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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended S eptember 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the Transition Period From to

​

Commission File Number 001-11048

ENVELA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

​

​ | ​ | ​
Nevada |  | 88-0097334
(STATE OF INCORPORATION) | ​ | (I.R.S. EMPLOYER IDENTIFICATION NO.)

​

​

​ ​
1901 Gateway Drive, Suite 100, Irving, Texas 75038
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

​

(972) 587-4049
(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

​

Securities registered pursuant to Section 12(b) of the Act:

​ | ​ | ​ | ​ | ​
Title of Each Class |  | Trading Symbol |  | Name of Exchange on which Registered
Common Stock, par value $0.01 per share | ​ | ELA ELA | ​ | NYSE American NYSE Texas

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​ | ​ | ​ | ​
Large accelerated filer | ☐ | Accelerated filer | ☐
Non-accelerated filer | ☒ | Smaller reporting company | ☒
​ | ​ | Emerging growth company | ☐

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 4, 2025 the registrant had 25,963,476 shares of common stock outstanding.

​

​

​

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Table of Contents

TABLE OF CONTENTS

​

​ ​ ​ | ​ | ​ | ​
PART I. FINANCIAL INFORMATION |  | PAGE
​ | ​ | ​ | ​
ITEM 1. | FINANCIAL STATEMENTS | ​ | 4
​ | ​ | ​ | ​
​ | CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) | ​ | 4
​ | ​ | ​ | ​
​ | CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024 | ​ | 5
​ | ​ | ​ | ​
​ | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) | ​ | 6
​ | ​ | ​ | ​
​ | CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) | ​ | 7
​ | ​ | ​ | ​
​ | CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) | ​ | 8
​ | ​ | ​ | ​
​ | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ​ | 9
​ | ​ | ​ | ​
​ | NOTE 1 – BASIS OF PRESENTATION | ​ | 9
​ | NOTE 2 – PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS | ​ | 9
​ | NOTE 3 – ACCOUNTING POLICIES AND ESTIMATES | ​ | 10
​ | NOTE 4 – INVENTORIES | ​ | 16
​ | NOTE 5 – GOODWILL | ​ | 16
​ | NOTE 6 – PROPERTY AND EQUIPMENT, NET | ​ | 17
​ | NOTE 7 – INTANGIBLE ASSETS, NET | ​ | 18
​ | NOTE 8 – ACCRUED EXPENSES | ​ | 19
​ | NOTE 9 – SEGMENT INFORMATION | ​ | 19
​ | NOTE 10 – REVENUE | ​ | 22
​ | NOTE 11 – LEASES | ​ | 23
​ | NOTE 12 – BASIC AND DILUTED AVERAGE SHARES | ​ | 24
​ | NOTE 13 – DEBT | ​ | 27
​ | NOTE 14 – STOCK-BASED COMPENSATION | ​ | 29
​ | NOTE 15 – RELATED PARTY TRANSACTIONS | ​ | 29
​ | NOTE 16 – CONTINGENCIES | ​ | 29
​ | ​ | ​ | ​
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ​ | 30
​ | ​ | ​ | ​
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | ​ | 55
​ | ​ | ​ | ​
ITEM 4. | CONTROLS AND PROCEDURES | ​ | 55
​ | ​ | ​ | ​
PART II. OTHER INFORMATION | ​ | ​
​ | ​ | ​ | ​
ITEM 1. | LEGAL PROCEEDINGS | ​ | 56
​ | ​ | ​ | ​
ITEM 1A. | RISK FACTORS | ​ | 56
​ | ​ | ​ | ​
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES | ​ | 56
​ | ​ | ​ | ​

2

Table of Contents

ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | ​ | 56
​ | ​ | ​ | ​
ITEM 4. | MINE SAFETY DISCLOSURES | ​ | 56
​ | ​ | ​ | ​
ITEM 5. | OTHER INFORMATION | ​ | 57
​ | ​ | ​ | ​
ITEM 6. | EXHIBITS | ​ | 58
​ | ​ | ​ | ​
​ | SIGNATURE | ​ | 59
​ | ​ | ​ | ​
​ | GLOSSARY OF DEFINED TERMS | ​ | 60

​

​

​

3

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Nine Months Ended September 30,
(Unaudited) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Sales | ​ | $ | 57,389,411 | ​ | $ | 46,899,559 | ​ | $ | 160,522,073 | ​ | $ | 132,054,341
Cost of goods sold | ​ |  | 44,321,481 | ​ |  | 35,435,320 | ​ |  | 123,098,196 | ​ |  | 98,879,961
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross margin | ​ |  | 13,067,930 | ​ |  | 11,464,239 | ​ |  | 37,423,877 | ​ |  | 33,174,380
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Expenses: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Selling, general and administrative | ​ |  | 8,393,878 | ​ |  | 9,028,988 | ​ |  | 25,470,207 | ​ |  | 25,784,012
Depreciation and amortization | ​ |  | 472,524 | ​ |  | 414,779 | ​ |  | 1,378,276 | ​ |  | 1,120,611
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total operating expenses | ​ |  | 8,866,402 | ​ |  | 9,443,767 | ​ |  | 26,848,483 | ​ |  | 26,904,623
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income | ​ |  | 4,201,528 | ​ |  | 2,020,472 | ​ |  | 10,575,394 | ​ |  | 6,269,757
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other income (expense): | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Other income | ​ |  | 233,642 | ​ |  | 340,351 | ​ |  | 833,498 | ​ |  | 804,296
Interest expense | ​ |  | (105,757) | ​ |  | (106,139) | ​ |  | (318,306) | ​ |  | (336,134)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income before income taxes | ​ |  | 4,329,413 | ​ |  | 2,254,684 | ​ |  | 11,090,586 | ​ |  | 6,737,919
Income tax expense | ​ |  | (972,493) | ​ |  | (569,645) | ​ |  | (2,487,920) | ​ |  | (1,581,162)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 3,356,920 | ​ | $ | 1,685,039 | ​ | $ | 8,602,666 | ​ | $ | 5,156,757
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic earnings per share: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Net income | ​ | $ | 0.13 | ​ | $ | 0.06 | ​ | $ | 0.33 | ​ | $ | 0.20
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Diluted earnings per share: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Net income | ​ | $ | 0.13 | ​ | $ | 0.06 | ​ | $ | 0.33 | ​ | $ | 0.20
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted average shares outstanding: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Basic | ​ |  | 25,966,802 | ​ |  | 26,061,748 | ​ |  | 25,984,703 | ​ |  | 26,242,452
Diluted | ​ |  | 25,966,802 | ​ |  | 26,076,748 | ​ |  | 25,984,703 | ​ |  | 26,257,452

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

4

Table of Contents

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, |  | December 31,
​ | ​ | 2025 | ​ | 2024
Assets | ​ | (Unaudited) | ​ |  | ​
Current assets: |  | ​ |  |  | ​ |
Cash and cash equivalents | ​ | $ | 24,424,414 | ​ | $ | 20,609,003
Accounts receivable, net of allowances | ​ |  | 4,782,564 | ​ |  | 4,384,238
Notes receivable | ​ |  | — | ​ |  | 2,000
Inventories | ​ |  | 29,066,264 | ​ |  | 25,705,524
Prepaid expenses | ​ |  | 1,041,771 | ​ |  | 874,203
Other current assets | ​ | ​ | 125,000 | ​ | ​ | 28,839
Total current assets | ​ |  | 59,440,013 | ​ |  | 51,603,807
​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ |  | 13,722,647 | ​ |  | 13,515,162
Right-of-use assets from operating leases | ​ |  | 10,317,832 | ​ |  | 4,741,326
Goodwill | ​ |  | 3,621,453 | ​ |  | 3,621,453
Intangible assets, net | ​ |  | 3,593,998 | ​ |  | 4,097,778
Deferred tax asset | ​ | ​ | — | ​ | ​ | 49,526
Other assets | ​ |  | 244,525 | ​ |  | 241,437
​ | ​ | ​ | ​ | ​ | ​ | ​
Total assets | ​ | $ | 90,940,468 | ​ | $ | 77,870,489
​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and stockholders’ equity | ​ |  |  | ​ |  |
Current liabilities: | ​ |  |  | ​ |  |
Accounts payable | ​ | $ | 3,683,324 | ​ | $ | 3,177,550
Notes payable | ​ |  | 2,945,351 | ​ |  | 3,591,351
Operating lease liabilities | ​ |  | 1,844,223 | ​ |  | 2,078,505
Accrued expenses | ​ |  | 1,949,806 | ​ |  | 3,215,343
Other current liabilities | ​ |  | 1,039,976 | ​ |  | 455,385
Total current liabilities | ​ |  | 11,462,680 | ​ |  | 12,518,134
​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred tax liability | ​ |  | 237,729 | ​ |  | —
Notes payable, less current portion | ​ |  | 9,540,281 | ​ |  | 9,930,828
Operating lease liabilities, less current portion | ​ |  | 8,633,882 | ​ |  | 2,769,389
​ | ​ | ​ | ​ | ​ | ​ | ​
Total liabilities | ​ | ​ | 29,874,572 | ​ | ​ | 25,218,351
​ | ​ | ​ | ​ | ​ | ​ | ​
Contingencies (Note 16) | ​ |  |  | ​ |  |
​ | ​ | ​ | ​ | ​ | ​ | ​
Stockholders’ equity: | ​ |  |  | ​ |  |
Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding | ​ |  | — | ​ |  | —
Common stock, $0.01 par value; 60,000,000 shares authorized; 26,924,631 shares issued and 25,963,476 shares outstanding as of September 30, 2025; 26,924,631 shares issued and 25,995,701 shares outstanding as of December 31, 2024 | ​ |  | 269,246 | ​ |  | 269,246
Treasury stock at cost, 961,155 and 928,930 shares, as of September 30, 2025 and December 31, 2024, respectively | ​ |  | (4,757,731) | ​ |  | (4,568,823)
Additional paid-in capital | ​ |  | 40,173,000 | ​ |  | 40,173,000
Retained earnings | ​ |  | 25,381,381 | ​ |  | 16,778,715
​ | ​ | ​ | ​ | ​ | ​ | ​
Total stockholders’ equity | ​ |  | 61,065,896 | ​ |  | 52,652,138
​ | ​ | ​ | ​ | ​ | ​ | ​
Total liabilities and stockholders’ equity | ​ | $ | 90,940,468 | ​ | $ | 77,870,489

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
(Unaudited) |  | 2025 |  | 2024
Operations | ​ |  | ​ | ​ |  | ​
Net income | ​ | $ | 8,602,666 | ​ | $ | 5,156,757
Adjustments to reconcile net income to net cash provided by operations: | ​ |  |  | ​ |  |
Depreciation and amortization | ​ |  | 1,378,276 | ​ |  | 1,120,611
Provision for credit losses | ​ |  | 204,855 | ​ |  | 260,898
Deferred taxes | ​ |  | 287,255 | ​ |  | (4,481)
Non-cash lease expense | ​ |  | 1,838,632 | ​ |  | 1,525,870
Loss on disposal of equipment | ​ | ​ | 5,491 | ​ | ​ | —
Changes in operating assets and liabilities: | ​ |  |  | ​ |  |
Accounts receivable | ​ |  | (603,181) | ​ |  | 3,668,782
Inventories | ​ |  | (3,360,740) | ​ |  | (5,927,057)
Prepaid expenses | ​ |  | (167,568) | ​ |  | 332,013
Other assets | ​ |  | (99,249) | ​ |  | (104,188)
Accounts payable | ​ |  | 505,774 | ​ |  | (535,530)
Accrued expenses | ​ |  | (1,265,537) | ​ |  | (170,678)
Operating leases | ​ |  | (1,784,927) | ​ |  | (1,585,642)
Other liabilities | ​ |  | 584,591 | ​ |  | 2,712,409
​ | ​ | ​ | ​ | ​ | ​ | ​
Net cash provided by operations | ​ |  | 6,126,338 | ​ |  | 6,449,764
​ | ​ | ​ | ​ | ​ | ​ | ​
Investing | ​ |  |  | ​ |  |
Purchase of property and equipment | ​ |  | (1,037,491) | ​ |  | (2,955,024)
Purchase of intangible assets | ​ |  | (50,631) | ​ |  | (302,693)
Proceeds from (investment in) notes receivable | ​ | ​ | 2,000 | ​ | ​ | (3,000)
Proceeds from sales of equipment | ​ | ​ | 650 | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​
Net cash (used in) investing | ​ |  | (1,085,472) | ​ |  | (3,260,717)
​ | ​ | ​ | ​ | ​ | ​ | ​
Financing | ​ |  |  | ​ |  |
Payments on notes payable | ​ |  | (1,036,547) | ​ |  | (941,706)
Purchase of treasury stock | ​ | ​ | (188,908) | ​ | ​ | (2,348,995)
​ | ​ | ​ | ​ | ​ | ​ | ​
Net cash (used in) financing | ​ |  | (1,225,455) | ​ |  | (3,290,701)
​ | ​ | ​ | ​ | ​ | ​ | ​
Net change in cash and cash equivalents | ​ |  | 3,815,411 | ​ |  | (101,654)
Cash and cash equivalents, beginning of period | ​ |  | 20,609,003 | ​ |  | 17,853,853
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents, end of period | ​ | $ | 24,424,414 | ​ | $ | 17,752,199
​ | ​ | ​ | ​ | ​ | ​ | ​
Supplemental disclosures | ​ |  |  | ​ |  |
Cash paid during the period for: | ​ |  |  | ​ |  |
Interest | ​ | $ | 325,532 | ​ | $ | 385,285
Income Taxes | ​ | $ | 2,153,798 | ​ | $ | 1,862,525
​ | ​ | ​ | ​ | ​ | ​ | ​
Noncash investing and financing activities | ​ | ​ | ​ | ​ | ​ | ​
Scottsdale Transaction measurement period adjustment, addition to intangible assets, reduction to goodwill | ​ | ​ | — | ​ | ​ | 27,500
Scottsdale Transaction measurement period adjustment, addition to property and equipment, reduction to goodwill | ​ | ​ | — | ​ | ​ | 122,500
Scottsdale Transaction measurement period adjustment, reduction to notes payable, reduction to goodwill | ​ | ​ | — | ​ | ​ | 150,000

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  |  |  |  | ​ |  |  |  |  | ​ |  | Additional |  |  | ​ |  | Total
​ | ​ | Common Stock | ​ | Treasury Stock | ​ | Preferred Stock | ​ | Paid-in | ​ | Retained | ​ | Stockholders’
(Unaudited) |  | Shares |  | Amount |  | Shares |  | Amount |  | Shares |  | Amount |  | Capital |  | Earnings |  | Equity
Three Months Ended September 30, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of July 1, 2024 | ​ | 26,924,631 | ​ | $ | 269,246 | ​ | (769,402) | ​ | $ | (3,775,534) | ​ | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 13,493,374 | ​ | $ | 50,160,086
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Income |  | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,685,039 | ​ | ​ | 1,685,039
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Shares repurchased |  | — | ​ | ​ | — | ​ | (147,195) | ​ | ​ | (728,510) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (728,510)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of September 30, 2024 |  | 26,924,631 | ​ | $ | 269,246 |  | (916,597) | ​ | $ | (4,504,044) |  | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 15,178,413 | ​ | $ | 51,116,615

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ |  |  |  | ​ |  |  |  |  | ​ |  |  |  |  | ​ |  | Additional |  |  | ​ |  | Total
​ | ​ | Common Stock | ​ | Treasury Stock | ​ | Preferred Stock | ​ | Paid-in | ​ | Retained | ​ | Stockholders’
(Unaudited) | ​ | Shares | ​ | Amount | ​ | Shares | ​ | Amount | ​ | Shares | ​ | Amount | ​ | Capital | ​ | Earnings | ​ | Equity
Three Months Ended September 30, 2025 |  | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of July 1, 2025 | ​ | 26,924,631 | ​ | $ | 269,246 | ​ | (949,593) | ​ | $ | (4,690,149) | ​ | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 22,024,461 | ​ | $ | 57,776,558
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Income |  | — |  | ​ | — |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 3,356,920 |  | ​ | 3,356,920
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Shares repurchased |  | — |  | ​ | — |  | (11,562) |  | ​ | (67,582) |  | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | (67,582)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of September 30, 2025 |  | 26,924,631 | ​ | $ | 269,246 |  | (961,155) | ​ | $ | (4,757,731) |  | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 25,381,381 | ​ | $ | 61,065,896

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  |  |  | ​ |  |  |  |  | ​ |  |  |  |  | ​ |  | Additional |  |  | ​ |  | Total
​ | ​ | Common Stock | ​ | Treasury Stock | ​ | Preferred Stock | ​ | Paid-in | ​ | Retained | ​ | Stockholders’
(Unaudited) | ​ | Shares | ​ | Amount | ​ | Shares | ​ | Amount | ​ | Shares | ​ | Amount | ​ | Capital | ​ | Earnings | ​ | Equity
Nine Months Ended September 30, 2024 |  | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of January 1, 2024 | ​ | 26,924,631 | ​ | $ | 269,246 | ​ | (415,973) | ​ | $ | (2,155,049) | ​ | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 10,021,656 | ​ | $ | 48,308,853
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Income |  | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,156,757 |  | ​ | 5,156,757
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Shares repurchased |  | — | ​ | ​ | — | ​ | (500,624) | ​ | ​ | (2,348,995) | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — |  | ​ | (2,348,995)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of September 30, 2024 |  | 26,924,631 | ​ | $ | 269,246 |  | (916,597) | ​ | $ | (4,504,044) |  | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 15,178,413 | ​ | $ | 51,116,615

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ |  | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ | Additional | ​ |  | ​ | ​ | Total
​ | ​ | Common Stock | ​ | Treasury Stock | ​ | Preferred Stock | ​ | Paid-in | ​ | Retained | ​ | Stockholders’
(Unaudited) | ​ | Shares | ​ | Amount | ​ | Shares | ​ | Amount | ​ | Shares | ​ | Amount | ​ | Capital | ​ | Earnings | ​ | Equity
Nine Months Ended September 30, 2025 |  | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of January 1, 2025 | ​ | 26,924,631 | ​ | $ | 269,246 | ​ | (928,930) | ​ | $ | (4,568,823) | ​ | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 16,778,715 | ​ | $ | 52,652,138
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Income |  | — |  | ​ | — |  | — |  | ​ | — |  | — |  | ​ | — |  | ​ | — |  | ​ | 8,602,666 |  | ​ | 8,602,666
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Shares repurchased |  | — |  | ​ | — |  | (32,225) |  | ​ | (188,908) |  | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | (188,908)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of September 30, 2025 |  | 26,924,631 | ​ | $ | 269,246 |  | (961,155) | ​ | $ | (4,757,731) |  | — | ​ | $ | — | ​ | $ | 40,173,000 | ​ | $ | 25,381,381 | ​ | $ | 61,065,896

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

​

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ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

NOTE 1 — BASIS OF PRESENTATION

​

These unaudited condensed consolidated financial statements of Envela Corporation, a Nevada corporation, and its subsidiaries (together with its subsidiaries, the “Company” or “Envela”), included herein have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States (“U.S.”) for interim financial information and with the instructions to Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X prescribed by the Securities and Exchange Commission (the “SEC”). Pursuant to the SEC’s rules and regulations, Quarterly Reports do not include all of the information and notes required by U.S. GAAP. In the opinion of management, all adjustments, which are of a normal and recurring nature except those which have been disclosed elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”), necessary for a fair presentation of the unaudited condensed consolidated financial statements for these periods, have been included. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year ended December 31, 2025 (“Fiscal 2025”). Management suggests these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“Fiscal 2024”) filed with the SEC on March 26, 2025 (“2024 Annual Report”). The Company's operations are located within the contiguous U.S. and its functional and reporting currency is the U.S. Dollar (“$”).

Envela files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and other information with the SEC. Such information and amendments to reports previously filed or furnished are available on the Company’s corporate website, www.envela.com, as soon as reasonably practicable after such materials are filed with or furnished to the SEC. The SEC also maintains an internet site at www.sec.gov that contains the Company’s filings.

NOTE 2 — PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS

Throughout this document, Envela Corporation is referred to as “we,” “us,” “our,” “Envela,” or the “Company.”

Principles of Consolidation

Envela serves as a holding company, conducting its operations via subsidiaries engaged in various businesses and activities within the re-commerce and recycling sectors. The Company does not have any variable interest entities requiring consolidation. All intercompany transactions and balances have been eliminated.

Nature of Operations

The products and services we offer are delivered by our subsidiaries under their distinct brands, rather than directly by Envela itself. Significant business activities within our operating and reportable segments are detailed below:

Consumer Segment

Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, along with secondary market bullion. We incorporate recycled diamonds and gemstones into our new designs meaning they were previously set and unset, producing a low-carbon and ethical origin product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items have an enduring quality, enabling them to maintain their beauty and value as they are passed from one owner to another.

Commercial Segment

Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the Information Technology (“IT”) asset disposition (“ITAD”) industry. The separated commodities, including metals, plastics, and glass, are sold to downstream processors where they are further processed and reintroduced into new products. ITAD services maximize the residual value of retired IT assets by adhering to a reuse-first philosophy and ensuring equipment is refurbished and re-marketed after data sanitization. The Company

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

offers services that manage the entire lifecycle of technology products to ensure data security, regulatory compliance, and environmental sustainability. We are proud of our role in supporting a circular economy through the responsible reuse and recycling of electronic devices.

See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details.

See Note 3 – Accounting Policies and Estimates and Note 9 – Segment Information for further details.

NOTE 3 — ACCOUNTING POLICIES AND ESTIMATES

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include revenue recognition, determining the nature and timing of satisfaction of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; the fair value of and/or potential impairment of goodwill and intangible assets for the reporting units; useful lives of our tangible and intangible assets; allowances for credit losses; the market value of, and demand for, our inventory and the potential outcome of uncertain tax positions that have been recognized on our condensed consolidated financial statements or tax returns. Actual results could differ from those estimates and assumptions.

Revenue Recognition

Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, provides guidance to identify performance obligations for revenue-generating transactions. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the corresponding performance obligation is satisfied.

Consumer Segment

For the consumer segment, revenue from monetary transactions (i.e., cash and accounts receivable) with wholesale customers is recognized when the merchandise is delivered or at the point of sale for retail customers, and consideration for the transaction has been made either by immediate payment or through a receivable obligation. For e-commerce, revenue is recognized when the customer has fulfilled their obligation to pay or promise to pay, and goods have been shipped.

Revenue on precious metals requiring an assay is recognized upon transfer of title, based on the determination of the underlying weight and price of the associated metals.

The Company offers third-party financing for retail customers. Revenue is recognized upon transfer of title, with the promise of the third-party financing company to pay.

Commercial Segment

The commercial segment recognizes refining revenue when our inventory arrives at the destination port and the performance obligation is satisfied by transferring the control of the promised goods that are identified in the customer contract. The initial invoice is recognized in full when our performance obligation is satisfied. Under the guidance of ASC 606, an estimate of the variable consideration that we are expected to be entitled to is included in the transaction price stated at the estimated weight and current spot price of the metal. An adjustment to revenue is made once the underlying weight and any metal spot price movement is resolved, which is usually around six weeks. Any adjustment from the resolution of the underlying uncertainty is netted with the settlement due from the original contract. Historically, these amounts have not been material.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

The commercial segment provides its services according to a Scope of Work (“SOW”). Revenue from our service offerings is recognized upon completion of the SOW at a predetermined amount based on the number of units processed and a preset price per unit or weight measurement.

The commercial segment provides freight arrangement services related to inbound asset or material movements to our facilities. Revenue from freight arrangement services is recognized at settlement with our inbound customers, which occurs when the SOW has been completed. Under the guidance of ASC 606, the Company is deemed to be a principal and as such records freight arrangement services as a component of revenue, and the associated expense is recorded as a component of cost of goods sold.

The commercial segment recognizes revenue on outright sales when the terms and transaction price are agreed to, the product is shipped, and title is transferred.

See Note 10 – Revenue for further details.

Sales Returns and Allowances

Sales are recorded, net of expected returns. In some cases, the consumer and commercial segment’s customers may return a product purchased within 30 days of receipt. Our allowance for estimated returns is based on our review of historical returns experience and reduces our reported revenues accordingly.

As of September 30, 2025, and December 31, 2024, the consumer segment’s allowance for returns was $10,876 and $11,942, respectively.

As of September 30, 2025, and December 31, 2024, the commercial segment’s allowance for returns was $43,864 and $48,569, respectively.

Concentrations and Credit Risk

The Company is potentially subject to concentrations of counterparty credit risk. The concentrations described herein pertain to certain domestic precious metals transactions requiring an assay which are of short duration and settled on comparable terms. Overall customer concentrations as a percentage of sales may vary as a result of the mix of products being sold within each comparative period. Individual customer concentrations are also impacted by each customer’s production schedule, and as such, the Company identifies the most appropriate sales outlet to ensure a timely transaction settlement.

For the nine months ended September 30, 2025, two customers aggregated 51.2% of our sales and represented 0.0% of our accounts receivable balance.

For the nine months ended September 30, 2024, two customers aggregated 40.0% of our sales and represented 0.0% of our accounts receivable balance.

The Company believes that no single customer is critical to its business as a result of having diverse revenue streams and the optionality of sales outlets primarily associated with base and precious metals.

Shipping and Handling Costs

Within the consumer and commercial segments, shipping and handling costs are accounted for as fulfillment costs within cost of goods sold.

For the three months ended September 30, 2025 and 2024, the consumer segment’s shipping and handling costs were $12,819 and $17,223, respectively. For the three months ended September 30, 2025 and 2024, the commercial segment’s shipping and handling costs were $987,918 and $1,128,553, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

For the nine months ended September 30, 2025 and 2024, the consumer segment’s shipping and handling costs were $43,419 and $67,013, respectively. For the nine months ended September 30, 2025 and 2024, the commercial segment’s shipping and handling costs were $2,905,726 and $3,716,832, respectively.

Advertising Costs

The consumer and commercial segment’s advertising costs are expensed as incurred.

For the three months ended September 30, 2025 and 2024, the consumer segment’s advertising costs were $294,509 and $357,151, respectively. For the three months ended September 30, 2025 and 2024, the commercial segment’s advertising costs were $102,531 and $59,714, respectively.

For the nine months ended September 30, 2025 and 2024, the consumer segment’s advertising costs were $864,949 and $930,132, respectively. For the nine months ended September 30, 2025 and 2024, the commercial segment’s advertising costs were $308,539 and $192,691, respectively.

Leases

We determine if an arrangement is a lease at inception. We do not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs.

In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842, Leases requires us to use the interest rate that a lessee would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. If we cannot readily determine the discount rate implicit in lease agreements, we utilize our incremental borrowing rate. For leases one-year or less the Company has elected not to record lease liabilities and right-of use assets and instead recognize the expense associated with the lease payments using the straight-line basis.

Income Taxes

Income taxes are accounted for under the asset and liability method prescribed by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date.

Valuation of Deferred Tax Assets

The Company’s deferred tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company reviews the likelihood that the benefit of the deferred tax assets will be realized and the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. We have not taken a tax position that, if challenged, would have a material effect on the condensed consolidated financial statements or the effective tax rate for the three and nine months ended September 30, 2025 and 2024.

As of September 30, 2025, the Company had a deferred tax liability of $237,729. As of December 31, 2024, the Company had a deferred tax asset of $49,526. The Company did not have a valuation allowance as of September 30, 2025, or December 31, 2024.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

Segment Information

The accounting standards for reporting information about operating segments define an operating segment as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. For the periods presented in these condensed consolidated financial statements, the Company’s CODM was identified as the Chief Executive Officer.

The Company allocates its corporate expenses to its operating segments, including selling, general and administrative expenses, depreciation and amortization, other income, interest expense, and income tax expense.

See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details.

​

See Note 2 – Principles of Consolidation and Nature of Operations and Note 9 – Segment Information for further details.

​

Earnings Per Share

Basic earnings per share of our common stock, par value $0.01 per share (our “Common Stock”), is computed by dividing net earnings available to holders of the Common Stock by the weighted average number of shares of Common Stock outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and warrants outstanding determined using the treasury stock method.

See Note 12 – Basic and Diluted Average Shares for further details.

Stock-Based Compensation

The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments, including grants of stock options, based on the fair value of the award at the date of the grant. In addition, to the extent that the Company receives an excess tax benefit upon exercise of an award, such benefit is reflected as cash flow from financing activities within the condensed consolidated statement of cash flows.

See Note 14 – Stock-Based Compensation for further details.

Taxes Collected from Customers

The Company’s policy is to present taxes collected from customers and remitted to governmental authorities on a net basis. The Company records the amounts collected as a current liability and relieves such liability upon remittance to the taxing authority without impacting revenue or expenses.

Financial Instruments

The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amounts reported for the notes receivable and notes payable approximate fair value because the underlying instruments have an interest rate that reflects current market rates. None of these instruments are held for trading purposes.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. At times, cash and cash equivalents exceed federally insured limits.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The carrying amounts reported in the condensed consolidated balance sheets approximate fair value.

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​

Accounts Receivable, Net of Allowances

Accounts receivable represent amounts primarily due from customers on products and services. Our allowance for credit losses is primarily determined by an analysis of our accounts receivable aging, using the expected losses methodology. The allowance for credit losses is determined based on the historical experience of collecting past due amounts, based on the degree of their aging. In addition, specific accounts that are considered and expected to be uncollectible are included in the allowance for credit losses. Accounts receivables are considered delinquent when payment has not been made within contract terms. Accounts receivable are written off when all efforts to collect have been exhausted and the potential for recovery is considered remote.

As of September 30, 2025, and December 31, 2024, the consumer segment’s allowance for credit losses was $0 and $0, respectively.

As of September 30, 2025, and December 31, 2024, the commercial segment’s allowance for credit losses was $631,547 and $433,159, respectively.

Inventories

Consumer Segment

The consumer segment states its inventory at the lower of cost and net realizable value. The cost of inventory is an amount equal to that paid for the individual asset or lot of goods. We consider factors such as the current spot market price of precious metals and the current market demand for the items being purchased. Consigned inventory has a net-zero balance. The majority of our inventory has some component of its value that is based on the spot market price of precious metals. We monitor metals-based commodity markets to assess any adverse impact on the carrying value of our inventory.

Commercial Segment

The commercial segment states its inventory at the lower of cost and net realizable value. The cost of our technology assets is an amount equal to that paid for the individual asset or lot of goods, or, in instances in which we have an obligation to sell the asset before we pay for it, we utilize the retail cost method to estimate its value. Inherent to the retail cost method are certain management judgments and estimates that may impact the ending inventory valuation of such assets, as well as the gross profit recognized at the time of sale of such assets. We believe that our estimates related to the application of the retail cost method in valuing such assets reasonably estimates cost. The cost of our processed and unprocessed inventory, primarily consisting of base metals and electronic scrap with grades laden with precious metals, is determined by utilizing the weighted average cost method. We monitor metals-based commodity markets to assess any adverse impact on the carrying value of our inventory.

See Note 4 – Inventories for further details.

Goodwill

Goodwill is not amortized but evaluated for impairment on an annual basis during the fourth quarter of our fiscal year, or earlier if events or circumstances indicate the carrying value may be impaired. There were no triggering events identified during the nine months ended September 30, 2025, requiring an interim goodwill impairment test, and the Company did not record a goodwill impairment charge in any of the periods presented.

See Note 5 – Goodwill for further details.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

Property and Equipment, Net

Property and equipment are carried at cost less accumulated depreciation and are depreciated on a straight-line basis over the estimated useful lives of the assets; except for construction in progress which has not yet been placed into service. The following table depicts the estimated useful lives of our property and equipment asset classes:

​

​ | ​ | ​
Vehicles |  | 5 to 7 years
Buildings |  | 39 years
Building improvements |  | Shorter of 15 years or remaining useful life
Furniture and fixtures |  | 5 to 7 years
Machinery and equipment |  | 3 to 10 years
Leasehold improvements |  | Shorter of 15 years or remaining lease term

​

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Expenditures for repairs and maintenance are expensed as incurred; betterments that increase the value or materially extend the life of the related assets are capitalized.

See Note 6 – Property and Equipment, Net for further details.

Intangible Assets, Net

Finite-lived intangible assets are carried at cost less accumulated amortization and are amortized on a straight-line basis over the estimated useful lives of the assets; except for assets under development that have not yet been placed into service. The following table depicts the estimated useful lives of our property and equipment asset classes:

​

​ | ​ | ​
Customer lists, relationships, and contracts |  | 10 years
Technology(1) |  | 5 years
Trademarks/tradenames |  | 10 years

(1) | Technology consists of domain names, software assets, and enterprise resource planning systems.

Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

See Note 7 – Intangible Assets, Net for further details.

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires an entity to disclose additional information about specific expense categories. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption and retrospective application permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. The guidance is effective for annual and interim periods beginning after December 15, 2025, with early adoption and prospective application permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

​

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 updates the accounting for internal-use software by replacing former stage-based rules with a principles-based framework. Entities will now capitalize costs associated with internal-use software only when management has authorized and committed funding and it is probable that the project will be completed and the software will be used to perform the intended function. ASU 2025-06 also supersedes website development cost guidance, moving it to ASC 350-40. The guidance is effective for annual and interim periods beginning after December 15, 2027, with early adoption and prospective, retrospective or a modified transition application permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

​

No other recently issued or effective ASUs had, or are expected to have, a material impact on our financial position and results of operations.

​

NOTE 4 — INVENTORIES

The following table summarizes the details of the Company’s inventories:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2025 |  | 2024
Consumer |  | ​ |  |  | ​ |
Trade inventories | ​ | $ | 26,868,102 | ​ | $ | 23,973,333
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 26,868,102 | ​ |  | 23,973,333
​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  |  | ​ |  |
Trade inventories | ​ |  | 2,198,162 | ​ |  | 1,732,191
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 2,198,162 | ​ |  | 1,732,191
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 29,066,264 | ​ | $ | 25,705,524

​

​

NOTE 5 — GOODWILL

The following table summarizes the details of the Company’s changes in goodwill:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2025 |  | 2024
Consumer |  | ​ |  |  | ​ |
Opening balance | ​ | $ | — | ​ | $ | 300,000
Additions (reductions) (1) | ​ |  | — | ​ |  | (300,000)
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  |  | ​ |  |
Opening balance | ​ |  | 3,621,453 | ​ |  | 3,621,453
Additions (reductions) | ​ |  | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 3,621,453 | ​ |  | 3,621,453
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 3,621,453 | ​ | $ | 3,621,453

(1) | The decrease in goodwill of $300 thousand for the year ended December 31, 2024, related to measurement period adjustments pertaining to the acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona (the “Scottsdale Transaction”).

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​

NOTE 6 — PROPERTY AND EQUIPMENT, NET

The following table summarizes the details of the Company’s property and equipment, net:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2025 |  | 2024
Consumer |  | ​ |  |  | ​ |
Land | ​ | $ | 1,824,892 | ​ | $ | 1,824,892
Building and improvements | ​ |  | 6,131,612 | ​ |  | 6,078,606
Leasehold improvements | ​ |  | 1,972,648 | ​ |  | 1,736,193
Furniture and fixtures | ​ |  | 1,409,893 | ​ |  | 1,203,540
Machinery and equipment | ​ |  | 1,614,325 | ​ |  | 1,570,704
Vehicles | ​ |  | 53,318 | ​ |  | 53,318
Construction in progress (1) | ​ |  | 141,200 | ​ |  | 135,856
​ | ​ |  | 13,147,888 | ​ |  | 12,603,109
Less: accumulated depreciation | ​ |  | (3,684,757) | ​ |  | (3,287,437)
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 9,463,131 | ​ |  | 9,315,672
​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  |  | ​ |  |
Leasehold improvements | ​ |  | 160,850 | ​ |  | 172,391
Furniture and fixtures | ​ |  | 74,811 | ​ |  | 74,811
Machinery and equipment | ​ |  | 1,389,680 | ​ |  | 1,336,427
Vehicles | ​ |  | 206,556 | ​ |  | 206,556
​ | ​ |  | 1,831,897 | ​ |  | 1,790,185
Less: accumulated depreciation | ​ |  | (1,277,312) | ​ |  | (1,112,694)
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 554,585 | ​ |  | 677,491
​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ |  |  | ​ |  |
Land | ​ |  | 1,106,664 | ​ |  | 1,106,664
Building and improvements | ​ |  | 2,730,138 | ​ |  | 2,688,523
Furniture and fixtures | ​ |  | 35,197 | ​ |  | —
Machinery and equipment | ​ |  | 59,155 | ​ |  | 28,627
Construction in progress (1) | ​ |  | 141,205 | ​ |  | —
​ | ​ |  | 4,072,359 | ​ |  | 3,823,814
Less: accumulated depreciation | ​ |  | (367,428) | ​ |  | (301,815)
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 3,704,931 | ​ |  | 3,521,999
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 13,722,647 | ​ | $ | 13,515,162

(1) | As of September 30, 2025 and December 31, 2024, these assets are being constructed, have not yet been placed into service, and are not yet depreciable.

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​

NOTE 7 — INTANGIBLE ASSETS, NET

The following table summarizes the details of the Company’s intangible assets, net:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2025 |  | 2024
Consumer |  | ​ |  |  | ​ |
Technology | ​ | $ | 409,896 | ​ | $ | 409,896
Customer lists | ​ | ​ | 13,000 | ​ | ​ | 13,000
Trademarks/tradenames | ​ | ​ | 3,924 | ​ | ​ | —
Assets under development (1) | ​ |  | — | ​ |  | 3,381
​ | ​ |  | 426,820 | ​ |  | 426,277
Less: accumulated amortization | ​ |  | (386,700) | ​ |  | (379,980)
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 40,120 | ​ |  | 46,297
​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  |  | ​ |  |
Trademarks/tradenames | ​ |  | 2,869,000 | ​ |  | 2,869,000
Customer contracts | ​ |  | 1,873,000 | ​ |  | 1,873,000
Customer relationships | ​ |  | 1,809,000 | ​ |  | 1,809,000
​ | ​ |  | 6,551,000 | ​ |  | 6,551,000
Less: accumulated amortization | ​ |  | (3,349,947) | ​ |  | (2,877,855)
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 3,201,053 | ​ |  | 3,673,145
​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ |  |  | ​ |  |
Technology | ​ |  | 512,635 | ​ |  | 462,548
​ | ​ |  | 512,635 | ​ |  | 462,548
Less: accumulated amortization | ​ |  | (159,810) | ​ |  | (84,212)
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 352,825 | ​ |  | 378,336
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 3,593,998 | ​ | $ | 4,097,778

(2) | As of September 30, 2025 and December 31, 2024, these intangible assets are under development, have not yet been placed into service, and are not yet amortizable.

The following table depicts the Company’s estimated future amortization expense related to intangible assets as of September 30, 2025:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Consumer |  | Commercial |  | Corporate |  | Total
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2025 |  | $ | 2,331 |  | $ | 157,363 |  | $ | 27,139 |  | $ | 186,833
2026 |  | ​ | 9,324 |  | ​ | 629,448 |  | ​ | 108,562 |  | ​ | 747,334
2027 |  | ​ | 9,324 |  | ​ | 629,448 |  | ​ | 108,562 |  | ​ | 747,334
2028 |  | ​ | 8,454 |  | ​ | 629,448 |  | ​ | 108,562 |  | ​ | 746,464
2029 |  | ​ | 3,669 |  | ​ | 539,920 |  | ​ | — |  | ​ | 543,589
Thereafter |  | ​ | 7,018 |  | ​ | 615,426 |  | ​ | — |  | ​ | 622,444
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 40,120 | ​ | $ | 3,201,053 | ​ | $ | 352,825 | ​ | $ | 3,593,998

​

​

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NOTE 8 — ACCRUED EXPENSES

The following table summarizes the details of the Company’s accrued expenses:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, |  | December 31,
​ | ​ | 2025 | ​ | 2024
Consumer |  | ​ |  |  | ​ |
Accrued interest | ​ | $ | 5,230 | ​ | $ | 11,276
Payroll | ​ |  | 227,214 | ​ |  | 361,829
Taxes | ​ |  | 265,847 | ​ |  | 133,008
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 498,291 | ​ |  | 506,113
​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  |  | ​ |  |
Accrued interest | ​ |  | 6,853 | ​ |  | 7,568
Payroll | ​ |  | 246,013 | ​ |  | 457,722
Taxes | ​ |  | 26,539 | ​ |  | —
Unvouchered inventory payments | ​ |  | 825,661 | ​ |  | 1,915,567
Other | ​ |  | 4,324 | ​ |  | 26,334
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 1,109,390 | ​ |  | 2,407,191
​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ |  |  | ​ |  |
Accrued interest | ​ |  | 6,436 | ​ |  | 6,902
Payroll | ​ |  | 18,572 | ​ |  | 38,205
Professional fees | ​ |  | 35,000 | ​ |  | 81,973
Taxes | ​ |  | 235,397 | ​ |  | 153,479
Other | ​ |  | 46,720 | ​ |  | 21,480
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 342,125 | ​ |  | 302,039
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 1,949,806 | ​ | $ | 3,215,343

​

​

NOTE 9 — SEGMENT INFORMATION

The CODM uses operating income to evaluate the performance of the overall business, make investing decisions, and allocate resources. The following table depicts the Company’s segment results of operations, including significant expenses that are regularly reviewed by the CODM, for the three months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30,
​ |  | 2025 | ​ | 2024
​ |  | Consumer |  | Commercial |  | Consolidated |  | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sales | ​ | $ | 45,068,036 | ​ | $ | 12,321,375 | ​ | $ | 57,389,411 |  | $ | 33,756,600 | ​ | $ | 13,142,959 | ​ | $ | 46,899,559
Cost of goods sold | ​ |  | 39,866,966 | ​ |  | 4,454,515 | ​ |  | 44,321,481 |  |  | 29,840,285 | ​ |  | 5,595,035 | ​ |  | 35,435,320
Selling, general and administrative | ​ |  | 3,827,882 | ​ |  | 4,565,996 | ​ |  | 8,393,878 |  |  | 3,925,981 | ​ |  | 5,103,007 | ​ |  | 9,028,988
Depreciation and amortization | ​ |  | 203,349 | ​ |  | 269,175 | ​ |  | 472,524 |  |  | 150,657 | ​ |  | 264,122 | ​ |  | 414,779
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (loss) | ​ | $ | 1,169,839 | ​ | $ | 3,031,689 | ​ | $ | 4,201,528 |  | $ | (160,323) | ​ | $ | 2,180,795 | ​ | $ | 2,020,472

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​

​

The following table depicts the reconciliation of the Company’s segment operating income to income before income taxes for the three months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30,
​ | ​ | 2025 | ​ | 2024
​ | ​ | Consumer |  | Commercial |  | Consolidated |  | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (loss) | ​ | $ | 1,169,839 | ​ | $ | 3,031,689 | ​ | $ | 4,201,528 |  | $ | (160,323) | ​ | $ | 2,180,795 | ​ | $ | 2,020,472
Other income | ​ |  | 104,863 | ​ |  | 128,779 | ​ |  | 233,642 |  |  | 62,502 | ​ |  | 277,849 | ​ |  | 340,351
Interest expense | ​ |  | (53,429) | ​ |  | (52,328) | ​ |  | (105,757) |  |  | (51,486) | ​ |  | (54,653) | ​ |  | (106,139)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss) before income taxes | ​ | $ | 1,221,273 | ​ | $ | 3,108,140 | ​ | $ | 4,329,413 |  | $ | (149,307) | ​ | $ | 2,403,991 | ​ | $ | 2,254,684
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

The following table depicts the Company’s segment results of operations, including significant expenses that are regularly reviewed by the CODM, for the nine months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ |  | 2025 | ​ | 2024
​ |  | Consumer |  | Commercial |  | Consolidated |  | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sales | ​ | $ | 125,012,398 | ​ | $ | 35,509,675 | ​ | $ | 160,522,073 |  | $ | 93,972,645 | ​ | $ | 38,081,696 | ​ | $ | 132,054,341
Cost of goods sold | ​ |  | 110,942,439 | ​ |  | 12,155,757 | ​ |  | 123,098,196 |  |  | 82,485,812 | ​ |  | 16,394,149 | ​ |  | 98,879,961
Selling, general and administrative | ​ |  | 11,451,215 | ​ |  | 14,018,992 | ​ |  | 25,470,207 |  |  | 11,186,939 | ​ |  | 14,597,073 | ​ |  | 25,784,012
Depreciation and amortization | ​ |  | 579,585 | ​ |  | 798,691 | ​ |  | 1,378,276 |  |  | 356,851 | ​ |  | 763,760 | ​ |  | 1,120,611
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (loss) | ​ | $ | 2,039,159 | ​ | $ | 8,536,235 | ​ | $ | 10,575,394 |  | $ | (56,957) | ​ | $ | 6,326,714 | ​ | $ | 6,269,757

​

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​

The following table depicts the reconciliation of the Company’s segment operating income to income before income taxes for the nine months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ | ​ | 2025 | ​ | 2024
​ | ​ | Consumer |  | Commercial |  | Consolidated |  | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (loss) | ​ | $ | 2,039,159 | ​ | $ | 8,536,235 | ​ | $ | 10,575,394 |  | $ | (56,957) | ​ | $ | 6,326,714 | ​ | $ | 6,269,757
Other income | ​ |  | 261,870 | ​ |  | 571,628 | ​ |  | 833,498 |  |  | 78,510 | ​ |  | 725,786 | ​ |  | 804,296
Interest expense | ​ |  | (161,469) | ​ |  | (156,837) | ​ |  | (318,306) |  |  | (171,584) | ​ |  | (164,550) | ​ |  | (336,134)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss) before income taxes | ​ | $ | 2,139,560 | ​ | $ | 8,951,026 | ​ | $ | 11,090,586 |  | $ | (150,031) | ​ | $ | 6,887,950 | ​ | $ | 6,737,919

​

Other significant segment items that are regularly reviewed by the CODM are Capital Expenditures, which the Company defines as any purchases of property and equipment or intangible assets. The following table depicts Capital Expenditures for the three months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30,
​ |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 127,585 | ​ | $ | 1,990,966
Commercial | ​ |  | 49,158 | ​ |  | —
Corporate | ​ |  | 29,220 | ​ |  | 4,732
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 205,963 | ​ | $ | 1,995,698

​

The following table depicts Capital Expenditures for the nine months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 688,059 | ​ | $ | 2,695,590
Commercial | ​ |  | 101,429 | ​ |  | 108,222
Corporate | ​ |  | 298,634 | ​ |  | 453,905
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 1,088,122 | ​ | $ | 3,257,717

​

The following table depicts the Company’s total assets:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of
​ |  | September 30, 2025 |  | December 31, 2024
​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 45,296,981 | ​ | $ | 40,454,328
Commercial | ​ |  | 21,265,661 | ​ |  | 33,068,887
Corporate | ​ |  | 24,377,826 | ​ |  | 4,347,274
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 90,940,468 | ​ | $ | 77,870,489

​

​

21

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ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

NOTE 10 — REVENUE

The following table depicts the Company’s disaggregation of total sales and gross margin for the three months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |
​ | ​ | 2025 | ​ | 2024 |
​ |  | Sales |  | Gross Margin |  | Margin | ​ | Sales |  | Gross Margin |  | Margin | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 45,068,036 | ​ | $ | 5,201,070 |  | 11.5 | % | $ | 33,756,600 | ​ | $ | 3,916,315 |  | 11.6 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  | 12,321,375 | ​ |  | 7,866,860 |  | 63.8 | % |  | 13,142,959 | ​ |  | 7,547,924 |  | 57.4 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 57,389,411 | ​ | $ | 13,067,930 |  | 22.8 | % | $ | 46,899,559 | ​ | $ | 11,464,239 |  | 24.4 | %

​

The following table depicts the Company’s disaggregation of total sales and gross margin for the nine months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended September 30, |
​ | ​ | 2025 | ​ | 2024 |
​ |  | Sales |  | Gross Margin |  | Margin | ​ | Sales |  | Gross Margin |  | Margin | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 125,012,398 | ​ | $ | 14,069,959 |  | 11.3 | % | $ | 93,972,645 | ​ | $ | 11,486,833 |  | 12.2 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  | 35,509,675 | ​ |  | 23,353,918 |  | 65.8 | % |  | 38,081,696 | ​ |  | 21,687,547 |  | 57.0 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 160,522,073 | ​ | $ | 37,423,877 |  | 23.3 | % | $ | 132,054,341 | ​ | $ | 33,174,380 |  | 25.1 | %

​

The following table lists the opening and closing balances of our contract assets and liabilities:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | Accounts |  | ​ | Contract |  | ​ | Contract
​ | ​ | ​ | Receivable | ​ | ​ | Assets | ​ | ​ | Liabilities
Consumer |  | ​ |  |  | ​ |  |  | ​ |
Opening Balance - 1/1/2024 | ​ | $ | 3,411,501 | ​ | $ | — |  | $ | 211,651
Closing Balance - 9/30/2024 |  | ​ | 366,612 |  | ​ | — |  | ​ | 2,924,060
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Commercial |  |  |  |  |  |  |  |  |
Opening Balance - 1/1/2024 |  |  | 4,399,658 |  |  | — |  |  | —
Closing Balance - 9/30/2024 |  |  | 3,514,867 |  |  | — |  |  | —

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | Accounts |  | ​ | Contract |  | ​ | Contract
​ | ​ | ​ | Receivable | ​ | ​ | Assets | ​ | ​ | Liabilities
Consumer |  | ​ |  |  | ​ |  |  | ​ |
Opening Balance - 1/1/2025 |  | $ | 738,132 |  | $ | — |  | $ | 455,385
Closing Balance - 9/30/2025 |  | ​ | 1,546,403 |  | ​ | — |  | ​ | 1,001,918
​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Commercial |  |  |  |  |  |  |  |  |
Opening Balance - 1/1/2025 |  |  | 3,646,106 |  |  | — |  |  | —
Closing Balance - 9/30/2025 |  |  | 3,236,161 |  | ​ | — |  | ​ | 38,058

​

The Company has no contract assets, and the contract liabilities are customer deposits, store credit, and gift cards, which are reported within other current liabilities in the condensed consolidated balance sheets.

22

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ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

NOTE 11 — LEASES

The following table depicts the Company’s future minimum lease payments as of September 30, 2025:

​

​ | ​ | ​ | ​
​ |  | Operating
​ | ​ | Leases
Consumer |  | ​ |
2025 | ​ | $ | 202,618
2026 | ​ |  | 1,186,142
2027 | ​ |  | 887,803
2028 | ​ |  | 652,641
2029 | ​ |  | 533,234
Thereafter | ​ |  | 203,189
​ | ​ | ​ | ​
Total minimum lease payments | ​ |  | 3,665,627
Less: imputed interest | ​ |  | (304,946)
​ | ​ | ​ | ​
Sub-total | ​ |  | 3,360,681
​ | ​ | ​ | ​
Commercial | ​ |  |
2025 | ​ |  | 310,669
2026 | ​ |  | 1,387,320
2027 | ​ |  | 1,453,169
2028 | ​ |  | 1,476,504
2029 | ​ |  | 1,535,564
Thereafter | ​ |  | 2,147,047
​ | ​ | ​ | ​
Total minimum lease payments | ​ |  | 8,310,273
Less: imputed interest | ​ |  | (1,192,849)
​ | ​ | ​ | ​
Sub-total | ​ |  | 7,117,424
​ | ​ | ​ | ​
Total | ​ |  | 10,478,105
​ | ​ | ​ | ​
Less: current portion | ​ |  | 1,844,223
​ | ​ | ​ | ​
​ | ​ | $ | 8,633,882

​

All of the Company’s leased facilities as of September 30, 2025, are non-cancellable. The leases are a combination of triple net leases, for which the Company pays its proportionate share of common area maintenance, property taxes, and property insurance, and modified gross leases, for which the Company directly pays for common area maintenance and property insurance. Lease costs are comprised of a combination of minimum lease payments and variable lease costs.

The following table depicts supplemental cash flow information related to operating leases:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​
Non-cash activities: right-of-use operating lease assets obtained in exchange for new operating lease liabilities | ​ | $ | 7,235,358 | ​ | $ | 1,562,664
​ | ​ | ​ | ​ | ​ | ​ | ​

​

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ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

The following table depicts the Company’s leasing costs for the three months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30,
​ |  | 2025 | ​ | 2024
​ | ​ | Consumer |  | Commercial |  | Consolidated | ​ | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease cost | ​ | $ | 286,594 | ​ | $ | 343,992 | ​ | $ | 630,586 | ​ | $ | 200,220 | ​ | $ | 339,654 | ​ | $ | 539,874
Variable lease cost | ​ |  | 62,802 | ​ | ​ | 40,880 | ​ |  | 103,682 | ​ |  | 56,433 | ​ | ​ | 162,320 | ​ |  | 218,753
Short-term lease cost | ​ | ​ | 915 | ​ | ​ | 36,541 | ​ | ​ | 37,456 | ​ | ​ | 42,227 | ​ | ​ | 45,748 | ​ | ​ | 87,975
​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 350,311 | ​ | $ | 421,413 | ​ | $ | 771,724 | ​ | $ | 298,880 | ​ | $ | 547,722 | ​ | $ | 846,602

​

The following table depicts the Company’s leasing costs for the nine months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ |  | 2025 | ​ | 2024
​ | ​ | Consumer |  | Commercial |  | Consolidated | ​ | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating lease cost | ​ | $ | 830,757 | ​ | $ | 1,007,875 | ​ | $ | 1,838,632 | ​ | $ | 506,245 | ​ | $ | 1,019,625 | ​ | $ | 1,525,870
Variable lease cost | ​ |  | 180,671 | ​ | ​ | 343,675 | ​ |  | 524,346 | ​ |  | 170,206 | ​ | ​ | 439,469 | ​ |  | 609,675
Short-term lease cost | ​ | ​ | 29,868 | ​ | ​ | 109,040 | ​ | ​ | 138,908 | ​ | ​ | 119,952 | ​ | ​ | 143,742 | ​ | ​ | 263,694
​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 1,041,296 | ​ | $ | 1,460,590 | ​ | $ | 2,501,886 | ​ | $ | 796,403 | ​ | $ | 1,602,836 | ​ | $ | 2,399,239

​

As of September 30, 2025, the weighted average remaining lease term and weighted average discount rate for operating leases were 4.8 years and 5.1%. As of September 30, 2024, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.5 years and 3.8%.

NOTE 12 — BASIC AND DILUTED AVERAGE SHARES

The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the three months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended
​ | ​ | September 30,
​ | ​ | 2025 | ​ | 2024
​ | ​ | ​ | ​ | ​
Basic weighted average shares |  | 25,966,802 |  | 26,061,748
Effect of potential dilutive securities |  | — |  | 15,000
​ | ​ | ​ | ​ | ​
Diluted weighted average shares |  | 25,966,802 |  | 26,076,748

​

The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the nine months ended September 30, 2025 and 2024:

​

​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended
​ | ​ | September 30,
​ | ​ | 2025 | ​ | 2024
​ | ​ | ​ | ​ | ​
Basic weighted average shares |  | 25,984,703 |  | 26,242,452
Effect of potential dilutive securities |  | — |  | 15,000
​ | ​ | ​ | ​ | ​
Diluted weighted average shares |  | 25,984,703 |  | 26,257,452

​

24

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ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

For three and nine months ended September 30, 2025 and 2024, there were 0 and 15 thousand Common Stock options unexercised, respectively. For the three and nine months ended September 30, 2025 and 2024, there were no anti-dilutive shares.

