UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

  

CURRENT REPORT

Pursuant to Section 13 or 15( d ) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):
July 16, 2014 (July 15, 2014)

  

DGSE COMPANIES, INC.

(Exact name of registrant as specified in its charter)

  

Nevada 1-11048 88-0097334
(State or other
jurisdiction of
incorporation) 		(Commission
File Number) 		(IRS Employer
Identification No.)

 

15850 Dallas Parkway, Suite 140
Dallas, Texas 75248
(Address of principal executive offices) (Zip Code)

 

(972) 587-4049
(Registrant’s telephone number, including area code)

 

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

  

Item 1.01.                Entry into a Material Definitive Agreement.

 

On July 15, 2014, DGSE Companies, Inc., a Nevada corporation (the “ Company ”), received final notice from the Tax Division (the “ Tax Division ”) of the Comptroller of Public Accounts of the State of Texas (the “ Comptroller ”) of the Tax Division’s consent to the negotiated payment agreement (the “ Payment Agreement ”) to pay amounts due by the Company under the Comptroller’s Decision (the “ Decision ”) in connection with the Comptroller’s Sales and Use Tax Audit of the Company for the period of March 1, 2006 through November 30, 2009 (the “ Sale Tax Audit ”). A copy of the Decision, attached hereto as Exhibit 99.1 , is incorporated herein by reference. The form of Payment Agreement, attached hereto as Exhibit 10.1 , is incorporated herein by reference.

 

The Decision was entered in connection with the conclusion of the Sales Tax Audit of the Company by the Comptroller and was most recently discussed in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2013, as filed with the Securities and Exchange Commission on March 27, 2014.

 

The Decision dismisses the Company’s Petition for Redetermination and concludes the Sales Tax Audit based on an agreement between the Comptroller Tax Division and the Company, whereby the Company has agreed to pay (i) tax due of $800,397, (ii) a 10% penalty and (iii) interest. The total amount due as of May 29, 2014 was approximately $1.1 million. Interest continues to accrue.

 

Pursuant to the terms of the Payment Agreement, the Company will pay the agreed amount provided in the Decision over an 18-month period, beginning with an initial payment of $325,000 followed by monthly payments of $47,000 until all agreed tax amounts, penalty and accrued interest are paid.

 

Item 7.01                 Regulation FD Disclosure.

 

Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference in this Item 7.01. The Decision and Payment Agreement are being furnished pursuant to Regulation FD.

 

On July 16, 2014, the Company issued a press release, attached hereto as Exhibit 99.2 , announcing the Decision and Payment Agreement.

 

Item 9.01.                Financial Statements and Exhibits.

 

(a)              Not applicable .

 

(b)             Not applicable .

 

(c)              Not applicable .

 

(d)              Exhibits .

 

Exhibit No.   Description
10.1   Payment Agreement, dated July 11, 2014
99.1   Comptroller’s Decision, dated May 29, 2014
99.2   Press Release, dated July 16, 2014

 

 
 

  

EXHIBITS

 

Exhibit No.   Description
10.1   Payment Agreement, dated July 11, 2014
99.1   Comptroller’s Decision, dated May 29, 2014
99.2   Press Release, dated July 16, 2014

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  DGSE COMPANIES, INC.
     
Date: July 16, 2014 By: /s/ James D. Clem
    James D. Clem
    Chief Executive Officer

 

 

 

Payment Agreement

 

STATE OF TEXAS

 

COMPTROLLER OF PUBLIC ACCOUNTS

 

PAYMENT AGREEMENT

 

   DGSE Corporation      17521848246
   Taxpayer Name      Taxpayer’s Number
     
   11311 Reeder Rd.      Dallas,Texas 75229-3408
   Street Address      City State Zip Code
     
       7/11/2014
       Date of Agreement

 

The above named taxpayer agrees that the following delinquent Sales & Use taxes, penalties and interest are owed and will be paid according to the following terms:

 

Tax   $ 800,397,12  
Penalty   $ 80,039.72  
Interest   $ 239,922.23  
Amt Due   $ 1,120,359.07  
Down Payment   $ 325,000.00  
Total Amount Due   $ 795,359.07  

 

This liability is for the period 03/01/06  through 11/30/09 .

