Envela Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 726 ) 38 ​ ​ CONSOLIDATED STATEMENTS OF INCOME 39 ​ ​ CONSOLIDATED BALANCE SHEETS 40 ​ ​ CONSOLIDATED STATEMENTS OF CASH FLOWS 41 ​ ​ CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 42 ​ ​ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 43 ​ ​ ​ NOTE 1. BASIS OF PRESENTATION 43 NOTE 2. PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS 43 NOTE 3. ACCOUNTING POLICIES AND ESTIMATES 44 NOTE 4. CHANGES IN BUSINESS 51 NOTE 5. INVENTORIES 52 NOTE 6. GOODWILL 53 NOTE 7. PROPERTY AND EQUIPMENT, NET 54 NOTE 8. INTANGIBLE ASSETS, NET 55 NOTE 9. ACCRUED EXPENSES 56 NOTE 10. SEGMENT INFORMATION 57 NOTE 11. REVENUE 58 NOTE 12. LEASES 59 NOTE 13. BASIC AND DILUTED AVERAGE SHARES 60 NOTE 14. DEBT 62 NOTE 15. STOCK-BASED COMPENSATION 64 NOTE 16. RELATED PARTY TRANSACTIONS 64 NOTE 17. CONTINGENCIES 64 NOTE 18. INCOME TAXES 65 NOTE 19. DEFINED CONTRIBUTION PLANS 66 ​ ​ ​ ​ 37 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Board of Directors and Stockholders of Envela Corporation and Subsidiaries ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheets of Envela Corporation and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters ​ Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. ​ /s/ Whitley Penn LLP ​ We have served as the Company’s auditor since 2012. ​ Dallas, Texas March 26, 2025 ​ 38 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Sales ​ $ 180,376,229 ​ $ 175,263,826 Cost of goods sold ​ 136,060,442 ​ 133,607,296 ​ ​ ​ ​ ​ ​ ​ Gross margin ​ 44,315,787 ​ 41,656,530 ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ Selling, general and administrative ​ 34,605,132 ​ 31,537,677 Depreciation and amortization ​ 1,551,774 ​ 1,362,064 ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 36,156,906 ​ 32,899,741 ​ ​ ​ ​ ​ ​ ​ Operating income ​ 8,158,881 ​ 8,756,789 ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ Other income ​ 1,037,682 ​ 727,782 Interest expense ​ ( 447,383 ) ​ ( 463,201 ) ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 8,749,180 ​ 9,021,370 Income tax expense ​ ( 1,992,121 ) ​ ( 1,873,918 ) ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 6,757,059 ​ $ 7,147,452 ​ ​ ​ ​ ​ ​ ​ Basic earnings per share: ​ ​ Net income ​ $ 0.26 ​ $ 0.27 ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ Net income ​ $ 0.26 ​ $ 0.27 ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ Basic ​ 26,180,801 ​ 26,822,725 Diluted ​ 26,180,801 ​ 26,837,725 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 39 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 ​ Assets ​ ​ ​ ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 20,609,003 ​ $ 17,853,853 ​ Accounts receivable, net of allowances ​ 4,384,238 ​ 7,811,159 ​ Notes receivable ​ 2,000 ​ 4,700 ​ Inventories ​ 25,705,524 ​ 23,146,177 ​ Prepaid expenses ​ 874,203 ​ 1,082,425 ​ Other current assets ​ ​ 28,839 ​ ​ — ​ Total current assets ​ 51,603,807 ​ 49,898,314 ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 13,515,162 ​ 10,764,224 ​ Right-of-use assets from operating leases ​ 4,741,326 ​ 4,189,621 ​ Goodwill ​ 3,621,453 ​ 3,921,453 ​ Intangible assets, net ​ 4,097,778 ​ 4,499,170 ​ Deferred tax asset ​ ​ 49,526 ​ ​ — ​ Other assets ​ 241,437 ​ 201,447 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 77,870,489 ​ $ 73,474,229 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders’ equity ​ ​ ​ Current liabilities: ​ ​ ​ Accounts payable ​ $ 3,177,550 ​ $ 3,126,743 ​ Notes payable ​ 3,591,351 ​ 1,361,443 ​ Operating lease liabilities ​ 2,078,505 ​ 1,807,729 ​ Accrued expenses ​ 3,215,343 ​ 2,486,423 ​ Other current liabilities ​ 455,385 ​ 211,651 ​ Total current liabilities ​ 12,518,134 ​ 8,993,989 ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liability ​ — ​ 38,668 ​ Notes payable, less current portion ​ 9,930,828 ​ 13,572,048 ​ Operating lease liabilities, less current portion ​ 2,769,389 ​ 2,560,671 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ $ 25,218,351 ​ $ 25,165,376 ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingencies (Note 17) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ Preferred stock, $ 0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding ​ — ​ — ​ Common stock, $ 0.01 par value; 60,000,000 shares authorized; 26,924,631 shares issued and 25,995,701 shares outstanding as of December 31, 2024; 26,924,631 shares issued and 26,508,658 shares outstanding as of December 31, 2023 ​ 269,246 ​ 269,246 ​ Treasury stock at cost, 928,930 and 415,973 shares, as of December 31, 2024 and December 31, 2023, respectively ​ ( 4,568,823 ) ​ ( 2,155,049 ) ​ Additional paid-in capital ​ 40,173,000 ​ 40,173,000 ​ Retained earnings ​ 16,778,715 ​ 10,021,656 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ 52,652,138 ​ 48,308,853 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 77,870,489 ​ $ 73,474,229 ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 40 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Operations ​ ​ ​ ​ Net income ​ $ 6,757,059 ​ $ 7,147,452 Adjustments to reconcile net income to net cash provided by operations: ​ ​ Depreciation and amortization ​ 1,551,774 ​ 1,362,064 Provision for credit losses ​ 234,853 ​ 300,431 Deferred taxes ​ ( 88,194 ) ​ 1,526,926 Non-cash lease expense ​ 2,083,178 ​ 1,895,428 Loss on disposal of equipment ​ ​ 7,084 ​ ​ — Changes in operating assets and liabilities: ​ ​ Accounts receivable ​ 3,192,068 ​ ( 161,815 ) Inventories ​ ( 2,559,347 ) ​ ( 4,390,392 ) Prepaid expenses ​ 208,222 ​ 149,392 Other assets ​ ( 64,129 ) ​ 15,728 Accounts payable ​ 50,807 ​ ( 232,139 ) Accrued expenses ​ 728,920 ​ 199,829 Operating leases ​ ( 2,155,389 ) ​ ( 1,899,365 ) Other liabilities ​ 243,734 ​ ( 70,831 ) ​ ​ ​ ​ ​ ​ ​ Net cash provided by operations ​ 10,190,640 ​ 5,842,708 ​ ​ ​ ​ ​ ​ ​ Investing ​ ​ Purchase of property and equipment ​ ( 3,459,506 ) ​ ( 2,047,036 ) Purchase of intangible assets ​ ( 298,898 ) ​ ( 191,075 ) Investment in notes receivable ​ ​ ( 2,000 ) ​ ​ 578,250 Acquisition, Scottsdale Transaction ​ — ​ ( 100,000 ) ​ ​ ​ ​ ​ ​ ​ Net cash (used in) investing ​ ( 3,760,404 ) ​ ( 1,759,861 ) ​ ​ ​ ​ ​ ​ ​ Financing ​ ​ Payments on notes payable ​ ( 1,261,312 ) ​ ( 1,243,914 ) Purchase of treasury stock ​ ​ ( 2,413,774 ) ​ ​ ( 2,155,049 ) ​ ​ ​ ​ ​ ​ ​ Net cash (used in) financing ​ ( 3,675,086 ) ​ ( 3,398,963 ) ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents ​ 2,755,150 ​ 683,884 Cash and cash equivalents, beginning of period ​ 17,853,853 ​ 17,169,969 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period ​ $ 20,609,003 ​ $ 17,853,853 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures ​ ​ Cash paid during the period for: ​ ​ Interest ​ $ 449,032 ​ $ 463,561 Income Taxes ​ $ 2,270,708 ​ $ 197,561 ​ ​ ​ ​ ​ ​ ​ Noncash investing and financing activities ​ ​ ​ ​ ​ ​ Scottsdale Transaction measurement period adjustment, addition to intangible assets, reduction to goodwill ​ ​ 27,500 ​ ​ — Scottsdale Transaction measurement period adjustment, addition to property and equipment, reduction to goodwill ​ ​ 122,500 ​ ​ — Scottsdale Transaction measurement period adjustment, reduction to notes payable, reduction to goodwill ​ ​ 150,000 ​ ​ — Scottsdale Transaction, addition to notes payable, addition to goodwill ​ ​ — ​ ​ 200,000 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 41 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ ​ ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1, 2023 ​ 26,924,631 ​ $ 269,246 ​ — ​ $ — ​ — ​ $ — ​ $ 40,173,000 ​ $ 2,874,204 ​ $ 43,316,450 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ 7,147,452 ​ 7,147,452 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ — ( 415,973 ) ​ ( 2,155,049 ) — ​ — ​ — ​ — ​ ( 2,155,049 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2023 26,924,631 ​ $ 269,246 ( 415,973 ) ​ $ ( 2,155,049 ) — ​ $ — ​ $ 40,173,000 ​ $ 10,021,656 ​ $ 48,308,853 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ ​ ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1, 2024 ​ 26,924,631 ​ $ 269,246 ​ ( 415,973 ) ​ $ ( 2,155,049 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 10,021,656 ​ $ 48,308,853 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ 6,757,059 ​ 6,757,059 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ — ( 512,957 ) ​ ( 2,413,774 ) — ​ — ​ — ​ — ​ ( 2,413,774 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2024 26,924,631 ​ $ 269,246 ( 928,930 ) ​ $ ( 4,568,823 ) — ​ $ — ​ $ 40,173,000 ​ $ 16,778,715 ​ $ 52,652,138 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 42 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BASIS OF PRESENTATION The consolidated financial statements include the accounts of Envela and its wholly owned subsidiaries. The accounting for the accompanying consolidated financial statements has been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) and, in the opinion of management, reflects all adjustments necessary to state fairly the Company’s financial position, results of operations, stockholders’ equity, and cash flows for the periods presented. 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 recommerce 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 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 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 responsible reuse and recycling of electronic devices. ​ See Note 10 – Segment Information for further details. ​ 43 Table of Contents NOTE 3 — ACCOUNTING POLICIES AND ESTIMATES Use of Estimates The preparation of consolidated 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 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 (e.g., 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. Historically, these amounts have not been material. The commercial segment also provides recycling services according to a Scope of Work (“SOW”). Revenue from recycling services 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 assets or material movements to our facilities. Revenue from freight arrangement services is recognized at settlement with our inbound customers which occurs 44 Table of Contents 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 terms and transaction price are agreed to, the product is shipped, and the title is transferred. See Note 11 – 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 December 31, 2024, and December 31, 2023, the consumer segment’s allowance for returns was $ 11,942 and $ 28,402 , respectively. As of December 31, 2024, and December 31, 2023, the commercial segment’s allowance for returns was $ 48,569 and $ 0 , 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 that are short duration and settled on comparable terms. Overall customer concentrations as a percentage of sales may vary as a result of the mix of products being sold within each comparative period. Individual customer concentrations are also impacted by each customer’s production schedule and as such, the Company identifies the most appropriate sales outlet to ensure a timely transaction settlement. For the year ended December 31, 2024, one customer aggregated 30.1 % of our sales and represented 6.8 % of our accounts receivable balance. For the year ended December 31, 2023, one customer aggregated 29.5 % of our sales and represented 27.9 % 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 years ended December 31, 2024, and December 31, 2023, the consumer segment’s shipping and handling costs were $ 95,765 and $ 13,076 , respectively. For the years ended December 31, 2024, and December 31, 2023, the commercial segment’s shipping and handling costs were $ 4,840,381 and $ 5,686,236 , respectively. Advertising Costs The consumer and commercial segment’s advertising costs are expensed as incurred. 45 Table of Contents For the years ended December 31, 2024, and December 31, 2023, the consumer segment’s advertising costs were $ 1,309,013 and $ 945,340 , respectively. For the years ended December 31, 2024, and December 31, 2023, the commercial segment’s advertising costs were $ 281,814 and $ 37,110 , 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. The Company believes that its significant filing positions are highly certain and that all of its other significant income tax filing positions and deductions would be sustained upon audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions. The Company recognizes accrued interest and penalties resulting from audits by tax authorities in the provision for income taxes in the consolidated statements of income. During Fiscal 2024 and Fiscal 2023, the Company did not incur any federal income tax interest or penalties. See Note 18 – Income Taxes for further details. 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 consolidated financial statements or the effective tax rate for the years ended December 31, 2024, and December 31, 2023. As of December 31, 2024, the Company had a deferred tax asset of $ 49,526 . As of December 31, 2023, the Company had a deferred tax liability of $ 38,668 . The Company did no t have a valuation allowance as of December 31, 2024, or December 31, 2023. 46 Table of Contents See Note 18 – Income Taxes for further details. 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. As of December 31, 2024, 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 7. 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 10 – Segment Information for further details. Earnings Per Share Basic earnings per share of Common Stock is computed by dividing net earnings available to holders of our Common Stock by the weighted average number of common shares 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 13 – 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 in the consolidated statement of cash flows. See Note 15 – 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 revenues or expenses. Financial Instruments The carrying amounts reported in the 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. 47 Table of Contents 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 consolidated balance sheets approximate fair value. 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 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 December 31, 2024, and December 31, 2023, the consumer segment’s allowance for credit losses was $ 0 and $ 0 , respectively. As of December 31, 2024, and December 31, 2023, the commercial segment’s allowance for credit losses was $ 433,159 and $ 260,858 , respectively. A summary of the allowance for credit losses is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ Beginning Balance ​ $ 260,858 ​ $ 51,734 Provision for credit losses (+) ​ 234,853 ​ 300,431 Receivables written off (-) ​ ( 62,552 ) ​ ( 91,307 ) ​ ​ ​ ​ ​ ​ ​ Ending Balance ​ $ 433,159 ​ $ 260,858 ​ Inventories Consumer Segment The consumer segment states its inventory at the lower of cost and net realizable value. We cost our inventory based on our own internal estimate of the fair value of the items at the time of purchase. 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 determined utilizing the retail cost method. The cost of our processed and unprocessed inventory, primarily consisteing of base metals and electronic scrap materials, is determined 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. 48 Table of Contents Goodwill Goodwill is not amortized but is 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 year ended December 31, 2024, and the Company did not record a goodwill impairment charge in any of the periods presented. See Note 6 – Goodwill for further details. 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 7 – 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 8 – Intangible Assets, Net for further details. 49 Table of Contents Correction of Immaterial Error The Company’s commercial segment previously reported revenue from freight arrangement services as a component of cost of goods sold. The Company has further evaluated the nature and scope of its service offering and has determined that it meets the definition of a principal in accordance with ASC 606 and, as such, be reported within revenue. The following table summarizes the correction of immaterial error: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ March 31, ​ June 30, ​ September 30, ​ December 31, ​ ​ ​ ​ 2023 2023 2023 2023 Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 48,389,040 ​ $ 50,303,527 ​ $ 36,266,271 ​ $ 36,715,250 ​ $ 171,674,088 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Correction of immaterial error ​ 1,420,492 ​ 792,350 ​ 610,215 ​ 766,681 ​ 3,589,738 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales adjusted ​ 49,809,532 ​ 51,095,877 ​ 36,876,486 ​ 37,481,931 ​ 175,263,826 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold ​ 36,979,138 ​ 39,541,480 ​ 26,531,989 ​ 26,964,951 ​ 130,017,558 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Correction of immaterial error ​ 1,420,492 ​ 792,350 ​ 610,215 ​ 766,681 ​ 3,589,738 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold adjusted ​ 38,399,630 ​ 40,333,830 ​ 27,142,204 ​ 27,731,632 ​ 133,607,296 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ $ 11,409,902 ​ $ 10,762,047 ​ $ 9,734,282 ​ $ 9,750,299 ​ $ 41,656,530 ​ The error had no impact on gross margin, operating income, net income, and basic and diluted earnings per share nor any other financial statement amount. Further, these errors had no impact on the consolidated balance sheets, statements of stockholders’ equity, and statements of cash flows. These corrections do not affect any of the metrics used to calculate and evaluate management’s compensation and have no impact on bonuses, commissions, stock-based compensation, or any other employee remuneration. Historical amounts have been corrected and are presented on a comparable basis. See Note 11 – Revenue for further details. Changes in Disclosure The Company has elected to discontinue reporting the disaggregation of inventory and revenue by resale and recycle. The Company’s business operations continue to evolve and include fee-for-service revenue that does not always correlate to these categories and underlying inventory positions; further, our inventory positions within these disaggregated presentations can vary at any point in time as they are a diverse mix of technology assets, base and precious metals and luxury hard assets. The Company believes that its disclosure of the nature of its operations, the inventory held at each segment and associated risk factors provides a sufficient understanding of its impact on our business. See Note 5 – Inventories and Note 11 – Revenue for further details. Reclassifications For the Company’s 2023 Annual Report, the amount reported for other current assets within the Consolidated Balance Sheets is related entirely to notes receivables. The Company has elected to present notes receivable as its own line item and has reclassified the historical presentation of the aforementioned as of December 31, 2023. See the Consolidated Balance Sheets for further details. 50 Table of Contents The Company previously did not disclose construction in progress and intangible assets under development. The Company has determined that providing this information further enhances the understanding of the nature of our capital expenditures. The Company has elected to reclassify the historical presentation of the aforementioned as of December 31, 2023. See Note 7 – Property and Equipment, Net for further details. The Company previously reported the development of its enterprise resource planning system within property and equipment, net. The Company has further evaluated the nature of this asset under ASC 350, Intangibles – Goodwill and Other, and has determined that it is a nonmonetary asset without physical substance and was acquired separately from hardware and as such be reported within intangible assets, net. The Company has elected to reclassify the historical presentation of the aforementioned as of December 31, 2023. Cash expenditures for the enterprise resource planning system have been reclassified to “Purchases of intangible assets” within the Consolidated Statements of Cash Flows. See Note 8 – Intangible Assets, Net for further details. New Accounting Standards In November 2024, the FASB issued 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. Recently Adopted Accounting Standards In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of segment expenses that are significant and regularly provided to the CODM. In addition, ASU 2023-07 requires the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Retrospective application to all prior periods presented in the financial statements is required. The Company adopted this guidance effective January 1, 2024. As ASU 2023-07 applies to reportable segment disclosures, the adoption did not have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures (“ASU 2023-09”), which updates income tax disclosures related to the effective income tax rate reconciliation and requires disclosure of income taxes paid by jurisdiction. The guidance is effective for annual periods beginning after December 15, 2024, and may be applied prospectively or retrospectively, with early adoption permitted. The Company adopted this guidance with retrospective application, effective January 1, 2024. As ASU 2023-09 applies to income tax disclosures, the adoption did not have a material impact on the Company’s consolidated financial statements. No other recently issued or effective ASU’s had, or are expected to have, a material impact on the Company’s results of operations, financial condition, or liquidity. ​ NOTE 4 — CHANGES IN BUSINESS The Scottsdale Transaction qualified as a business combination for accounting purposes, which involves the application of the acquisition method described in ASC 805, Business Combinations. The asset purchase agreement was entered into by a wholly-owned subsidiary of the Company. The purchase price was $ 150 thousand. The total purchase consideration transferred for the Scottsdale Transaction was $ 100 thousand in cash and a $ 50 thousand note payable obligation. See Note 14 – Debt for further details. 51 Table of Contents The primary purpose of the Scottsdale Transaction was to broaden customer offerings with a complimentary brand and provide another outlet for the reuse of ethically sourced precious metals and gemstones in the manufacturing of new products. The results of operations relating to the Scottsdale Transaction have been reflected in the Company’s consolidated financial statements from the initial date of acquisition. The Scottsdale Transaction was not material to the Company’s consolidated financial statements, and therefore, pro forma operating results and other disclosures for the Scottsdale Transaction are not presented except as referenced below. As part of the Scottsdale Transaction, on September 12, 2023 the consumer segment recorded goodwill of $ 300 thousand as part of the initial purchase price allocation. During the year ended December 31, 2024, with the finalization of the terms of the Scottsdale Transaction, the Company made certain measurement period adjustments to the preliminary purchase price allocation, which resulted in a $ 300 thousand decrease to goodwill, a $ 150 thousand decrease due to the amendment of the purchase price, and a $ 150 thousand decrease due to the recognition of the assets acquired as part of the acquisition. See Note 6 – Goodwill for further details. In accordance with ASC 805, Business Combinations, the table presented below represents the final allocation of purchase price consideration. The following table summarizes the fair values that were allocated to the Scottsdale Transaction: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ ​ ​ ​ Property and equipment, net ​ $ 122,500 Intangible assets, net ​ 27,500 ​ ​ ​ ​ ​ ​ $ 150,000 ​ ​ NOTE 5 — INVENTORIES The following table summarizes the details of the Company’s inventories: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Consumer ​ ​ Trade inventories ​ $ 23,973,333 ​ $ 21,905,055 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 23,973,333 ​ 21,905,055 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Trade inventories ​ 1,732,191 ​ 1,241,122 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 1,732,191 ​ 1,241,122 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 25,705,524 ​ $ 23,146,177 ​ ​ ​ ​ ​ 52 Table of Contents NOTE 6 — GOODWILL The following table summarizes the details of the Company’s changes in goodwill: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Consumer ​ ​ Opening balance ​ $ 300,000 ​ $ — Additions (reductions) (1)(2) ​ ( 300,000 ) ​ 300,000 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ — ​ 300,000 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Opening balance ​ 3,621,453 ​ 3,621,453 Additions (reductions) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 3,621,453 ​ 3,621,453 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,621,453 ​ $ 3,921,453 ​ (1) The decrease in goodwill of $ 300 thousand for the year ended December 31, 2024, relates to the Company’s finalization of the allocation of fair values to assets acquired in the Scottsdale Transaction. (2) The increase in goodwill of $ 300 thousand for the year ended December 31, 2023, relates to the Company’s acquisition of Scottsdale Transaction. ​ 53 Table of Contents NOTE 7 — PROPERTY AND EQUIPMENT, NET The following table summarizes the details of the Company’s property and equipment, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted ​ ​ December 31, ​ December 31, ​ ​ ​ ​ December 31, ​ 2024 2023 Reclassification 2023 Consumer ​ ​ ​ ​ Land ​ $ 1,824,892 ​ $ 1,824,892 ​ $ — ​ $ 1,824,892 Building and improvements ​ 6,078,606 ​ 4,126,507 ​ ( 1,443,207 ) ​ 2,683,300 Leasehold improvements ​ 1,736,193 ​ 1,450,695 ​ — ​ 1,450,695 Furniture and fixtures ​ 1,203,540 ​ 802,058 ​ ( 101,226 ) ​ 700,832 Machinery and equipment ​ 1,570,704 ​ 1,224,783 ​ ( 3,215 ) ​ 1,221,568 Vehicles ​ 53,318 ​ 22,859 ​ — ​ 22,859 Construction in progress (1)(5) ​ 135,856 ​ — ​ 1,547,648 ​ 1,547,648 ​ ​ 12,603,109 ​ 9,451,794 ​ — ​ 9,451,794 Less: accumulated depreciation ​ ( 3,287,437 ) ​ ( 2,946,727 ) ​ — ​ ( 2,946,727 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 9,315,672 ​ 6,505,067 ​ — ​ 6,505,067 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Leasehold improvements ​ 172,391 ​ 151,647 ​ — ​ 151,647 Furniture and fixtures ​ 74,811 ​ 145,950 ​ — ​ 145,950 Machinery and equipment ​ 1,336,427 ​ 1,142,731 ​ ( 48,979 ) ​ 1,093,752 Vehicles ​ 206,556 ​ 222,232 ​ — ​ 222,232 Construction in progress (2)(5) ​ — ​ — ​ 48,979 ​ 48,979 ​ ​ 1,790,185 ​ 1,662,560 ​ — ​ 1,662,560 Less: accumulated depreciation ​ ( 1,112,694 ) ​ ( 819,389 ) ​ — ​ ( 819,389 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 677,491 ​ 843,171 ​ — ​ 843,171 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Land ​ 1,106,664 ​ 1,106,664 ​ — ​ 1,106,664 Building and improvements ​ 2,688,523 ​ 2,505,716 ​ ( 3,500 ) ​ 2,502,216 Machinery and equipment ​ 28,627 ​ 28,627 ​ — ​ 28,627 Enterprise resource planning system (3) ​ — ​ 191,075 ​ ( 191,075 ) ​ — Construction in progress (4)(5) ​ — ​ — ​ 3,500 ​ 3,500 ​ ​ 3,823,814 ​ 3,832,082 ​ ( 191,075 ) ​ 3,641,007 Less: accumulated depreciation ​ ( 301,815 ) ​ ( 225,021 ) ​ — ​ ( 225,021 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 3,521,999 ​ 3,607,061 ​ ( 191,075 ) ​ 3,415,986 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 13,515,162 ​ $ 10,955,299 ​ $ ( 191,075 ) ​ $ 10,764,224 ​ (1) The reclassification primarily related to the build-out of our Arizona retail stores, which were placed into service in the second quarter of Fiscal 2024. (2) The reclassification related to the build-out of production equipment, which was placed into service in the second quarter of Fiscal 2024. (3) Reclassified amount to Intangible Assets, Net. See Note 8 – Intangible Assets, Net for further details. 54 Table of Contents (4) The reclassification related to improvements to our corporate headquarters, which were placed into service in the second quarter of Fiscal 2024. ​ (5) As of December 31, 2024 and December 31, 2023, these assets are being constructed, have not yet been placed into service and are not yet depreciable. ​ NOTE 8 — INTANGIBLE ASSETS, NET The following table summarizes the details of the Company’s intangible assets, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted ​ ​ December 31, ​ December 31, ​ ​ ​ ​ December 31, ​ 2024 2023 Reclassification 2023 Consumer ​ ​ ​ ​ Technology ​ $ 409,896 ​ $ 371,352 ​ $ — ​ $ 371,352 Customer lists ​ ​ 13,000 ​ ​ — ​ ​ — ​ ​ — Assets under development (2) ​ 3,381 ​ — ​ — ​ — ​ ​ 426,277 ​ 371,352 ​ — ​ 371,352 Less: accumulated amortization ​ ( 379,980 ) ​ ( 365,852 ) ​ — ​ ( 365,852 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 46,297 ​ 5,500 ​ — ​ 5,500 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Trademarks/tradenames ​ 2,869,000 ​ 2,869,000 ​ — ​ 2,869,000 Customer contracts ​ 1,873,000 ​ 1,873,000 ​ — ​ 1,873,000 Customer relationships ​ 1,809,000 ​ 1,809,000 ​ — ​ 1,809,000 ​ ​ 6,551,000 ​ 6,551,000 ​ — ​ 6,551,000 Less: accumulated amortization ​ ( 2,877,855 ) ​ ( 2,248,405 ) ​ — ​ ( 2,248,405 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 3,673,145 ​ 4,302,595 ​ — ​ 4,302,595 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Technology ​ 462,548 ​ — ​ ​ ​ — Assets under development (1)(2) ​ — ​ — ​ 191,075 ​ 191,075 ​ ​ 462,548 ​ — ​ 191,075 ​ 191,075 Less: accumulated amortization ​ ( 84,212 ) ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 378,336 ​ — ​ 191,075 ​ 191,075 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 4,097,778 ​ $ 4,308,095 ​ $ 191,075 ​ $ 4,499,170 ​ (1) The reclassification related to the initial development of our enterprise resource planning system, which was placed into service in the first quarter of Fiscal 2024. (2) As of December 31, 2024 and December 31, 2023, these intangible assets are under development, have not yet been placed into service and are not yet amortizable. 55 Table of Contents The following table depicts the Company’s estimated future amortization expense related to intangible assets as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer Commercial Corporate Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 8,928 ​ 629,448 ​ 94,584 ​ 732,960 2026 ​ 8,928 ​ 629,448 ​ 94,584 ​ 732,960 2027 ​ 8,928 ​ 629,448 ​ 94,584 ​ 732,960 2028 ​ 8,052 ​ 629,448 ​ 94,584 ​ 732,084 2029 ​ 3,273 ​ 539,923 ​ — ​ 543,196 Thereafter ​ 4,807 ​ 615,430 ​ — ​ 620,237 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 42,916 ​ $ 3,673,145 ​ $ 378,336 ​ $ 4,094,397 ​ ​ NOTE 9 — ACCRUED EXPENSES The following table summarizes the details of the Company’s accrued expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 Consumer ​ ​ Accrued interest ​ $ 11,276 ​ $ 11,904 Payroll ​ 361,829 ​ 226,435 Taxes ​ 133,008 ​ 125,130 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 506,113 ​ 363,469 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Accrued interest ​ 7,568 ​ 7,903 Payroll ​ 457,722 ​ 375,663 Unvouchered inventory payments ​ 1,915,567 ​ 1,041,188 Other ​ 26,334 ​ 96,422 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,407,191 ​ 1,521,176 