# EDGAR Filing Document

**Accession Number:** 0000701719
**File Stem:** 0000701719-25-000036
**Filing Date:** 2025-8
**Character Count:** 198109
**Document Hash:** c01faa034738f532a33cc2e7bf77f22e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000701719-25-000036.hdr.sgml**: 20250806

**ACCESSION NUMBER**: 0000701719-25-000036

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 80

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250806

**DATE AS OF CHANGE**: 20250806

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Envela Corp
- **CENTRAL INDEX KEY:** 0000701719
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-JEWELRY STORES [5944]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 880097334
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-11048
- **FILM NUMBER:** 251189424

**BUSINESS ADDRESS:**
- **STREET 1:** 1901 GATEWAY DRIVE
- **STREET 2:** SUITE 100
- **CITY:** IRVING
- **STATE:** TX
- **ZIP:** 75038
- **BUSINESS PHONE:** 9725874049

**MAIL ADDRESS:**
- **STREET 1:** 1901 GATEWAY DRIVE
- **STREET 2:** SUITE 100
- **CITY:** IRVING
- **STATE:** TX
- **ZIP:** 75038

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DGSE COMPANIES INC
- **DATE OF NAME CHANGE:** 20030703

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

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

?xml version='1.0' encoding='ASCII'? ENVELA CORPORATION_June 30, 2025

[**Table of Contents**](#TOC)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

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

For the quarterly period ended **June 30, 2025**

**OR**

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

**For the Transition Period From** &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **to** &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Commission File Number 001-11048**

![Graphic](ela-20250630x10q004.jpg)

---

| |
|:---|
| **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 | Name of Exchange on which Registered |
| **Common Stock, par value $0.01 per share**<br> **ELA**<br>**ELA** | **NYSE American**<br>**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 ☒&nbsp;&nbsp;&nbsp;&nbsp;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 ☒&nbsp;&nbsp;&nbsp;&nbsp;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 ☐&nbsp;&nbsp;&nbsp;&nbsp;No ☒

As of August 5, 2025 the registrant had 25,965,277 shares of common stock outstanding.

------

[**Table of Contents**](#TOC)

#### **TABLE OF CONTENTS**

---

| | | | |
|:---|:---|:---|:---|
| [**PART I. FINANCIAL INFORMATION**](#PARTIFINANCIALINFORMATION) | [**PART I. FINANCIAL INFORMATION**](#PARTIFINANCIALINFORMATION) |  | **PAGE** |
| [ITEM 1.](#ITEM1FINANCIALSTATEMENTS) | [FINANCIAL STATEMENTS](#ITEM1FINANCIALSTATEMENTS) |  | 4 |
|  | [CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)](#CONSOLIDATEDSTATEMENTSOFINCOME) |  | 4 |
|  | [CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024](#CONSOLIDATEDBALANCESHEETS) |  | 5 |
|  | [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)](#CONSOLIDATEDSTATEMENTSOFCASHFLOWS) |  | 6 |
|  | [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)](#STATEMENTSOFSTOCKHOLDERSEQUITY) |  | 7 |
|  | [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED)](#StatementOfEquityFortheSixMonthsended) |  | 8 |
|  | [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](#NOTESTOCONDENSEDCONSOLIDATEDFINANCIA) |  | 9 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 1 – BASIS OF PRESENTATION](#NOTE_1_BASIS_OF_PRESENTATION) |  | 9 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 2 – PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS](#NOTE_PRIN_OF_CONSOL) |  | 9 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 3 – ACCOUNTING POLICIES AND ESTIMATES](#NOTE_ACCTGPOLICIESANDESTIMATES) |  | 10 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 4 – INVENTORIES](#NOTE_INVENTORIES) |  | 16 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 5 – GOODWILL](#NOTE_GOODWILL) |  | 16 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 6 – PROPERTY AND EQUIPMENT, NET](#NOTE_PROPANDEQUIP) |  | 17 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 7 – INTANGIBLE ASSETS, NET](#NOTE_INTANGIBLEASSETS) |  | 18 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 8 – ACCRUED EXPENSES](#NOTE_ACCRUEDEXPENSES) |  | 19 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 9 – SEGMENT INFORMATION](#NOTE_SEGMENTINFO) |  | 19 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 10 – REVENUE](#NOTE_REVENUE) |  | 22 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 11 – LEASES](#NOTE_LEASES) |  | 23 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 12 – BASIC AND DILUTED AVERAGE SHARES](#NOTE_BASICDILUTESHARES) |  | 24 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 13 – DEBT](#NOTE_DEBT) |  | 26 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 14 – STOCK-BASED COMPENSATION](#NOTE_SBC) |  | 28 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 15 – RELATED PARTY TRANSACTIONS](#NOTE_RELPARTYTRANS) |  | 28 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[NOTE 16 – CONTINGENCIES](#NOTE_CONTINGENCIES) |  | 28 |
| [ITEM 2.](#ITEM2MANAGEMENTSDISCUSSIONANDANAL) | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#ITEM2MANAGEMENTSDISCUSSIONANDANAL) |  | 29 |
| [ITEM 3.](#ITEM3QUANTITATIVEANDQUALITATIVEDIS) | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#ITEM3QUANTITATIVEANDQUALITATIVEDIS) |  | 48 |
| [ITEM 4.](#ITEM4CONTROLSANDPROCEDURES) | [CONTROLS AND PROCEDURES](#ITEM4CONTROLSANDPROCEDURES) |  | 48 |
| [**PART II. OTHER INFORMATION**](#PARTIIOTHERINFORMATION) | [**PART II. OTHER INFORMATION**](#PARTIIOTHERINFORMATION) |  |  |
| [ITEM 1.](#ITEM1LEGALPROCEEDINGS) | [LEGAL PROCEEDINGS](#ITEM1LEGALPROCEEDINGS) |  | 50 |
| [ITEM 1A.](#ITEM1ARISKFACTORS) | [RISK FACTORS](#ITEM1ARISKFACTORS) |  | 50 |
| [ITEM 2.](#ITEM2UNREGISTEREDSALESOFEQUITYSEC) | [UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES](#ITEM2UNREGISTEREDSALESOFEQUITYSEC) |  | 50 |

---

[**Table of Contents**](#TOC)

---

| | | |
|:---|:---|:---|
| [ITEM 3.](#ITEM3DEFAULTSUPONSENIORSECURITIES) | [DEFAULTS UPON SENIOR SECURITIES](#ITEM3DEFAULTSUPONSENIORSECURITIES) | 50 |
| [ITEM 4.](#ITEM4MINESAFETYDISCLOSURES) | [MINE SAFETY DISCLOSURES](#ITEM4MINESAFETYDISCLOSURES) | 50 |
| [ITEM 5.](#ITEM5OTHERINFORMATION) | [OTHER INFORMATION](#ITEM5OTHERINFORMATION) | 51 |
| [ITEM 6.](#ITEM6EXHIBITS) | [EXHIBITS](#ITEM6EXHIBITS) | 52 |
|  | [SIGNATURE](#Signatures) | 53 |
|  | [GLOSSARY OF DEFINED TERMS](#GLOSSARYOFDEFINEDTERMS) | 54 |

---

[**Table of Contents**](#TOC)

#### PART I. FINANCIAL INFORMATION

#### ITEM 1: FINANCIAL STATEMENTS

#### ENVELA CORPORATION AND SUBSIDIARIES

#### CONDENSED CONSOLIDATED STATEMENTS OF INCOME

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
| **(Unaudited)** | **2025** | 2024 | **2025** | 2024 |
| Sales | $**54876833** | $45297002 | $**103132662** | $85154782 |
| &nbsp;&nbsp;Cost of goods sold | **42488910** | 33907545 | **78776715** | 63444641 |
| Gross margin | **12387923** | 11389457 | **24355947** | 21710141 |
| Expenses: |  |  |  |  |
| &nbsp;&nbsp;Selling, general and administrative | **8672067** | 9118048 | **17076329** | 16755024 |
| &nbsp;&nbsp;Depreciation and amortization | **460411** | 362267 | **905752** | 705832 |
| Total operating expenses | **9132478** | 9480315 | **17982081** | 17460856 |
| Operating income | **3255445** | 1909142 | **6373866** | 4249285 |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;Other income | **394251** | 225417 | **599856** | 463945 |
| &nbsp;&nbsp;Interest expense | **(106228)** | (109141) | **(212549)** | (229995) |
| Income before income taxes | **3543468** | 2025418 | **6761173** | 4483235 |
| &nbsp;&nbsp;Income tax expense | **(791069)** | (461239) | **(1515427)** | (1011517) |
| Net income | $**2752399** | $1564179 | $**5245746** | $3471718 |
| Basic earnings per share: |  |  |  |  |
| &nbsp;&nbsp;Net income | $**0.11** | $0.06 | $**0.20** | $0.13 |
| Diluted earnings per share: |  |  |  |  |
| &nbsp;&nbsp;Net income | $**0.11** | $0.06 | $**0.20** | $0.13 |
| Weighted average shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;Basic | **25991979** | 26248554 | **25993802** | 26333796 |
| &nbsp;&nbsp;Diluted | **25991979** | 26263554 | **25993802** | 26348796 |

---

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

[**Table of Contents**](#TOC)

#### ENVELA CORPORATION AND SUBSIDIARIES

#### CONDENSED CONSOLIDATED BALANCE SHEETS

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| **Assets** | **(Unaudited)** |  |
| Current assets: |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $**22851869** | $20609003 |
| &nbsp;&nbsp;Accounts receivable, net of allowances | **5065919** | 4384238 |
| &nbsp;&nbsp;Notes receivable | **—** | 2000 |
| &nbsp;&nbsp;Inventories | **27381184** | 25705524 |
| &nbsp;&nbsp;Prepaid expenses | **1166819** | 874203 |
| &nbsp;&nbsp;Other current assets | **114864** | 28839 |
| Total current assets | **56580655** | 51603807 |
| Property and equipment, net | **13802440** | 13515162 |
| Right-of-use assets from operating leases | **4587527** | 4741326 |
| Goodwill | **3621453** | 3621453 |
| Intangible assets, net | **3780766** | 4097778 |
| Deferred tax asset | **90858** | 49526 |
| Other assets | **252061** | 241437 |
| Total assets | $**82715760** | $77870489 |
| **Liabilities and stockholders' equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;Accounts payable | $**3158474** | $3177550 |
| &nbsp;&nbsp;Notes payable | **3374442** | 3591351 |
| &nbsp;&nbsp;Operating lease liabilities | **1818941** | 2078505 |
| &nbsp;&nbsp;Accrued expenses | **2382896** | 3215343 |
| &nbsp;&nbsp;Other current liabilities | **1625679** | 455385 |
| Total current liabilities | **12360432** | 12518134 |
| Notes payable, less current portion | **9668844** | 9930828 |
| Operating lease liabilities, less current portion | **2909926** | 2769389 |
| Total liabilities | $**24939202** | $25218351 |
| Contingencies (Note 16) |  |  |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding |  |  |
| &nbsp;&nbsp;Common stock, $0.01 par value; 60,000,000 shares authorized; 26,924,631 shares issued and 25,975,038 shares outstanding as of June 30, 2025; 26,924,631 shares issued and 25,995,701 shares outstanding as of December 31, 2024 | **269246** | 269246 |
| &nbsp;&nbsp;Treasury stock at cost, 949,593 and 928,930 shares, as of June 30, 2025 and December 31, 2024, respectively | **(4690149)** | (4568823) |
| Additional paid-in capital | **40173000** | 40173000 |
| Retained earnings | **22024461** | 16778715 |
| Total stockholders' equity | **57776558** | 52652138 |
| Total liabilities and stockholders' equity | $**82715760** | $77870489 |

---

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

[**Table of Contents**](#TOC)

#### ENVELA CORPORATION AND SUBSIDIARIES

#### CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
| **(Unaudited)** | **2025** | 2024 |
| **Operations** |  |  |
| Net income | $**5245746** | $3471718 |
| Adjustments to reconcile net income to net cash provided by operations: |  |  |
| &nbsp;&nbsp;Depreciation and amortization | **905752** | 705832 |
| &nbsp;&nbsp;Provision for credit losses | **82366** | 240166 |
| &nbsp;&nbsp;Deferred taxes | **(41332)** | (45383) |
| &nbsp;&nbsp;Non-cash lease expense | **1208522** | 985996 |
| &nbsp;&nbsp;Loss on disposal of equipment | **5491** |  |
| &nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | **(764047)** | 2732769 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | **(1675660)** | (3633741) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | **(292616)** | 159517 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | **(96649)** | (18609) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | **(19076)** | (31919) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | **(832447)** | (643856) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | **(1173750)** | (1010247) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | **1170294** | 90019 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operations | **3722594** | 3002262 |
| **Investing** |  |  |
| Purchase of property and equipment | **(831529)** | (965525) |
| Purchase of intangible assets | **(50630)** | (296496) |
| Proceeds from (investment in) notes receivable | **2000** | (2983) |
| Proceeds from sales of equipment | **650** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) investing | **(879509)** | (1265004) |
| **Financing** |  |  |
| Payments on notes payable | **(478893)** | (626625) |
| Purchase of treasury stock | **(121326)** | (1620485) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) financing | **(600219)** | (2247110) |
| Net change in cash and cash equivalents | **2242866** | (509852) |
| Cash and cash equivalents, beginning of period | **20609003** | 17853853 |
| Cash and cash equivalents, end of period | $**22851869** | $17344001 |
| **Supplemental disclosures** |  |  |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;Interest | $**218685** | $284796 |
| &nbsp;&nbsp;Income Taxes | $**1732100** | $1352525 |