 

TERMS OF AGREEMENT:

 

In consideration of the mutual promises and agreements contained herein, and to provide for the collection of the amounts identified above, the parties agree to the following terms:

 

1. Taxpayer shall pay $ 47,000.00 on or before the 15th day of each month, beginning on August 15 , 2014, and continuing on the 15 th day of each month thereafter until the entire tax liability, including penalties and all accrued interest are paid in full.

 

2. Additional statutory penalties and/ or interest will accrue on the unpaid tax balance and must be paid as part of this agreement.

 

 
 

 

Payment Agreement

 

3. Upon default of any of the terms of this agreement, the Comptroller may collect the amounts due from the taxpayer by any method allowed by Chapter 111, Tax Code, or any other applicable law. No notice of default is required to be given to any party prior to taking such collection action.

 

4. No State tax lien currently on record, or hereafter filed, will be released until all taxes, penalties and interest due under this agreement or on this account are paid in full.

 

5. All payments shall be made in the form of cash, certified check or money order payable to the Comptroller of Public Accounts. All payments shall be directed to the attention of Texas Comptroller 9221 LBJ Freeway Dallas, Texas 75243-3429 and must be physically received or postmarked on the date that they are due.

 

6. The Statute of Limitations for collecting any amounts due herein is extended for the duration of this agreement and that no further written extensions of the limitations period need be executed by the parties. This extension of the Statute of Limitations for collection does not extend the period for refunds or assessment.

 

7. The parties have read this agreement carefully and have been given the opportunity to consult with legal counsel prior to its execution.

 

8. The individuals executing this agreement on behalf of the parties all expressly represent that they have full legal capacity and authority to enter into this agreement on behalf of the named party.

 

9. This agreement sets forth the entire understanding of the parties with respect to this matter. It may not be amended or modified without mutual consent of both parties. The parties expressly agree that the remedies provided to the Comptroller are cumulative, and are in addition to, and not in lieu of any remedies available to the Comptroller under the Texas Tax Code.

 

10. Jurisdiction of and venue for enforcement and interpretation of this agreement shall lie exclusively with the district courts of Travis County, Texas. The parties agree that any suit brought with respect to this agreement or its enforcement must be heard in the district courts of Travis County, Texas and in no other jurisdiction or forum.

 

11. The taxpayer must file and pay in full all current and future tax reports or returns with the Comptroller as required by law.

 

12. This Payment Agreement is not binding and effective until and unless it is signed and approved by an authorized Comptroller Representative.

 

13. Notices generated as the result of a delinquency shall continue to be mailed during the course of the payment agreement regardless of any special conditions indicated.

 

SPECIAL CONDITIONS:

1) Installment payments may be made electronically.

 

 
 

 

Payment Agreement

 

2) The Comptroller agrees to waive the 10% determination penalty

 

3) The length of this agreement is 18 months

 

Sign

here:

   

Sign

here:

 
  Taxpayer     Comptroller’s Representative
  Title: ___________________________________      
         
Sign        
here:        
  Taxpayer      
  Title: ___________________________________      

 

 

 

 

HEARING NO. 106,804

 

RE: DGSE CORPORATION § BEFORE THE COMPTROLLER
  § OF PUBLIC ACCOUNTS
  § OF THE STATE OF TEXAS
  §  
  § SUSAN COMBS
  § Texas Comptroller of Public Accounts
TAXPAYER NO: 17521848246 §  
AUDIT OFFICE: Audit - Dallas W 2150 § PERRY S. HEITMAN
AUDIT PERIOD: March 1, 2006 § Representing Tax Division
THROUGH November 30, 2009 §  
  § CYNTHIA OHLENFORST
Sales And Use Tax/RDT § Representing Petitioner

 

COMPTROLLER’S DECISION

 

On March 17, 2014, the Tax Division and Petitioner moved to dismiss this case on the basis of agreement. Petitioner’s liability has been calculated in accordance with the agreement, and the resulting liability is set forth in Attachment A, which is incorporated herein by reference and approved and adopted in all respects. It is therefore ORDERED that the petition be dismissed and the audit be made final in accordance with the agreement of the parties and Attachment A.

 

This Decision becomes final twenty days after the date Petitioner receives notice of this Decision, and the total sum of the tax, penalty, and interest amounts is due and payable within twenty days thereafter. If such sum is not paid within such time, an additional penalty of ten percent of the taxes due will accrue, and interest will continue to accrue. If either party desires a rehearing, that party must file a motion for rehearing, which must state the grounds for rehearing, no later than twenty days after the date Petitioner receives notice of this Decision. Notice of this Decision is presumed to occur on the third day after the date of this Decision.

 

Signed on this 29 th day of May 2014.

 

  SUSAN COMBS
  Comptroller of Public Accounts

 

  by: /s/ Martin A. Hubert
    Martin A. Hubert
    Deputy Comptroller

 

 

 

 

p ress r elease

FOR IMMEDIATE RELEASE

 

 

DGSE Companies, Inc. Announces Final Resolution of Texas Sales Tax Dispute

 

Dallas – July 16, 2014 - DGSE Companies, Inc. (NYSE MKT: DGSE) (“DGSE” or the “Company”), a leading wholesaler and retailer of jewelry, diamonds, fine watches, and precious metal bullion and rare coin products, today announced that it had received a decision from the Comptroller of Public Accounts of the State of Texas (the “Comptroller”) regarding the Company’s Petition for Redetermination in relation to the Comptroller’s Sales and Use Tax Audit for the period of March 1, 2006 through November 30, 2009. The Comptroller’s decision dismisses the petition and finalizes the audit based on an agreement between the Comptroller Tax Division and the Company, whereby the Company has agreed to pay tax due of $800,397, as well as a 10% penalty, and interest. The total amount due as of May 29, 2014, equaled approximately $1.1 million, although interest will continue to accrue.

 

The Company also announced that it has reached a payment agreement with the Comptroller, allowing the Company to pay the agreed amount over an 18-month period, beginning with an initial payment of $325,000 followed by monthly payments of $47,000 until all agreed tax amounts, penalty and accrued interest are paid.

 

Dusty Clem, Chairman and Chief Executive Officer, stated, “While still a material amount, we’ve worked closely with the Comptroller’s office to reduce this payment from the initial $4.4 million tax assessment the Comptroller estimated in 2010. We’re happy to have resolved the last of the significant legacy issues that related to DGSE’s previous management team, so that we can continue to focus on creating a sustainably profitable business for our shareholders.”

 

The Company previously announced that it had accrued approximately $1.1 million towards an estimated settlement with the Comptroller, which the Company believes will cover the majority of the settlement. The Company may incur some additional interest charges, based on the payment plan it has now executed with the Comptroller.

 

About DGSE Companies

DGSE Companies, Inc. wholesales and retails jewelry, diamonds, fine watches, and precious metal bullion and rare coin products through its Bullion Express, Charleston Gold & Diamond Exchange, and Dallas Gold & Silver Exchange operations. DGSE also owns Fairchild International, Inc., one of the largest vintage watch wholesalers in the country. In addition to its retail facilities in Illinois, South Carolina, and Texas, the Company operates internet websites which can be accessed at www.bullionexpress.com, www.dgse.com, and www.cgdeinc.com. Real-time price quotations and real-time order execution in precious metals are provided on another DGSE website at www.USBullionExchange.com. Wholesale customers can access the full vintage watch inventory through the restricted site at www.FairchildWatches.com. The Company is headquartered in Dallas, Texas and its common stock trades on the NYSE MKT exchange under the symbol "DGSE."

 

This press release includes statements which may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

 

Contact:

DGSE Companies, Inc.

Dusty Clem, Chairman, President and CEO

972-587-4021
investorrelations@dgse.com

 

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