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LONGTERM DEBT | 12 Months Ended
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Dec. 31, 2021
LONGTERM DEBT |
LONG-TERM DEBT | NOTE 10 — LONG-TERM DEBT Long-term debt consists of the following:
|  | Outstanding Balance |  |  |  |  |  |  |
|  | December 31, |  |  | December 31, |  |  | Current |  |  |  |
|  | 2021 |  |  | 2020 |  |  | Interest Rate |  |  | Maturity |
DGSE |  |  |  |  |  |  |  |  |  |  |  |
Note payable, related party (1) |  | $ | - |  |  | $ | 2,863,715 |  |  |  | - |  |  | Paid off by third party |
Note payable, Farmers Bank (2) |  |  | 2,770,729 |  |  |  | - |  |  |  | 3.10 | % |  | November 15, 2026 |
Note payable, Truist Bank (3) |  |  | 909,073 |  |  |  | 942,652 |  |  |  | 3.65 | % |  | July 9, 2030 |
Note payable, Texas Bank & Trust (4) |  |  | 474,009 |  |  |  | 491,852 |  |  |  | 3.75 | % |  | September 14, 2025 |
Note payable, Texas Bank & Trust (5) |  |  | 1,752,446 |  |  |  | - |  |  |  | 3.25 | % |  | July 30, 2031 |
DGSE Sub-Total |  |  | 5,906,257 |  |  |  | 4,298,219 |  |  |  |  |  |  |  |
ECHG |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Note payable, related party (1) |  |  | - |  |  |  | 6,496,127 |  |  |  | - |  |  | Paid off by third party |
Note payable, Farmers Bank (2) |  |  | 6,286,459 |  |  |  | - |  |  |  | 3.10 | % |  | November 15, 2026 |
Revolving Line of Credit (6) |  |  | 1,700,000 |  |  |  | - |  |  |  | 3.10 | % |  | November 23, 2024 |
Avail Transaction note (7) |  |  | 2,000,000 |  |  |  | - |  |  |  | 0.00 | % |  | April 1, 2025 |
ECHG Sub-Total |  |  | 9,986,459 |  |  |  | 6,496,127 |  |  |  |  |  |  |  |
Envela |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Note payable, Texas Bank & Trust (8) |  |  | 2,843,415 |  |  |  | 2,951,379 |  |  |  | 3.25 | % |  | November 4, 2025 |
Note payable (9) |  |  | - |  |  |  | 1,668,200 |  |  |  | - |  |  | Federal Loan Forgiven |
Envela Sub-Total |  |  | 2,843,415 |  |  |  | 4,619,579 |  |  |  |  |  |  |  |
Sub-Total |  |  | 18,736,131 |  |  |  | 15,413,925 |  |  |  |  |  |  |  |
Current portion |  |  | 2,765,794 |  |  |  | 2,120,457 |  |  |  |  |  |  |  |
|  | $ | 15,970,337 |  |  | $ | 13,293,468 |  |  |  |  |  |  |  |
(1) On May 20, 2019, in connection with the Echo Transaction, the Company entered into two loan agreements with John R. Loftus, the Company’s CEO, President and Chairman of the Board. ECHG, LLC executed a five-year, $6,925,979 note for the Echo Transaction, amortized over 20 years at a 6% annual interest rate. The interest and principal payment due monthly was $49,646. DGSE executed a five-year, $3,074,021 note to pay off the accounts payable – related party balance to a former Related Party as of May 20, 2019. That promissory note was also amortized over 20 years at a 6% annual interest rate. The interest and principal payment due monthly on the note for DGSE was $22,203. On November 23, 2021, both notes were refinanced by Farmers State Bank of Oakley Kansas. (2) On November 23, 2021, both notes listed in item (1) above were refinanced by Farmers State Bank of Oakley Kansas. The first note was refinanced for the remaining and outstanding balance of $6,309,962, is a five-year promissory note amortized over 20 years at 3.1% annual interest rate. The note has monthly principal and interest payments of $35,292. The second note was refinanced for the remaining and outstanding balance of $2,781,087, is a five-year promissory note amortized over 20 years at 3.1% annual interest rate. The note has monthly principal and interest payments of $15,555. (3) On July 9, 2020, DGSE closed the purchase of a retail building located at 610 E. Round Grove Road in Lewisville, Texas for $1.195 million. The purchase was partly financed through a $956,000, ten year loan, bearing an annual interest rate of 3.65%, amortized over 20 years, payable to Truist Bank (f/k/a BB&T Bank). The note has monthly interest and principal payments of $5,645. (4) On September 14, 2020, 1106 NWH Holdings, LLC, a wholly owned subsidiary of DGSE, closed on the purchase of a retail building located at 1106 W. Northwest Highway in Grapevine, Texas for $620,000. The purchase was partly financed through a $496,000, five-year loan, bearing an annual interest rate of 3.75%, amortized over 20 years, payable to Texas Bank & Trust. The note has monthly interest and principal payments of $2,941. (5) On July 30, 2021, 9166 Gaylord Holdings, LLC, a wholly owned subsidiary of DGSE, closed the purchase of a new retail building located at 9166 Gaylord Parkway in Frisco, Texas for $2,215,500. The purchase was partly financed through a $1,772,000, five-year loan (the “TB&T Frisco Loan”), bearing an annual interest rate of 3.75%, amortized over 20 years, payable to Texas Bank and Trust. The note has monthly interest and principal payments of $10,509. (6) On November 23, 2021, the Company secured a 36 month line of credit from Farmers State Bank of Oakley Kansas for $3,500,000 at 3.1% annual interest rate. (7) On October 29, 2021, ECHG entered into the Avail Transaction to purchase all of the assets, liabilities and rights and interests of Avail AZ, for $4.5 million. The purchase was facilitated by an initial payment of $2.5 million at closing, and the remaining $2.0 million to be paid out by 12 quarterly payments starting April 1, 2022, of $166,667 each. The Installment note payable for the Avail Transaction imputed at 3.1% (8) On November 4, 2020, 1901 Gateway Holdings, LLC, a wholly owned subsidiary of Envela Corporation, closed on the purchase of its new corporate office building located at 1901 Gateway Drive, Irving, Texas for $3.521 million. The building was partially financed through a $2.96 million, five-year loan, bearing an interest rate of 3.25%, amortized over 20 years, payable to Texas Bank & Trust. The note has monthly interest and principal payments of $16,792. (9) The Company applied for and received, on April 20, 2020, approximately $1.67 million, 1% interest, federally backed loan intended to pay employees and cover certain rent and utility-related costs during the COVID-19 pandemic with Truist Bank (f/k/a BB&T Bank) as the lender. The Federal Loan was forgivable to the extent that certain criteria were met. We applied for the forgiveness of the Federal Loan during Fiscal 2020, and received notification during Fiscal 2021 that the loan had been forgiven. The forgiveness of the Federal Loan is included in Other income from loan forgiveness on our consolidated income statements. Future scheduled principal payments of our note payables and note payables, related party, as of December 31, 2021 are as follows:
Note payable, Farmers State Bank - DGSE |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 102,214 |
2023 |  |  | 105,428 |
2024 |  |  | 108,743 |
2025 |  |  | 112,163 |
2026 |  |  | 2,342,181 |
Subtotal |  | $ | 2,770,729 |
Note payable, Truist Bank - DGSE |  |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 34,683 |
2023 |  |  | 35,989 |
2024 |  |  | 37,343 |
2025 |  |  | 38,749 |
2026 |  |  | 40,208 |
Thereafter |  |  | 722,101 |
Subtotal |  | $ | 909,073 |
Note payable, Texas Bank & Trust - DGSE |  |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 17,823 |
2023 |  |  | 18,503 |
2024 |  |  | 19,209 |
2025 |  |  | 418,474 |
Subtotal |  | $ | 474,009 |
Note payable, Texas Bank & Trust - DGSE |  |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 70,200 |
2023 |  |  | 72,515 |
2024 |  |  | 74,907 |
2025 |  |  | 77,379 |
2026 |  |  | 1,457,445 |
Subtotal |  | $ | 1,752,446 |
Note payable, Farmers Bank - ECHG |  |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 231,912 |
2023 |  |  | 239,204 |
2024 |  |  | 246,726 |
2025 |  |  | 254,484 |
2026 |  |  | 5,314,133 |
Subtotal |  | $ | 6,286,459 |
Note payable - Revolving Line of Credit |  |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 1,700,000 |
Subtotal |  | $ | 1,700,000 |
Note payable - Justin and Tami Tinkle |  |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 500,000 |
2023 |  |  | 666,667 |
2024 |  |  | 666,667 |
2025 |  |  | 166,666 |
Subtotal |  | $ | 2,000,000 |
Note payable, Texas Bank & Trust - Envela |  |  |  |
Year Ending December 31, |  | Amount |
2022 |  | $ | 108,962 |
2023 |  |  | 112,627 |
2024 |  |  | 116,414 |
2025 |  |  | 2,505,412 |
Subtotal |  | $ | 2,843,415 |
|  | $ | 18,736,131 |

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