---

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

[**Table of Contents**](#TOC)

#### ENVELA CORPORATION AND SUBSIDIARIES

#### CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Preferred Stock** | **Preferred Stock** | | | |
| <br>**(Unaudited)** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** | <br>**Retained**<br>**Earnings** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |  |  |  |  |  |  |  |
| Balance as of April 1, 2024 | 26924631 | $269246 | (617313) | $(3060195) |  | $— | $40173000 | $11929195 | $49311246 |
| Net Income |  |  |  |  |  |  |  | 1564179 | 1564179 |
| Shares repurchased |  |  | (152089) | (715339) |  |  |  |  | (715339) |
| Balance as of June 30, 2024 | 26924631 | $269246 | (769402) | $(3775534) |  | $— | $40173000 | $13493374 | $50160086 |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| |  |  |  |  |  |  | | | |
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Preferred Stock** | **Preferred Stock** | | | |
| <br>**(Unaudited)** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** | <br>**Retained**<br>**Earnings** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |  |  |  |  |  |  |  |
| **Balance as of April 1, 2025** | **26924631** | $**269246** | **(929430)** | $**(4571449)** |  | $— | $**40173000** | $**19272062** | $**55142859** |
| **Net Income** |  |  |  |  |  |  |  | **2752399** | **2752399** |
| **Shares repurchased** | **—** | **—** | **(20163)** | **(118700)** | **—** | **—** |  |  | **(118700)** |
| **Balance as of June 30, 2025** | **26924631** | $**269246** | **(949593)** | $**(4690149)** | **—** | $**—** | $**40173000** | $**22024461** | $**57776558** |

---

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

[**Table of Contents**](#TOC)

#### ENVELA CORPORATION AND SUBSIDIARIES

#### CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Preferred Stock** | **Preferred Stock** | | | |
| <br>**(Unaudited)** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** | <br>**Retained**<br>**Earnings** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |  |  |  |  |  |  |  |
| Balance as of January 1, 2024 | 26924631 | $269246 | (415973) | $(2155049) |  | $— | $40173000 | $10021656 | $48308853 |
| Net Income |  |  |  |  |  |  |  | 3471718 | 3471718 |
| Shares repurchased | **—** | **—** | (353429) | (1620485) |  |  |  |  | (1620485) |
| Balance as of June 30, 2024 | 26924631 | $269246 | (769402) | $(3775534) |  | $— | $40173000 | $13493374 | $50160086 |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| |  |  |  |  |  |  | | | |
| | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | **Preferred Stock** | **Preferred Stock** | | | |
| <br>**(Unaudited)** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** | <br>**Retained**<br>**Earnings** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |  |  |  |  |  |  |  |
| **Balance as of January 1, 2025** | **26924631** | $**269246** | **(928930)** | $**(4568823)** |  | $— | $**40173000** | $**16778715** | $**52652138** |
| **Net Income** |  |  |  |  |  |  |  | **5245746** | **5245746** |
| **Shares repurchased** | **—** | **—** | **(20663)** | **(121326)** | **—** | **—** |  |  | **(121326)** |
| **Balance as of June 30, 2025** | **26924631** | $**269246** | **(949593)** | $**(4690149)** | **—** | $**—** | $**40173000** | $**22024461** | $**57776558** |

---

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 six months ended June 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 offers services that manage the entire lifecycle of technology products to ensure data security, regulatory compliance, and

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**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

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 Recognition 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 revenue at an amount that reflects the consideration to which we expect to be entitled to in exchange for transferring goods or services to the customer.

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 current precious metal spot price and weight of the precious metal. An adjustment to revenue is made once the underlying weight and any precious 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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**ENVELA CORPORATION AND SUBSIDIARIES**

**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 June 30, 2025, and December 31, 2024, the consumer segment's allowance for returns was $7,345 and $11,942, respectively.

As of June 30, 2025, and December 31, 2024, the commercial segment's allowance for returns was $64,425 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 product 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 six months ended June 30, 2025, two customers aggregated 50.3% of our sales and represented 19.1% of our accounts receivable balance.

For the six months ended June 30, 2024, two customers aggregated 21.0% 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 June 30, 2025 and 2024, the consumer segment's shipping and handling costs were $13,914 and $49,350, respectively. For the three months ended June 30, 2025 and 2024, the commercial segment's shipping and handling costs were $926,483 and $1,194,203, respectively.

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**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

For the six months ended June 30, 2025 and 2024, the consumer segment's shipping and handling costs were $30,600 and $49,789, respectively. For the six months ended June 30, 2025 and 2024, the commercial segment's shipping and handling costs were $1,917,808 and $2,588,280, respectively.

#### Advertising Costs
The consumer and commercial segment's advertising costs are expensed as incurred.

For the three months ended June 30, 2025 and 2024, the consumer segment's advertising costs were $290,277 and $324,868, respectively. For the three months ended June 30, 2025 and 2024, the commercial segment's advertising costs were $124,873 and $61,672, respectively.

For the six months ended June 30, 2025 and 2024, the consumer segment's advertising costs were $570,440 and $572,982, respectively. For the six months ended June 30, 2025 and 2024, the commercial segment's advertising costs were $206,008 and $132,977, 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 of 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 six months ended June 30, 2025 and 2024.

As of June 30, 2025, the Company had a deferred tax asset of $90,858. 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 June 30, 2025, or December 31, 2024.

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**ENVELA CORPORATION AND SUBSIDIARIES**

**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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**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

#### 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 uncollectable are included in the allowance for credit losses. Accounts receivables are considered delinquent when payment has not been made within contract terms. Accounts receivables are written off when all efforts to collect have been exhausted and the potential for recovery is considered remote.

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

As of June 30, 2025, and December 31, 2024, the commercial segment's allowance for credit losses was $511,439 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. The cost of our processed and unprocessed inventory, primarily consisting of base metals and electronic scrap materials, 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 six months ended June 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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**ENVELA CORPORATION AND SUBSIDIARIES**

**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:

---

| | |
|:---|:---|
| Automobiles and trucks | 5 to 7 years |
| Buildings | 39 years |
| Building improvements | Shorter of 15 years or remaining useful life |
| Furniture and fixtures | 5 to 7 years |
| Office technology | 3 to 7 years |
| Leasehold improvements | Shorter of 15 years or remaining lease term |
| Production and material handling equipment | 5 to 10 years |

---

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 | 10 years |
| Domain names | 5 years |
| Enterprise resource planning systems | 5 years |
| Trade names | 10 years |

---

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.

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

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**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

#### NOTE 4 — INVENTORIES
The following table summarizes the details of the Company's inventories:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| Consumer |  |  |
| Trade inventories | $**25221844** | $23973333 |
| &nbsp;&nbsp;Sub-total | **25221844** | 23973333 |
| Commercial |  |  |
| Trade inventories | **2159340** | 1732191 |
| &nbsp;&nbsp;Sub-total | **2159340** | 1732191 |
|  | $**27381184** | $25705524 |

---

#### NOTE 5 — GOODWILL
The following table summarizes the details of the Company's changes in goodwill:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| Consumer |  |  |
| Opening balance | $**—** | $300000 |
| Additions (reductions) <sup>(1)</sup> | **—** | (300000) |
| &nbsp;&nbsp;Sub-total | **—** |  |
| Commercial |  |  |
| Opening balance | **3621453** | 3621453 |
| Additions (reductions) | **—** |  |
| &nbsp;&nbsp;Sub-total | **3621453** | 3621453 |
|  | $**3621453** | $3621453 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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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**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

#### NOTE 6 — PROPERTY AND EQUIPMENT, NET
The following table summarizes the details of the Company's property and equipment, net:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| Consumer |  |  |
| Land | $**1824892** | $1824892 |
| Building and improvements | **6114344** | 6078606 |
| Leasehold improvements | **1972648** | 1736193 |
| Furniture and fixtures | **1409893** | 1203540 |
| Machinery and equipment | **1598448** | 1570704 |
| Vehicles | **53318** | 53318 |
| Construction in progress <sup>(1)</sup> | **62211** | 135856 |
|  | **13035754** | 12603109 |
| Less: accumulated depreciation | **(3495199)** | (3287437) |
| &nbsp;&nbsp;Sub-total | **9540555** | 9315672 |
| Commercial |  |  |
| Leasehold improvements | **160850** | 172391 |
| Furniture and fixtures | **74811** | 74811 |
| Machinery and equipment | **1357159** | 1336427 |
| Vehicles | **206556** | 206556 |
|  | **1799376** | 1790185 |
| Less: accumulated depreciation | **(1204173)** | (1112694) |
| &nbsp;&nbsp;Sub-total | **595203** | 677491 |
| Corporate |  |  |
| Land | **1106664** | 1106664 |
| Building and improvements | **2730138** | 2688523 |
| Furniture and fixtures | **35197** |  |
| Machinery and equipment | **55868** | 28627 |
| Construction in progress <sup>(1)</sup> | **83185** |  |
|  | **4011052** | 3823814 |
| Less: accumulated depreciation | **(344370)** | (301815) |
| &nbsp;&nbsp;Sub-total | **3666682** | 3521999 |
|  | $**13802440** | $13515162 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) As of June 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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**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

#### NOTE 7 — INTANGIBLE ASSETS, NET
The following table summarizes the details of the Company's intangible assets, net:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| Consumer |  |  |
| Technology | $**409896** | $409896 |
| Customer lists | **13000** | 13000 |
| Assets under development <sup>(1)</sup> | **3924** | 3381 |
|  | **426820** | 426277 |
| Less: accumulated amortization | **(384438)** | (379980) |
| &nbsp;&nbsp;Sub-total | **42382** | 46297 |
| Commercial |  |  |
| Trademarks/tradenames | **2869000** | 2869000 |
| Customer contracts | **1873000** | 1873000 |
| Customer relationships | **1809000** | 1809000 |
|  | **6551000** | 6551000 |
| Less: accumulated amortization | **(3192582)** | (2877855) |
| &nbsp;&nbsp;Sub-total | **3358418** | 3673145 |
| Corporate |  |  |
| Technology | **512635** | 462548 |
|  | **512635** | 462548 |
| Less: accumulated amortization | **(132669)** | (84212) |
| &nbsp;&nbsp;Sub-total | **379966** | 378336 |
|  | $**3780766** | $4097778 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) As of June 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 June 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Consumer** | **Commercial** | **Corporate** | **Total** |
| 2025 | 4464 | 314724 | 54280 | 373468 |
| 2026 | 8928 | 629448 | 108562 | 746938 |
| 2027 | 8928 | 629448 | 108562 | 746938 |
| 2028 | 8056 | 629448 | 108562 | 746066 |
| 2029 | 3273 | 539923 |  | 543196 |
| Thereafter | 4809 | 615427 |  | 620236 |
|  | $38458 | $3358418 | $379966 | $3776842 |

---

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**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

#### NOTE 8 — ACCRUED EXPENSES
The following table summarizes the details of the Company's accrued expenses:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| Consumer |  |  |
| Accrued interest | $**6158** | $11276 |
| Payroll | **377247** | 361829 |
| Taxes | **199160** | 133008 |
| &nbsp;&nbsp;Sub-total | **582565** | 506113 |
| Commercial |  |  |
| Accrued interest | **6934** | 7568 |
| Payroll | **453480** | 457722 |
| Taxes | **17693** |  |
| Unvouchered inventory payments | **1136404** | 1915567 |
| Other | **9799** | 26334 |
| &nbsp;&nbsp;Sub-total | **1624310** | 2407191 |
| Corporate |  |  |
| Accrued interest | **6517** | 6902 |
| Payroll | **29725** | 38205 |
| Taxes | **104921** | 153479 |
| Professional fees | **1888** | 81973 |
| Other | **32970** | 21480 |
| &nbsp;&nbsp;Sub-total | **176021** | 302039 |
|  | $**2382896** | $3215343 |

---

#### 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 June 30, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | Consumer | Commercial | Consolidated |
| Sales | $**43173758** | $**11703075** | $**54876833** | $31990028 | $13306974 | $45297002 |
| Cost of goods sold | **38515772** | **3973138** | **42488910** | 27968699 | 5938846 | 33907545 |
| Selling, general and administrative | **3735427** | **4936640** | **8672067** | 4009468 | 5108580 | 9118048 |
| Depreciation and amortization | **195604** | **264807** | **460411** | 112518 | 249749 | 362267 |
| &nbsp;&nbsp;Operating income | $**726955** | $**2528490** | $**3255445** | $(100657) | $2009799 | $1909142 |

---

[**Table of Contents**](#TOC)

**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | Consumer | Commercial | Consolidated |
| Operating income | $**726955** | $**2528490** | $**3255445** | $(100657) | $2009799 | $1909142 |
| Other income | **156158** | **238093** | **394251** | 8003 | 217414 | 225417 |
| Interest expense | **(53993)** | **(52235)** | **(106228)** | (55697) | (53444) | (109141) |
| &nbsp;&nbsp;Income before income taxes | $**829120** | $**2714348** | $**3543468** | $(148351) | $2173769 | $2025418 |

---

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | Consumer | Commercial | Consolidated |
| Sales | $**79944362** | $**23188300** | $**103132662** | $60216045 | $24938737 | $85154782 |
| Cost of goods sold | **71075473** | **7701242** | **78776715** | 52645527 | 10799114 | 63444641 |
| Selling, general and administrative | **7623333** | **9452996** | **17076329** | 7260958 | 9494066 | 16755024 |
| Depreciation and amortization | **376236** | **529516** | **905752** | 206194 | 499638 | 705832 |
| &nbsp;&nbsp;Operating income | $**869320** | $**5504546** | $**6373866** | $103366 | $4145919 | $4249285 |

---

[**Table of Contents**](#TOC)

**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | Consumer | Commercial | Consolidated |
| Operating income | $**869320** | $**5504546** | $**6373866** | $103366 | $4145919 | $4249285 |
| Other income | **157007** | **442849** | **599856** | 16008 | 447937 | 463945 |
| Interest expense | **(108040)** | **(104509)** | **(212549)** | (120098) | (109897) | (229995) |
| &nbsp;&nbsp;Income before income taxes | $**918287** | $**5842886** | $**6761173** | $(724) | $4483959 | $4483235 |

---

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 June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | 2024 |
| Consumer | $**291521** | $435671 |
| Commercial | **52271** | 108222 |
| Corporate | **153380** | 333139 |
|  | $**497172** | $877032 |

---

The following table depicts capital expenditures for the six months ended June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | 2024 |
| Consumer | $**560474** | $704624 |
| Commercial | **52271** | 108222 |
| Corporate | **269414** | 449175 |
|  | $**882159** | $1262021 |

---

The following table depicts the Company's total assets:

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **June 30, 2025** | December 31, 2024 |
| Consumer | $**43903025** | $40454328 |
| Commercial | **16001230** | 33068887 |
| Corporate | **22811505** | 4347274 |
|  | $**82715760** | $77870489 |

---

[**Table of Contents**](#TOC)

**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 June 30, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Sales** | **Gross Margin** | **Margin** | Sales | Gross Margin | Margin |
| Consumer | $**43173758** | $**4657986** | **10.8%**  | $31990028 | $4021329 | 12.6% |
| Commercial | **11703075** | **7729937** | **65.5%**  | 13306974 | 7368128 | 65.5% |
|  | $**54876833** | $**12387923** | **22.6%**  | $45297002 | $11389457 | 25.1% |

---

The following table depicts the Company's disaggregation of total sales and gross margin for the six months ended June 30, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Sales** | **Gross Margin** | **Margin** | Sales | Gross Margin | Margin |
| Consumer | $**79944362** | $**8868889** | **11.1%**  | $60216045 | $7570518 | 12.6% |
| Commercial | **23188300** | **15487058** | **66.8%**  | 24938737 | 14139623 | 56.7% |
|  | $**103132662** | $**24355947** | **23.6%**  | $85154782 | $21710141 | 25.5% |

---

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Accounts**<br>**Receivable** | **Contract**<br>**Assets** | **Contract**<br>**Liabilities** |
| Consumer |  |  |  |
| Opening Balance - 1/1/2024 | $3411501 | $— | $185348 |
| Closing Balance - 6/30/2024 | 396415 |  | 299613 |
| Commercial |  |  |  |
| Opening Balance - 1/1/2024 | 4399658 |  |  |
| Closing Balance - 6/30/2024 | 4441809 |  |  |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Accounts**<br>**Receivable** | **Contract**<br>**Assets** | **Contract**<br>**Liabilities** |
| Consumer |  |  |  |
| Opening Balance - 1/1/2025 | $738132 | $— | $435508 |
| Closing Balance - 6/30/2025 | 1395486 |  | 1601699 |
| Commercial |  |  |  |
| Opening Balance - 1/1/2025 | 3646106 |  |  |
| Closing Balance - 6/30/2025 | 3670433 |  | 3623 |

---

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

[**Table of Contents**](#TOC)

**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 June 30, 2025:

---

| | |
|:---|:---|
|  | **Operating**<br>**Leases** |
| Consumer |  |
| 2025 | $503126 |
| 2026 | 1186142 |
| 2027 | 887803 |
| 2028 | 652641 |
| 2029 | 533234 |
| Thereafter | 203191 |
| Total minimum lease payments | 3966137 |
| Less: imputed interest | (342884) |
| &nbsp;&nbsp;Sub-total | 3623253 |
| Commercial |  |
| 2025 | 621338 |
| 2026 | 474320 |
| 2027 | 33454 |
| 2028 |  |
| 2029 |  |
| Thereafter |  |
| Total minimum lease payments | 1129112 |
| Less: imputed interest | (23498) |
| &nbsp;&nbsp;Sub-total | 1105614 |
| Total | 4728867 |
| &nbsp;&nbsp;Less: current portion | 1818941 |
|  | $2909926 |

---

All of the Company's leased facilities as of June 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:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | 2024 |
| Non-cash activities: right-of-use operating lease assets obtained in exchange for new operating lease liabilities | $**951464** | $660087 |

---

[**Table of Contents**](#TOC)

**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 June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | 2024 |
| Operating lease cost | $**605553** | $511346 |
| Variable lease cost | **215083** | 127177 |
| Short-term lease cost | **31191** | 129379 |
|  | $**851827** | $767902 |

---

The following table depicts the Company's leasing costs for the six months ended June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | 2024 |
| Operating lease cost | $**1208522** | $984880 |
| Variable lease cost | **420664** | 387028 |
| Short-term lease cost | **100977** | 180729 |
|  | $**1730163** | $1552637 |

---

As of June 30, 2025, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.8 years and 4.2%. As of June 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 June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended**  | **Three Months Ended**  |
|  | **June 30,**  | **June 30,**  |
|  | **2025** | 2024 |
| Basic weighted average shares | **25991979** | 26248554 |
| Effect of potential dilutive securities | **—** | 15000 |
| Diluted weighted average shares | **25991979** | 26263554 |

---

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

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended**  | **Six Months Ended**  |
|  | **June 30,**  | **June 30,**  |
|  | **2025** | 2024 |
| Basic weighted average shares | **25993802** | 26333796 |
| Effect of potential dilutive securities | **—** | 15000 |
| Diluted weighted average shares | **25993802** | 26348796 |

---

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

[**Table of Contents**](#TOC)

**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

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 six months ended June 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Fiscal Period** | **Total Number of**<br>**Shares Purchased** | **Average Price**<br>**Paid per Share** | **Total Price**<br>**Paid** | **Shares Available**<br>**to Purchase** |
| Balance as of January 1, 2025 | 928930 | $4.92 | $4568823 | 71070 |
| &nbsp;&nbsp;January 1 - 31, 2025 |  |  |  | 71070 |
| &nbsp;&nbsp;February 1 - 28, 2025 |  |  |  | 71070 |
| &nbsp;&nbsp;March 1 - 31, 2025 | 500 | 5.25 | 2626 | 170570 |
| Balance as of March 31, 2025 | 929430 | $4.92 | $4571449 | 170570 |
| &nbsp;&nbsp;April 1 - 30, 2025 |  |  |  | 170570 |
| &nbsp;&nbsp;May 1 - 31, 2025 |  |  |  | 170570 |
| &nbsp;&nbsp;June 1 - 30, 2025 | 20163 | 5.89 | 118700 | 150407 |
| Balance as of June 30, 2025 | 949593 | $4.94 | $4690149 | 150407 |

---

For the three months ended June 30, 2025, the Company repurchased 20,163 shares for $118,700, for an average price of $5.89.

For the six months ended June 30, 2025, the Company repurchased 20,663 shares for $121,326, for an average price of $5.87.

[**Table of Contents**](#TOC)

**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** | **Outstanding Balance** |
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| Consumer |  |  |
| Note payable, FSB <sup>(1)</sup> | $**2399094** | $2455043 |
| Note payable, Truist Bank <sup>(3)</sup> | **781942** | 801175 |
| Notes payable, TBT <sup>(45)</sup> | **1929792** | 1979730 |
| Note payable, Scottsdale Transaction <sup>(6)</sup> | **50000** | 50000 |
| &nbsp;&nbsp;Sub-total | **5160828** | 5285948 |
| Commercial |  |  |
| Note payable, FSB <sup>(2)</sup> | **5442691** | 5569171 |
| Note payable, Avail Transaction <sup>(7)</sup> | **—** | 166667 |
| &nbsp;&nbsp;Sub-total | **5442691** | 5735838 |
| Corporate |  |  |
| Line of credit, FSB <sup>(8)</sup> | **—** |  |
| Note payable, TBT <sup>(9)</sup> | **2439767** | 2500393 |
| &nbsp;&nbsp;Sub-total | **2439767** | 2500393 |
| Total | **13043286** | 13522179 |
| &nbsp;&nbsp;Less: current portion | **(3374442)** | (3591351) |
|  | $**9668844** | $9930828 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;(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 bears interest at 3.75% and matures on September 14, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;(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.

[**Table of Contents**](#TOC)

**ENVELA CORPORATION AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;(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 bears interest at 3.25% and matures on November 3, 2025.

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2026** | **2027** | **2028** | **2029** | **Thereafter** |
| Consumer |  |  |  |  |  |  |
| Note payable, FSB <sup>(1)</sup> | 56612 | 2342481 |  |  |  |  |
| Note payable, Truist Bank <sup>(3)</sup> | 19511 | 40203 | 41716 | 43216 | 44913 | 592381 |
| Notes payable, TBT <sup>(45)</sup> | 443246 | 71593 | 74324 | 77018 | 80098 | 1183516 |
| Note payable, Scottsdale Transaction <sup>(6)</sup> | 31250 | 18750 |  |  |  |  |
| &nbsp;&nbsp;Sub-total | 550619 | 2473027 | 116040 | 120234 | 125011 | 1775897 |
| Commercial |  |  |  |  |  |  |
| Note payable, FSB <sup>(2)</sup> | 127986 | 5314705 |  |  |  |  |
| Note payable, Avail Transaction <sup>(7)</sup> |  |  |  |  |  |  |
| &nbsp;&nbsp;Sub-total | 127986 | 5314705 |  |  |  |  |
| Corporate |  |  |  |  |  |  |
| Line of Credit, FSB <sup>(8)</sup> |  |  |  |  |  |  |
| Note payable, TBT <sup>(9)</sup> | 2439767 |  |  |  |  |  |
| &nbsp;&nbsp;Sub-total | 2439767 |  |  |  |  |  |
|  | $3118372 | $7787732 | $116040 | $120234 | $125011 | $1775897 |

---

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

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

---

| | | | |
|:---|:---|:---|:---|
| <br>**Scheduled Principal Payments and Maturities by Year** | **Scheduled**<br>**Principal**<br>**Payments** | <br>**Loan**<br>**Maturities** | <br>**Total** |
| 2025 | 325939 | 2792433 | 3118372 |
| 2026 | 476475 | 7311257 | 7787732 |
| 2027 | 116040 |  | 116040 |
| 2028 | 120234 |  | 120234 |
| 2029 | 125011 |  | 125011 |
| Thereafter | 175713 | 1600184 | 1775897 |
|  | $1339412 | $11703874 | $13043286 |

---

[**Table of Contents**](#TOC)

**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 June 30, 2025, no awards have been granted under the 2025 Plan. As a result, no stock-based compensation expense was recognized for the three and six months ended June 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 six months ended June 30, 2025 and 2024.

[**Table of Contents**](#TOC)

#### 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

#### Introduction
This section includes a discussion of our operations for the three and six months ended June 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" was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We are currently evaluating the provisions of the new law and the potential effects on our financial position, results of operations, and cash flows. However, the Company does not expect the new law to have a material impact on the Company's results of operations, financial condition, or liquidity.

[**Table of Contents**](#TOC)

***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 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. The timing and scope of such tariffs by the U.S. and retaliatory tariffs by other countries in response to such tariffs are currently uncertain. The impacts of tariffs on each of our reportable segments are detailed below:

**Consumer Segment** 

The Company's 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 Company's 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:

#### 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

[**Table of Contents**](#TOC)

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.

[**Table of Contents**](#TOC)

#### Results of Operations

#### Comparison of the Three Months Ended June 30, 2025 and 2024
The following table depicts our disaggregated condensed consolidated statements of income for the three months ended June 30, 2025 and 2024:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | **% of Sales** <sup>(1)</sup> | Consumer | Commercial | Consolidated | % of Sales <sup>(1)</sup> |
| Sales | $**43173758** | $**11703075** | $**54876833** | **100.0%**  | $31990028 | $13306974 | $45297002 | 100.0% |
| &nbsp;&nbsp;&nbsp;Cost of goods sold | **38515772** | $**3973138** | **42488910** | **77.4%**  | 27968699 | 5938846 | 33907545 | 74.9% |
| Gross margin | **4657986** | **7729937** | **12387923** | **22.6%**  | 4021329 | 7368128 | 11389457 | 25.1% |
| Expenses: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | **3735427** | **4936640** | **8672067** | **15.8%**  | 4009468 | 5108580 | 9118048 | 20.1% |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **195604** | **264807** | **460411** | **0.8%**  | 112518 | 249749 | 362267 | 0.8% |
| Total operating expenses | **3931031** | **5201447** | **9132478** | **16.6%**  | 4121986 | 5358329 | 9480315 | 20.9% |
| Operating income (loss) | **726955** | **2528490** | **3255445** | **5.9%**  | (100657) | 2009799 | 1909142 | 4.2% |
| Other income (expense): |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income | **156158** | **238093** | **394251** | **0.7%**  | 8003 | 217414 | 225417 | 0.5% |
| &nbsp;&nbsp;&nbsp;Interest expense | **(53993)** | **(52235)** | **(106228)** | **(0.2)%**  | (55697) | (53444) | (109141) | (0.2)% |
| Income (loss) before income taxes | **829120** | **2714348** | **3543468** | **6.5%**  | (148351) | 2173769 | 2025418 | 4.5% |
| &nbsp;&nbsp;&nbsp;Income tax (expense) benefit | **(185749)** | **(605320)** | **(791069)** | **(1.4)%**  | (29607) | (431632) | (461239) | (1.0)% |
| Net income (loss) | $**643371** | $**2109028** | $**2752399** | **5.0%**  | $(177958) | $1742137 | $1564179 | 3.5% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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 June 30, 2025 and 2024:

#### Sales

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**54876833** | $45297002 | $9579831 | 21.1% |
| *% of consolidated sales* | ***100.0***<br>*%***  | *100.0*<br>*%*  |  |  |
| Consumer | $**43173758** | $31990028 | $11183730 | 35.0% |
| *% of consumer sales* | ***100.0***<br>*%***  | *100.0*<br>*%*  |  |  |
| Commercial | $**11703075** | $13306974 | $(1603899) | (12.1)% |
| *% of commercial sales* | ***100.0***<br>*%***  | *100.0*<br>*%*  |  |  |

---

[**Table of Contents**](#TOC)

Consolidated

Sales increased by $9,579,831, or 21.1%, during the three months ended June 30, 2025, to $54,876,833, as compared to $45,297,002 during the same period in Fiscal 2024.

Consumer Segment

Sales in the consumer segment increased by $11,183,730, or 35.0%, during the three months ended June 30, 2025, to $43,173,758, as compared to $31,990,028 during the same period in Fiscal 2024. The change was primarily attributed to stronger volumes and pricing on our wholesale precious metals transactions. Our wholesale precious metals transactions were impacted by favorable inbound material flow from our in-store buying programs. Our retail stores business also achieved favorable sales results.

Commercial Segment

Sales in the commercial segment decreased by $1,603,899, or 12.1%, during the three months ended June 30, 2025, to $11,703,075, as compared to $13,306,974 during the same period in Fiscal 2024. The change was primarily attributed to the unfavorable performance from our electronic scrap grades and associated recoveries attributable to significant inbound material flow from a single supplier that was present in the same period in Fiscal 2024 and less sales of personal technology assets and from ITAD revenue share settlements during the current period in Fiscal 2025, which were offset by continued growth in our product returns business.

#### Cost of Goods Sold

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**42488910** | $33907545 | $8581365 | 25.3% |
| *% of consolidated sales* | ***77.4***<br>*%***  | *74.9*<br>*%*  |  |  |
| Consumer | $**38515772** | $27968699 | $10547073 | 37.7% |
| *% of consumer sales* | ***89.2***<br>*%***  | *87.4*<br>*%*  |  |  |
| Commercial | $**3973138** | $5938846 | $(1965708) | (33.1)% |
| *% of commercial sales* | ***33.9***<br>*%***  | *44.6*<br>*%*  |  |  |

---

Consolidated

Cost of goods sold increased by $8,581,365, or 25.3%, during the three months ended June 30, 2025, to $42,488,910, as compared to $33,907,545 during the same period in Fiscal 2024.

Consumer Segment

Cost of goods sold in the consumer segment increased by $10,547,073, or 37.7%, during the three months ended June 30, 2025, to $38,515,772, as compared to $27,968,699 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 89.2% during the three months ended June 30, 2025, as compared to 87.4% during the three months ended June 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.

[**Table of Contents**](#TOC)

Commercial Segment

Cost of goods sold in the commercial segment decreased by $1,965,708, or 33.1%, during the three months ended June 30, 2025, to $3,973,138, as compared to $5,938,846 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned lower sales volumes across most of our segment verticals.

Cost of goods sold as a percentage of sales was 33.9% during the three months ended June 30, 2025, as compared to 44.6% during the three months ended June 30, 2024. The change was primarily attributed to our sales mix during Fiscal 2025 in which we experienced higher overall margins from the sale of personal technology assets and ITAD revenue share settlements coupled with continued growth in revenue from our service-related product returns business, which does not have a cost of goods sold component as the associated inventory remains with the client.

#### Gross Margin

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**12387923** | $11389457 | $998466 | 8.8% |
| *% of consolidated sales* | ***22.6***<br>*%***  | *25.1*<br>*%*  |  |  |
| Consumer | $**4657986** | $4021329 | $636657 | 15.8% |
| *% of consumer sales* | ***10.8***<br>*%***  | *12.6*<br>*%*  |  |  |
| Commercial | $**7729937** | $7368128 | $361809 | 4.9% |
| *% of commercial sales* | ***66.1***<br>*%***  | *55.4*<br>*%*  |  |  |

---

Consolidated

Gross margin increased by $998,466, or 8.8%, during the three months ended June 30, 2025, to $12,387,923, as compared to $11,389,457 during the same period in Fiscal 2024.

Consumer Segment

Gross margin in the consumer segment increased by $636,657, or 15.8%, during the three months ended June 30, 2025, to $4,657,986, as compared to $4,021,329 during the same period in Fiscal 2024. The net impact of the aforementioned increase in sales of $11,183,730 and increase in cost of goods sold of $10,547,073 resulted in the $636,657 increase in gross margin.

Commercial Segment

Gross margin in the commercial segment increased by $361,809, or 4.9%, during the three months ended June 30, 2025, to $7,729,937, as compared to $7,368,128 during the same period in Fiscal 2024. The net impact of the aforementioned decrease in sales of $1,603,899 and decrease in cost of goods sold $1,965,708 resulted in the $361,809 increase in gross margin.

[**Table of Contents**](#TOC)

#### Selling, General and Administrative

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**8672067** | $9118048 | $(445981) | (4.9)% |
| *% of consolidated sales* | ***15.8***<br>*%***  | *20.1*<br>*%*  |  |  |
| Consumer | $**3735427** | $4009468 | $(274041) | (6.8)% |
| *% of consumer sales* | ***8.7***<br>*%***  | *12.5*<br>*%*  |  |  |
| Commercial | $**4936640** | $5108580 | $(171940) | (3.4)% |
| *% of commercial sales* | ***42.2***<br>*%***  | *38.4*<br>*%*  |  |  |

---

Consolidated

Selling, general and administrative expense decreased by $445,981, or 4.9%, during the three months ended June 30, 2025, to $8,672,067, as compared to $9,118,048 during the same period in Fiscal 2024.

Consumer Segment

Selling, general and administrative expense in the consumer segment decreased by $274,041, or 6.8%, during the three months ended June 30, 2025, to $3,735,427, as compared to $4,009,468 during the same period in Fiscal 2024. The change was primarily attributed to cost reductions associated with store onboarding that occurred in the same period in Fiscal 2024 along with select reductions in production and non-production human capital costs associated with optimizing our headcount during the current period in Fiscal 2025, which was partially offset by the full cost structures related to our new stores.

Commercial Segment

Selling, general and administrative expense in the commercial segment decreased by $171,940, or 3.4%, during the three months ended June 30, 2025, to $4,936,640, as compared to $5,108,580 during the same period in Fiscal 2024. The change was primarily attributed to onboarding support services associated with our enterprise resource planning system ("ERP") that occurred during the same period in Fiscal 2024 as well as a reduction in variable-cost production expenses that scale with sales volumes, which was partially offset by an increase in non-production human capital costs during the current period in Fiscal 2025.

#### Depreciation and Amortization

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**460411** | $362267 | $98144 | 27.1% |
| *% of consolidated sales* | ***0.8***<br>*%***  | *0.8*<br>*%*  |  |  |
| Consumer | $**195604** | $112518 | $83086 | 73.8% |
| *% of consumer sales* | ***0.5***<br>*%***  | *0.4*<br>*%*  |  |  |
| Commercial | $**264807** | $249749 | $15058 | 6.0% |
| *% of commercial sales* | ***2.3***<br>*%***  | *1.9*<br>*%*  |  |  |

---

Consolidated

Depreciation and amortization expense increased by $98,144, or 27.1%, during the three months ended June 30, 2025, to $460,411, as compared to $362,267 during the same period in Fiscal 2024.

[**Table of Contents**](#TOC)

Consumer Segment

Depreciation and amortization expense in the consumer segment increased by $83,086, or 73.8%, during the three months ended June 30, 2025, to $195,604, as compared to $112,518 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 $15,058, or 6.0%, during the three months ended June 30, 2025, to $264,807, as compared to $249,749 during the same period in Fiscal 2024. There was no material change in depreciation or amortization expense from the same period in Fiscal 2024, and as such, no discussion point.

#### Other Income (Expense)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**394251** | $225417 | $168834 | 74.9% |
| *% of consolidated sales* | ***0.7***<br>*%***  | *0.5*<br>*%*  |  |  |
| Consumer | $**156158** | $8003 | $148155 | 1851.2% |
| *% of consumer sales* | ***0.4***<br>*%***  | *0.0*<br>*%*  |  |  |
| Commercial | $**238093** | $217414 | $20679 | 9.5% |
| *% of commercial sales* | ***2.0***<br>*%***  | *1.6*<br>*%*  |  |  |

---

Consolidated

Other income increased by $168,834, or 74.9%, during the three months ended June 30, 2025, to $394,251, as compared to $225,417 during the same period in Fiscal 2024.

Consumer Segment

Other income in the consumer segment increased by $148,155, or 1,851.2%, during the three months ended June 30, 2025, to $156,158, as compared to $8,003 during the same period in Fiscal 2024. The change was primarily attributed to the receipt of an employee retention credit and incrementally from the earnings on excess cash balances. The impact of dividend and interest income are referenced below.

Dividend income comprised $8,883 and $0 of other income during the three months ended June 30, 2025 and 2024, respectively. Interest income comprised $51,038 and $2 of other income during the three months ended June 30, 2025 and 2024, respectively.

Commercial Segment

Other income in the commercial segment increased by $20,679, or 9.5%, during the three months ended June 30, 2025, to $238,093, as compared to $217,414 during the same period in Fiscal 2024. The change was primarily attributed to the earnings on excess cash balances. The impact of dividend and interest income are referenced below.

Dividend income comprised $74,702 and $0 other income during the three months ended June 30, 2025 and 2024, respectively. Interest income comprised $130,427 and $199,960 of other income during the three months ended June 30, 2025 and 2024, respectively.

[**Table of Contents**](#TOC)

#### Interest Expense

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**(106228)** | $(109141) | $2913 | (2.7)% |
| *% of consolidated sales* | ***(0.2)***<br>*%***  | *(0.2)*<br>*%*  |  |  |
| Consumer | $**(53993)** | $(55697) | $1704 | (3.1)% |
| *% of consumer sales* | ***(0.1)***<br>*%***  | *(0.2)*<br>*%*  |  |  |
| Commercial | $**(52235)** | $(53444) | $1209 | (2.3)% |
| *% of commercial sales* | ***(0.4)***<br>*%***  | *(0.4)*<br>*%*  |  |  |

---

Consolidated

Interest expense decreased by $2,913, or 2.7%, during the three months ended June 30, 2025, to $106,228, as compared to $109,141 during the same period in Fiscal 2024.

Consumer Segment

Interest expense in the consumer segment decreased by $1,704, or 3.1%, during the three months ended June 30, 2025, to $53,993, as compared to $55,697 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 $1,209, or 2.3%, during the three months ended June 30, 2025, to $52,235, as compared to $53,444 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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**(791069)** | $(461239) | $(329830) | 71.5% |
| *% of consolidated sales* | ***(1.4)***<br>*%***  | *(1.0)*<br>*%*  |  |  |
| Consumer | $**(185749)** | $(29607) | $(156142) | 527.4% |
| *% of consumer sales* | ***(0.4)***<br>*%***  | *(0.1)*<br>*%*  |  |  |
| Commercial | $**(605320)** | $(431632) | $(173688) | 40.2% |
| *% of commercial sales* | ***(5.2)***<br>*%***  | *(3.2)*<br>*%*  |  |  |

---

Consolidated

Income tax expense increased by $329,830, or 71.5%, during the three months ended June 30, 2025, to $791,069, as compared to $461,239 during the same period in Fiscal 2024. Currently, the Company has a deferred tax asset reflecting a future tax benefit that the Company expects to receive. 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 22.3% and 22.8% for the three months ended June 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 increase for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

[**Table of Contents**](#TOC)

#### Net Income (Loss)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**2752399** | $1564179 | $1188220 | 76.0% |
| *% of consolidated sales* | ***5.0***<br>*%***  | *3.5*<br>*%*  |  |  |
| Consumer | $**643371** | $(177958) | $821329 | NM |
| *% of consumer sales* | ***1.5***<br>*%***  | *(0.6)*<br>*%*  |  |  |
| Commercial | $**2109028** | $1742137 | $366891 | 21.1% |
| *% of commercial sales* | ***18.0***<br>*%***  | *13.1*<br>*%*  |  |  |

---

NM – Not Meaningful

Consolidated

Net income increased by $1,188,220, or 76%, during the three months ended June 30, 2025, to $2,752,399, as compared to $1,564,179 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2025 and 2024 for further details.

Consumer Segment

Net income (loss) increased in the consumer segment by $821,329, during the three months ended June 30, 2025, to net income of $643,371, as compared to net loss of $177,958 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2025 and 2024 for further details.

Commercial Segment

Net income increased in the commercial segment by $366,891, or 21.1%, during the three months ended June 30, 2025, to $2,109,028, as compared to $1,742,137 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2025 and 2024 for further details.

#### Earnings Per Share
The following table depicts the Company's earnings per share:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**0.11** | $0.06 | $0.05 | 83.3% |

---

Consolidated

Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.05, or 83.3%, during the three months ended June 30, 2025, to $0.11, as compared to $0.06 during the same period in Fiscal 2024.

[**Table of Contents**](#TOC)

#### Comparison of the Six Months Ended June 30, 2025 and 2024
The following table depicts our disaggregated condensed consolidated statements of income for the six months ended June 30, 2025 and 2024:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | **% of Sales** <sup>(1)</sup> | Consumer | Commercial | Consolidated | % of Sales <sup>(1)</sup> |
| Sales | $**79944362** | $**23188300** | $**103132662** | **100.0%**  | $60216045 | $24938737 | $85154782 | 100.0% |
| &nbsp;&nbsp;&nbsp;Cost of goods sold | **71075473** | **7701242** | **78776715** | **76.4%**  | 52645527 | 10799114 | 63444641 | 74.5% |
| Gross margin | **8868889** | **15487058** | **24355947** | **23.6%**  | 7570518 | 14139623 | 21710141 | 25.5% |
| Expenses: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | **7623333** | **9452996** | **17076329** | **16.6%**  | 7260958 | 9494066 | 16755024 | 19.7% |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **376236** | **529516** | **905752** | **0.9%**  | 206194 | 499638 | 705832 | 0.8% |
| Total operating expenses | **7999569** | **9982512** | **17982081** | **17.5%**  | 7467152 | 9993704 | 17460856 | 20.5% |
| Operating income | **869320** | **5504546** | **6373866** | **6.1%**  | 103366 | 4145919 | 4249285 | 5.0% |
| Other income (expense): |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income | **157007** | **442849** | **599856** | **0.6%**  | 16008 | 447937 | 463945 | 0.5% |
| &nbsp;&nbsp;&nbsp;Interest expense | **(108040)** | **(104509)** | **(212549)** | **(0.2)%**  | (120098) | (109897) | (229995) | (0.3)% |
| Income before income taxes | **918287** | **5842886** | **6761173** | **6.6%**  | (724) | 4483959 | 4483235 | 5.3% |
| &nbsp;&nbsp;&nbsp;Income tax expense | **(205822)** | **(1309605)** | **(1515427)** | **(1.5)%**  | (88758) | (922759) | (1011517) | (1.2)% |
| Net income | $**712465** | $**4533281** | $**5245746** | **5.1%**  | $(89482) | $3561200 | $3471718 | 4.1% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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 six months ended June 30, 2025 and 2024:

#### Sales

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**103132662** | $85154782 | $17977880 | 21.1% |
| *% of consolidated sales* | ***100.0***<br>*%***  | *100.0*<br>*%*  |  |  |
| Consumer | $**79944362** | $60216045 | $19728317 | 32.8% |
| *% of consumer sales* | ***100.0***<br>*%***  | *100.0*<br>*%*  |  |  |
| Commercial | $**23188300** | $24938737 | $(1750437) | (7.0)% |
| *% of commercial sales* | ***100.0***<br>*%***  | *100.0*<br>*%*  |  |  |

---

Consolidated

Sales increased by $17,977,880 or 21.1%, during the six months ended June 30, 2025, to $103,132,662, as compared to $85,154,782 during the same period in Fiscal 2024.

[**Table of Contents**](#TOC)

Consumer Segment

Sales in the consumer segment increased by $19,728,317, or 32.8%, during the six months ended June 30, 2025, to $79,944,362, as compared to $60,216,045 during the same period in Fiscal 2024. The change was primarily attributed to the stronger volumes and pricing on our wholesale precious metals transactions that has 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 $1,750,437, or 7.0%, during the six months ended June 30, 2025, to $23,188,300, as compared to $24,938,737 during the same period in Fiscal 2024. The change was primarily attributed to less sales of personal technology assets and from ITAD revenue share settlements that occurred throughout Fiscal 2025 and incrementally from lower volumes of our electronic scrap grades and associated recoveries which was most pronounced in our second quarter of Fiscal 2025. Offsetting these unfavorable variances was the strong performance of our service-related product returns business.

#### Cost of Goods Sold

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**78776715** | $63444641 | $15332074 | 24.2% |
| *% of consolidated sales* | ***76.4***<br>*%***  | *74.5*<br>*%*  |  |  |
| Consumer | $**71075473** | $52645527 | $18429946 | 35.0% |
| *% of consumer sales* | ***88.9***<br>*%***  | *87.4*<br>*%*  |  |  |
| Commercial | $**7701242** | $10799114 | $(3097872) | (28.7)% |
| *% of commercial sales* | ***33.2***<br>*%***  | *43.3*<br>*%*  |  |  |

---

Consolidated

Cost of goods sold increased by $15,332,074, or 24.2%, during the six months ended June 30, 2025, to $78,776,715, as compared to $63,444,641 during the same period in Fiscal 2024.

Consumer Segment

Cost of goods sold in the consumer segment increased by $18,429,946, or 35.0%, during the six months ended June 30, 2025, to $71,075,473, as compared to $52,645,527 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned higher wholesale precious metals transactions compared to the same period in Fiscal 2024.

Cost of goods sold as a percentage of sales was 88.9% during the six months ended June 30, 2025, as compared to 87.4% during the six months ended June 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 $3,097,872, or 28.7%, during the six months ended June 30, 2025, to $7,701,242, as compared to $10,799,114 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned lower sales volumes across most of our segment verticals.

Cost of goods sold as a percentage of sales was 33.2% during the six months ended June 30, 2025, as compared to 43.3% during the six months ended June 30, 2024. The change was primarily attributed to our sales mix during Fiscal 2025 in which we experienced higher overall margins from the sale of personal technology assets and ITAD revenue share

[**Table of Contents**](#TOC)

settlements coupled with continued growth in revenue from our service-related product returns business, which does not have a cost of goods sold component as the associated inventory remains with the client.

#### Gross Margin

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**24355947** | $21710141 | $2645806 | 12.2% |
| *% of consolidated sales* | ***23.6***<br>*%***  | *25.5*<br>*%*  |  |  |
| Consumer | $**8868889** | $7570518 | $1298371 | 17.2% |
| *% of consumer sales* | ***11.1***<br>*%***  | *12.6*<br>*%*  |  |  |
| Commercial | $**15487058** | $14139623 | $1347435 | 9.5% |
| *% of commercial sales* | ***66.8***<br>*%***  | *56.7*<br>*%*  |  |  |

---

Consolidated

Gross margin increased by $2,645,806, or 12.2%, during the six months ended June 30, 2025, to $24,355,947, as compared to $21,710,141 during the same period in Fiscal 2024.

Consumer Segment

Gross margin in the consumer segment increased by $1,298,371, or 17.2%, during the six months ended June 30, 2025, to $8,868,889, as compared to $7,570,518 during the same period in Fiscal 2024. The net impact of the aforementioned increase in sales of $19,728,317 and increase in cost of goods sold of $18,429,946 resulted in the $1,298,371 increase in gross margin.

Commercial Segment

Gross margin in the commercial segment increased by $1,347,435, or 9.5%, during the six months ended June 30, 2025, to $15,487,058, as compared to $14,139,623 during the same period in Fiscal 2024. The net impact of the aforementioned decrease in sales of $1,750,437 and decrease in cost of goods sold of $3,097,872 resulted in the $1,347,435 increase in gross margin.

#### Selling, General and Administrative

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**17076329** | $16755024 | $321305 | 1.9% |
| *% of consolidated sales* | ***16.6***<br>*%***  | *19.7*<br>*%*  |  |  |
| Consumer | $**7623333** | $7260958 | $362375 | 5.0% |
| *% of consumer sales* | ***9.5***<br>*%***  | *12.1*<br>*%*  |  |  |
| Commercial | $**9452996** | $9494066 | $(41070) | (0.4)% |
| *% of commercial sales* | ***40.8***<br>*%***  | *38.1*<br>*%*  |  |  |

---

Consolidated

Selling, general and administrative expense increased by $321,305, or 1.9%, during the six months ended June 30, 2025, to $17,076,329, as compared to $16,755,024 during the same period in Fiscal 2024.

[**Table of Contents**](#TOC)

Consumer Segment

Selling, general and administrative expense in the consumer segment increased by $362,375, or 5.0%, during the six months ended June 30, 2025, to $7,623,333, as compared to $7,260,958 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 that occurred in the same period in Fiscal 2024 along with select reductions in production human capital costs associated with optimizing our headcount which was more impactful in the second quarter of Fiscal 2025.

Commercial Segment

Selling, general and administrative expense in the commercial segment decreased by $41,070, or 0.4%, during the six months ended June 30, 2025, to $9,452,996, as compared to $9,494,066 during the same period in Fiscal 2024. The business has been able to maintain its cost structure over the same period in Fiscal 2024, and as such, no discussion point.

#### Depreciation and Amortization

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**905752** | $705832 | $199920 | 28.3% |
| *% of consolidated sales* | ***0.9***<br>*%***  | *0.8*<br>*%*  |  |  |
| Consumer | $**376236** | $206194 | $170042 | 82.5% |
| *% of consumer sales* | ***0.5***<br>*%***  | *0.3*<br>*%*  |  |  |
| Commercial | $**529516** | $499638 | $29878 | 6.0% |
| *% of commercial sales* | ***2.3***<br>*%***  | *2.0*<br>*%*  |  |  |

---

Consolidated

Depreciation and amortization expense increased by $199,920, or 28.3%, during the six months ended June 30, 2025, to $905,752, as compared to $705,832 during the same period in Fiscal 2024.

Consumer Segment

Depreciation and amortization expense in the consumer segment increased by $170,042, or 82.5%, during the six months ended June 30, 2025, to $376,236, as compared to $206,194 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 $29,878, or 6.0%, during the six months ended June 30, 2025, to $529,516, as compared to $499,638 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.

[**Table of Contents**](#TOC)

#### Other Income (Expense)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**599856** | $463945 | $135911 | 29.3% |
| *% of consolidated sales* | ***0.6***<br>*%***  | *0.5*<br>*%*  |  |  |
| Consumer | $**157007** | $16008 | $140999 | 880.8% |
| *% of consumer sales* | ***0.2***<br>*%***  | *0.0*<br>*%*  |  |  |
| Commercial | $**442849** | $447937 | $(5088) | (1.1)% |
| *% of commercial sales* | ***1.9***<br>*%***  | *1.8*<br>*%*  |  |  |

---

Consolidated

Other income increased by $135,911, or 29.3%, during the six months ended June 30, 2025, to $599,856, as compared to $463,945 during the same period in Fiscal 2024.

Consumer Segment

Other income in the consumer segment increased by $140,999, or 880.8%, during the six months ended June 30, 2025, to $157,007, as compared to $16,008 during the same period in Fiscal 2024. The change was primarily attributed to the receipt of an employee retention credit and incrementally from the earnings on excess cash balances. The impact of dividend and interest income is referenced below.

Dividend income comprised $8,883 and $0 of other income during the six months ended June 30, 2025 and 2024, respectively. Interest income comprised $51,038 and $8 of other income during the six months ended June 30, 2025 and 2024, respectively.

Commercial Segment

Other income in the commercial segment decreased by $5,088, or 1.1%, during the six months ended June 30, 2025, to $442,849, as compared to $447,937 during the same period in Fiscal 2024. The change was primarily attributed to a reduction in earned interest rates associated with our interest bearing account and from rental income being present in our first quarter of Fiscal 2024 results. The impact of dividend and interest income is referenced below.

Dividend income comprised $129,567 and $0 of other income during the six months ended June 30, 2025 and 2024, respectively. Interest income comprised $274,758 and $396,522 of other income during the six months ended June 30, 2025 and 2024, respectively.

#### Interest Expense

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**(212549)** | $(229995) | $17446 | (7.6)% |
| *% of consolidated sales* | ***(0.2)***<br>*%***  | *(0.3)*<br>*%*  |  |  |
| Consumer | $**(108040)** | $(120098) | $12058 | (10.0)% |
| *% of consumer sales* | ***(0.1)***<br>*%***  | *(0.2)*<br>*%*  |  |  |
| Commercial | $**(104509)** | $(109897) | $5388 | (4.9)% |
| *% of commercial sales* | ***(0.5)***<br>*%***  | *(0.4)*<br>*%*  |  |  |

---

[**Table of Contents**](#TOC)

Consolidated

Interest expense decreased by $17,446, or 7.6%, during the six months ended June 30, 2025, to $212,549, as compared to $229,995 during the same period in Fiscal 2024.

Consumer Segment

Interest expense in the consumer segment decreased by $12,058, or 10%, during the six months ended June 30, 2025, to $108,040, as compared to $120,098 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 $5,388, or 4.9%, during the six months ended June 30, 2025, to $104,509, as compared to $109,897 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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**(1515427)** | $(1011517) | $(503910) | 49.8% |
| *% of consolidated sales* | ***(1.5)***<br>*%***  | *(1.2)*<br>*%*  |  |  |
| Consumer | $**(205822)** | $(88758) | $(117064) | 131.9% |
| *% of consumer sales* | ***(0.3)***<br>*%***  | *(0.1)*<br>*%*  |  |  |
| Commercial | $**(1309605)** | $(922759) | $(386846) | 41.9% |
| *% of commercial sales* | ***(5.6)***<br>*%***  | *(3.7)*<br>*%*  |  |  |

---

Consolidated

Income tax expense increased by $503,910, or 49.8%, during the six months ended June 30, 2025, to $1,515,427, as compared to $1,011,517 during the same period in Fiscal 2024. Currently, the Company has a deferred tax asset reflecting a future tax benefit that the Company expects to receive. 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 22.6% for the six months ended June 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 increase for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

[**Table of Contents**](#TOC)

#### Net Income (Loss)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**5245746** | $3471718 | $1774028 | 51.1% |
| *% of consolidated sales* | ***5.1***<br>*%***  | *4.1*<br>*%*  |  |  |
| Consumer | $**712465** | $(89482) | $801947 | NM |
| *% of consumer sales* | ***0.9***<br>*%***  | *(0.1)*<br>*%*  |  |  |
| Commercial | $**4533281** | $3561200 | $972081 | 27.3% |
| *% of commercial sales* | ***19.5***<br>*%***  | *14.3*<br>*%*  |  |  |

---

NM – Not Meaningful

Consolidated

Net income increased by $1,774,028, or 51.1%, during the six months ended June 30, 2025, to $5,245,746, as compared to $3,471,718 during the same period in Fiscal 2024.

Consumer Segment

Net income (loss) increased in the consumer segment by $801,947, during the six months ended June 30, 2025, to net income of $712,465, as compared to net loss of $89,482 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Six Months Ended June 30, 2025 and 2024 for further details.

Commercial Segment

Net income increased in the commercial segment by $972,081, or 27.3%, during the six months ended June 30, 2025, to $4,533,281, as compared to $3,561,200 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Six Months Ended June 30, 2025 and 2024 for further details.

#### Earnings Per Share
The following table depicts the Company's earnings per share:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Consolidated | $**0.20** | $0.13 | $0.07 | 53.8% |

---

Consolidated

Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.07, or 53.8%, during the six months ended June 30, 2025, to $0.20, as compared to $0.13 during the same period in Fiscal 2024.

#### Non-U.S. GAAP Financial Measures
Within this management discussion and analysis, we use supplemental measures of our performance, which are derived from our consolidated financial information, but which are not presented in our condensed consolidated financial statements prepared in accordance with U.S. GAAP. We believe that providing these non-U.S. GAAP financial measures adds a meaningful presentation of our operating and financial performance. See the reconciliation of net income to adjusted earnings before interest, tax, depreciation, and amortization ("Adjusted EBITDA") and Net Cash, in Non-U.S. GAAP Financial Measures below.

[**Table of Contents**](#TOC)

#### Adjusted EBITDA
Adjusted EBITDA is defined as the sum of net income (loss) of the Company, adjusted for additions (deductions) of interest expense, other (income) expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA is a key performance measure that management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure as an overall assessment of our performance, to evaluate the effectiveness of our strategies and for planning purposes.

The following table provides a reconciliation of net income to Adjusted EBITDA for the three months ended June 30, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | Consumer | Commercial | Consolidated |
| Adjusted EBITDA Reconciliation: | Adjusted EBITDA Reconciliation: |  |  |  |  |  |
| Net income (loss) | $**643371** | $**2109028** | $**2752399** | $(177958) | $1742137 | $1564179 |
| Addition (deduction): |  |  |  |  |  |  |
| Depreciation and amortization | **195604** | **264807** | **460411** | 112518 | 249749 | 362267 |
| Other income | **(156158)** | **(238093)** | **(394251)** | (8003) | (217414) | (225417) |
| Interest expense | **53993** | **52235** | **106228** | 55697 | 53444 | 109141 |
| Income tax expense  | **185749** | **605320** | **791069** | 29607 | 431632 | 461239 |
|  | $**922559** | $**2793297** | $**3715856** | $11861 | $2259548 | $2271409 |

---

The following table provides a reconciliation of net income to Adjusted EBITDA for the six months ended June 30, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Consumer** | **Commercial** | **Consolidated** | Consumer | Commercial | Consolidated |
| Adjusted EBITDA Reconciliation: | Adjusted EBITDA Reconciliation: |  |  |  |  |  |
| Net income | $**712465** | $**4533281** | $**5245746** | $(89482) | $3561200 | $3471718 |
| Addition (deduction): |  |  |  |  |  |  |
| Depreciation and amortization | **376236** | **529516** | **905752** | 206194 | 499638 | 705832 |
| Other income | **(157007)** | **(442849)** | **(599856)** | (16008) | (447937) | (463945) |
| Interest expense | **108040** | **104509** | **212549** | 120098 | 109897 | 229995 |
| Income tax expense | **205822** | **1309605** | **1515427** | 88758 | 922759 | 1011517 |
|  | $**1245556** | $**6034062** | $**7279618** | $309560 | $4645557 | $4955117 |

---

#### Net Cash
Net Cash is defined as the difference between (i) cash and cash equivalents and (ii) the sum of debt obligations. We believe that presenting Net Cash is useful to investors as a measure of our liquidity and leverage profile, as cash and cash equivalents can be used, among other things, to repay indebtedness.

[**Table of Contents**](#TOC)

The following table depicts the Company's Net Cash:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | December 31, <br>2024 |
| Total cash | $**22851869** | $20609003 |
| Less: debt obligations | **(13043286)** | (13522179) |
|  | $**9808583** | $7086824 |

---

#### Liquidity and Capital Resources
The following table summarizes the Company's condensed consolidated statement of cash flows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Change** | **Change** |
|  | **2025** | 2024 | Amount | % |
| Net cash provided by (used in): |  |  |  |  |
| &nbsp;&nbsp;Operating activities | $**3722594** | $3002262 | $720332 | 24.0% |
| &nbsp;&nbsp;Investing activities | **(879509)** | (1265004) | 385495 | (30.5)% |
| &nbsp;&nbsp;Financing activities | **(600219)** | (2247110) | 1646891 | (73.3)% |
| Net increase (decrease) in cash and cash equivalents | $**2242866** | $(509852) | $2752718 | NM |

---

NM – Not Meaningful

#### Operating Activities
Cash flows provided by operations increased by $720,332, or 24.0%, during the six months ended June 30, 2025, to $3,722,594, as compared to $3,002,262 during the same period in Fiscal 2024. The increase 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 changes in operating assets and liabilities, from the six months ended June 30, 2024 to the same period during Fiscal 2025:

● **Accounts receivable:** a $3,496,816 net increase primarily attributed to our commercial segment, due to an increase in accounts receivable in the normal course of operations in Fiscal 2025, offset by significant collections from a services customer in Fiscal 2024.

● **Inventories:** a $1,958,081 net decrease primarily attributed to our consumer segment, due to a lesser increase in inventory in Fiscal 2025 than from that incurred in Fiscal 2024 as a result of greater purchases of inventory to support the onboarding of our new stores.

● **Prepaid expenses:** a $452,133 net increase primarily attributed to our commercial segment, resulting from incurring costs in Fiscal 2025 to obtain a contract and from a reduction in prepaid freight associated with our ITAD revenue share settlements in Fiscal 2024.

● **Accrued expenses:** a $188,591 net decrease primarily attributed to our commercial segment, resulting from a reduction in unvouchered inventory purchases on assets still in evaluation phase in Fiscal 2025, partially offset by a greater reduction in accrued payroll and accrued tax in Fiscal 2024.

● **Other liabilities:** a $1,080,275 net increase primarily attributed to our consumer segment, resulting from purchased gift cards that occurred in Fiscal 2025.

#### Investing Activities
Cash flows (used in) investing activities decreased by $385,495, or 30.5%, during the six months ended June 30, 2025, to $879,509, as compared to $1,265,004 during the same period in Fiscal 2024. The decrease in cash (used in) investing activities during the six months ended June 30, 2025 was primarily attributed to a reduction in costs spent on our ERP and was partially offset by an increase in new store capital expenditures.

[**Table of Contents**](#TOC)

#### Financing Activities
Cash flows (used in) financing activities decreased by $1,646,891, or 73.3%, during the six months ended June 30, 2025, to $600,219, as compared to $2,247,110 during the same period in Fiscal 2024. The decrease in cash (used in) financing activities during the six months ended June 30, 2025, was primarily due to a reduction in share buybacks.

#### 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 June 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 June 30, 2025, the Company had no commitments for capital expenditures.

#### 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 June 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 June 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.

[**Table of Contents**](#TOC)

#### 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.

[**Table of Contents**](#TOC)

#### 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 June 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Fiscal Period** | **Total Number of**<br>**Shares Purchased**<br>**as Part of Publicly**<br>**Announced Plan**<br>**or Program** <sup>(1) (2)</sup> | <br>**Average Price**<br>**Paid Per Share ($)** | <br>**Total Price**<br>**Paid** | &nbsp;&nbsp;&nbsp;&nbsp;<br>**Maximum Number**<br>**of Shares that May**<br>**Yet be Purchased**<br>**Under the Plan** <sup>(1)</sup> |
| Balance as of March 31, 2025 | 929430 | $4.92 | $4571449 | 170570 |
| &nbsp;&nbsp;April 1 - 30, 2025 |  |  |  | 170570 |
| &nbsp;&nbsp;May 1 - 31, 2025 |  |  |  | 170570 |
| &nbsp;&nbsp;June 1 - 30, 2025 | 20163 | 5.89 | 118700 | 150407 |
| Balance as of June 30, 2025 | 949593 | $4.94 | $4690149 | 150407 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;(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

[**Table of Contents**](#TOC)

#### ITEM 5. OTHER INFORMATION
None

[**Table of Contents**](#TOC)

#### ITEM 6. EXHIBITS

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Exhibit**<br>**Number** | **Description** | **Filed**<br>**Herein** | **Incorporated**<br>**by Reference** | **Form** | **Date Filed**<br>**with SEC** |
| 3.1 | [Amended and Restated Bylaws, dated April 17, 2025](https://www.sec.gov/Archives/edgar/data/701719/000070171925000014/ela-20250417xex3d1.htm) |  | X | 8-K | April 23, 2025 |
| 10.1 | [2025 Equity Incentive Plan of Envela Corporation](ela-20250630xex10d1.htm) | X |  |  |  |
| 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](ela-20250630xex31d1.htm) | 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](ela-20250630xex31d2.htm) | 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](ela-20250630xex32d1.htm) | 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](ela-20250630xex32d2.htm) | 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 |  |  |  |

---

[**Table of Contents**](#TOC)

#### 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** | **ENVELA CORPORATION** |
|  | (Registrant) | (Registrant) |
| Date: August 6, 2025 |  | /s/ JOHN G. DELUCA |
|  |  | John G. DeLuca |
|  |  | Chief Financial Officer<br>(Principal Accounting Officer) |

---

**G**

[**Table of Contents**](#TOC)

**GLOSSARY OF DEFINED TERMS**

The following definitions apply to terms used in this document:

---

| | |
|:---|:---|
| 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 EBITDA | Adjusted Earnings Before Interest, Tax, Depreciation, and Amortization |
| 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  |
| Avail Transaction | The acquisition of Avail Recovery Solutions, LLC on October 29, 2021  |
| Board | Board of Directors |
| 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 |
| 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 six months ended June 30, 2025 |
| FSB | Farmer's State Bank of Oakley, Kansas |
| IT | Information Technology |
| ITAD | Information Technology Asset Disposition |
| ISO | Incentive Stock Options |
| NYSE | New York Stock Exchange |
| Net Cash | The difference between (i) cash and cash equivalents and (ii) the sum of debt obligations |
| Securities Act | Securities Act of 1933 |
| Scottsdale Transaction | The acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona  |
| SEC | U.S. Securities and Exchange Commission  |
| SOW | Scope of Work |
| TBT | Texas Bank & Trust |
| U.S. | United States |
| U.S. Dollar | $|
| U.S. GAAP | United States Generally Accepted Accounting Principles |

---

## Exhibit 10.1

**EXHIBIT 10.1**

ENVELA CORPORATION

2025 EQUITY INCENTIVE PLAN

1. Purpose

The proper execution of the duties and responsibilities of the executives, directors, and key employees of Envela Corp. (the "Corporation") is a vital factor in the continued growth and success of the Corporation. Toward this end, it is necessary to attract and retain effective and capable individuals to assume positions and provide services that contribute materially to the successful operation of the business of the Corporation. It will benefit the Corporation, therefore, to bind the interests of these persons more closely to its own interests by offering them an attractive opportunity to acquire a proprietary interest in the Corporation and thereby provide them with added incentive to remain in the service of the Corporation and to increase the prosperity, growth, and earnings of the Corporation. This equity incentive plan is intended to serve these purposes.

2. Definitions

The following terms wherever used herein will have the meanings set forth below.

 

*"Affiliate"* means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. An entity shall be deemed an Affiliate for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained. For purposes of this definition, "control" (including with correlative meanings, the terms "controlling," "controlled by," or "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract or otherwise. 

*"Board of Directors"* or *"Board"* means the Board of Directors of the Corporation.

 

*"Cause"* shall have the meaning assigned to such term in any Corporation, Subsidiary, or Affiliate unexpired employment, severance, or similar agreement or Option Agreement with an Optionee, or if no such agreement exists or if such agreement does not define "Cause" (or a word of like import), Cause means (i) the Optionee's breach of fiduciary duty or duty of loyalty to the Corporation, (ii) the Optionee's conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude, (iii) the Optionee's failure, refusal or neglect to perform and discharge his or her duties and responsibilities on behalf of the Corporation or a Subsidiary of the Corporation (other than by reason of disability) or to comply with any lawful directive of the Board or its designee, (iv) the Optionee's breach of any written policy of the Corporation or a Subsidiary or Affiliate thereof (including, without limitation, those relating to sexual harassment or the disclosure or misuse of confidential information), (v) the Optionee's breach of any agreement with the Corporation or a Subsidiary or Affiliate thereof (including, without limitation, any confidentiality, non-competition, non-solicitation or assignment of inventions agreement), (vi) the Optionee's commission of fraud, dishonesty, theft, embezzlement, self-dealing, misappropriation or other malfeasance against the business of the Corporation or a Subsidiary or Affiliate thereof, or (vii) the Optionee's commission of acts or omissions constituting gross negligence or gross misconduct in the performance of any aspect of his or her lawful duties or responsibilities, which have or may be expected to have an adverse effect on the Corporation, its Subsidiaries or Affiliates. An Optionee's employment shall be deemed to have terminated for "Cause" if, on the date his or her employment terminates, facts and circumstances exist that would have justified a termination for Cause, to the extent that such facts and circumstances are discovered within three (3) months following such termination. The Board, in its absolute discretion, shall determine the effect of all matters and questions relating to whether an Optionee's has been discharged for Cause.

*"Code"* means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

 

*"Committee"* means a committee to be appointed by the Board of Directors in accordance with Section 4(a) of the Plan.

 

*"Common Stock"* means the shares of common stock of the Corporation, including both the voting and any non-voting classes of stock.

------

 

*"Corporation"* means Envela Corp., a Nevada corporation.

*"Employee"* means a common-law employee of the Corporation or a Subsidiary.

*"Employment"* means periods during which an Employee qualifies as an Employee.

*"Exchange Act"* means the Securities Exchange Act of 1934, as amended.

*"Fair Market Value"* of the Common Stock on any date will be (a) the average on that date of the high and low prices of a share of Common Stock on the New York Stock Exchange American capital market; or (b) such other value as the Board reasonably determines is a more accurate indication of the fair market value of the Common Stock.

 

*"Immediate Family Member"* means each of (a) the children, step children or grandchildren of the Employee to whom the Option is granted, (b) the spouse or any parent of the Employee to whom the Option is granted, (c) any trust solely for the benefit of any such family members, and (iv) any partnership or other entity in which such family members are the only partners or other equity holders.

*"Incentive Stock Option"* means any Option granted pursuant to the Plan that is designated as an Incentive Stock Option and which satisfies the requirements of Section 422(b) of the Code.

*"Nonstatutory Stock Option"* means any Option granted pursuant to the Plan that is not an Incentive Stock Option.

 

*"Option"* or *"Stock Option"* means a right granted pursuant to the Plan to purchase shares of Common Stock and includes the terms "Incentive Stock Option " and "Nonstatutory Stock Option."

 

*"Optionee"* means an Employee who is granted an Option under this Plan.

*"Option Agreement"* means a written agreement representing Options granted pursuant to the Plan, as contemplated by Section 7 of the Plan.

 

*"Option Holder"* means the Optionee or, if applicable, the person to whom the Optionee's rights under the Option Agreement have been validly transferred.

 

*"Parent"* means a "parent company" of the Corporation, whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

*"Plan"* means the Envela Corporation 2025 Equity Incentive Plan as originally approved by the Board of Directors on April 30<sup>th</sup> 2025, as embodied in this document, and as the same may be amended from time to time.

*"Share"* means a share of the Common Stock of the Corporation that is subject to an Option as adjusted in accordance with Section 9 of the Plan.

 

*"Subsidiary"* means a "subsidiary corporation" of Corporation or a Parent, whether now or hereafter existing, as defined in Section 424(f) of the Code.

3. Effective Date of the Plan

The Plan will become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Corporation, provided that such shareholder approval is received before the expiration of one year from the date the Plan is approved by the Board of Directors, and provided further that the Board of Directors may grant Options pursuant to the Plan prior to shareholder approval if such Options by their terms are contingent upon subsequent shareholder approval of the Plan.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

4. Administration

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) <u>Procedure</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) <u>Administration With Respect to Directors and Officers</u>. With respect to grants of Options to Employees who are also officers or directors of the Corporation, the Plan will be administered by (A) the Board, if the Board may administer the Plan in compliance with Rule 16b-3 promulgated under the Exchange Act or any successor thereto ("Rule 16b-3") with respect to a plan intended to qualify thereunder as a discretionary plan, or (B) a committee designated by the Board to administer the Plan, which committee must be constituted in such a manner as to permit the Plan to comply with Rule 16b-3 with respect to a plan intended to qualify thereunder as a discretionary plan. Once appointed, such Committee will continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without Cause) and appoint new members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as a discretionary plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) <u>Multiple Administrative Bodies</u>. If permitted by Rule 16b-3, the Plan may be administered by different bodies with respect to directors, non-director officers and Employees who are neither directors nor officers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii) <u>Administration With Respect to Other Employees</u>. With respect to grants of Options to Employees who are neither directors nor officers of the Corporation, the Plan will be administered by (A) the Board or (B) a Committee designated by the Board, which committee must be constituted in such a manner as to satisfy the legal requirements relating to the administration of incentive stock option plans, if any, of the Nevada corporate and securities laws and of the Code (the "Applicable Laws"). Once appointed, such Committee will continue to serve in its designated capacity until otherwise directed by the Board. From time to time, the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without Cause) and appoint new members in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Powers of the Board</u>. Subject to the provisions of the Plan, the Board (or the Committee) will have the authority, in its discretion: (i) to grant Incentive Stock Options or Nonstatutory Stock Options; (ii) to determine, upon review of relevant information, the fair market value of the Common Stock in each class; (iii) to determine the exercise price per Share of Options to be granted, which exercise price must be determined in accordance with Section 7(b) of the Plan; (iv) to determine the regular, full-time Employees and non-employee directors to whom, and the time or times at which, Options will be granted and the number of Shares to be represented by each Option; (v) to interpret the Plan; (vi) to prescribe, amend and rescind rules and regulations relating to the Plan; (vii) to determine the rules and provisions of each Option granted (which need not be identical) and, with the consent of the holder thereof, modify or amend each Option; (viii) to accelerate or defer (with the consent of the Option Holder) the exercise date of any Option, consistent with the provisions of Section 7 of the Plan; (ix) to authorize any person to execute on behalf of the Corporation any instrument required to effectuate the grant of an Option previously granted by the Board or Committee; and (x) to make all other determinations deemed necessary or advisable for the administration of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) <u>Effect of Board's Decision</u>. All decisions, determinations and interpretations of the Board (or the Committee designated by the Board to administer the Plan) will be final and binding on all Optionees, and Option Holders of any Options under the Plan.

5. Participation in the Plan

Participation in the Plan will be limited to those Employees who are both (i) designated for payroll purposes as full-time, permanent employees of the Corporation and any Parent or Subsidiary and (ii) designated by the Committee and approved by the Board of Directors to participate in the Plan. The Plan will not confer upon any Optionee any right with respect to continuation of Employment, nor will it interfere in any way with his or her right or the Corporation's right to terminate his or her employment at any time, with or without Cause.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

6. Stock Subject to the Plan

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Section 9 of the Plan, there will be reserved for the granting of Options pursuant to the Plan and for issuance and sale pursuant to such Options 1,100,000 shares of Common Stock, subject to adjustments as provided in Section 7(d) of the Plan. To determine the number of Shares of either the voting or nonvoting class of Common Stock that is available at any time for the granting of Options, there will be deducted from the total number of reserved shares of that class of Common Stock, the number of shares of that class of Common Stock in respect of which Options have been granted pursuant to the Plan that are still outstanding or have been exercised. Any shares of Common Stock subject to an Option under the Plan that, after the effective date of the Plan, are forfeited, canceled, settled or otherwise terminated without a distribution of Shares to an Optionee will thereafter be deemed to be available for grant with respect to shares of Common Stock. In applying the immediately preceding sentence, if (i) Shares otherwise issuable or issued in respect of, or as part of, an Option are withheld to cover taxes or any applicable exercise price, such Shares shall be treated as having been issued under the Plan and shall not be available for issuance under the Plan, and (ii) any Options are exercised, the aggregate number of Shares subject to such Options shall be deemed issued under the Plan and shall not be available for issuance under the Plan. In addition, Shares (x) tendered to exercise outstanding Options, or (y) withheld to cover applicable taxes on any Options shall not be available for issuance under the Plan. The shares of Common Stock to be issued pursuant to the Plan will be made available from the authorized but unissued shares of Common Stock or reacquired Common Stock. If for any reason shares of Common Stock as to which an Option has been granted cease to be subject to purchase thereunder, then such shares of Common Stock again will (unless the Plan has been terminated) be available for issuance pursuant to the exercise of Options pursuant to the Plan. Notwithstanding any other provision of the Plan, Shares issued under the Plan and later repurchased by the Corporation will not become available for future grant or sale under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Proceeds from the purchase of shares of Common Stock upon the exercise of Options granted pursuant to the Plan will be used for the general business purposes of the Corporation.

7. Terms and Conditions of Options

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Options granted hereunder may be either Incentive Stock Options or Nonstatutory Stock Options and may be for the purchase of either voting or non-voting Common Stock, all as determined by the Board of Directors or Committee at its discretion and as designated in the terms of the Option Agreement. However, notwithstanding such designations, to the extent that the aggregate fair market value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Corporation) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options. For purposes of the prior sentence, Options will be taken into account in the order in which they were granted, and the fair market value of the Shares will be determined as of the time the Option with respect to such Shares is granted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be such price as is determined by the Board of Directors or Committee at the time of the grant; provided, however, that in no event shall the exercise price of an Option be less than the greater of (i) ten dollars ($10.00) per Share, (ii) one hundred percent (100%) of the Fair Market Value of a Share on the date of grant or (iii) one-hundred ten percent (110%) of the Fair Market Value of a Share on the date of grant in the case of an Incentive Stock Option granted to a ten percent (10%) shareholder of the Corporation (within the meaning of Code Section 422(b)(6)).

For purposes of this Section 7(b), if an Option is amended to reduce the exercise price, the date of grant of such Option will thereafter be considered to be the date of such amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Option, subject to the other limitations set forth in the Plan, may extend for a period of up to but not exceeding 10 years from the date on which it is granted. The term of each Option will be determined by the Board of Directors or Committee at the time of grant of the Option and specified in the Option Agreement, provided that if no term is specified by the Board or Committee the term of the Option will be the maximum term permitted under this Section, measured from the date on which it is granted. Notwithstanding anything to the contrary, in the case of an Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent of the voting power of all classes of stock of the Corporation or any Parent or Subsidiary, (a) if the Option is an Incentive Stock Option, the term of the Option will be five years from the date of grant thereof or such shorter term as may be provided in the Incentive Stock Option Agreement, or (b) if the Option is a Nonstatutory Stock Option, the term of the Option will be five years and one day from the date of grant thereof or such shorter term as may be provided in the Nonstatutory Stock Option Agreement.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Board of Directors or Committee may provide in the Option Agreement that the right to exercise each Option for the number of shares subject to each Option will vest in the Optionee over such period of time as the Board or Committee, in its discretion, determines for each Optionee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Upon voluntary or involuntary termination of an Optionee's active Employment for any reason (including disability), the Optionee's Option and all rights thereunder will terminate effective at the close of business on the date the Optionee ceases to be an active, regular employee of the Corporation or any of its subsidiaries, except (1) to the extent previously exercised and (2) as provided in Sections 7(f) and (g) of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) If an Optionee takes a leave of absence from the Corporation or any Parent or Subsidiary for personal reasons or as a result of entry into the armed forces of the United States or any of the departments or agencies of the United States government, the Committee may consider the Optionee's case and may take such action in respect of the related Option Agreement as it may deem appropriate under the circumstances in its absolute discretion, including accelerating the time previously granted Options may be exercised and extending the time following the Optionee's termination of Employment during which the Option Holder is entitled to purchase the shares of Common Stock subject to such Options, provided that in no event may any Option be exercised after the expiration of the term of the Option or more than ninety days after the Optionee's termination of Employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) If an Optionee's Employment terminates as a result of the Optionee's total and permanent disability (as defined in Section 22(e)(3) of the Code), the Option Holder may exercise his/her Option within no more than the twelve-month period beginning on the date of his/her termination of Employment (to the extent the Option Holder was entitled to exercise the Option at the date of the Optionee's termination of Employment and provided that in no event may any Option be exercised after the expiration of the term of the Option), after which the Option will lapse.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) If an Optionee dies during the term of his/her Option without the Option having been fully exercised, the Option will lapse, and the executor or administrator of the Optionee's estate or the person who inherits the right to exercise the Option by bequest or inheritance will not have any right to purchase the number of shares of Common Stock that the deceased Optionee was entitled to purchase at the date of death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) The granting of an Option pursuant to the Plan will not constitute or be evidence of any agreement or understanding, express or implied, on the part of the Corporation or any of its subsidiaries to retain or employ the Optionee for any specified period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j) Except as provided in Section 9, without the approval of the shareholders of the Company, the terms of outstanding Options may not be amended to (i) reduce the exercise price of an outstanding Option, (ii) grant a new Option in substitution for, or upon the cancellation of, any previously granted Option that has the effect of reducing the exercise price thereof, (iii) exchange any Option for Stock, cash or other consideration when the exercise price per share of Common Stock under such Option equals or exceeds the Fair Market Value of a share of Common Stock or (iv) take any other action that would be considered a "repricing" of an Option under the applicable listing standards of the national securities exchange on which the Shares are listed (if any).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) In addition to the general terms and conditions set forth in this Section 7 in respect of Options granted pursuant to the Plan, Incentive Stock Options granted pursuant to the Plan will be subject to the following additional terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "Incentive Stock Options" will be granted only to individuals who, at the date of grant of the Option, are regular, full-time Employees of the Corporation or any Parent or Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) No Employee who owns beneficially more than 10% of the total combined voting power of all classes of stock of the Corporation will be eligible to be granted an "Incentive Stock Option," unless the exercise price per Share is at least 110% of the Fair Market Value of the Common Stock subject to the Option on the date of grant of the Option and the Option, by its terms, is not exercisable after the expiration of five years from the date the Option is granted.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To the extent that the aggregate fair market value (determined at the time the Option is granted) of the shares of Common Stock in respect of which an Option is exercisable for the first time by the Optionee during any calendar year (and taking into account all "incentive stock option" plans of the Corporation and its subsidiaries) exceeds $100,000, that number of whole shares for which an Option issued hereunder is exercisable with an aggregate fair market value in excess of this $100,000 limit will not be treated as having been granted under an "incentive stock option"; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other terms and conditions specified by the Committee that are not inconsistent with the Plan, except that such terms and conditions must be consistent with the requirements for "incentive stock options" under Section 422 of the Code.