On March 14, 2023, a stock repurchase program was unanimously approved by the Company’s Board of Directors (the “Board”), which gave management authorization to purchase up to 1.0 million shares of the Company’s stock, at a per-share price not to exceed $9.00, on the open market. The plan expires on March 31, 2026.

On March 27, 2025, the Board unanimously approved the repurchase of an additional 100 thousand shares of the Common Stock, bringing the total authorization under the existing repurchase program to 1.1 million shares.

The following table lists the repurchase of Company shares for the three and nine months ended September 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Total Number of |  | Average Price |  | Total Price |  | Shares Available
Fiscal Period | ​ | Shares Purchased | ​ | Paid per Share | ​ | Paid | ​ | to Purchase
Balance as of January 1, 2025 |  | 928,930 | ​ | $ | 4.92 | ​ | $ | 4,568,823 |  | 71,070
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
January 1 - 31, 2025 |  | — | ​ |  | — | ​ |  | — |  | 71,070
February 1 - 28, 2025 |  | — | ​ |  | — | ​ |  | — |  | 71,070
March 1 - 31, 2025 |  | 500 | ​ |  | 5.25 | ​ |  | 2,626 |  | 170,570
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of March 31, 2025 |  | 929,430 | ​ | $ | 4.92 | ​ | $ | 4,571,449 |  | 170,570
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
April 1 - 30, 2025 |  | — | ​ |  | — | ​ |  | — |  | 170,570
May 1 - 31, 2025 |  | — | ​ |  | — | ​ |  | — |  | 170,570
June 1 - 30, 2025 |  | 20,163 | ​ |  | 5.89 | ​ |  | 118,700 |  | 150,407
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of June 30, 2025 |  | 949,593 | ​ | $ | 4.94 | ​ | $ | 4,690,149 |  | 150,407
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
July 1 - 31, 2025 |  | 8,134 | ​ |  | 5.93 | ​ |  | 48,218 |  | 142,273
August 1 - 31, 2025 |  | 3,428 | ​ |  | 5.65 | ​ |  | 19,364 |  | 138,845
September 1 - 30, 2025 |  | — | ​ |  | — | ​ |  | — |  | 138,845
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of September 30, 2025 |  | 961,155 | ​ | $ | 4.95 | ​ | $ | 4,757,731 |  | 138,845

​

For the three months ended September 30, 2025, the Company repurchased 11,562 shares for $67,582, for an average price of $5.85.

For the nine months ended September 30, 2025, the Company repurchased 32,225 shares for $188,908, for an average price of $5.86.

25

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

The following table lists the repurchase of Company shares for the three and nine months ended September 30, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Total Number of |  | Average Price |  | Total Price |  | Shares Available
Fiscal Period | ​ | Shares Purchased | ​ | Paid per Share | ​ | Paid | ​ | to Purchase
Balance as of January 1, 2024 |  | 415,973 | ​ | $ | 5.18 | ​ | $ | 2,155,049 |  | 584,027
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
January 1 - 31, 2024 |  | 59,417 | ​ |  | 4.52 | ​ |  | 268,569 |  | 524,610
February 1 - 29, 2024 |  | 56,343 | ​ |  | 4.53 | ​ |  | 255,195 |  | 468,267
March 1 - 31, 2024 |  | 85,580 | ​ |  | 4.46 | ​ |  | 381,382 |  | 382,687
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of March 31, 2024 |  | 617,313 | ​ | $ | 4.96 | ​ | $ | 3,060,195 |  | 382,687
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
April 1 - 30, 2024 |  | 30,891 | ​ |  | 4.66 | ​ |  | 143,840 |  | 351,796
May 1 - 31, 2024 |  | 37,672 | ​ |  | 4.65 | ​ |  | 175,257 |  | 314,124
June 1 - 30, 2024 |  | 83,526 | ​ |  | 4.74 | ​ |  | 396,242 |  | 230,598
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of June 30, 2024 |  | 769,402 | ​ | $ | 4.91 | ​ | $ | 3,775,534 |  | 230,598
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
July 1 - 31, 2024 |  | 75,326 | ​ |  | 4.87 | ​ |  | 367,144 |  | 155,272
August 1 - 31, 2024 |  | 51,353 | ​ |  | 4.98 | ​ |  | 255,633 |  | 103,919
September 1 - 30, 2024 |  | 20,516 | ​ |  | 5.15 | ​ |  | 105,733 |  | 83,403
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of September 30, 2024 |  | 916,597 | ​ | $ | 4.91 | ​ | $ | 4,504,044 |  | 83,403

​

For the three months ended September 30, 2024, the Company repurchased 147,195 shares for $728,510, for an average price of $4.95.

For the nine months ended September 30, 2024, the Company repurchased 500,624 shares for $2,348,995, for an average price of $4.69.

26

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ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

NOTE 13 — DEBT

The following table summarizes the details of the Company’s long-term debt obligations:

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Outstanding Balance
​ |  | September 30, |  | December 31,
​ |  | 2025 | ​ | 2024
Consumer |  | ​ |  |  | ​ |
Note payable, FSB (1) | ​ | $ | 2,370,896 | ​ | $ | 2,455,043
Note payable, Truist Bank (3) | ​ |  | 772,270 | ​ |  | 801,175
Notes payable, TBT (4,5) | ​ |  | 1,503,752 | ​ |  | 1,979,730
Note payable, Scottsdale Transaction (6) | ​ |  | 50,000 | ​ |  | 50,000
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 4,696,918 | ​ |  | 5,285,948
​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  |  | ​ |  |
Note payable, FSB (2) | ​ |  | 5,379,203 | ​ |  | 5,569,171
Note payable, Avail Transaction (7) | ​ |  | — | ​ |  | 166,667
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 5,379,203 | ​ |  | 5,735,838
​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ |  |  | ​ |  |
Line of credit, FSB (8) | ​ |  | — | ​ |  | —
Note payable, TBT (9) | ​ |  | 2,409,511 | ​ |  | 2,500,393
​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ |  | 2,409,511 | ​ |  | 2,500,393
​ | ​ | ​ | ​ | ​ | ​ | ​
Total | ​ |  | 12,485,632 | ​ |  | 13,522,179
​ | ​ | ​ | ​ | ​ | ​ | ​
Less: current portion | ​ |  | (2,945,351) | ​ |  | (3,591,351)
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 9,540,281 | ​ | $ | 9,930,828

(1) | On November 23, 2021, the consumer segment entered into a $2.781 million secured amortizing note payable with Farmer’s State Bank of Oakley, Kansas (“FSB”). The note payable bears interest at 3.10% and matures on November 15, 2026.

(2) | On November 23, 2021, the commercial segment entered into a $6.309 million secured amortizing note payable with FSB. The note payable bears interest at 3.10% and matures on November 15, 2026.

(3) | On July 9, 2020, the consumer segment entered into a $956 thousand secured amortizing note payable with Truist Bank. The note payable bears interest at 3.65% and matures on July 9, 2030.

(4) | On September 14, 2020, the consumer segment entered into a $496 thousand secured amortizing note payable with Texas Bank & Trust (“TBT”). The note payable incurred interest at 3.75% and matured on September 14, 2025.

(5) | On July 30, 2021, the consumer segment entered into a $1.772 million secured amortizing note payable with TBT. The note payable bears interest at 3.75% and matures on July 30, 2031.

(6) | On September 12, 2024, the consumer segment entered into a $50 thousand secured amortizing note payable in relation to the Scottsdale Transaction. The repayment of the note payable shall begin upon the fulfillment of certain terms and conditions under the asset purchase agreement entered into on September 12, 2024. The note payable’s imputed interest is 3.10% and matures on September 30, 2026.

27

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

(7) | On October 29, 2021, the consumer segment entered into a $2.000 million secured amortizing note payable in relation to the acquisition of Avail Recovery Solutions, LLC on October 29, 2021 (“Avail Transaction”). The note payable’s imputed interest was 3.10% and matured on January 1, 2025.

(8) | On November 8, 2024, the Company entered into a $3.800 million secured line of credit with FSB. The line of credit bears interest at our rate of deposit +1.00% with a floor of 3.10% and matures on November 23, 2027.

(9) | On November 4, 2020, a wholly owned subsidiary of Envela entered into a $2.960 million secured amortizing note payable with TBT. The note payable incurred interest at 3.25%, matured and was paid off on November 3, 2025.

The following table depicts the Company’s future principal payments on long-term debt obligations as of September 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  | Thereafter
Consumer |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Note payable, FSB (1) | $ | 28,414 |  | $ | 2,342,482 |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Note payable, Truist Bank (3) | ​ | 9,840 |  | ​ | 40,203 |  | ​ | 41,716 |  | ​ | 43,216 |  | ​ | 44,913 |  | ​ | 592,381
Notes payable, TBT (4,5) | ​ | 17,212 |  | ​ | 71,593 |  | ​ | 74,324 |  | ​ | 77,018 |  | ​ | 80,098 |  | ​ | 1,183,508
Note payable, Scottsdale Transaction (6) | ​ | 31,250 |  | ​ | 18,750 |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ | 86,716 |  | ​ | 2,473,028 |  | ​ | 116,040 |  | ​ | 120,234 |  | ​ | 125,011 |  | ​ | 1,775,889
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Note payable, FSB (2) | ​ | 64,468 |  | ​ | 5,314,735 |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
Note payable, Avail Transaction (7) | ​ | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ | 64,468 |  | ​ | 5,314,735 |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Corporate | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Line of Credit, FSB (8) | ​ | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
Note payable, TBT (9) | ​ | 2,409,511 |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sub-total | ​ | 2,409,511 |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | — |  | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | $ | 2,560,695 | ​ | $ | 7,787,763 | ​ | $ | 116,040 | ​ | $ | 120,234 | ​ | $ | 125,011 | ​ | $ | 1,775,889

​

Refer to (1) through (9) below the previous table for descriptions of the Company’s Debt Obligations.

The Company was in compliance with all of its debt obligation covenants for the three and nine months ended September 30, 2025 and 2024.

The following table depicts the Company’s future scheduled aggregate principal payments and maturities as of September 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Scheduled |  |  | ​ |  |  | ​
​ | ​ | Principal | ​ | Loan | ​ | ​ | ​
Scheduled Principal Payments and Maturities by Year |  | Payments |  | Maturities |  | Total
2025 |  | $ | 171,709 |  | $ | 2,388,986 |  | $ | 2,560,695
2026 |  | ​ | 476,475 |  | ​ | 7,311,288 |  | ​ | 7,787,763
2027 |  | ​ | 116,040 |  | ​ | — |  | ​ | 116,040
2028 |  | ​ | 120,234 |  | ​ | — |  | ​ | 120,234
2029 |  | ​ | 125,011 |  | ​ | — |  | ​ | 125,011
Thereafter |  | ​ | 175,713 |  | ​ | 1,600,176 |  | ​ | 1,775,889
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 1,185,182 | ​ | $ | 11,300,450 | ​ | $ | 12,485,632

​

​

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ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

​

NOTE 14 — STOCK-BASED COMPENSATION

On June 25, 2025, our shareholders approved the adoption of the 2025 Equity Incentive Plan (the “2025 Plan”), effective June 25, 2025. The 2025 Plan provides for the grant of up to 1.1 million shares of Common Stock pursuant to awards granted under the plan.

The 2025 Plan will remain in effect for a term of 10 years from the effective date, unless sooner terminated by the Board of Directors.

As of September 30, 2025, no awards have been granted under the 2025 Plan. In the 2024 comparative period, there was no stock-based compensation activity under any prior plans. As a result, no stock-based compensation expense was recognized for the three and nine months ended September 30, 2025 and 2024.

NOTE 15 — RELATED PARTY TRANSACTIONS

The Company has a corporate policy governing the identification, review, consideration, and approval or ratification of transactions with related persons. Under this policy, all related party transactions are identified and approved prior to consummation of the transaction to ensure they are consistent with the Company’s best interests and the best interests of its shareholders. The Company utilizes a space owned by a related party, for the secure processing and handling of materials before distribution. No consideration is exchanged between the parties, but the Company estimates that, if costs were incurred, they would be immaterial to its condensed consolidated financial statements.

NOTE 16 — CONTINGENCIES

We review the need to accrue for any loss contingency and establish a liability when, in the opinion of management, it is probable that a matter would result in a liability and the amount of loss, if any, can be reasonably estimated. We do not believe that the resolution of any currently pending lawsuits, claims, and proceedings, either individually or in the aggregate, will have a material adverse effect on financial position, results of operations, or liquidity. However, the outcomes of any currently pending lawsuits, claims, and proceedings cannot be predicted, and therefore, there can be no assurance that this will be the case. There are no loss contingencies subject to reporting for the three and nine months ended September 30, 2025 and 2024.

​

​

​

​

​

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context indicates otherwise for one of our specific operating segments, references to “we,” “us,” “our,” the “Company” and “Envela” refer to the consolidated business operations of Envela Corporation, and all of its direct and indirect subsidiaries.

Forward-Looking Statements

This Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (this “Form 10-Q”), including but not limited to: (i) the section of this Form 10-Q entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” (ii) information concerning our business prospects or future financial performance, anticipated revenues, expenses, profitability or other financial items; and (iii) our strategies, plans and objectives, together with other statements that are not historical facts, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally can be identified by the use of forward-looking terminology, such as “may,” “will,” “would,” “expect,” “intend,” “could,” “estimate,” “should,” “anticipate”, “potential,” “continue,” “deploy” or “believe.” We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements other than statements of historical information provided herein are forward-looking based on current expectations regarding important risk factors. Many of these risks and uncertainties are beyond our ability to control, and, in many cases, we cannot predict all of the risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results could differ materially from those expressed in the forward-looking statements, and readers should not regard those statements as a representation by us or any other person that the results expressed in the statements will be achieved. Important risk factors that could cause results or events to differ from current expectations are described under the section entitled “Risk Factors” in the Company’s 2024 Annual Report and any material updates are described under the section of this Form 10-Q entitled “Risk Factors” and elsewhere in this Form 10-Q. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the operations, performance, development and results of our business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date thereon, including without limitation, changes in our business strategy or planned capital expenditures, or store growth plans, or to reflect the occurrence of unanticipated events.

Introduction

This section includes a discussion of our operations for the three and nine months ended September 30, 2025 and 2024. The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of our financial condition and results of operations. The discussion should be read in conjunction with the Company’s 2024 Annual Report, the unaudited condensed consolidated financial statements, and the related Notes thereto included in Part I, Item 1 of this report.

Critical Accounting Policies and Estimates

There were no material changes to our critical accounting policies and estimates as described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Company’s 2024 Annual Report.

Economic Conditions

Impacts of Government Legislation

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We have evaluated the provisions of the new law and its potential effects on our effective tax rate, financial position, results of operations, and cash flows. OBBBA allows businesses to immediately deduct the full cost of qualifying assets in the year they are placed in service, rather than spreading the deduction over several years, and is effective for property acquired and placed in service after January 19, 2025. OBBBA also requires the businesses to recognize the effect of the tax law changes in the period of enactment, such

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as remeasuring estimated U.S. deferred tax assets and liabilities. The Company intends to utilize bonus depreciation, effectively reducing taxable income in the respective period of taxation and the cash deployed to settle such obligations. There was no material impact on the effective tax rate, financial position, results of operations, or cash flows during the three and nine months ended September 30, 2025. In future fiscal periods, the impact of OBBBA is contingent on the continued election of bonus depreciation and the amount of qualifying assets acquired by the Company.

Impacts of High Interest Rates and Inflation

The U.S. and other world economies are currently experiencing high interest rates and elevated levels of inflation, coupled with commodity price risk, mainly associated with variations in the market price of precious metals and diamonds, which have the potential to impact consumer discretionary spending behavior. Furthermore, adverse macroeconomic conditions can also impact demand for resale personal technology assets.

To counterbalance economic cycles that impact market selling prices and/or underlying operating costs, we adjust the inbound purchase price of commodity-based products, luxury hard assets, and resale technology.

We continuously monitor our inventory positions and associated working capital to respond to market conditions and to meet seasonal business cycles and expansionary plans. These economic cycles may from time to time require the business to utilize its line of credit or seek additional capital.

Impacts of Tariffs

The U.S. government has recently adopted new approaches to trade policy, and announced tariffs on certain foreign goods, certain global tariffs and the possibility of significant additional tariff increases or expansions of tariffs. Specifically, under Section 232 of the Trade Expansion Act of 1962 tariffs were applied to the importation of aluminum, copper, steel, and select derivative products, but excluded gold and silver. The impact of such tariffs and retaliatory tariffs by other countries in response to such tariffs continues to evolve and requires regular monitoring and evaluation. The deemed impacts of tariffs on each of our reportable segments are detailed below:

Consumer Segment

The consumer segment does not source inventory from or sell it into international markets, so it is not directly impacted by tariffs. However, global market uncertainty caused by tariffs can increase commodity costs on safe-haven metals such as gold and silver, which may increase working capital requirements. The Company mitigates increased working capital requirements by monitoring its inventory position and turnover, and maintaining disciplined buying practices to maintain margin.

Commercial Segment

The commercial segment periodically purchases limited quantities of personal technology assets for resale and replacement parts from international markets. Tariffs may increase costs for original equipment manufacturers, retailers, and parts distributors and, as a result, may require the Company to pay more for the purchase of personal technology assets for resale and replacement parts, thus increasing the Company’s required working capital requirements. The Company mitigates increased working capital requirements by monitoring its inventory position and turnover, maintaining disciplined buying practices, and using optimal domestic and international sales channels to maintain margins.

There can be no assurance that the measures we have adopted will be successful in mitigating the aforementioned risks.

Our Business

Envela serves as a holding company, conducting its operations via subsidiaries engaged in various businesses and activities within the recommerce and recycling sectors. The products and services we offer are delivered by our subsidiaries under their distinct brands, rather than directly by Envela itself. Significant business activities within our reportable segments are detailed below:

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Consumer Segment

Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, along with secondary market bullion. We incorporate recycled diamonds and gemstones into our new designs meaning they were previously set and unset, producing a low-carbon and ethical origin product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items have an enduring quality, enabling them to maintain their beauty and value as they are passed from one owner to another.

Commercial Segment

Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the ITAD industry. The separated commodities, including metals, plastics, and glass, are sold to downstream processors where they are further processed and reintroduced into new products. ITAD services maximize the residual value of retired IT assets by adhering to a reuse-first philosophy and ensuring equipment is refurbished and re-marketed after data sanitization. The Company offers services that manage the entire lifecycle of technology products to ensure data security, regulatory compliance, and environmental sustainability. We are proud of our role in supporting a circular economy through the responsible reuse and recycling of electronic devices.

Segment Activities

The Company believes it is well positioned to take advantage of its overall capital structure.

Consumer Segment

Our strategy is to expand the number of locations we operate by opening new locations throughout the U.S. Likewise, we continue to evaluate opportunities related to complementary product and service offerings for our stores and online business.

Commercial Segment

Our strategy is to expand both organically and through acquisitions. The Company has taken considerable steps to bolster its management team and operating systems to position itself for growth. Our production facilities are capable of managing the expansion of existing relationships and consolidation of acquisition targets within relative geographic proximity to our existing facilities.

​

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Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table depicts our disaggregated condensed consolidated statements of income for the three months ended September 30, 2025 and 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, |
​ | ​ | 2025 | ​ | 2024 |
​ |  | Consumer |  | Commercial |  | Consolidated |  | % of Sales (1) |  | Consumer |  | Commercial |  | Consolidated |  | % of Sales (1) |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sales | ​ | $ | 45,068,036 | ​ | $ | 12,321,375 | ​ | $ | 57,389,411 |  | 100.0 | % | $ | 33,756,600 | ​ | $ | 13,142,959 | ​ | $ | 46,899,559 |  | 100.0 | %
Cost of goods sold | ​ |  | 39,866,966 | ​ | $ | 4,454,515 | ​ |  | 44,321,481 |  | 77.2 | % |  | 29,840,285 | ​ |  | 5,595,035 | ​ |  | 35,435,320 |  | 75.6 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross margin | ​ |  | 5,201,070 | ​ |  | 7,866,860 | ​ |  | 13,067,930 |  | 22.8 | % |  | 3,916,315 | ​ |  | 7,547,924 | ​ |  | 11,464,239 |  | 24.4 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Expenses: | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Selling, general and administrative | ​ |  | 3,827,882 | ​ |  | 4,565,996 | ​ |  | 8,393,878 |  | 14.6 | % |  | 3,925,981 | ​ |  | 5,103,007 | ​ |  | 9,028,988 |  | 19.3 | %
Depreciation and amortization | ​ |  | 203,349 | ​ |  | 269,175 | ​ |  | 472,524 |  | 0.8 | % |  | 150,657 | ​ |  | 264,122 | ​ |  | 414,779 |  | 0.9 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total operating expenses | ​ |  | 4,031,231 | ​ |  | 4,835,171 | ​ |  | 8,866,402 |  | 15.4 | % |  | 4,076,638 | ​ |  | 5,367,129 | ​ |  | 9,443,767 |  | 20.1 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (loss) | ​ |  | 1,169,839 | ​ |  | 3,031,689 | ​ |  | 4,201,528 |  | 7.3 | % |  | (160,323) | ​ |  | 2,180,795 | ​ |  | 2,020,472 |  | 4.3 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other income (expense): | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Other income | ​ |  | 104,863 | ​ |  | 128,779 | ​ |  | 233,642 |  | 0.4 | % |  | 62,502 | ​ |  | 277,849 | ​ |  | 340,351 |  | 0.7 | %
Interest expense | ​ |  | (53,429) | ​ |  | (52,328) | ​ |  | (105,757) |  | (0.2) | % |  | (51,486) | ​ |  | (54,653) | ​ |  | (106,139) |  | (0.2) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss) before income taxes | ​ |  | 1,221,273 | ​ |  | 3,108,140 | ​ |  | 4,329,413 |  | 7.5 | % |  | (149,307) | ​ |  | 2,403,991 | ​ |  | 2,254,684 |  | 4.8 | %
Income tax (expense) benefit | ​ |  | (274,139) | ​ |  | (698,354) | ​ |  | (972,493) |  | (1.7) | % |  | 122,464 | ​ | ​ | (692,109) | ​ |  | (569,645) |  | (1.2) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (loss) | ​ | $ | 947,134 | ​ | $ | 2,409,786 | ​ | $ | 3,356,920 |  | 5.8 | % | $ | (26,843) | ​ | $ | 1,711,882 | ​ | $ | 1,685,039 |  | 3.6 | %

(1) | The “% of Sales” figures present the proportion of each line item to the total consolidated sales for the respective period, which management believes is relevant to an assessment and understanding of our financial condition and results of operations. Due to rounding, percentages presented may not add up precisely to the totals provided.

The individual segments reported the following for the three months ended September 30, 2025 and 2024:

Sales

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 57,389,411 | ​ | $ | 46,899,559 | ​ | $ | 10,489,852 |  | 22.4 | %
% of consolidated sales | ​ |  | 100.0 | % |  | 100.0 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 45,068,036 | ​ | $ | 33,756,600 | ​ | $ | 11,311,436 |  | 33.5 | %
% of consumer sales | ​ |  | 100.0 | % |  | 100.0 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 12,321,375 | ​ | $ | 13,142,959 | ​ | $ | (821,584) |  | (6.3) | %
% of commercial sales | ​ |  | 100.0 | % |  | 100.0 | % |  |  |  |  | ​

​

Consolidated

Sales increased by $10,489,852, or 22.4%, during the three months ended September 30, 2025, to $57,389,411, as compared to $46,899,559 during the same period in Fiscal 2024.

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Consumer Segment

Sales in the consumer segment increased by $11,311,436, or 33.5%, during the three months ended September 30, 2025, to $45,068,036, as compared to $33,756,600 during the same period in Fiscal 2024. The change was primarily attributed to higher transaction volumes, supported by record precious metals pricing, but was partially offset by moderate softness in certain customer-facing verticals. Overall performance benefited from favorable supply flows and strong customer engagement, when compared to the same period in Fiscal 2024.

​

Commercial Segment

Sales in the commercial segment decreased by $821,584, or 6.3%, during the three months ended September 30, 2025, to $12,321,375, as compared to $13,142,959 during the same period in Fiscal 2024. The change was primarily attributed to less revenue from: ITAD revenue share settlements, electronic scrap grades and associated recoveries, and personal technology assets sourced from our trade-in programs, which were partially offset by increased service revenue from product returns and secured processing of end-of-life assets. Our overall service-related verticals continue to grow and become a greater component of our revenue mix.

Cost of Goods Sold

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 44,321,481 | ​ | $ | 35,435,320 | ​ | $ | 8,886,161 |  | 25.1 | %
% of consolidated sales | ​ |  | 77.2 | % |  | 75.6 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 39,866,966 | ​ | $ | 29,840,285 | ​ | $ | 10,026,681 |  | 33.6 | %
% of consumer sales | ​ |  | 88.5 | % |  | 88.4 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 4,454,515 | ​ | $ | 5,595,035 | ​ | $ | (1,140,520) |  | (20.4) | %
% of commercial sales | ​ |  | 36.2 | % |  | 42.6 | % |  |  |  |  | ​

​

Consolidated

Cost of goods sold increased by $8,886,161, or 25.1%, during the three months ended September 30, 2025, to $44,321,481, as compared to $35,435,320 during the same period in Fiscal 2024.

Consumer Segment

Cost of goods sold in the consumer segment increased by $10,026,681, or 33.6%, during the three months ended September 30, 2025, to $39,866,966, as compared to $29,840,285 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned higher sales volumes and rising gold prices compared to the same period in Fiscal 2024.

Cost of goods sold as a percentage of sales was 88.5% during the three months ended September 30, 2025, as compared to 88.4% during the three months ended September 30, 2024. The change was immaterial, indicating a similar impact of product mix compared to the same period in Fiscal 2024.

Commercial Segment

Cost of goods sold in the commercial segment decreased by $1,140,520, or 20.4%, during the three months ended September 30, 2025, to $4,454,515, as compared to $5,595,035 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned impact from less ITAD revenue share settlements and incrementally from electronic scrap grades and associated recoveries along with personal technology assets sourced from our trade-in programs.

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Cost of goods sold as a percentage of sales was 36.2% during the three months ended September 30, 2025, as compared to 42.6% during the three months ended September 30, 2024. The change was primarily attributed to favorable margins from our ITAD revenue share settlements, albeit on lower overall sales, and was partially offset by less favorable margins from electronic scrap grades and associated recoveries. Our margins on the sale of personal technology assets were stable compared to the same period in Fiscal 2024.

Gross Margin

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 13,067,930 | ​ | $ | 11,464,239 | ​ | $ | 1,603,691 |  | 14.0 | %
% of consolidated sales | ​ |  | 22.8 | % |  | 24.4 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 5,201,070 | ​ | $ | 3,916,315 | ​ | $ | 1,284,755 |  | 32.8 | %
% of consumer sales | ​ |  | 11.5 | % |  | 11.6 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 7,866,860 | ​ | $ | 7,547,924 | ​ | $ | 318,936 |  | 4.2 | %
% of commercial sales | ​ |  | 63.8 | % |  | 57.4 | % |  |  |  |  | ​

​

Consolidated

Gross margin increased by $1,603,691, or 14.0%, during the three months ended September 30, 2025, to $13,067,930, as compared to $11,464,239 during the same period in Fiscal 2024.

Consumer Segment

Gross margin in the consumer segment increased by $1,284,755, or 32.8%, during the three months ended September 30, 2025, to $5,201,070, as compared to $3,916,315 during the same period in Fiscal 2024. The net impact of the aforementioned increase in sales of $11,311,436 and increase in cost of goods sold of $10,026,681 resulted in the $1,284,755 increase in gross margin.

Commercial Segment

Gross margin in the commercial segment increased by $318,936, or 4.2%, during the three months ended September 30, 2025, to $7,866,860, as compared to $7,547,924 during the same period in Fiscal 2024. The net impact of the aforementioned decrease in sales of $821,584 and decrease in cost of goods sold $1,140,520 resulted in the $318,936 increase in gross margin.

Selling, General and Administrative

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 8,393,878 | ​ | $ | 9,028,988 | ​ | $ | (635,110) |  | (7.0) | %
% of consolidated sales | ​ |  | 14.6 | % |  | 19.3 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 3,827,882 | ​ | $ | 3,925,981 | ​ | $ | (98,099) |  | (2.5) | %
% of consumer sales | ​ |  | 8.5 | % |  | 11.6 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 4,565,996 | ​ | $ | 5,103,007 | ​ | $ | (537,011) |  | (10.5) | %
% of commercial sales | ​ |  | 37.1 | % |  | 38.8 | % |  |  |  |  | ​

​

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Consolidated

Selling, general and administrative expense decreased by $635,110, or 7.0%, during the three months ended September 30, 2025, to $8,393,878, as compared to $9,028,988 during the same period in Fiscal 2024.

Consumer Segment

Selling, general and administrative expense in the consumer segment decreased by $98,099, or 2.5%, during the three months ended September 30, 2025, to $3,827,882, as compared to $3,925,981 during the same period in Fiscal 2024. The change was primarily attributed to a reduction in costs associated with store onboarding and initial marketing that occurred in the same period in Fiscal 2024 along with select reductions in production human-capital costs, partially offset by full cost structures related to our new stores.

Commercial Segment

Selling, general and administrative expense in the commercial segment decreased by $537,011, or 10.5%, during the three months ended September 30, 2025, to $4,565,996, as compared to $5,103,007 during the same period in Fiscal 2024. The change was primarily attributed to a reduction in variable-cost production expenses, of which human-capital costs were a significant component, along with a reduction in lease costs from the closure of our Arizona ITAD facility, which occurred in the latter part of the second quarter of Fiscal 2025. We began diverting inbound asset flow prior to closure, and we fully absorbed the asset flow from the former Arizona ITAD facility into our Texas ITAD facility in the third quarter of 2025.

Depreciation and Amortization

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Change |
​ | ​ | 2025 |  | 2024 | ​ | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Consolidated | ​ | $ | 472,524 | ​ | $ | 414,779 | ​ | $ | 57,745 | ​ | 13.9 | %
% of consolidated sales | ​ |  | 0.8 | % |  | 0.9 | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 203,349 | ​ | $ | 150,657 | ​ | $ | 52,692 |  | 35.0 | %
% of consumer sales | ​ |  | 0.5 | % |  | 0.4 | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 269,175 | ​ | $ | 264,122 | ​ | $ | 5,053 |  | 1.9 | %
% of commercial sales | ​ |  | 2.2 | % |  | 2.0 | % |  |  |  |  | ​

​

Consolidated

Depreciation and amortization expense increased by $57,745, or 13.9%, during the three months ended September 30, 2025, to $472,524, as compared to $414,779 during the same period in Fiscal 2024.

Consumer Segment

Depreciation and amortization expense in the consumer segment increased by $52,692, or 35.0%, during the three months ended September 30, 2025, to $203,349, as compared to $150,657 during the same period in Fiscal 2024. The change was primarily attributed to the depreciation of assets placed into service related to our new retail stores.

Commercial Segment

Depreciation and amortization expense in the commercial segment increased by $5,053, or 1.9%, during the three months ended September 30, 2025, to $269,175, as compared to $264,122 during the same period in Fiscal 2024. The change was primarily attributed to the allocation of corporate depreciation and amortization expense.

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Other Income (Expense)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Change |
​ | ​ | 2025 |  | 2024 | ​ | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Consolidated | ​ | $ | 233,642 | ​ | $ | 340,351 | ​ | $ | (106,709) |  | (31.4) | %
% of consolidated sales | ​ |  | 0.4 | % |  | 0.7 | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 104,863 | ​ | $ | 62,502 | ​ | $ | 42,361 |  | 67.8 | %
% of consumer sales | ​ |  | 0.2 | % |  | 0.2 | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 128,779 | ​ | $ | 277,849 | ​ | $ | (149,070) |  | (53.7) | %
% of commercial sales | ​ |  | 1.0 | % |  | 2.1 | % |  | ​ |  |  | ​

​

Consolidated

Other income decreased by $106,709, or 31.4%, during the three months ended September 30, 2025, to $233,642, as compared to $340,351 during the same period in Fiscal 2024.

Consumer Segment

Other income in the consumer segment increased by $42,361, or 67.8%, during the three months ended September 30, 2025, to $104,863, as compared to $62,502 during the same period in Fiscal 2024. The change was primarily attributable to the proportionate share of earned dividend and interest income. While our earned interest rate has reduced, our overall cash balances are higher, resulting in incrementally higher earned income on excess cash balances. Excess cash balances are now aggregated at the corporate level to optimize earnings as opposed to being held at the segment level. This resulted in higher segment earned income on excess cash balances. Further, the same period in Fiscal 2024 included the proportionate share of income from a settlement for repairs related to our corporate headquarters. The impact of dividend and interest income is referenced below.

Dividend income comprised $42,186 and $0 of other income during the three months ended September 30, 2025 and 2024, respectively. Interest income comprised $63,301 and $2 of other income during the three months ended September 30, 2025 and 2024, respectively.

Commercial Segment

Other income in the commercial segment decreased by $149,070, or 53.7%, during the three months ended September 30, 2025, to $128,779, as compared to $277,849 during the same period in Fiscal 2024. The change was primarily attributable to the proportionate share of earned dividend and interest income. While our earned interest rate has reduced, our overall cash balances are higher, resulting in incrementally higher earned income on excess cash balances. Excess cash balances are now aggregated at the corporate level to optimize earnings as opposed to being held at the segment level. This resulted in lower segment earned income on excess cash balances. Further, the same period in Fiscal 2024 included the proportionate share of income from a settlement for repairs related to our corporate headquarters. The impact of dividend and interest income is referenced below.

Dividend income comprised $43,029 and $0 other income during the three months ended September 30, 2025, and 2024, respectively. Interest income comprised $65,646 and $203,251 of other income during the three months ended September 30, 2025 and 2024, respectively.

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Interest Expense

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Change |
​ | ​ | 2025 |  | 2024 | ​ | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Consolidated | ​ | $ | (105,757) | ​ | $ | (106,139) | ​ | $ | 382 |  | (0.4) | %
% of consolidated sales | ​ |  | (0.2) | % |  | (0.2) | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | (53,429) | ​ | $ | (51,486) | ​ | $ | (1,943) |  | 3.8 | %
% of consumer sales | ​ |  | (0.1) | % |  | (0.2) | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | (52,328) | ​ | $ | (54,653) | ​ | $ | 2,325 |  | (4.3) | %
% of commercial sales | ​ |  | (0.4) | % |  | (0.4) | % |  |  |  |  | ​

​

Consolidated

Interest expense decreased by $382, or 0.4%, during the three months ended September 30, 2025, to $105,757, as compared to $106,139 during the same period in Fiscal 2024.

Consumer Segment

Interest expense in the consumer segment increased by $1,943, or 3.8%, during the three months ended September 30, 2025, to $53,429, as compared to $51,486 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point.

Commercial Segment

Interest expense in the commercial segment decreased by $2,325, or 4.3%, during the three months ended September 30, 2025, to $52,328, as compared to $54,653 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point.

Income Tax (Expense) Benefit

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Change |
​ | ​ | 2025 |  | 2024 | ​ | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Consolidated | ​ | $ | (972,493) | ​ | $ | (569,645) | ​ | $ | (402,848) |  | 70.7 | %
% of consolidated sales | ​ |  | (1.7) | % |  | (1.2) | % | ​ | ​ | ​ |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | (274,139) | ​ | $ | 122,464 | ​ | $ | (396,603) |  | NM | ​
% of consumer sales | ​ |  | (0.6) | % |  | 0.4 | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | (698,354) | ​ | $ | (692,109) | ​ | $ | (6,245) |  | 0.9 | %
% of commercial sales | ​ |  | (5.7) | % |  | (5.3) | % |  |  |  |  | ​

​

NM – Not Meaningful

​

Consolidated

Income tax expense increased by $402,848, or 70.7%, during the three months ended September 30, 2025, to $972,493, as compared to $569,645 during the same period in Fiscal 2024. Currently, the Company has a deferred tax liability reflecting a future obligation to pay taxes. The Company has a federal tax rate of approximately 21.0%, in addition to other state and local taxes, on net income. The effective income tax rate was 22.5% and 25.3% for the three months ended September 30, 2025 and 2024, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the result of state taxes and non-deductible expenses, as was the Company’s case for the three months ended September 30, 2025 and 2024.

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Net Income (Loss)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Change |
​ | ​ | 2025 |  | 2024 | ​ | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Consolidated | ​ | $ | 3,356,920 | ​ | $ | 1,685,039 | ​ | $ | 1,671,881 |  | 99.2 | %
% of consolidated sales | ​ |  | 5.8 | % |  | 3.6 | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 947,134 | ​ | $ | (26,843) | ​ | $ | 973,977 |  | NM | ​
% of consumer sales | ​ |  | 2.1 | % |  | (0.1) | % |  | ​ |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 2,409,786 | ​ | $ | 1,711,882 | ​ | $ | 697,904 |  | 40.8 | %
% of commercial sales | ​ |  | 19.6 | % |  | 13.0 | % |  |  |  |  | ​

​

NM – Not Meaningful

Consolidated

Net income increased by $1,671,881, or 99.2%, during the three months ended September 30, 2025, to $3,356,920, as compared to $1,685,039 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended September 30, 2025 and 2024 for further details.

Consumer Segment

Net income (loss) increased in the consumer segment by $973,977, during the three months ended September 30, 2025, to net income of $947,134, as compared to net loss of $26,843 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended September 30, 2025 and 2024 for further details.

Commercial Segment

Net income increased in the commercial segment by $697,904, or 40.8%, during the three months ended September 30, 2025, to $2,409,786, as compared to $1,711,882 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended September 30, 2025 and 2024 for further details.

Earnings Per Share

The following table depicts the Company’s earnings per share:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30, |  | Change |
​ | ​ | 2025 |  | 2024 | ​ | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |
Consolidated | ​ | $ | 0.13 | ​ | $ | 0.06 | ​ | $ | 0.07 |  | 116.7 | %

​

Consolidated

Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.07, or 116.7%, during the three months ended September 30, 2025, to $0.13, as compared to $0.06 during the same period in Fiscal 2024.

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Comparison of the nine months ended September 30, 2025 and 2024

The following table depicts our disaggregated condensed consolidated statements of income for the nine months ended September 30, 2025 and 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, |
​ |  | 2025 |  | 2024 | ​
​ |  | Consumer |  | Commercial |  | Consolidated |  | % of Sales (1) |  | Consumer |  | Commercial |  | Consolidated |  | % of Sales (1) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Sales | ​ | $ | 125,012,398 | ​ | $ | 35,509,675 | ​ | $ | 160,522,073 |  | 100.0 | % | $ | 93,972,645 | ​ | $ | 38,081,696 | ​ | $ | 132,054,341 |  | 100.0 | %
Cost of goods sold | ​ |  | 110,942,439 | ​ |  | 12,155,757 | ​ |  | 123,098,196 |  | 76.7 | % |  | 82,485,812 | ​ |  | 16,394,149 | ​ |  | 98,879,961 |  | 74.9 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross margin | ​ |  | 14,069,959 | ​ |  | 23,353,918 | ​ |  | 37,423,877 |  | 23.3 | % |  | 11,486,833 | ​ |  | 21,687,547 | ​ |  | 33,174,380 |  | 25.1 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Expenses: | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Selling, general and administrative | ​ |  | 11,451,215 | ​ |  | 14,018,992 | ​ |  | 25,470,207 |  | 15.9 | % |  | 11,186,939 | ​ |  | 14,597,073 | ​ |  | 25,784,012 |  | 19.5 | %
Depreciation and amortization | ​ |  | 579,585 | ​ |  | 798,691 | ​ |  | 1,378,276 |  | 0.9 | % |  | 356,851 | ​ |  | 763,760 | ​ |  | 1,120,611 |  | 0.8 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total operating expenses | ​ |  | 12,030,800 | ​ |  | 14,817,683 | ​ |  | 26,848,483 |  | 16.8 | % |  | 11,543,790 | ​ |  | 15,360,833 | ​ |  | 26,904,623 |  | 20.4 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (loss) | ​ |  | 2,039,159 | ​ |  | 8,536,235 | ​ |  | 10,575,394 |  | 6.5 | % |  | (56,957) | ​ |  | 6,326,714 | ​ |  | 6,269,757 |  | 4.7 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other income (expense): | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​ |  |  | ​ |  |  | ​ |  |  |  |  | ​
Other income | ​ |  | 261,870 | ​ |  | 571,628 | ​ |  | 833,498 |  | 0.5 | % |  | 78,510 | ​ |  | 725,786 | ​ |  | 804,296 |  | 0.6 | %
Interest expense | ​ |  | (161,469) | ​ |  | (156,837) | ​ |  | (318,306) |  | (0.2) | % |  | (171,584) | ​ |  | (164,550) | ​ |  | (336,134) |  | (0.3) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss) before income taxes | ​ |  | 2,139,560 | ​ |  | 8,951,026 | ​ |  | 11,090,586 |  | 6.9 | % |  | (150,031) | ​ |  | 6,887,950 | ​ |  | 6,737,919 |  | 5.1 | %
Income tax (expense) benefit | ​ |  | (479,961) | ​ |  | (2,007,959) | ​ |  | (2,487,920) |  | (1.5) | % |  | 33,706 | ​ |  | (1,614,868) | ​ |  | (1,581,162) |  | (1.2) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (loss) | ​ | $ | 1,659,599 | ​ | $ | 6,943,067 | ​ | $ | 8,602,666 |  | 5.4 | % | $ | (116,325) | ​ | $ | 5,273,082 | ​ | $ | 5,156,757 |  | 3.9 | %

(1) | The “% of Sales” figures present the proportion of each line item to the total consolidated sales for the respective period, which management believes is relevant to an assessment and understanding of our financial condition and results of operations. Due to rounding, percentages presented may not add up precisely to the totals provided.

The individual segments reported the following for the nine months ended September 30, 2025 and 2024:

Sales

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 160,522,073 | ​ | $ | 132,054,341 | ​ | $ | 28,467,732 |  | 21.6 | %
% of consolidated sales | ​ |  | 100.0 | % |  | 100.0 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 125,012,398 | ​ | $ | 93,972,645 | ​ | $ | 31,039,753 |  | 33.0 | %
% of consumer sales | ​ |  | 100.0 | % |  | 100.0 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 35,509,675 | ​ | $ | 38,081,696 | ​ | $ | (2,572,021) |  | (6.8) | %
% of commercial sales | ​ |  | 100.0 | % |  | 100.0 | % |  |  |  |  | ​

​

Consolidated

Sales increased by $28,467,732 or 21.6%, during the nine months ended September 30, 2025, to $160,522,073, as compared to $132,054,341 during the same period in Fiscal 2024.

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Consumer Segment

Sales in the consumer segment increased by $31,039,753, or 33.0%, during the nine months ended September 30, 2025, to $125,012,398, as compared to $93,972,645 during the same period in Fiscal 2024. The change was primarily attributed to the stronger volumes and pricing on precious metals transactions that have been consistent throughout Fiscal 2025 as well as stronger contributions from our historical and new retail store footprint.

Commercial Segment

Sales in the commercial segment decreased by $2,572,021, or 6.8%, during the nine months ended September 30, 2025, to $35,509,675, as compared to $38,081,696 during the same period in Fiscal 2024. The change was primarily attributed to less revenue from: ITAD revenue share settlements, electronic scrap grades and associated recoveries, and personal technology assets sourced from our trade-in programs, which were partially offset by increased service revenue from our product returns and secured processing of end-of-life assets. Our overall service-related verticals continue to grow and become a greater component of our revenue mix. The aforementioned impact on sales has been relatively consistent throughout the year, representing a continued shift to a greater proportional share of service revenue in our sales mix.

Cost of Goods Sold

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended September 30, |  | Change | ​
​ |  | 2025 |  | 2024 |  | Amount |  | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 123,098,196 | ​ | $ | 98,879,961 | ​ | $ | 24,218,235 |  | 24.5 | %
% of consolidated sales | ​ |  | 76.7 | % |  | 74.9 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 110,942,439 | ​ | $ | 82,485,812 | ​ | $ | 28,456,627 |  | 34.5 | %
% of consumer sales | ​ |  | 88.7 | % |  | 87.8 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 12,155,757 | ​ | $ | 16,394,149 | ​ | $ | (4,238,392) |  | (25.9) | %
% of commercial sales | ​ |  | 34.2 | % |  | 43.0 | % |  |  |  |  | ​

​

Consolidated

Cost of goods sold increased by $24,218,235, or 24.5%, during the nine months ended September 30, 2025, to $123,098,196, as compared to $98,879,961 during the same period in Fiscal 2024.

Consumer Segment

Cost of goods sold in the consumer segment increased by $28,456,627, or 34.5%, during the nine months ended September 30, 2025, to $110,942,439, as compared to $82,485,812 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned higher sales volumes and rising gold prices compared to the same period in Fiscal 2024.

Cost of goods sold as a percentage of sales was 88.7% during the nine months ended September 30, 2025, as compared to 87.8% during the nine months ended September 30, 2024. The change was primarily attributed to a greater mix of lower margin wholesale precious metals transactions in our overall cost of goods sold and incrementally from product mix at our retail stores.

Commercial Segment

Cost of goods sold in the commercial segment decreased by $4,238,392, or 25.9%, during the nine months ended September 30, 2025, to $12,155,757, as compared to $16,394,149 during the same period in Fiscal 2024. The change was primarily attributed to the impact from less ITAD revenue share settlements and incrementally from the recognition of costs associated with the sale of trade-in related personal technology assets. While sales decreased on our electronic scrap grades and associated recoveries, it did not correspondingly decrease the recognition of costs as a result of the mix of assets being sold.

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Cost of goods sold as a percentage of sales was 34.2% during the nine months ended September 30, 2025, as compared to 43.0% during the nine months ended September 30, 2024. The change was primarily attributed to favorable margins on ITAD revenue share settlements and trade-in product mix, which was partially offset by lower margins associated with sales associated with our sales of electronic waste and associated recoveries.

Gross Margin

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 37,423,877 | ​ | $ | 33,174,380 | ​ | $ | 4,249,497 |  | 12.8 | %
% of consolidated sales | ​ |  | 23.3 | % |  | 25.1 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 14,069,959 | ​ | $ | 11,486,833 | ​ | $ | 2,583,126 |  | 22.5 | %
% of consumer sales | ​ |  | 11.3 | % |  | 12.2 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 23,353,918 | ​ | $ | 21,687,547 | ​ | $ | 1,666,371 |  | 7.7 | %
% of commercial sales | ​ |  | 65.8 | % |  | 57.0 | % |  |  |  |  | ​

​

Consolidated

Gross margin increased by $4,249,497, or 12.8%, during the nine months ended September 30, 2025, to $37,423,877, as compared to $33,174,380 during the same period in Fiscal 2024.

Consumer Segment

Gross margin in the consumer segment increased by $2,583,126, or 22.5%, during the nine months ended September 30, 2025, to $14,069,959, as compared to $11,486,833 during the same period in Fiscal 2024. The net impact of the aforementioned increase in sales of $31,039,753 and increase in cost of goods sold of $28,456,627 resulted in the $2,583,126 increase in gross margin.

Commercial Segment

Gross margin in the commercial segment increased by $1,666,371, or 7.7%, during the nine months ended September 30, 2025, to $23,353,918, as compared to $21,687,547 during the same period in Fiscal 2024. The net impact of the aforementioned decrease in sales of $2,572,021 and decrease in cost of goods sold of $4,238,392 resulted in the $1,666,371 increase in gross margin.

Selling, General and Administrative

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 25,470,207 | ​ | $ | 25,784,012 | ​ | $ | (313,805) |  | (1.2) | %
% of consolidated sales | ​ |  | 15.9 | % |  | 19.5 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 11,451,215 | ​ | $ | 11,186,939 | ​ | $ | 264,276 |  | 2.4 | %
% of consumer sales | ​ |  | 9.2 | % |  | 11.9 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 14,018,992 | ​ | $ | 14,597,073 | ​ | $ | (578,081) |  | (4.0) | %
% of commercial sales | ​ |  | 39.5 | % |  | 38.3 | % |  |  |  |  | ​

​

Consolidated

Selling, general and administrative expense decreased by $313,805, or 1.2%, during the nine months ended September 30, 2025, to $25,470,207, as compared to $25,784,012 during the same period in Fiscal 2024.

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Consumer Segment

Selling, general and administrative expense in the consumer segment increased by $264,276, or 2.4%, during the nine months ended September 30, 2025, to $11,451,215, as compared to $11,186,939 during the same period in Fiscal 2024. The change was primarily attributed to the full cost structures related to our new stores and partially offset by a reduction in costs associated with store onboarding and initial marketing that occurred in the same period in Fiscal 2024 along with select reductions in production human-capital costs.

Commercial Segment

Selling, general and administrative expense in the commercial segment decreased by $578,081, or 4.0%, during the nine months ended September 30, 2025, to $14,018,992, as compared to $14,597,073 during the same period in Fiscal 2024. The change was primarily attributed to a reduction in variable-cost production expenses of which human-capital costs were a significant component along with a reduction in lease costs from the closure of our Arizona ITAD facility, which occurred in the later part of the second quarter of Fiscal 2025. We began diverting inbound asset flow prior to closure and we fully absorbed the asset flow from the former Arizona ITAD facility into our Texas ITAD facility in the third quarter of 2025.

Depreciation and Amortization

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 1,378,276 | ​ | $ | 1,120,611 | ​ | $ | 257,665 |  | 23.0 | %
% of consolidated sales | ​ |  | 0.9 | % |  | 0.8 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 579,585 | ​ | $ | 356,851 | ​ | $ | 222,734 |  | 62.4 | %
% of consumer sales | ​ |  | 0.5 | % |  | 0.4 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 798,691 | ​ | $ | 763,760 | ​ | $ | 34,931 |  | 4.6 | %
% of commercial sales | ​ |  | 2.2 | % |  | 2.0 | % |  |  |  |  | ​

​

Consolidated

Depreciation and amortization expense increased by $257,665, or 23.0%, during the nine months ended September 30, 2025, to $1,378,276, as compared to $1,120,611 during the same period in Fiscal 2024.

Consumer Segment

Depreciation and amortization expense in the consumer segment increased by $222,734, or 62.4%, during the nine months ended September 30, 2025, to $579,585, as compared to $356,851 during the same period in Fiscal 2024. The change was primarily attributed to the depreciation of assets placed into service related to our new retail stores.

Commercial Segment

Depreciation and amortization expense in the commercial segment increased by $34,931, or 4.6%, during the nine months ended September 30, 2025, to $798,691, as compared to $763,760 during the same period in Fiscal 2024. There was no material impact from assets capitalized or reaching maturity in each comparative period, and as such, no discussion point.

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Other Income (Expense)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | 833,498 | ​ | $ | 804,296 | ​ | $ | 29,202 | ​ | 3.6 | %
% of consolidated sales | ​ |  | 0.5 | % |  | 0.6 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 261,870 | ​ | $ | 78,510 | ​ | $ | 183,360 |  | 233.5 | %
% of consumer sales | ​ |  | 0.2 | % |  | 0.1 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 571,628 | ​ | $ | 725,786 | ​ | $ | (154,158) |  | (21.2) | %
% of commercial sales | ​ |  | 1.6 | % |  | 1.9 | % |  |  |  |  | ​

​

Consolidated

Other income increased by $29,202, or 3.6%, during the nine months ended September 30, 2025, to $833,498, as compared to $804,296 during the same period in Fiscal 2024.

Consumer Segment

Other income in the consumer segment increased by $183,360, or 233.5%, during the nine months ended September 30, 2025, to $261,870, as compared to $78,510 during the same period in Fiscal 2024. The change was primarily attributable to the proportionate share of earned dividend and interest income. While our earned interest rate has reduced, our overall cash balances are higher, resulting in incrementally higher earned income on excess cash balances. Excess cash balances are now aggregated at the corporate level to optimize earnings as opposed to being held at the segment level. This resulted in higher segment earned income on excess cash balances. The segment also received an employee retention credit in Fiscal 2025, and Fiscal 2024 included the proportionate share of income from a settlement for repairs related to our corporate headquarters. The impact of dividend and interest income is referenced below.

Dividend income comprised $51,069 and $0 of other income during the nine months ended September 30, 2025 and 2024, respectively. Interest income comprised $114,339 and $10 of other income during the nine months ended September 30, 2025 and 2024, respectively.

Commercial Segment

Other income in the commercial segment decreased by $154,158, or 21.2%, during the nine months ended September 30, 2025, to $571,628, as compared to $725,786 during the same period in Fiscal 2024. The change was primarily attributable to the proportionate share of earned dividend and interest income. While our earned interest rate has reduced, our overall cash balances are higher, resulting in incrementally higher earned income on excess cash balances. Excess cash balances are now aggregated at the corporate level to optimize earnings as opposed to being held at the segment level. This resulted in lower segment earned income on excess cash balances. Further, the same period in Fiscal 2024 included the proportionate share of income from a settlement for repairs related to our corporate headquarters. The impact of dividend and interest income is referenced below.

Dividend income comprised $172,596 and $0 of other income during the nine months ended September 30, 2025 and 2024, respectively. Interest income comprised $340,404 and $599,774 of other income during the nine months ended September 30, 2025 and 2024, respectively.

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Interest Expense

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ |  | 2025 |  | 2024 |  | Amount |  | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated | ​ | $ | (318,306) | ​ | $ | (336,134) | ​ | $ | 17,828 | ​ | (5.3) | %
% of consolidated sales | ​ |  | (0.2) | % |  | (0.3) | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | (161,469) | ​ | $ | (171,584) | ​ | $ | 10,115 |  | (5.9) | %
% of consumer sales | ​ |  | (0.1) | % |  | (0.2) | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | (156,837) | ​ | $ | (164,550) | ​ | $ | 7,713 |  | (4.7) | %
% of commercial sales | ​ |  | (0.4) | % |  | (0.4) | % |  |  |  |  | ​

​

Consolidated

Interest expense decreased by $17,828, or 5.3%, during the nine months ended September 30, 2025, to $318,306, as compared to $336,134 during the same period in Fiscal 2024.

Consumer Segment

Interest expense in the consumer segment decreased by $10,115, or 5.9%, during the nine months ended September 30, 2025, to $161,469, as compared to $171,584 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point.

Commercial Segment

Interest expense in the commercial segment decreased by $7,713, or 4.7%, during the nine months ended September 30, 2025, to $156,837, as compared to $164,550 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point.

Income Tax (Expense) Benefit

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ | ​ | 2025 | ​ | 2024 | ​ | Amount | ​ | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated |  | $ | (2,487,920) |  | $ | (1,581,162) |  | $ | (906,758) |  | 57.3 | %
% of consolidated sales | ​ |  | (1.5) | % |  | (1.2) | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | (479,961) | ​ | $ | 33,706 | ​ | $ | (513,667) |  | NM | ​
% of consumer sales | ​ |  | (0.4) | % |  | 0.0 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | (2,007,959) | ​ | $ | (1,614,868) | ​ | $ | (393,091) |  | 24.3 | %
% of commercial sales | ​ |  | (5.7) | % |  | (4.2) | % |  |  |  |  | ​

​

NM – Not Meaningful

​

Consolidated

Income tax expense increased by $906,758, or 57.3%, during the nine months ended September 30, 2025, to $2,487,920, as compared to $1,581,162 during the same period in Fiscal 2024. Currently, the Company has a deferred tax liability reflecting a future obligation to pay taxes. The Company has a federal tax rate of approximately 21.0%, in addition to other state and local taxes, on net income. The effective income tax rate was 22.4% and 23.5% for the nine months ended September 30, 2025 and 2024, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the result of state taxes and non-deductible expenses, as was the Company’s case for the nine months ended September 30, 2025 and 2024.

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Net Income (Loss)

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ | ​ | 2025 | ​ | 2024 | ​ | Amount | ​ | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated |  | $ | 8,602,666 |  | $ | 5,156,757 |  | $ | 3,445,909 |  | 66.8 | %
% of consolidated sales | ​ |  | 5.4 | % |  | 3.9 | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer | ​ | $ | 1,659,599 | ​ | $ | (116,325) | ​ | $ | 1,775,924 |  | NM | ​
% of consumer sales | ​ |  | 1.3 | % |  | (0.1) | % |  |  |  |  | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial | ​ | $ | 6,943,067 | ​ | $ | 5,273,082 | ​ | $ | 1,669,985 |  | 31.7 | %
% of commercial sales | ​ |  | 19.6 | % |  | 13.8 | % |  |  |  |  | ​

​

NM – Not Meaningful

Consolidated

Net income increased by $3,445,909, or 66.8%, during the nine months ended September 30, 2025, to $8,602,666, as compared to $5,156,757 during the same period in Fiscal 2024.

Consumer Segment

Net income (loss) increased in the consumer segment by $1,775,924, during the nine months ended September 30, 2025, to net income of $1,659,599, as compared to net loss of $116,325 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Nine Months Ended September 30, 2025 and 2024 for further details.

Commercial Segment

Net income increased in the commercial segment by $1,669,985, or 31.7%, during the nine months ended September 30, 2025, to $6,943,067, as compared to $5,273,082 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Nine Months Ended September 30, 2025 and 2024 for further details.

Earnings Per Share

The following table depicts the Company’s earnings per share:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ | ​ | 2025 | ​ | 2024 | ​ | Amount | ​ | % |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consolidated |  | $ | 0.33 |  | $ | 0.20 |  | $ | 0.13 |  | 65.0 | %

​

Consolidated

Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.13, or 65.0%, during the nine months ended September 30, 2025, to $0.33, as compared to $0.20 during the same period in Fiscal 2024.

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Non-U.S. GAAP Financial Measures

Within this management discussion and analysis, we use supplemental measures of our financial performance, which are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with U.S. GAAP. When evaluated in conjunction with U.S. GAAP financial measures, the Company believes that these non-U.S. GAAP financial measures add meaningful insight into our financial position, results of operations, liquidity, and ability to meet financial obligations.

These non-U.S. GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with U.S. GAAP. Each of these non-U.S. GAAP financial measures is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparing performance among different companies. The Company also presents certain non-U.S. GAAP financial measures and its nearest financial measure utilizing U.S. GAAP for the trailing four quarters period ended September 30, 2025. Management considers the trailing four quarters period ended September 30, 2025, to be helpful in understanding historical financial results, trends, and the calculation of leverage ratios. The non-U.S. GAAP and U.S. GAAP financial measures for the trailing four quarters period ended September 30, 2025, are compared against the most recent fiscal period ended December 31, 2024, which is the nearest twelve-month reporting period under U.S. GAAP. These financial measure comparisons, along with comparisons utilizing three- and nine-month periods for non-U.S. GAAP and its nearest financial measure utilizing U.S. GAAP may differ materially from those reported for the fiscal period ended December 31, 2025.

We have included the definitions of our non-U.S. GAAP financial measures and reconciliations to the most comparable U.S. GAAP financial measures in the following tables below.

Adjusted EBITDA and Adjusted EBITDAR

Adjusted EBITDA is defined as the sum of (i) net income (loss) of the Company, adjusted for additions (deductions) of (ii) interest expense, (iii) other (income) expense, (iv) income tax expense (benefit), and (v) depreciation and amortization. Management considers Adjusted EBITDA to be a key financial measure to assess our overall operating performance.

Adjusted EBITDAR is defined as (i) Adjusted EBITDA plus (ii) minimum fixed rent expense for properties occupied under operating leases. Management considers Adjusted EBITDAR to be a key financial measure to assess our overall operating performance, excluding the impact of variability in leasing methods and capital structures. These measures are also inputs into the Company’s leverage ratios.

The Company’s Adjusted EBITDA and Adjusted EBITDAR are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, “net income” or other financial measures of operating performance calculated in accordance with U.S. GAAP.

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The following table reconciles Adjusted EBITDA and Adjusted EBITDAR to the most comparable U.S. GAAP financial measure for the three months ended September 30, 2025 and 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended September 30,
​ | ​ | 2025 | ​ | 2024
​ |  | Consumer |  | Commercial |  | Consolidated |  | Consumer |  | Commercial |  | Consolidated
Adjusted EBITDA Reconciliation: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Net income (loss) | ​ | $ | 947,134 | ​ | $ | 2,409,786 | ​ | $ | 3,356,920 | ​ | $ | (26,843) | ​ | $ | 1,711,882 | ​ | $ | 1,685,039
Addition (deduction): | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Depreciation and amortization | ​ |  | 203,349 | ​ |  | 269,175 | ​ |  | 472,524 | ​ |  | 150,657 | ​ |  | 264,122 | ​ |  | 414,779
Other income | ​ |  | (104,863) | ​ |  | (128,779) | ​ |  | (233,642) | ​ |  | (62,502) | ​ |  | (277,849) | ​ |  | (340,351)
Interest expense | ​ |  | 53,429 | ​ |  | 52,328 | ​ |  | 105,757 | ​ |  | 51,486 | ​ |  | 54,653 | ​ |  | 106,139
Income tax expense (benefit) | ​ |  | 274,139 | ​ |  | 698,354 | ​ |  | 972,493 | ​ |  | (122,464) | ​ |  | 692,109 | ​ |  | 569,645
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 1,373,188 | ​ | $ | 3,300,864 | ​ | $ | 4,674,052 | ​ | $ | (9,666) | ​ | $ | 2,444,917 | ​ | $ | 2,435,251
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted EBITDAR Reconciliation: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted EBITDA | ​ | $ | 1,373,188 | ​ | $ | 3,300,864 | ​ | $ | 4,674,052 | ​ | $ | (9,666) | ​ | $ | 2,444,917 | ​ | $ | 2,435,251
Addition: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Rent expense(1) | ​ | ​ | 286,594 | ​ | ​ | 343,992 | ​ | ​ | 630,586 | ​ | ​ | 200,220 | ​ | ​ | 339,654 | ​ | ​ | 539,874
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 1,659,782 | ​ | $ | 3,644,856 | ​ | $ | 5,304,638 | ​ | $ | 190,554 | ​ | $ | 2,784,571 | ​ | $ | 2,975,125

| (1) | The table below depicts the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable U.S. GAAP financial measure for the three months ended September 30, 2025, and September 30, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30,
​ |  | 2025 | ​ | 2024
​ | ​ | Consumer |  | Commercial |  | Consolidated | ​ | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total lease costs, per ASC 842 | ​ | $ | 350,311 | ​ | $ | 421,413 | ​ | $ | 771,724 | ​ | $ | 298,880 | ​ | $ | 547,722 | ​ | $ | 846,602
Less: variable lease cost | ​ |  | (62,802) | ​ | ​ | (40,880) | ​ |  | (103,682) | ​ |  | (56,433) | ​ | ​ | (162,320) | ​ |  | (218,753)
Less: short-term lease cost | ​ | ​ | (915) | ​ | ​ | (36,541) | ​ | ​ | (37,456) | ​ | ​ | (42,227) | ​ | ​ | (45,748) | ​ | ​ | (87,975)
​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 286,594 | ​ | $ | 343,992 | ​ | $ | 630,586 | ​ | $ | 200,220 | ​ | $ | 339,654 | ​ | $ | 539,874

​

​

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The following table reconciles Adjusted EBITDA and Adjusted EBITDAR to the most comparable U.S. GAAP financial measure for the nine months ended September 30, 2025 and 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Nine Months Ended September 30,
​ | ​ | 2025 | ​ | 2024
​ |  | Consumer |  | Commercial |  | Consolidated |  | Consumer |  | Commercial |  | Consolidated
Adjusted EBITDA Reconciliation: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Net income (loss) | ​ | $ | 1,659,599 | ​ | $ | 6,943,067 | ​ | $ | 8,602,666 | ​ | $ | (116,325) | ​ | $ | 5,273,082 | ​ | $ | 5,156,757
Addition (deduction): | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Depreciation and amortization | ​ |  | 579,585 | ​ |  | 798,691 | ​ |  | 1,378,276 | ​ |  | 356,851 | ​ |  | 763,760 | ​ |  | 1,120,611
Other income | ​ |  | (261,870) | ​ |  | (571,628) | ​ |  | (833,498) | ​ |  | (78,510) | ​ |  | (725,786) | ​ |  | (804,296)
Interest expense | ​ |  | 161,469 | ​ |  | 156,837 | ​ |  | 318,306 | ​ |  | 171,584 | ​ |  | 164,550 | ​ |  | 336,134
Income tax expense (benefit) | ​ |  | 479,961 | ​ |  | 2,007,959 | ​ |  | 2,487,920 | ​ |  | (33,706) | ​ |  | 1,614,868 | ​ |  | 1,581,162
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 2,618,744 | ​ | $ | 9,334,926 | ​ | $ | 11,953,670 | ​ | $ | 299,894 | ​ | $ | 7,090,474 | ​ | $ | 7,390,368
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted EBITDAR Reconciliation: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted EBITDA | ​ | $ | 2,618,744 | ​ | $ | 9,334,926 | ​ | $ | 11,953,670 | ​ | $ | 299,894 | ​ | $ | 7,090,474 | ​ | $ | 7,390,368
Addition: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Rent expense(1) | ​ | ​ | 830,757 | ​ | ​ | 1,007,875 | ​ | ​ | 1,838,632 | ​ | ​ | 506,245 | ​ | ​ | 1,019,625 | ​ | ​ | 1,525,870
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 3,449,501 | ​ | $ | 10,342,801 | ​ | $ | 13,792,302 | ​ | $ | 806,139 | ​ | $ | 8,110,099 | ​ | $ | 8,916,238

| (1) | The table below depicts the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable U.S. GAAP financial measure for the nine months ended September 30, 2025, and September 30, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ |  | 2025 | ​ | 2024
​ | ​ | Consumer |  | Commercial |  | Consolidated | ​ | Consumer |  | Commercial |  | Consolidated
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total lease costs, per ASC 842 | ​ | $ | 1,041,296 | ​ | $ | 1,460,590 | ​ | $ | 2,501,886 | ​ | $ | 796,403 | ​ | $ | 1,602,836 | ​ | $ | 2,399,239
Less: variable lease cost | ​ |  | (180,671) | ​ | ​ | (343,675) | ​ |  | (524,346) | ​ |  | (170,206) | ​ |  | (439,469) | ​ |  | (609,675)
Less: short-term lease cost | ​ | ​ | (29,868) | ​ | ​ | (109,040) | ​ | ​ | (138,908) | ​ | ​ | (119,952) | ​ | ​ | (143,742) | ​ | ​ | (263,694)
​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 830,757 | ​ | $ | 1,007,875 | ​ | $ | 1,838,632 | ​ | $ | 506,245 | ​ | $ | 1,019,625 | ​ | $ | 1,525,870

​

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The following table reconciles Adjusted EBITDA and Adjusted EBITDAR to the most comparable U.S. GAAP financial measure for the trailing four quarters ended September 30, 2025:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Trailing Four Quarters Ended | ​ | Year Ended
​ | ​ | December 31, |  | March 31, | ​ | June 30, | ​ | September 30, |  | September 30, | ​ | December 31,
​ | ​ | 2024 |  | 2025 | ​ | 2025 | ​ | 2025 |  | 2025 | ​ | 2024
Adjusted EBITDA Reconciliation: |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  | ​ | ​ |
Net income | ​ | $ | 1,600,302 | ​ | $ | 2,493,347 | ​ | $ | 2,752,399 | ​ | $ | 3,356,920 | ​ | $ | 10,202,968 | ​ | $ | 6,757,059
Addition (deduction): | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  |  | ​ |  | ​
Depreciation and amortization | ​ |  | 431,163 | ​ |  | 445,341 | ​ |  | 460,411 | ​ |  | 472,524 | ​ | ​ | 1,809,439 | ​ | ​ | 1,551,774
Other income | ​ |  | (233,386) | ​ |  | (205,605) | ​ |  | (394,251) | ​ |  | (233,642) | ​ | ​ | (1,066,884) | ​ | ​ | (1,037,682)
Interest expense | ​ |  | 111,249 | ​ |  | 106,321 | ​ |  | 106,228 | ​ |  | 105,757 | ​ | ​ | 429,555 | ​ | ​ | 447,383
Income tax expense | ​ |  | 410,959 | ​ |  | 724,358 | ​ |  | 791,069 | ​ |  | 972,493 | ​ | ​ | 2,898,879 | ​ | ​ | 1,992,121
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 2,320,287 | ​ | $ | 3,563,762 | ​ | $ | 3,715,856 | ​ | $ | 4,674,052 | ​ | $ | 14,273,957 | ​ | $ | 9,710,655
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted EBITDAR Reconciliation: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted EBITDA | ​ | $ | 2,320,287 | ​ | $ | 3,563,762 | ​ | $ | 3,715,856 | ​ | $ | 4,674,052 | ​ | $ | 14,273,957 | ​ | $ | 9,710,655
Addition: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Rent expense(1) | ​ | ​ | 579,195 | ​ | ​ | 602,493 | ​ | ​ | 605,553 | ​ | ​ | 630,586 | ​ | ​ | 2,417,827 | ​ | ​ | 2,105,065
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 2,899,482 | ​ | $ | 4,166,255 | ​ | $ | 4,321,409 | ​ | $ | 5,304,638 | ​ | $ | 16,691,784 | ​ | $ | 11,815,720

| (1) | The table below depicts the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable U.S. GAAP financial measure for the trailing four quarter ended September 30, 2025, and September 30, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Trailing Four Quarters Ended | ​ | Year Ended
​ |  | December 31, |  | March 31, | ​ | June 30, | ​ | September 30, |  | September 30, | ​ | December 31,
​ | ​ | 2024 |  | 2025 | ​ | 2025 | ​ | 2025 |  | 2025 | ​ | 2024
Total lease costs, per ASC 842 | ​ | $ | 861,214 | ​ | $ | 878,336 | ​ | $ | 851,827 | ​ | $ | 771,724 | ​ | $ | 3,363,101 | ​ | $ | 3,260,453
Less: variable lease cost | ​ |  | (198,286) | ​ |  | (205,581) | ​ |  | (215,083) | ​ |  | (103,682) | ​ |  | (722,632) | ​ |  | (807,961)
Less: short-term lease cost | ​ |  | (83,733) | ​ |  | (70,262) | ​ |  | (31,191) | ​ |  | (37,456) | ​ |  | (222,642) | ​ |  | (347,427)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 579,195 | ​ | $ | 602,493 | ​ | $ | 605,553 | ​ | $ | 630,586 | ​ | $ | 2,417,827 | ​ | $ | 2,105,065
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Leverage Ratios

The Company’s Debt to Adjusted EBITDA Leverage Ratio is defined as the Company’s (i) Debt Obligations divided by (ii) Adjusted EBITDA. Debt Obligations are defined as the sum of amounts outstanding under notes payable balances.

The Company’s Net Debt to Adjusted EBITDA Leverage Ratio is defined as the Company’s (i) Net Debt Obligations divided by (ii) Adjusted EBITDA. Net Debt Obligations are defined as the difference between the Company’s (i) Debt Obligations and (ii) Total Cash.

Management considers these financial measures to be helpful in understanding the Company’s ability to service Debt Obligations, excluding and including the impact of Total Cash available to service such obligations.

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The Company’s Debt to Adjusted Leverage Ratio and Net Debt to Adjusted EBITDA Leverage Ratio are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, other financial measures utilized to assess our ability to service “notes payable” in accordance with U.S. GAAP. The Company considers the Debt to Net Income Leverage Ratio defined as (i) Debt Obligations divided by (ii) net income to be the representative financial measure of our ability to service “notes payable” utilizing U.S. GAAP derived financial statement balances and is incorporated into the presentation below.

The following table reconciles components of the Debt to Adjusted EBITDA Leverage Ratio and Net Debt to Adjusted EBITDA Leverage Ratio for the trailing four quarters ended September 30, 2025 and for the year ended December 31, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31, |
​ |  | 2025 |  | 2024 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Debt Obligations | (a) | $ | 12,485,632 | ​ | $ | 13,522,179 | ​
Total Cash | ​ |  | (24,424,414) | ​ |  | (20,609,003) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Debt Obligations | (b) | $ | (11,938,782) | ​ | $ | (7,086,824) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (1) | (c) | $ | 10,202,968 | ​ | $ | 6,757,059 | ​
Adjusted EBITDA (1) | (d) | $ | 14,273,957 | ​ | $ | 9,710,655 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Leverage Ratios | ​ | ​ | ​ | ​ | ​ | ​ | ​
Debt to Net Income Leverage: (a) divided by (c) | ​ | ​ | 1.22 | x | ​ | 2.00 | x
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Debt to Adjusted EBITDA Leverage: (a) divided by (d) | ​ | ​ | 0.87 | x | ​ | 1.39 | x
Net Debt to Adjusted EBITDA Leverage: (b) divided by (d) | ​ | ​ | (0.84) | x | ​ | (0.73) | x

(1) | The presentation of net income and Adjusted EBITDAR for September 30, 2025, represents the total amount of net income and Adjusted EBITDAR for the trailing four quarters ended September 30, 2025.

​

Adjusted Debt to Adjusted EBITDAR Leverage and Adjusted Net Debt to Adjusted EBITDAR Leverage Ratios

The Company’s Adjusted Debt to Adjusted EBITDAR Leverage Ratio is defined as the Company’s (i) Adjusted Debt Obligations divided by (ii) Adjusted EBITDAR. Adjusted Debt Obligations are defined as the sum of the Company’s (i) Debt Obligations and (ii) operating lease liabilities.

The Company’s Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio is defined as the Company’s (i) Adjusted Net Debt Obligations divided by (ii) Adjusted EBITDAR. Adjusted Net Debt Obligations are defined as the difference between the Company’s (i) Adjusted Debt Obligations and (ii) Total Cash.

Management considers these financial measures to be helpful in understanding the Company’s ability to service debt and operating lease obligations, excluding and including the impact of Total Cash available to service such obligations.

The Company’s Adjusted Debt to Adjusted EBITDAR Leverage Ratio and Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, other financial measures utilized to assess our ability to service “notes payable” and “operating lease liabilities” in accordance with U.S. GAAP. The Company considers the Adjusted Debt to Net Income Leverage Ratio, defined as the sum of (i) Debt Obligations and (ii) operating lease liabilities divided by (iii) net income, to be the representative financial measure of our ability to service “notes payable” and “operating leases” utilizing U.S. GAAP derived financial statement balances and is incorporated into the presentation below.

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The following table reconciles components of the Adjusted Debt to Adjusted EBITDAR Leverage Ratio and Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio for the trailing four quarters ended September 30, 2025 and for the year ended December 31, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31, |
​ |  | 2025 |  | 2024 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Debt Obligations | ​ | $ | 12,485,632 | ​ | $ | 13,522,179 | ​
Operating lease liabilities | ​ |  | 10,478,105 | ​ |  | 4,847,894 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted Debt Obligations | (a) | $ | 22,963,737 | ​ | $ | 18,370,073 | ​
Total Cash | ​ | ​ | 24,424,414 | ​ | ​ | 20,609,003 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted Net Debt Obligations | (b) | $ | (1,460,677) | ​ | $ | (2,238,930) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (1) | (c) | $ | 10,202,968 | ​ | $ | 6,757,059 | ​
Adjusted EBITDAR (1) | (d) | $ | 16,691,784 | ​ | $ | 11,815,720 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted Leverage Ratios | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted Debt to Net Income Leverage: (a) divided by (c) | ​ | ​ | 2.25 | x | ​ | 2.72 | x
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjusted Debt to Adjusted EBITDAR Leverage: (a) divided by (d) | ​ | ​ | 1.38 | x | ​ | 1.55 | x
Adjusted Net Debt to Adjusted EBITDAR Leverage: (b) divided by (d) | ​ | ​ | (0.09) | x | ​ | (0.19) | x

(1) | The presentation of net income and Adjusted EBITDAR for September 30, 2025, represents the total amount of net income and Adjusted EBITDAR for the trailing four quarters ended September 30, 2025.

​

Net Cash

Net Cash is defined as the difference between the Company’s (i) cash and cash equivalents (“Total Cash”) and (ii) Debt Obligations. Management considers this financial measure to be helpful in understanding the Company’s liquidity.

The Company’s Net Cash is considered a non-U.S. GAAP financial measure and is not calculated in accordance with, or preferable to, “cash and cash equivalents” and amounts outstanding under “notes payable” balances or other financial measures of liquidity calculated in accordance with U.S. GAAP.

The following table reconciles Net Cash to its comparable U.S. GAAP financial measures:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
​ |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​
Total Cash | ​ | $ | 24,424,414 | ​ | $ | 20,609,003
Less: Debt Obligations | ​ |  | (12,485,632) | ​ |  | (13,522,179)
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 11,938,782 | ​ | $ | 7,086,824

​

Free Cash Flow

Free Cash Flow is defined as the difference between the Company’s (i) net cash provided by operations (“Operating Cash Flow”) and (ii) Capital Expenditures.

Management considers this financial measure to be helpful in understanding the amount of Free Cash Flow that the Company can utilize to meet its financing needs.

The Company’s Free Cash Flow is considered a non-U.S. GAAP financial measure and is not calculated in accordance with, or preferable to, “net cash provided by operations” or other financial measures of cash flow available to meet financing needs calculated in accordance with U.S. GAAP.

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The following table reconciles Free Cash Flow to the comparable U.S. GAAP financial measures for the three months ended September 30, 2025 and September 30, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30,
​ |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Cash Flow | ​ | $ | 2,403,744 | ​ | $ | 3,447,502
Capital Expenditures | ​ |  | (205,963) | ​ | ​ | (1,995,696)
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 2,197,781 | ​ | $ | 1,451,806

​

The following table reconciles Free Cash Flow to the comparable U.S. GAAP financial measures for the nine months ended September 30, 2025 and September 30, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30,
​ |  | 2025 |  | 2024
​ | ​ | ​ | ​ | ​ | ​ | ​
Operating Cash Flow | ​ | $ | 6,126,338 | ​ | $ | 6,449,764
Capital Expenditures | ​ |  | (1,088,122) | ​ |  | (3,257,717)
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 5,038,216 | ​ | $ | 3,192,047

​

The following table reconciles Free Cash Flow to the comparable U.S. GAAP financial measures for the trailing four quarters ended September 30, 2025 and for the year ended December 31, 2024:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Trailing Four Quarters Ended | ​ | Year Ended
​ |  | December 31, |  | March 31, | ​ | June 30, | ​ | September 30, |  | September 30, | ​ | December 31,
​ | ​ | 2024 |  | 2025 | ​ | 2025 | ​ | 2025 |  | 2025 | ​ | 2024
Operating Cash Flow | ​ | $ | 3,740,876 | ​ | $ | 1,131,057 | ​ | $ | 2,591,537 | ​ | $ | 2,403,744 | ​ | $ | 9,867,214 | ​ | $ | 10,190,640
Capital Expenditures | ​ |  | (500,687) | ​ |  | (384,987) | ​ |  | (497,172) | ​ |  | (205,963) | ​ |  | (1,588,809) | ​ |  | (3,160,608)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | $ | 3,240,189 | ​ | $ | 746,070 | ​ | $ | 2,094,365 | ​ | $ | 2,197,781 | ​ | $ | 8,278,405 | ​ | $ | 7,030,032

​

Liquidity and Capital Resources

The following table summarizes the Company’s condensed consolidated statement of cash flows:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, | ​ | Change |
​ | ​ | 2025 | ​ | 2024 | ​ | Amount | ​ | % |
Net cash provided by (used in): |  | ​ |  |  | ​ |  |  | ​ |  |  |  | ​
Operating activities | ​ | $ | 6,126,338 | ​ | $ | 6,449,764 | ​ | $ | (323,426) |  | (5.0) | %
Investing activities | ​ |  | (1,085,472) | ​ |  | (3,260,717) | ​ | ​ | 2,175,245 |  | (66.7) | %
Financing activities | ​ |  | (1,225,455) | ​ |  | (3,290,701) | ​ |  | 2,065,246 |  | (62.8) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net increase (decrease) in cash and cash equivalents | ​ | $ | 3,815,411 | ​ | $ | (101,654) | ​ | $ | 3,917,065 |  | NM | ​

​

NM – Not Meaningful

Operating Activities

Cash flows provided by operations decreased by $323,426, or 5.0%, during the nine months ended September 30, 2025, to $6,126,338, as compared to $6,449,764 during the same period in Fiscal 2024. The decrease in cash provided by operations was primarily attributed to an increase in net income, certain non-cash adjustments to reconcile net income to operating cash flow (as detailed in the condensed consolidated statements of cash flows), and the following significant net

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changes in cash associated with operating assets and liabilities, from the nine months ended September 30, 2024 to the same period during Fiscal 2025:

| ● | Accounts receivable: a $4,271,963 net increase primarily attributed to our consumer segment, resulting from a large wholesale precious metal receivable being present in the same period in Fiscal 2024, which relieved thereafter.

| ● | Inventories: a $2,566,317 net decrease primarily attributed to our consumer segment, resulting from a lesser increase in inventory in Fiscal 2025 than from that incurred in the same period in Fiscal 2024. In the Fiscal 2024 period, the consumer segment had greater purchases of inventory to support the onboarding of our new stores.

| ● | Prepaid expenses: a $499,581 net increase primarily attributed to our commercial segment, resulting from incurring costs in Fiscal 2025 to obtain a contract, which was partially offset by a reduction in prepaid freight associated with our ITAD revenue share settlements in the same period in Fiscal 2024.

| ● | Accrued expenses: a $1,094,859 net decrease primarily attributed to our commercial segment, resulting from a reduction in liabilities associated with unvouchered inventory in Fiscal 2025, which was partially offset by an increase in accrued state and federal income tax expense held on our corporate ledger in Fiscal 2025.

| ● | Other liabilities: a $2,127,818 net decrease primarily attributed to our consumer segment, resulting from a significant increase in customer deposits in Fiscal 2024, which relieved thereafter.

​

Investing Activities

Cash flows (used in) investing activities decreased by $2,175,245, or 66.7%, during the nine months ended September 30, 2025, to $1,085,472, as compared to $3,260,717 during the same period in Fiscal 2024. The decrease in cash (used in) investing activities during the nine months ended September 30, 2025, was primarily impacted by more significant capital being deployed on ERP development, new store build-outs, and an associated real estate purchase for one of our Arizona locations in the same period in Fiscal 2024. Fiscal 2025 expenditures have primarily related to improvements to our corporate headquarters and new store-related improvements.

Financing Activities

Cash flows (used in) financing activities decreased by $2,065,246, or 62.8%, during the nine months ended September 30, 2025, to $1,225,455, as compared to $3,290,701 during the same period in Fiscal 2024. The decrease in cash (used in) financing activities during the nine months ended September 30, 2025, was primarily due to a reduction in share buybacks during Fiscal 2025. This reduction was partially offset by an increase in payments on notes payable in Fiscal 2025.

Capital Resources

Although the Company has access to a line of credit our primary source of liquidity and capital resources currently consist of cash generated from our operating activities. We do not anticipate the need to fund our operations via the line of credit and we do not have any amounts drawn as of September 30, 2025. We have historically renewed, extended, or replaced short-term debt as it matures, and management believes that we will be able to continue to do so in the near future.

Capital Expenditures

In Fiscal 2025, the Company is focused on optimizing our new store performance, along with the continued focus on growing our Commercial business organically and evaluating opportunities for strategic growth. The Company continuously monitors the deployment of capital and primarily funds capital expenditures through cash flow from operating activities. Where appropriate, the Company may use debt financing on select projects. When this occurs, the Company further evaluates future cash flows of the project to ensure the debt tenure and pay-back period are in alignment, as well as the appropriateness of the rate of return. As of September 30, 2025, the Company had no commitments for capital expenditures.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Because we are a “smaller reporting company,” we are not required to disclose the information required by this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2025. We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective to provide reasonable assurance of the foregoing.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance of achieving their objectives, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

​

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are various claims, lawsuits and pending actions against the Company arising in the normal course of the Company’s business. It is the opinion of management that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or cash flow. Management is also not aware of any legal proceedings contemplated by government agencies of which the outcome is reasonably likely to have a material adverse effect on the Company’s financial condition, results of operations or cash flow.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed under Part I, Item 1A, “Risk Factors” in the Company’s 2024 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

Repurchases

The following lists the repurchase of Company shares for the three months ended September 30, 2025:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Total Number of |  |  | ​ |  |  | ​ |  |
​ | ​ | Shares Purchased | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Maximum Number
​ | ​ | as Part of Publicly | ​ | ​ | ​ | ​ | ​ | ​ | ​ | of Shares that May
​ | ​ | Announced Plan | ​ | Average Price | ​ | Total Price | ​ | Yet be Purchased
Fiscal Period | ​ | or Program (1) (2) | ​ | Paid Per Share ($) | ​ | Paid | ​ | Under the Plan (1)
Balance as of June 30, 2025 |  | 949,593 | ​ | $ | 4.94 | ​ | $ | 4,690,149 |  | 150,407
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
July 1 - 31, 2025 |  | 8,134 | ​ |  | 5.93 | ​ |  | 48,218 |  | 142,273
August 1 - 31, 2025 |  | 3,428 | ​ |  | 5.65 | ​ |  | 19,364 |  | 138,845
September 1 - 30, 2025 |  | — | ​ |  | — | ​ |  | — |  | 138,845
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance as of September 30, 2025 |  | 961,155 | ​ | $ | 4.95 | ​ | $ | 4,757,731 |  | 138,845

(1) | All shares were purchased in open-market transactions through the stock repurchase program approved by the Board on March 14, 2023, for the repurchase of up to 1.0 million shares of the Common Stock. On March 27, 2025, the Board authorized the repurchase of an additional 100 thousand shares of the Common Stock, bringing the total authorization under the existing program to 1.1 million shares.

(2) | The stock repurchase program was publicly announced on May 3, 2023, and expires March 31, 2026. Repurchases under the stock repurchase plan began on May 10, 2023.

The timing and amount of any common stock repurchased under the program will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

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ITEM 5. OTHER INFORMATION

N o n e

​

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ITEM 6. EXHIBITS

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Exhibit Number |  | Description |  | Filed Herein |  | Incorporated by Reference |  | Form |  | Date Filed with SEC |  | Exhibit Number
31.1 | ​ | Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 by John R. Loftus | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
31.2 | ​ | Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 by John G. DeLuca | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
32.1 | ​ | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John R. Loftus | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
32.2 | ​ | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John G. DeLuca | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.INS | ​ | XBRL Instance Document | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.SCH | ​ | XBRL Taxonomy Extension Schema Document | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.CAL | ​ | XBRL Taxonomy Calculation Linkbase Document | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.DEF | ​ | XBRL Taxonomy Definition Linkbase Document | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.LAB | ​ | XBRL Taxonomy Label Linkbase Document | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
101.PRE | ​ | XBRL Taxonomy Presentation Linkbase Document | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
104* | ​ | Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) | ​ | X | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​

​

​

​

​

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SIGNATURE

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

​ | ​ | ​ | ​
​ |  | ENVELA CORPORATION
​ | ​ | (Registrant)
​ | ​ | ​ | ​
Date: November 5, 2025 | ​ | ​ | /s/ JOHN G. DELUCA
​ | ​ | ​ | John G. DeLuca
​ | ​ | ​ | Chief Financial Officer (Principal Accounting Officer)

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GLOSSARY OF DEFINED TERMS

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The following definitions apply to terms used in this document:

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2024 Annual Report | Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 26, 2025
2025 Plan | 2025 Equity Incentive Plan
Adjusted Debt Obligations | Adjusted Debt Obligations represents (i) Debt Obligations plus (ii) operating lease liabilities per the Balance Sheet.
Adjusted Debt to Adjusted EBITDAR Leverage Ratio | The Adjusted Debt to Adjusted EBITDAR Leverage Ratio is a non-U.S. GAAP measure and represents (i) Adjusted Debt Obligations divided by (ii) Adjusted EBITDAR.
Adjusted Debt to Net Income Leverage Ratio | The Adjusted Debt to Net Income Leverage Ratio is a non-U.S. GAAP measure and represents the sum of (i) Debt Obligations and operating lease liabilities (ii) divided by (iii) Adjusted EBITDAR.
Adjusted EBITDA | Adjusted Earnings Before Interest, Tax, Depreciation, and Amortization
Adjusted EBITDAR | Adjusted EBITDAR is a non-U.S. GAAP measure and equals (i) Adjusted EBITDA plus (ii) minimum fixed rent expense for properties occupied under operating leases.
Adjusted Net Debt Obligations | Adjusted Net Debt Obligations is a non-U.S. GAAP measure and represents the difference between (i) Adjusted Debt Obligations per the Balance Sheet and (ii) Total Cash.
Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio | The Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio is a non-U.S. GAAP measure and represents (i) Adjusted Net Debt Obligations divided by (ii) Adjusted EBITDAR.
ASC | Accounting Standards Codification
ASU | Accounting Standards Update
ASU 2024-03 | ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
ASU 2025-05 | Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
ASU 2025-06 | Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
Avail Transaction | The acquisition of Avail Recovery Solutions, LLC on October 29, 2021
Board | Board of Directors
Capital Expenditures | Capital Expenditures represent the purchase of (i) property and equipment, and (ii) intangible assets.
CODM | Chief Operating Decision Maker
Common Stock | The Company's common stock, par value $0.01 per share
Company | Envela Corporation, a Nevada corporation, and its subsidiaries
Debt Obligations | Debt Obligations represents amounts outstanding under notes payable balances per the Balance Sheet.
Debt to Adjusted EBITDA Leverage Ratio | The Debt to Adjusted EBITDA Leverage Ratio is a non-U.S. GAAP measure and represents (i) Debt Obligations divided by (ii) Adjusted EBITDA.
Debt to Net Income Leverage Ratio | The Debt to Net Income Leverage Ratio represents the leverage ratio of the Company utilizing the following U.S. GAAP measures: (i) Debt Obligations divided by (ii) Net Income.
Envela | Envela Corporation, a Nevada corporation, and its subsidiaries
Exchange Act | Securities Exchange Act of 1934
Financial Statements | The Related Condensed Consolidated Statements of Income, Stockholders’ Equity, and Cash Flows
Fiscal 2024 | Fiscal year ended December 31, 2024
Fiscal 2025 | Fiscal year ended December 31, 2025
Form 10-Q | Form 10-Q for the three and nine months ended September 30, 2025
Free Cash Flow | Free Cash Flow is a non-U.S. GAAP measure and represents the difference between the Company’s (i) Operating Cash Flow and (ii) Capital Expenditures.
FSB | Farmer's State Bank of Oakley, Kansas

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ISO | Incentive Stock Options
IT | Information Technology
ITAD | Information Technology Asset Disposition
Net Cash | The difference between (i) cash and cash equivalents and (ii) the sum of debt obligations
Net Debt Obligations | Net Debt Obligations is a non-U.S. GAAP measure and represents the difference between (i) Debt Obligations per the Balance Sheet and (ii) Total Cash.
Net Debt to Adjusted EBITDA Leverage Ratio | The Net Debt to Adjusted EBITDA Leverage Ratio is a non-U.S. GAAP measure that represents (i) Net Debt Obligations divided by (ii) Adjusted EBITDA.
NM | Not Meaningful
NYSE | New York Stock Exchange
OBBBA | One Big Beautiful Bill Act
Operating Cash Flow | Operating Cash Flow measures the amount of cash generated from normal business operations during a specific period and is referred to as net cash provided by operations in the Statement of Cash Flows.
Rent Expense | Minimum fixed rent expense for properties occupied under operating leases.
Scottsdale Transaction | The acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona
SEC | U.S. Securities and Exchange Commission
Securities Act | Securities Act of 1933
SOW | Scope of Work
TBT | Texas Bank & Trust
Total Cash | Total Cash represents cash and cash equivalents per the Balance Sheet.
Trailing Four Quarters | The Trailing Four Quarters ended period is defined as the cumulative total amount of the most recent four consecutive fiscal quarters of financial results for the respective reported balance.
U.S. | United States
U.S. Dollar | $
U.S. GAAP | United States Generally Accepted Accounting Principles

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