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ Accrued interest ​ 6,902 ​ 7,227 Payroll ​ 38,205 ​ 24,543 Taxes ​ 153,479 ​ 404,357 Professional fees ​ 81,973 ​ 165,651 Other ​ 21,480 ​ — ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 302,039 ​ 601,778 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,215,343 ​ $ 2,486,423 ​ ​ 56 Table of Contents NOTE 10 — 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 years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 ​ Consumer Commercial Consolidated Consumer Commercial Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 130,469,468 ​ $ 49,906,761 ​ $ 180,376,229 $ 129,413,669 ​ $ 45,850,157 ​ $ 175,263,826 Cost of goods sold ​ 114,587,598 ​ 21,472,844 ​ 136,060,442 113,765,111 ​ 19,842,185 ​ 133,607,296 Selling, general and administrative ​ 15,211,970 ​ 19,393,162 ​ 34,605,132 10,640,840 ​ 20,896,837 ​ 31,537,677 Depreciation and amortization ​ 524,510 ​ 1,027,264 ​ 1,551,774 325,227 ​ 1,036,837 ​ 1,362,064 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 145,390 ​ $ 8,013,491 ​ $ 8,158,881 $ 4,682,491 ​ $ 4,074,298 ​ $ 8,756,789 ​ The following table depicts a reconciliation from segment operating income to income before income taxes for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ ​ Consumer Commercial Consolidated Consumer Commercial Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 145,390 ​ $ 8,013,491 ​ $ 8,158,881 $ 4,682,491 ​ $ 4,074,298 ​ $ 8,756,789 Other income ​ 104,561 ​ 933,121 ​ 1,037,682 83,806 ​ 643,976 ​ 727,782 Interest expense ​ ( 228,792 ) ​ ( 218,591 ) ​ ( 447,383 ) ( 192,393 ) ​ ( 270,808 ) ​ ( 463,201 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ $ 21,159 ​ $ 8,728,021 ​ $ 8,749,180 $ 4,573,904 ​ $ 4,447,466 ​ $ 9,021,370 ​ 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 years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 3,159,705 ​ $ 1,856,490 Commercial ​ 144,419 ​ 194,575 Corporate ​ 454,280 ​ 187,046 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,758,404 ​ $ 2,238,111 57 Table of Contents ​ The following table depicts the Company’s total assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, 2024 December 31, 2023 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 40,454,328 ​ $ 35,839,361 Commercial ​ 33,068,887 ​ 33,777,041 Corporate ​ 4,347,274 ​ 3,857,827 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 77,870,489 ​ $ 73,474,229 ​ ​ NOTE 11 — REVENUE The following table depicts the Company’s disaggregation of total sales and gross margin for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ ​ Sales Gross Margin Margin ​ Sales Gross Margin Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 130,469,468 ​ $ 15,881,870 12.2 % $ 129,413,669 ​ $ 15,648,558 12.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 49,906,761 ​ 28,433,917 57.0 % 42,260,419 ​ 26,007,972 61.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Correction of immaterial error (1) ​ — ​ ​ — ​ — ​ 3,589,738 ​ — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial adjusted ​ 49,906,761 ​ 28,433,917 57.0 % 45,850,157 ​ 26,007,972 56.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 180,376,229 ​ $ 44,315,787 24.6 % $ 175,263,826 ​ $ 41,656,530 23.8 % ​ ​ (1) Correction of immaterial error relating to freight arrangement services, see Note 3 – Accounting Policies and Estimates for further details. The following table lists the opening and closing balances of our contract assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts ​ Contract ​ Contract ​ ​ ​ Receivable ​ ​ Assets ​ ​ Liabilities Consumer ​ ​ ​ Opening Balance - 1/1/2023 ​ $ 839,239 ​ $ — $ 282,481 Closing Balance - 12/31/2023 ​ 3,411,501 ​ — ​ 185,348 ​ ​ ​ ​ ​ ​ ​ Commercial Opening Balance - 1/1/2023 7,110,535 — — Closing Balance - 12/31/2023 4,399,658 — — 58 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts ​ Contract ​ Contract ​ ​ ​ Receivable ​ ​ Assets ​ ​ Liabilities Consumer ​ ​ ​ Opening Balance - 1/1/2024 $ 3,411,501 $ — $ 185,348 Closing Balance - 12/31/2024 ​ 738,132 ​ — ​ 435,508 ​ ​ ​ ​ ​ ​ ​ Commercial Opening Balance - 1/1/2024 4,399,658 — — Closing Balance - 12/31/2024 3,646,106 — — ​ The Company has no contract assets, and the only contract liabilities are customer deposits and gift cards, which are reported within other liabilities in the consolidated balance sheets. ​ NOTE 12 — LEASES The following table depicts the Company’s future annual minimum leases payments as of December 31, 2024: ​ ​ ​ ​ ​ ​ Operating ​ ​ Leases Consumer ​ 2025 ​ $ 904,549 2026 ​ 951,460 2027 ​ 653,121 2028 ​ 417,959 2029 ​ 298,552 Thereafter ​ 96,240 ​ ​ ​ ​ Total minimum lease payments ​ 3,321,881 Less: imputed interest ​ ( 251,323 ) ​ ​ ​ ​ Sub-total ​ 3,070,558 ​ ​ ​ ​ Commercial ​ 2025 ​ 1,321,299 2026 ​ 474,320 2027 ​ 33,454 2028 ​ — 2029 ​ — Thereafter ​ — ​ ​ ​ ​ Total minimum lease payments ​ 1,829,073 Less: imputed interest ​ ( 51,737 ) ​ ​ ​ ​ Sub-total ​ 1,777,336 ​ ​ ​ ​ Total ​ 4,847,894 ​ ​ ​ ​ Less: current portion ​ 2,078,505 ​ ​ ​ ​ ​ ​ $ 2,769,389 ​ All of the Company’s leased facilities as of December 31, 2024, 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 59 Table of Contents insurance, and modified gross leases, for which the Company directly pays for common area maintenance and property insurance. The following table depicts supplemental cash flow information related to operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ December 31, 2024 December 31, 2023 ​ ​ ​ ​ ​ ​ ​ Non-cash activities: Right-of-use operating lease assets obtained in exchange for new operating lease liabilities ​ $ 2,341,024 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ The following table depicts the Company’s leasing costs for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ December 31, 2024 December 31, 2023 ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 2,105,065 ​ $ 1,911,766 Variable lease cost ​ 807,961 ​ 834,793 Short-term lease cost ​ 347,427 ​ 5,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,260,453 ​ $ 2,751,559 ​ As of December 31, 2024, the weighted average remaining lease term and weighted average discount rate for operating leases were 3.0 years and 3.9 %. As of December 31, 2023, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.0 years and 4.4 %. ​ NOTE 13 — BASIC AND DILUTED AVERAGE SHARES The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Basic weighted average shares 26,180,801 26,822,725 Effect of potential dilutive securities — 15,000 ​ ​ ​ ​ ​ ​ Diluted weighted average shares 26,180,801 26,837,725 ​ For the year ended December 31, 2024, there were no Common Stock options unexercised. For the year ended December 31, 2023, there was a total of 15 thousand Common Stock options unexercised. For the years ended December 31, 2024, and 2023, there were no anti-dilutive shares, nor warrants outstanding. On March 14, 2023, a stock repurchase program was unanimously approved by the Company’s Board, which gave management authorization to purchase up to one million shares of the Company’s Common Stock, at a per-share price not to exceed $ 9.00 , on the open market. The plan expires on March 31, 2026. 