8. Methods of Exercising Options

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) An Optionee (or other Option Holder, if any, entitled to exercise an Option hereunder) desiring to exercise an Option granted pursuant to the Plan as to all or part of the shares of Common Stock covered by the Option must (i) notify the Corporation in writing at its principal office to that effect, specifying the number of shares of Common Stock to be purchased and the method of payment therefor, and (ii) make payment or provision for payment for the shares of Common Stock so purchased in accordance with this Section 8. Such written notice may be given by means of a facsimile transmission. If a facsimile transmission is used, the Option Holder should mail the original executed copy of the written notice to the Corporation promptly thereafter. An Option may not be exercised for as fraction of a share of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, will be determined by the Board of Directors, as permitted under the laws of the State of Nevada, and may include payment in whole or in part (i) by means of consideration received under any cashless exercise procedure approved by the Board of Directors (including the withholding of Shares otherwise issuable upon exercise), (ii) in the form of unrestricted Shares already owned by the Optionee which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (iii) any other form of consideration approved by the Board of Directors and permitted by applicable Nevada law, or (iv) any combination of the foregoing. In determining which methods a Participant may utilize to pay the exercise price, the Board of Directors may consider such factors as it determines are appropriate; *provided*, *however*, that with respect to Incentive Stock Options, all such discretionary determinations shall be made by the Board of Directors at the time of grant and specified in an applicable Option Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) An Option will be deemed to be exercised when written notice of such exercise has been given to the Corporation in accordance with the terms of the Option by the Option Holder and full payment for the Shares with respect to which the Option is exercised has been received by the Corporation. Full payment may, as authorized by the Board of Directors, consist of any consideration and method of payment allowable under Section 8(b) of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Corporation or of a duly authorized transfer agent of the Corporation) of the stock certificate evidencing such Shares, no right to vote (in the case of voting stock) or receive dividends or any other rights as a shareholder will exist with respect to the optioned Shares, notwithstanding the exercise of the Option. The Corporation will issue (or cause to be issued) such stock certificate promptly upon exercise of the Option. If the exercise of an Option is treated in part as the exercise of a Nonstatutory Stock Option, the Corporation will issue a separate stock certificate evidencing the Shares of each class treated as acquired upon exercise of an Incentive Stock Option and a separate stock certificate evidencing the Shares of each class treated as acquired upon exercise of a Nonstatutory Stock Option, and will identify each such certificate accordingly in its stock transfer records. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 9 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) An Option Holder at any time may elect in writing to abandon an Option in respect of all or part of the number of shares of Common Stock as to which the Option will not have been exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Exercise of an Option in any manner will result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

9. Adjustments Upon Changes in Capitalization or Merger

Subject to any required action by the shareholders of the Corporation, the number of shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, will be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Corporation; provided, however, that conversion of any convertible securities of the Corporation will not be deemed to have been "effected without receipt of consideration." Such adjustment must be made by the Board of Directors, whose determination in that respect will be final, binding and conclusive. Except as expressly provided herein, no issuance by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, will affect, and no adjustment by reason thereof may be made with respect to, the number or price of shares of Common Stock subject to an Option.

In the event of the proposed dissolution, liquidation or sale of all or substantially all of the assets of the Corporation, the Board must notify the Optionee or other Option Holder at least fifteen (15) days prior to such proposed action. To the extent it has not been previously exercised, the Option will terminate immediately prior to the consummation of such proposed action. In the event of the merger of the Corporation with or into another corporation, the Option will be assumed or an equivalent option will be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless such successor corporation does not agree to assume the Option or to substitute an equivalent option, in which case the Board will, in lieu of such assumption or substitution, provide for the Option Holder to have the right to exercise the Option as to all of the optioned Shares, including Shares as to which the Option would not otherwise be exercisable. If the Board makes an Option fully exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board must notify the Optionee or other Option Holder that the Option will be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Option will terminate upon the expiration of such period.

10. Time of Granting Options

The date of grant of an Option will, for all purposes, be the date on which the Board of Directors or Committee makes the determination granting such Option. Notice of the determination will be given to each Optionee within a reasonable time after the date of such grant.

11. Amendments and Discontinuance of the Plan

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board of Directors has the right at any time and from time to time to amend, modify, or discontinue the Plan in such respects as the Board may deem advisable; provided that, unless approved by the Corporation 's shareholders in accordance with Section 16, no such amendment, modification, or discontinuance of the Plan may (i) revoke or alter the terms of any valid Option previously granted pursuant to the Plan, (ii) increase the number of shares of Common Stock to be reserved for issuance and sale pursuant to Options granted pursuant to the Plan, (iii) change the maximum aggregate number of shares of Common Stock that may be issued upon the exercise of Options granted pursuant to the Plan to any single individual, (iv) decrease the price determined pursuant to the provisions of Section 7(b), (v) change the class of persons to whom Options may be granted pursuant to the Plan, (vi) provide for Options exercisable more than 10 years after the date granted, (vii) if the Corporation has a class of equity securities registered under Section 12 of the Exchange Act at the time of such revision or amendment, any material increase in the benefits accruing to participants under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Shareholder Approval</u>. If any amendment requiring shareholder approval under Section 16(a) of the Plan is made at a time when any class of equity securities by the Corporation is registered under Section 12 of the Exchange Act, such shareholder approval must be solicited as described in Section 16 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) <u>Effect of Amendment or Termination</u>. Any such amendment or termination of the Plan will not affect Options already granted, and such Options will remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee or other Option Holder and the Board of Directors, which agreement must be in writing and signed by the Option Holder and the Corporation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

12. Plan Subject to Governmental Laws and Regulations

The Plan and the grant and exercise of Options pursuant to the Plan are subject to all applicable governmental laws and regulations. Notwithstanding any other provision of the Plan to the contrary, the Board of Directors may in its sole and absolute discretion make such changes in the Plan as may be required to conform the Plan to such laws and regulations. Shares may not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto complies with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and will be further subject to the approval of counsel for the Corporation with respect to such compliance.

As a condition to the exercise of an Option, the Corporation may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Corporation, such a representation is required by any of the aforementioned relevant provisions of law.

13. Reservation of Shares

The Corporation, during the term of this Plan, will at all times reserve and keep available such number of Shares as are sufficient to satisfy the requirements of the Plan.

The inability of the Corporation to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Corporation's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Corporation of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority has not been obtained.

14. Minimum Vesting Requirements

Except in the case of Options substituted pursuant to Section 9 and subject to the following sentence, Options granted under the Plan shall be subject to a minimum vesting period of one (1) year. Notwithstanding the foregoing, the Committee may grant Options covering five percent (5%) or fewer of the total number of Shares authorized under the Plan without respect to the above-described minimum vesting requirement.

15. Option Agreements

Options will be evidenced by written agreement in such form as the Committee determines from time to time.

16. Shareholder Approval

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Continuance of the Plan is subject to approval by the shareholders of the Corporation within twelve (12) months before or after the date the Plan is adopted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The required approval of the shareholders of the Corporation will be solicited substantially in accordance with Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.

17. Term of Plan

The Plan will become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Corporation as described in Section 16 of the Plan. It will continue in effect for a term of ten (10) years unless sooner terminated under Section 11 of the Plan.

18. Code Section 409A

The intent of the parties is that payments and benefits under the Plan comply with Code Section 409A (or an available exemption therefrom) to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and be administered to be in accordance therewith. Each amount to be paid or benefit to be provided to

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the Optionee pursuant to the Plan, which constitute deferred compensation subject to Code Section 409A, shall be construed as a separate identified payment for purposes of Code Section 409A. Nothing contained in the Plan or an Option Agreement shall be construed as a guarantee of any particular tax effect with respect to an Option. The Corporation does not guarantee that any Options provided under the Plan will satisfy the provisions of Code Section 409A, and in no event will the Corporation be liable for any or all portion of any taxes, penalties, interest or other expenses that may be incurred by an Optionee on account of any non-compliance with Code Section 409A.

19. Withholding Taxes

Each Optionee shall, no later than the date as of which the value of an Option first becomes includible in the gross income of such Optionee for federal, state and/or local income tax purposes, pay to the Corporation, or make arrangements satisfactory to the Board of Directors regarding payment of, any federal, state, or local taxes of any kind, domestic or foreign, required by law or regulation to be withheld with respect to the Option. The obligations of the Corporation under the Plan shall be conditional on the making of such payments or arrangements, and the Corporation shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Optionee. Whenever Shares are to be delivered pursuant to an Option, the Corporation shall have the right to require the Optionee to remit to the Corporation in cash an amount sufficient to satisfy any related federal, state and local taxes, domestic or foreign, to be withheld and applied to the tax obligations. With the approval of the Board of Directors, an Optionee may satisfy the foregoing requirement by electing to have the Corporation withhold from delivery of Shares or by delivering already owned unrestricted Shares, in each case, having a value equal to the amount required to be withheld or other greater amount not exceeding the maximum statutory rate required to be collected on the transaction under applicable law, as applicable to the Optionee, if such other greater amount would not, as determined by the Board of Directors, result in adverse financial accounting treatment (including in connection with the effectiveness of FASB Accounting Standards Update 2016-09). Such Shares shall be valued at their Fair Market Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an Option. The Corporation may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding obligation with respect to any Option (including by a "net exercise" or broker assisted "cashless" exercise procedure approved by the Board of Directors).

20. Severability

If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby.

21. Choice of Law

This Plan shall be governed by, and construed in accordance with, the laws of the State of Nevada, as such laws are applied to contracts entered into and performed in such State.

22. Headings

The headings in this Plan and any Option Agreements are for convenience of reference only and shall not limit or otherwise affect the meaning thereof.

23. Forfeitures

The Board may specify in an Option Agreement that the Participant's rights, payments and benefits with respect to an Option shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to the applicable vesting conditions of the Option. Such events may include, without limitation, breach of any non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in an Option Agreement or that are otherwise applicable to the Optionee, a termination of the Optionee's Employment for Cause, or other conduct by the Optionee that is detrimental to the business or reputation of the Corporation and its Subsidiaries and/or its Affiliates.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

24. Limitations on Participation

Participation in this Plan shall be limited exclusively to those individuals who are designated as eligible participants under Section 5 of this Plan. No person shall have any rights or be entitled to any benefits under this Plan except as expressly provided herein. Eligibility to participate is limited to employees of the Corporation or its Affiliates who are designated by the Committee and approved by the Board, and no other individual or entity shall be deemed a participant or have any claim under the Plan. The mere act of being eligible shall not entitle any person to be selected to receive an Option grant, and participation in one year shall not guarantee participation in any future year.

25. Plan Document Controls

The Plan and each Option Agreement together constitute the entire agreement with respect to the subject matter hereof and thereof; provided, that in the event of any inconsistency between the Plan and such Option Agreement, the terms and conditions of the Plan shall control.

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## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO**

**RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, IMPLEMENTING SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, John R. Loftus, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Envela Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ JOHN R. LOFTUS |
|  |  | John R. Loftus |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

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## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO**

**RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, IMPLEMENTING SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, John G. DeLuca, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Envela Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ JOHN G. DELUCA |
|  |  | John G. DeLuca |
|  |  | Chief Financial Officer |
|  |  | (Principal Accounting Officer) |

---

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## Exhibit 32.1

**EXHIBIT 32.1**

**Certification Pursuant to**

**Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)**

The undersigned, as the Chief Executive Officer of Envela Corporation, certifies, to the best of his knowledge, that the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, which accompanies this certification fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of Envela Corporation at the dates and for the periods indicated. The foregoing certification is made pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and shall not be relied upon for any other purpose.

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| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ JOHN R. LOFTUS |
|  |  | John R. Loftus |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

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## Exhibit 32.2

**EXHIBIT 32.2**

**Certification Pursuant to**

**Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)**

The undersigned, as the Chief Financial Officer of Envela Corporation, certifies, to the best of his knowledge, that the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, which accompanies this certification fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of Envela Corporation at the dates and for the periods indicated. The foregoing certification is made pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and shall not be relied upon for any other purpose.

---

| | | |
|:---|:---|:---|
| Date: August 6, 2025 | By: | /s/ JOHN G. DELUCA |
|  |  | John G. DeLuca |
|  |  | Chief Financial Officer |
|  |  | (Principal Accounting Officer) |

---

------