Item
1. Security and
Issuer.
This
statement relates to the common stock, par value $0.01 per share (the “Common Stock”), of
DGSE Companies, Inc., a Nevada corporation (the “Issuer”), whose
principal executive office is located at 11311 Reeder Road, Dallas, Texas
75229.
Item
2. Identity and
Background.
(a) Dr.
L.S. Smith.
(b) 519
Interstate 30, Suite 243, Rockwall, Texas 75087.
(c) Dr.
Smith is Chairman of the Board of Directors and Chief Executive Officer of the
Issuer, the principal executive office of which is located at the address named
in Item 1 of this Schedule 13D/A.
(d) During
the last five years, Dr. Smith has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) Dr.
Smith has not, during the last five years, been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction which resulted in or
was subject to (i) a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws; or (ii) a finding of any violation with respect to such
laws.
(f) Dr.
Smith is a citizen of the United States.
Item
3. Source and
Amount of Funds or Other Consideration.
Dr. Smith
was given irrevocable proxy power over 3,000,000 shares (the “NTR Proxy”) of the
common stock of the Issuer, par value $0.01 per share (the “Common Stock”), held
by NTR Metals, LLC, a Texas limited liability company (“NTR”) for a period of
four (4) years, beginning May 25, 2010 (the “Closing Date”), in
return for his grant to NTR of an option (the “Option”) to acquire
one million (1,000,000) shares of the Common Stock owned by Dr. Smith (the
“Stock Option
Shares”). Dr. Smith was given irrevocable proxy power over
310,000 shares (the “Alan-Lee Proxy”) of
Common Stock owned by Mr. Craig Alan-Lee, a director of the Issuer (“Mr. Alan-Lee”), for a
period of four (4) years, dated May 18, 2010 and effective as of the Closing
Date, in return for no consideration. Additionally, Dr. Smith was
given irrevocable proxy power over 246,976 shares (the “Oyster Proxy”) of
Common Stock owned by Mr. William H. Oyster, an officer and director of the
Issuer (“Mr.
Oyster”), for a period of four (4) years, dated May 18, 2010 and
effective as of the Closing Date, in return for no
consideration.
Item
4. Purpose of
Transaction.
The NTR
Proxy, the Alan-Lee Proxy, and the Oyster Proxy (collectively, the “Proxies”) were
obtained for, and are being held for, the purpose of maintaining Dr. Smith’s
voting control over a majority of the Common Stock of the Issuer. The Proxies
were obtained in connection with the transfer of 3,376,361 shares of Common
Stock from Stanford International Bank, Ltd., an entity organized under the laws
of Antigua, to NTR and 37 individuals including Mssrs. Oyster and
Alan-Lee.
Other
than the Proxies, the Option, and the Smith Irrevocable Proxy Agreement, each as
discussed herein, Dr. Smith does not have any plans or proposals which relate to
or would result in (a) the acquisition by any person of additional securities of
the Issuer, or the disposition of securities of the Issuer; (b) any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Issuer or any of its
subsidiaries; (d) any change in the present board of directors or management of
the Company; (e) any material change in the present capitalization or dividend
policy of the Issuer; (f) any other material change in the Issuer’s business or
corporate structure; (g) changes in the Issuer’s charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person; (h) changes causing a class of securities
of the Issuer to be delisted from a national securities exchange or to cease to
be authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (i) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended; or (j) any action similar to
any of those enumerated above. However, Dr. Smith reserves the right to propose
or undertake or participate in any of the foregoing actions in the
future.
Item
5. Interest in
Securities of Issuer.
(a) As
of the date of this report, Dr. Smith beneficially owns 6,404,914 shares
(including 945,634 shares underlying exercisable options) of the Issuer’s Common
Stock, which in the aggregate, represents 57% of the currently outstanding
shares of the Issuer’s Common Stock (for purposes of calculating the percentage,
the 945,634 shares subject to Dr. Smith’s exercisable options were assumed to be
outstanding). Dr. Smith disclaims beneficial ownership of 3,556,976
of those shares which Dr. Smith has the power to vote pursuant to the Proxies
granted by the owners thereof to Dr. Smith, and this report should not be deemed
to be an admission that Dr. Smith is the beneficial owner of such shares of
Common Stock. Dr. Smith further disclaims membership in any group with the
persons granting him the Proxies with respect to those 3,557,276 shares of
Common Stock.
The foregoing calculations of
percentage ownership are based on 10,290,252 shares of Common Stock outstanding,
as reported by the Issuer’s transfer agent on June 2, 2010.
(b) Dr.
Smith has sole voting and dispositive power with respect to 2,847,938 shares of
the Issuer’s Common Stock (including 945,634 shares underlying exercisable
options) and sole voting power and no dispositive power with respect to
3,557,276 shares subject to the Proxies.