60 Table of Contents The following table lists the repurchase of Company shares for the year ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Average Price Total Price Shares Available Fiscal Period ​ Shares Purchased ​ Paid per Share ​ Paid ​ to Purchase Balance as of January 1, 2024 415,973 ​ $ 5.18 ​ $ 2,155,049 584,027 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1 - 31, 2024 59,417 ​ 4.52 ​ 268,569 524,610 February 1 - 29, 2024 56,343 ​ 4.53 ​ 255,195 468,267 March 1 - 31, 2024 85,580 ​ 4.46 ​ 381,382 382,687 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of March 31, 2024 617,313 ​ $ 4.96 ​ $ 3,060,195 382,687 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 1 - 30, 2024 30,891 ​ 4.66 ​ 143,840 351,796 May 1 - 31, 2024 37,672 ​ 4.65 ​ 175,257 314,124 June 1 - 30, 2024 83,526 ​ 4.74 ​ 396,242 230,598 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2024 769,402 ​ $ 4.91 ​ $ 3,775,534 230,598 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July 1 - 31, 2024 75,326 ​ 4.87 ​ 367,144 155,272 August 1 - 31, 2024 51,353 ​ 4.98 ​ 255,633 103,919 September 1 - 30, 2024 20,516 ​ 5.15 ​ 105,733 83,403 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of September 30, 2024 916,597 ​ $ 4.91 ​ $ 4,504,044 83,403 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ October 1 - 31, 2024 11,787 ​ 5.25 ​ 61,905 71,616 November 1 - 30, 2024 546 ​ 5.26 ​ 2,874 71,070 December 1 - 31, 2024 — ​ — ​ - 71,070 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2024 928,930 ​ $ 4.92 ​ $ 4,568,823 71,070 ​ For the year ended December 31, 2024, the Company repurchased 512,957 shares for $ 2,413,774 , for an average price of $ 4.71 . ​ 61 Table of Contents NOTE 14 — DEBT The following table summarizes the details of the Company’s long-term debt obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding Balance ​ December 31, December 31, ​ 2024 ​ 2023 Consumer ​ ​ Note payable, FSB (1) ​ $ 2,455,043 ​ $ 2,563,108 Note payable, Truist Bank (3) ​ 801,175 ​ 838,430 Notes payable, TBT (4,5) ​ 1,979,730 ​ 2,064,928 Note payable, Scottsdale Transaction (6) ​ 50,000 ​ 200,000 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,285,948 ​ 5,666,466 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Note payable, FSB (2) ​ 5,569,171 ​ 5,815,381 Note payable, Avail Transaction (7) ​ 166,667 ​ 833,333 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,735,838 ​ 6,648,714 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ Line of credit, FSB (8) ​ — ​ — Note payable, TBT (9) ​ 2,500,393 ​ 2,618,311 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,500,393 ​ 2,618,311 ​ ​ ​ ​ ​ ​ ​ Total ​ 13,522,179 ​ 14,933,491 ​ ​ ​ ​ ​ ​ ​ Less: current portion ​ ( 3,591,351 ) ​ ( 1,361,443 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 9,930,828 ​ $ 13,572,048 ​ 62 Table of Contents The following table depicts the Company’s future principal payments on long-term debt obligations as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 2029 Thereafter Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note payable, FSB (1) ​ 112,570 ​ 2,342,474 ​ — ​ — ​ — ​ — Note payable, Truist Bank (3) ​ 38,745 ​ 40,203 ​ 41,716 ​ 43,216 ​ 44,913 ​ 592,381 Notes payable, TBT (4,5) ​ 487,260 ​ 71,359 ​ 74,081 ​ 76,767 ​ 79,836 ​ 1,190,427 Note payable, Scottsdale Transaction (6) ​ 31,250 ​ 18,750 ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 669,825 ​ 2,472,786 ​ 115,797 ​ 119,983 ​ 124,749 ​ 1,782,808 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ Note payable, FSB (2) ​ 254,466 ​ 5,314,705 ​ — ​ — ​ — ​ — Note payable, Avail Transaction (7) ​ 166,667 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 421,133 ​ 5,314,705 ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ ​ ​ Line of Credit, FSB (8) ​ — ​ — ​ — ​ — ​ — ​ — Note payable, TBT (9) ​ 2,500,393 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,500,393 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,591,351 ​ $ 7,787,491 ​ $ 115,797 ​ $ 119,983 ​ $ 124,749 ​ $ 1,782,808 ​ (1) On November 23, 2021, the consumer segment entered into a $ 2.781 million secured amortizing note payable with Farmer’s State Bank of Oakley, Kansas (“FSB”). The note payable bears interest at 3.10 % and matures on November 15, 2026. (2) On November 23, 2021, the commercial segment entered into a $ 6.309 million secured amortizing note payable with FSB. The note payable bears interest at 3.10 % and matures on November 15, 2026. (3) On July 9, 2020, the consumer segment entered into a $ 956 thousand secured amortizing note payable with Truist Bank. The note payable bears interest at 3.65 % and matures on July 9, 2030. (4) On September 14, 2020, the consumer segment entered into a $ 496 thousand secured amortizing note payable with Texas Bank & Trust (“TBT”). The note payable bears interest at 3.75 % and matures on September 14, 2025. (5) On July 30, 2021, the consumer segment entered into a $ 1.772 million secured amortizing note payable with TBT. The note payable bears interest at 3.75 % and matures on July 30, 2031. (6) On September 12, 2024, the consumer segment entered into a $ 50 thousand secured amortizing note payable in relation to the Scottsdale Transaction. The repayment of the note payable shall begin upon the fulfillment of certain terms and conditions under the asset purchase agreement entered into on September 12, 2024. The note payable’s imputed interest is 3.10 % and matures on September 30, 2026. (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 is 3.10 % and matures on January 1, 2025. (8) On November 8, 2024, the Company entered into a $ 3.800 million secured line of credit with FSB. The line of credit bears interest at our rate of deposit + 1.00 % with a floor of 3.10 % and matures on November 23, 2027. This note was 63 Table of Contents previously presented within our commercial segment and is now presented within corporate as the line of credit provides borrowing capacity for all segments. (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 4, 2025. The Company was in compliance with all of its debt obligation covenants for the years ended December 31, 2024, and December 31, 2023. The following table depicts the Company’s future scheduled aggregate principal payments and maturities as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scheduled ​ ​ ​ ​ Principal ​ Loan ​ ​ ​ Scheduled Principal Payments and Maturities by Year Payments Maturities Total 2025 ​ 798,947 ​ 2,792,404 ​ 3,591,351 2026 ​ 476,241 ​ 7,311,250 ​ 7,787,491 2027 ​ 115,797 ​ — ​ 115,797 2028 ​ 119,983 ​ — ​ 119,983 2029 ​ 124,749 ​ — ​ 124,749 Thereafter ​ 172,583 ​ 1,610,225 ​ 1,782,808 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,808,300 ​ $ 11,713,879 ​ $ 13,522,179 ​ ​ NOTE 15 — STOCK-BASED COMPENSATION On June 21, 2004, our shareholders approved the adoption of the 2004 Stock Option Plan (the “2004 Plan”), which reserved 1,700,000 shares of our Common Stock for issuance upon exercise of options to purchase our Common Stock. Prior to 2012, the Company granted options to purchase an aggregate of 1,459,634 shares of our Common Stock under the 2004 Plan to certain of our officers, directors, key employees, and other individuals who provided us with goods and services. As of December 31, 2024, of the options issued under the 2004 Plan, 845,634 had been exercised, 614,000 had expired, and zero (0) remain outstanding. Since no further issuances can be made under the 2004 Plan and no options remain outstanding, the 2004 Plan has been formally terminated. On December 7, 2016, stockholders of the Company approved the adoption of the 2016 Equity Incentive Plan (the “2016 Plan”), which reserved 1,100,000 shares for issuance pursuant to awards issued thereunder. As of December 31, 2024, no awards had been made under the 2016 Plan. The 2016 plan was never utilized and no equity awards were made, the 2016 Plan has been formally terminated. ​ NOTE 16 — 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 consolidated financial statements. ​ NOTE 17 — 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 64 Table of Contents 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 years ended December 31, 2024 and 2023. ​ NOTE 18 — INCOME TAXES The Company’s income from continuing operations before income tax expense for Fiscal 2024 and Fiscal 2023 was $ 8,749,180 and $ 9,021,370 , respectively, and was derived entirely from domestic operations. The following table summarizes the components of income tax expense, disaggregated by current and deferred, and by federal and state: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 Current ​ ​ ​ ​ ​ ​ Federal ​ $ 1,888,771 ​ $ 164,376 State and local ​ ​ 191,544 ​ ​ 175,318 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ ​ 2,080,315 ​ ​ 339,694 ​ ​ ​ ​ ​ ​ ​ Deferred ​ ​ ​ ​ ​ ​ Federal ​ $ ( 88,194 ) ​ $ 1,534,224 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ ​ ( 88,194 ) ​ ​ 1,534,224 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,992,121 ​ $ 1,873,918 ​ The following table provides a reconciliation of the Company’s federal tax rate to its effective tax rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ Income tax expense at the federal tax rate ​ $ 1,837,328 ​ 21.00 % $ 1,894,488 ​ 21.0 % State and local taxes, net of federal income tax effect (1) ​ ​ 151,320 ​ 1.8 % ​ 137,915 ​ 1.5 % Nontaxable or nondeductible items ​ ​ 8,415 ​ 0.1 % ​ 9,178 ​ 0.1 % Other ​ ​ ( 4,942 ) ​ ( 0.1 ) % ​ ( 167,663 ) ​ ( 1.9 ) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,992,121 ​ 22.8 % $ 1,873,918 ​ 20.8 % ​ (1) State taxes, net of federal benefit are predominately due to activity in Texas as the majority of business activity of the Company is from that state. 65 Table of Contents The following table summarizes income taxes paid, net of any refunds received for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 2,090,000 ​ $ — State and local ​ ​ 180,708 ​ ​ 197,561 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,270,708 ​ $ 197,561 ​ The following table summarizes income taxes paid, net of any refunds received, disaggregated by individual jurisdictions in which income taxes paid, net of refunds received is equal to or greater than five percent of total income taxes paid, for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 2,090,000 ​ $ — Texas ​ ​ 123,000 ​ ​ 142,000 Arizona (1) ​ ​ 30,000 ​ ​ 50,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,243,000 ​ $ 192,000 ​ (1) Taxes paid to the state of Arizona exceeded the five percent threshold for the year ended December 31, 2023, but not for the year ended December 31, 2024. The following chart provides detail of the significant temporary differences giving rise to deferred tax assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ December 31, 2024 December 31, 2023 Deferred Tax Asset (Liability) ​ ​ ​ ​ ​ ​ Inventories ​ $ 57,015 ​ $ 83,963 Contingencies and accruals ​ ​ 128,673 ​ ​ 100,910 Property and equipment ​ ​ ( 146,109 ) ​ ​ ( 226,446 ) Goodwill and intangibles ​ ​ 3,111 ​ ​ ( 3,931 ) Other ​ ​ 6,836 ​ ​ 6,836 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 49,526 ​ $ ( 38,668 ) ​ No valuation allowance was recorded against the net deferred tax asset (liability) balance as of December 31, 2024 and December 31, 2023. ​ NOTE 19 — DEFINED CONTRIBUTION PLANS The Company sponsors a defined contribution 401(k) plan (“DCP”). Employee contributions under the DCP are fully vested, with employer matching contributions being subject to a service vesting schedule. In Fiscal 2024 and 2023, the Company contributed $ 13,472 and $ 14,300 to the DCP, respectively. ​ 66 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ​