
Irregularities, and the subsequent halt in trading of our common stock on the Exchange, we have received notice of two lawsuits
that have been filed. The first, Civil Action No. 3:12-cv-3664 filed in the United States District Court for the Northern District
of Texas, on September&nbsp;7, 2012, entitled Grant Barfuss, on behalf of himself and all others similarly situated vs. DGSE Companies,
Inc.; L.S. Smith, John Benson and William Oyster. This is a complaint alleging violations of the securities laws and seeks unspecified
damages. Plaintiffs allege that certain public filings in 2010 and 2011 were false and misleading. The second suit,&nbsp;Case No.
3:12-cv-03850 in the United States District Court for the Northern District of Texas, was filed on September 21, 2012, by Jason
Farmer, Derivatively on Behalf of Nominal Defendant DGSE Companies, Inc., Plaintiff, v. William H. Oyster, James D. Clem, William
Cordeiro, Craig Alan-Lee, David Rector, L.S. Smith, and John Benson, Defendants, and DGSE Companies, Inc., Nominal Defendant. This
suit has been filed against DGSE, as a nominal defendant, and against certain and former officers and directors. The plaintiff
asserts that certain proxy statements were false and misleading, that the defendants breached fiduciary duties owed to DGSE, for
abuse of control, and seeks unspecified compensatory and exemplary damages, along with certain corporate governance changes,&nbsp;for
the benefit of DGSE. We have not responded to either suit yet, but we intend to defend ourselves vigorously.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 29, 2011, we and our subsidiary,
Superior, entered into a settlement agreement with FASNAP Corporation (&ldquo;FASNAP&rdquo;) in relation to a lawsuit filed against
us in California. The lawsuit resulted from a transaction in which we mistakenly sold rare coins that had been in Superior&rsquo;s
possession prior to our acquisition of Superior. After the coins were sold, it was discovered that these coins belonged to FASNAP
and that they had not given us authorization to sell the coins. Under the terms of the settlement agreement, we returned the remaining
coins which were still in our possession, and we agreed to pay FASNAP the approximate market value of those coins which had been
sold. The total cost of the agreement was $2,560,713. Upon review of the facts leading to the lawsuit and settlement, our Current
Management believes that under U.S. GAAP, we had sufficient information to accrue for this settlement as a contingent loss, as
early as the fiscal year ended December 31, 2009 (&ldquo;Fiscal 2009&rdquo;). As a part of the current review and restatement,
we are recognizing this accrual in Fiscal 2009 through a reduction to retained earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Texas Comptroller of Public Accounts
(the &ldquo;Comptroller&rdquo;) conducted a sales and use tax audit of DGSE with respect to the period March 1, 2006 through November
30, 2009 and subsequently sent a Notification of Audit Results, by letter dated December 17, 2010, asserting that we owe an amount
of tax due, plus penalties and interest. We submitted a request for redetermination to the Comptroller by letter dated January
13, 2011. By letter dated August 25, 2011, the Comptroller stated that our request for a redetermination hearing has been granted.
The hearing has not yet taken place.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL 2: RATIFICATION OF THE APPOINTMENT
OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WHITLEY PENN AS INDEPENDENT AUDITORS
OF DGSE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE FISCAL YEAR ENDING 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee has appointed Whitley
Penn as the Company&rsquo;s independent registered accountants to audit the Company&rsquo;s financial statements for the fiscal
year ending December&nbsp;31, 2012, and has further directed that management submit the selection of independent registered accountants
for ratification by the Company&rsquo;s stockholders at the annual meeting. Stockholder ratification of the selection of Whitley
Penn is not required by our by-laws or otherwise. However, the Company is submitting the selection of Whitley Penn to the stockholders
for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee
will reconsider whether or not to retain Whitley Penn. Even if the selection is ratified, the Audit Committee in its discretion
may direct the appointment of a different independent accounting firm at any time during the year if it is determined that such
a change would be in the best interests of DGSE and its stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Representatives of the firm of Whitley
Penn are expected to be present at the Company&rsquo;s annual meeting and will have an opportunity to make a statement, if they
so desire, and will be available to respond to appropriate questions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with the requirements of
the Sarbanes-Oxley Act of 2002 and the Audit Committee&rsquo;s charter, all audit and audit-related work and all non-audit work
performed by the Company&rsquo;s independent accountants, Whitley Penn, is approved in advance by the Audit Committee, including
the proposed fees for such work. The Audit Committee is informed of each service actually rendered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table presents fees for the
audits of our annual Consolidated Financial Statements for Fiscal 2011 and Fiscal 2010.&nbsp; This table includes fees for professional
services rendered by our current independent auditors, our past independent auditors and other firms who provided services related
to the production of our restated Consolidated Financial Statements for Fiscal 2011 and 2010.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Auditor/Service Provider</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">Audit Fees - Cornwell Jackson(1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">158,774</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">170,835</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Audit Fees - Whitley Penn(2)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9.9pt">Total Audit Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">158,774</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">170,835</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Audit Related Fees - Cornwell Jackson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,647</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Audit Related Fees - Whitley Penn</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9.9pt">Total Audit Related Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,647</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Tax Fees - Cornwell Jackson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,635</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,801</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Tax Fees - Whitley Penn</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9.9pt">Total Tax Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,635</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,801</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">All Other Fees - Cornwell Jackson</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">30,549</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">56,246</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">All Other Fees - Whitley Penn</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9.9pt">Total All Other Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">30,549</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">56,246</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total Fees to Independent Auditors and Service Providers</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">194,645</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">255,529</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 2%">(1)</TD>
    <TD STYLE="width: 98%">Cornwell Jackson and Company, P.C. was dismissed as the Company's independent auditors on May 29, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD STYLE="text-align: justify">Whitley Penn was engaged as the Company's independent auditors on May 29, 2012, to provide audit services in relation to the Company's Fiscal 2010 and Fiscal 2011 consolidated financial statements, but no services were rendered during those periods.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amounts for audit fees include generally
the fees charged for (i) the audit of our annual Consolidated Financial Statements and internal controls over financial reporting
under the Sarbanes-Oxley Act and (ii) the reviews of our quarterly financial statements. The tax fees were primarily for tax return
preparation and tax-related services.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Applicable law and regulations provide
an exemption that permits certain services to be provided by the Company&rsquo;s outside auditors even if they are not pre-approved.
The Company has not relied on this exemption at any time since the Sarbanes-Oxley Act was enacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: black">We engaged the
accounting firm of </FONT>Cornwell Jackson and Company, P.C. (&ldquo;Cornwell Jackson&rdquo;)<FONT STYLE="color: black"> on October
11, 2004, to review and audit our financial statements. After May 18, 2012, Cornwell Jackson provided no further services to us,
and Cornwell Jackson was dismissed as our independent accountants by our Board on May 29, 2012. In order to comply with the requirements
of the SEC Practice Section, on June 1, 2012, Cornwell Jackson submitted the notification letter indicating that the client-auditor
relationship had ceased effective May 29, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No report of Cornwell Jackson on our financial
statements for either of our past two fiscal years contained any adverse opinion or disclaimer of opinion or was qualified or modified
as to uncertainty, audit scope or accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During our two most recent fiscal years
and through and including any interim period preceding Cornwell Jackson&rsquo;s dismissal by our Board of Directors on May 29,
2012, there were no disagreements with Cornwell Jackson on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of Cornwell Jackson, would
have caused it to make reference thereto in any report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cornwell Jackson, in a letter to us dated
May 26, 2011 and in connection with its audit of our financial statements included in our Annual Report on Form 10-K for Fiscal
2010, advised us that we did not have the internal controls necessary for us to develop reliable financial statements (the &ldquo;Letter&rdquo;).
Our Board discussed the subject matter of the Letter with Cornwell Jackson, and we have authorized Cornwell Jackson to respond
fully to the inquiries of any successor accounting firms concerning the subject matter of the Letter. There were no disagreements
with Cornwell Jackson regarding the Letter or the subject matter of the Letter. Other than the Letter, during our two most recent
fiscal years and through and including any interim period preceding Cornwell Jackson&rsquo;s dismissal by our Board on May 29,
2012, there were no &ldquo;reportable events&rdquo; (as that term is defined in Item 304(a)(1)(v) of Regulation S-K promulgated
under the Securities Act).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We requested that Cornwell Jackson furnish
us with a letter addressed to the SEC stating whether or not it agrees with the above statements in this Proposal 2. A copy of
such letter to the SEC is filed as Exhibit 16.1 to the Current Report on Form 8-K filed with the SEC on June 4, 2012, and is incorporated
herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 29, 2012, we engaged the firm of
Whitley Penn as our principal independent accountant to audit our financial statements. The members of our Board of Directors unanimously
approved the engagement of Whitley Penn.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Prior to the engagement of Whitley Penn,
neither we nor any person on our behalf consulted Whitley Penn regarding either (i) the application of accounting principles to
a specified completed or proposed transaction or the type of audit opinion that might be rendered on our financial statements,
or (ii) any matter that was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K, promulgated under
the Securities Act and the related instructions to such Item) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation
S-K, promulgated under the Securities Act).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Vote Required</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The affirmative vote of a majority of the
votes cast at the meeting at which a quorum representing a majority of all outstanding shares of the Company&rsquo;s Common Stock
is present and voting, either in person or by proxy, is required for the ratification of the Company&rsquo;s independent registered
accountants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>APPOINTMENT OF</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Whitley
Penn AS INDEPENDENT AUDITORS OF DGSE FOR THE FISCAL YEAR ENDING</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>December 31, 2012.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECTION 16(a) BENEFICIAL OWNERSHIP</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REPORTING COMPLIANCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Section 16(a) of the
Exchange Act requires our directors and officers and persons who beneficially own more than ten percent of our Common Stock to
file with the SEC reports of beneficial ownership on Forms 3 and changes in beneficial ownership of our Common Stock and other
equity securities on Forms 4 or Forms 5. SEC regulations require all officers, directors and greater than 10% stockholders to furnish
us with copies of all Section 16(a) forms they file.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Based solely upon a review
of Forms 3 and 4 and amendments thereto furnished to us during, and Forms 5 and amendments thereto furnished to us with respect
to, Fiscal 2011, and any written representations from reporting persons that no Form 5 is required, the following table sets forth
information regarding each person who, at any time during Fiscal 2011, was a director, officer or beneficial owner of more than
10% of our Common Stock who failed to file on a timely basis, as disclosed in the above forms, reports required by Section 16(a)
of the Exchange Act during Fiscal 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid">Name</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Number of Late<BR> Reports</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Number of<BR> Transactions Not<BR> Reported On
    a<BR> Timely Basis</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Known Failures<BR> To File a<BR> Required Form</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 55%; text-align: left; padding-left: 0">NTR Metals, LLC</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">11</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">19</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0">James D. Clem</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>STOCKHOLDER COMMUNICATIONS AND PROPOSALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have adopted a formal process by which
stockholders may communicate with our board of directors. Our board recommends that stockholders initiate any communications with
the board in writing and send them in care of the investor relations department by mail to our principal offices at 11311 Reeder
Road, Dallas, Texas 75229. This centralized process will assist the board in reviewing and responding to stockholder communications
in an appropriate manner. The name of any specific intended board recipient should be noted in the communication. The board has
instructed the investor relations department to forward such correspondence only to the intended recipients; however, the board
has also instructed the investor relations department, prior to forwarding any correspondence, to review such correspondence and,
in its discretion, not to forward certain items if they are deemed of a personal, illegal, commercial, offensive or frivolous nature
or otherwise inappropriate for the board&rsquo;s consideration. In such cases, that correspondence will be forwarded to our corporate
secretary for review and possible response. This information is also contained on our website at www.DGSE.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Stockholder proposals to be presented at
the Company&rsquo;s Annual Meeting of Stockholders to be held in 2013, for inclusion in the Company&rsquo;s proxy statement and
form of proxy relating to that meeting, must be received in a reasonable time before the Company begins to print and mail its proxy
materials for the 2013 Annual Meeting of Stockholders. Such stockholder proposals must comply with the Company&rsquo;s bylaws and
the requirements of Regulation&nbsp;14A of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Rule&nbsp;14a-4 of the Exchange Act governs
the Company&rsquo;s use of discretionary proxy voting authority with respect to a stockholder proposal that is not addressed in
the proxy statement. With respect to the Company&rsquo;s 2013 Annual Meeting of Stockholders, if the Company is not provided notice
of a stockholder proposal in a reasonable time before the Company begins to print and mail its proxy materials for the 2013 Annual
Meeting of Stockholders, the Company will be permitted to use its discretionary voting authority when the proposal is raised at
the meeting, without any discussion of the matter in the proxy statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PERSONS MAKING THE SOLICITATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The enclosed proxy is solicited on behalf
of the Company&rsquo;s Board of Directors. The Company will pay the cost of soliciting proxies in the accompanying form. The Company&rsquo;s
officers may solicit proxies by mail, telephone, telegraph or fax. Upon request, the Company will reimburse brokers, dealers, banks
and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy material to beneficial owners of
the Company&rsquo;s shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OTHER MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board of Directors is not aware of
any matter to be presented for action at the meeting other than the matters set forth herein. Should any other matter requiring
a vote of stockholders arise, the proxies in the enclosed form confer upon the person or persons entitled to vote the shares represented
by such proxies&rsquo; discretionary authority to vote the same in accordance with their best judgment in the interest of DGSE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A copy of the Company&rsquo;s Annual Report
on Form 10-K for the fiscal year ended December&nbsp;31, 2011, including financial statements, accompanies this proxy statement.
The Annual Report is not to be regarded as proxy soliciting material or as a communication by means of which any solicitation is
to be made. A copy of the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2011, filed with
the SEC, is available (excluding exhibits) without cost to stockholders upon written request made to Investor Relations, DGSE Companies,
Inc., 11311 Reeder Road, Dallas, Texas or on-line at the Company&rsquo;s web site: http://www.dgse.com/DGSE_Companies/investor-relations.aspx</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">By Order of the Board of Directors,</TD>
    <TD STYLE="width: 50%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ C. Brett Burford</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>C. BRETT BURFORD</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-style: italic">Secretary</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">November 28, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



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