Dr. Smith
disclaims beneficial ownership of the 3,557,276 shares subject to the
Proxies.
(c) Not
applicable.
(d) Dr.
Smith confirms that, except as described herein, he is not aware of any other
person with the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of, any of the shares of common stock of the
Issuer beneficially owned by him.
(e) Not
applicable.
Item
6.
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Contracts,
Arrangements, Understandings or Relationships With Respect to Securities
of the Issuer.
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NTR
granted the NTR Proxy to Dr. Smith in return for the Option, as represented by
that certain Irrevocable Proxy to Vote Shares, dated May 25, 2010, by and
between NTR and Dr. Smith, a copy of which is attached hereto as Exhibit
99.1. The Option, as represented by that certain Option
Contract, dated May 25, 2010, by and between NTR and Dr. Smith, a copy of which
is attached hereto as Exhibit 99.2,
provides that NTR may acquire the Stock Option Shares at an exercise price of
$6.00 per share and the release of Dr. Smith’s personal guaranty of the Issuer’s
$1,500,000 line of credit with Texas Capital Bank, N.A. for the first two (2)
years following the Closing Date. The Option Contract further
provides that if the Option remains unexercised on the second anniversary
following the Closing Date, then the exercise price shall increase to $10.00 per
share and the release of Dr. Smith’s guaranty of the Issuer’s $1,500,000 line of
credit with Texas Capital Bank, N.A. for the third and fourth years following
the Closing Date. The NTR Proxy will terminate upon the earlier of
(a) NTR’s exercise of the Option, (b) Dr. Smith’s death or the appointment of a
legal guardian for Dr. Smith due to incapacity by reason of physical or mental
condition, or (c) the fourth anniversary of the Closing Date.
Pursuant
to that certain Smith Irrevocable Proxy Agreement, dated May 25, 2010, by and
between Dr. Smith and NTR, a copy of which is attached hereto as Exhibit 99.3, Dr.
Smith agreed to appoint NTR as Dr. Smith’s irrevocable proxy to vote his Common
Stock with respect to any matter regarding the Issuer on which Dr. Smith may be
entitled to vote upon the earlier of (a) NTR’s exercise of the Option or (b) Dr.
Smith’s death or the appointment of a legal guardian for Dr. Smith due to
incapacity by reason of physical or mental condition. If and when executed, the
term of this proxy will be for the remainder of the four (4) year period
following the Closing Date.
Mr.
Alan-Lee granted the Alan-Lee Proxy to Dr. Smith for a period of four (4) years,
dated May 18, 2010 and effective as of the Closing Date, in return for no
consideration, as represented by that certain Irrevocable Proxy to Vote Shares,
dated May 18, 2010 and effective as of the Closing Date, by and between Mr.
Oyster and Dr. Smith, a copy of which is attached hereto as Exhibit
99.4. Mr. Oyster granted the Oyster Proxy to Dr. Smith for a
period of four (4) years, dated May 18, 2010 and effective as of the Closing
Date, in return for no consideration, as represented by that certain Irrevocable
Proxy to Vote Shares, dated May 18, 2010 and effective as of the Closing Date,
by and between Mr. Oyster and Dr. Smith, a copy of which is attached hereto as
Exhibit
99.5. Additionally, the information set forth, or incorporated
by reference, in Items 3 through 5 of this Statement is hereby incorporated by
reference in this Item 6.
Item
7. Materials
to be Filed as Exhibits.
99.1 Irrevocable
Proxy to Vote Shares, dated May 25, 2010, by and between NTR Metals, LLC and Dr.
L.S. Smith.
99.2 Option
Contract, dated May 25, 2010, by and between NTR Metals, LLC and Dr. L.S.
Smith.
99.3 Smith
Irrevocable Proxy Agreement, dated May 25, 2010, by and between NTR Metals, LLC
and Dr. L.S. Smith.
99.4 Irrevocable
Proxy to Vote Shares, dated May 18, 2010, by and between Mr. William H. Oyster
and Dr. L.S. Smith.
99.5 Irrevocable
Proxy to Vote Shares, dated May 18, 2010, by and between Mr. Craig Alan-Lee and
Dr. L.S. Smith.
EXHIBITS
Exhibit No.
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Description
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99.1
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Irrevocable
Proxy to Vote Shares, dated May 25, 2010
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99.2
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Option
Contract, dated May 25, 2010
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99.3
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Smith
Irrevocable Proxy Agreement, dated May 25, 2010
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99.4
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Irrevocable
Proxy to Vote Shares, dated May 18, 2010
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99.5
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Irrevocable
Proxy to Vote Shares, dated May 18,
2010
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SIGNATURES
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
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June 3, 2010
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(Date)
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/s/ Dr. L.S. Smith
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(Signature)
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Dr. L.S. Smith
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(Name
and Title)
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