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Item 1. Financial Statements

2025-08-06 compared with 2025-05-07 · 169 added, 93 removed, 440 unchanged (37% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of goods sold

7 unchanged sentences

Income tax expense

( 1,515,427 )

( 1,011,517 )

Basic earnings per share:

33 unchanged sentences

60,000,000 shares authorized;

26,924,631 shares issued and 25,995,201 shares outstanding as of March 31, 2025;

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

Treasury stock at cost, 929,430 and 928,930 shares, as of March 31, 2025 and December 31, 2024, respectively

Treasury stock at cost, 949,593 and 928,930 shares, as of June 30, 2025 and December 31, 2024, respectively

( 4,690,149 )

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

Adjustments to reconcile net income to net cash provided by operations:

3 unchanged sentences

Non-cash lease expense

Loss on disposal of equipment

Changes in operating assets and liabilities:

6 unchanged sentences

Operating leases

( 1,173,750 )

( 1,010,247 )

Other liabilities

3 unchanged sentences

Proceeds from (investment in) notes receivable

Proceeds from sales of equipment

Net cash (used in) investing

( 1,265,004 )

Payments on notes payable

Purchase of treasury stock

( 1,620,485 )

Net cash (used in) financing

11 unchanged sentences

Stockholders’

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Balance as of April 1, 2024

( 3,060,195 )

Shares repurchased

Balance as of June 30, 2024

( 3,775,534 )

Treasury Stock

Preferred Stock

Stockholders’

Three Months Ended June 30, 2025

Balance as of April 1, 2025

( 4,571,449 )

Shares repurchased

Balance as of June 30, 2025

( 4,690,149 )

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

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Treasury Stock

Preferred Stock

Stockholders’

Six Months Ended June 30, 2024

Balance as of January 1, 2024

1 unchanged sentence

Shares repurchased

Balance as of March 31, 2024

( 1,620,485 )

Balance as of June 30, 2024

( 3,775,534 )

Treasury Stock

1 unchanged sentence

Stockholders’

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Balance as of January 1, 2025

1 unchanged sentence

Shares repurchased

Balance as of March 31, 2025

Balance as of June 30, 2025

( 4,690,149 )

3 unchanged sentences

NOTE 1 — BASIS OF PRESENTATION

These unaudited interim 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 United States Generally Accepted Accounting Principles (“U.S.

GAAP”) 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”).

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.

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 consolidated financial statements for these interim periods, have been included.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the fiscal year ended December 31, 2025 (“Fiscal 2025”).

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”).

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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.

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.

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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:

Significant business activities within our operating and reportable segments are detailed below:

Consumer Segment

16 unchanged sentences

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with U.S.

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.

4 unchanged sentences

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.

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.

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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 respective precious metal.

An adjustment to revenue is made once the underlying weight and any precious metal spot price movement are resolved, which is usually around six weeks.

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.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

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 terms and transaction price are agreed to, the product is shipped, and title is transferred.

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.

1 unchanged sentence

Sales are recorded, net of expected returns.

In certain instances, the consumer and commercial segment’s customers may return a product purchased within 30 days of receipt.

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 March 31, 2025, and December 31, 2024, the consumer segment’s allowance for returns was $ 8,929 and $ 11,942 , respectively.

As of March 31, 2025, and December 31, 2024, the commercial segment’s allowance for returns was $ 53,458 and $ 48,569 , respectively.

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

1 unchanged sentence

The concentrations described herein pertain to certain domestic precious metals transactions requiring an assay which are of short duration and settled on comparable terms.

Overall customer concentrations, as a percentage of sales, may vary as a result of the mix of products being sold within each comparative period.

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 three months ended March 31, 2025, two customers accounted for 51.3 % of our sales and represented 0.0 % of our accounts receivable balance.

For the three months ended March 31, 2024, one customer accounted for 34.1 % of our sales and represented 0.0 % of our accounts receivable balance.

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.

1 unchanged sentence

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 March 31, 2025 and 2024, the consumer segment’s shipping and handling costs were $ 16,686 and $ 439 , respectively.

For the three months ended March 31, 2025 and 2024, the commercial segment’s shipping and handling costs were $ 991,324 and $ 1,394,077 , respectively.

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.

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 March 31, 2025 and 2024, the consumer segment’s advertising costs were $ 279,246 and $ 247,903 , respectively.

For the three months ended March 31, 2025 and 2024, the commercial segment’s advertising costs were $ 80,218 and $ 71,095 , respectively.

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.

We determine if an arrangement is a lease at inception.

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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 three months ended March 31, 2025 and 2024.

As of March 31, 2025, the Company had a deferred tax asset of $ 66,186 .

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 no t have a valuation allowance as of March 31, 2025, or December 31, 2024.

The Company did no t have a valuation allowance as of June 30, 2025, or December 31, 2024.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Segment Information

1 unchanged sentence

For the periods presented in these condensed consolidated financial statements, the Company’s CODM was identified as the Chief Executive Officer.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

2 unchanged sentences

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 our Common Stock by the weighted average number of shares of Common Stock outstanding for the reporting period.

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.

3 unchanged sentences

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 the exercise of an award, such benefit is reflected in cash flow from financing activities within the condensed consolidated statement of cash flows.

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.

1 unchanged sentence

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.

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

7 unchanged sentences

The carrying amounts reported in the condensed consolidated balance sheets approximate fair value.

Accounts Receivable, Net of Allowances

Accounts receivable represents 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

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

the allowance for credit losses.

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

As of March 31, 2025, and December 31, 2024, the commercial segment’s allowance for credit losses was $ 454,491 and $ 433,159 , respectively.

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.

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.

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.

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The commercial segment states its inventory at the lower of cost and net realizable value.

The cost of our technology assets is determined by utilizing the retail cost method.

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.

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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 three months ended March 31, 2025, requiring an interim goodwill impairment test, and the Company did not record a goodwill impairment charge in any of the periods presented.

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.

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.

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:

1 unchanged sentence

Building improvements

Shorter of 15 years or the remaining useful life

Shorter of 15 years or remaining useful life

Furniture and fixtures

1 unchanged sentence

Leasehold improvements

Shorter of 15 years or the remaining lease term

Shorter of 15 years or remaining lease term

Production and material handling equipment

3 unchanged sentences

betterments that increase the value or materially extend the life of the related assets are capitalized.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

7 unchanged sentences

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

New Accounting Standards Pronouncements

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):

3 unchanged sentences

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

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4 — INVENTORIES

2 unchanged sentences

Trade inventories

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 5 — GOODWILL

24 unchanged sentences

Building and improvements

Furniture and fixtures

Machinery and equipment

1 unchanged sentence

accumulated depreciation

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

(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.

ENVELA CORPORATION AND SUBSIDIARIES

12 unchanged sentences

accumulated amortization

(1) As of March 31, 2025 and December 31, 2024, these intangible assets are under development and 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 March 31, 2025:

(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:

ENVELA CORPORATION AND SUBSIDIARIES

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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 March 31, 2025 and 2024:

Three Months Ended March 31,

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,

Cost of goods sold

4 unchanged sentences

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 March 31, 2025 and 2024:

Three Months Ended March 31,

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,

Operating income

1 unchanged sentence

Income before income taxes

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,

Cost of goods sold

Selling, general and administrative

Depreciation and amortization

Operating income

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,

Operating income

Interest expense

Income before income taxes

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 March 31, 2025 and 2024:

Three Months Ended March 31,

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

Three Months Ended June 30,

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

Six Months Ended June 30,

The following table depicts the Company’s total assets:

March 31, 2025

June 30, 2025

December 31, 2024

NOTE 10 — REVENUE

The following table depicts the Company’s disaggregation of total sales and gross margin for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

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,

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,

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

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NOTE 11 — LEASES

The following table depicts the Company’s future minimum lease payments as of March 31, 2025:

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

Total minimum lease payments

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current portion

All of the Company’s leased facilities as of March 31, 2025, are non-cancellable.

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:

Three Months Ended March 31,

Six Months Ended June 30,

Non-cash activities:

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table depicts the Company’s leasing costs for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

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

Three Months Ended June 30,

Operating lease cost

1 unchanged sentence

Short-term lease cost

As of March 31, 2025, the weighted average remaining lease term and weighted average discount rate for operating leases were 3.2 years and 4.0 %.

As of March 31, 2024, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.3 years and 4.3 %.

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

Six Months Ended June 30,

Operating lease cost

Variable lease cost

Short-term lease cost

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 March 31, 2025 and 2024:

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

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Diluted weighted average shares

For three months ended March 31, 2025 and 2024, there were 0 and 15 thousand Common Stock options unexercised, respectively.

For the three months ended March 31, 2025 and 2024, there were no anti-dilutive shares.

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

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

Basic weighted average shares

Effect of potential dilutive securities

Diluted weighted average shares

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.

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 100,000 shares of the Common Stock, bringing the total authorization under the existing repurchase program to 1,100,000 shares.

The following table lists the repurchase of Company shares for the three months ended March 31, 2025:

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:

Total Number of

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Balance as of March 31, 2025

For the three months ended March 31, 2025, the Company repurchased 500 shares for $ 2,626 , for an average price of $ 5.25 .

April 1 - 30, 2025

May 1 - 31, 2025

June 1 - 30, 2025

Balance as of June 30, 2025

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 .

ENVELA CORPORATION AND SUBSIDIARIES

30 unchanged sentences

(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 matured and was paid in full on January 1, 2025.

The note payable’s imputed interest was 3.10 % and matured on January 1, 2025.

(8) On November 8, 2024, the Company entered into a $ 3.800 million secured line of credit with FSB.

2 unchanged sentences

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 March 31, 2025:

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

Note payable, FSB (1)

3 unchanged sentences

Note payable, FSB (2)

Note payable, Avail Transaction (7)

Line of Credit, FSB (8)

Note payable, TBT (9)

The Company was in compliance with all of its debt obligation covenants for the three months ended March 31, 2025 and 2024.

The following table depicts the Company’s future scheduled aggregate principal payments and maturities as of March 31, 2025:

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:

Scheduled Principal Payments and Maturities by Year

NOTE 14 — STOCK-BASED COMPENSATION

There was no stock-based compensation expense for the three months ended March 31, 2025 and 2024.

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

7 unchanged sentences

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 months ended March 31, 2025 and 2024.

There are no loss contingencies subject to reporting for the three and six months ended June 30, 2025 and 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements