Envela Corp 10-Q

ITEM 1: FINANCIAL STATEMENTS ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, (Unaudited) 2025 2024 2025 2024 Sales ​ $ 54,876,833 ​ $ 45,297,002 ​ $ 103,132,662 ​ $ 85,154,782 Cost of goods sold ​ 42,488,910 ​ 33,907,545 ​ 78,776,715 ​ 63,444,641 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ 12,387,923 ​ 11,389,457 ​ 24,355,947 ​ 21,710,141 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ Selling, general and administrative ​ 8,672,067 ​ 9,118,048 ​ 17,076,329 ​ 16,755,024 Depreciation and amortization ​ 460,411 ​ 362,267 ​ 905,752 ​ 705,832 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 9,132,478 ​ 9,480,315 ​ 17,982,081 ​ 17,460,856 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ 3,255,445 ​ 1,909,142 ​ 6,373,866 ​ 4,249,285 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ Other income ​ 394,251 ​ 225,417 ​ 599,856 ​ 463,945 Interest expense ​ ( 106,228 ) ​ ( 109,141 ) ​ ( 212,549 ) ​ ( 229,995 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 3,543,468 ​ 2,025,418 ​ 6,761,173 ​ 4,483,235 Income tax expense ​ ( 791,069 ) ​ ( 461,239 ) ​ ( 1,515,427 ) ​ ( 1,011,517 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 2,752,399 ​ $ 1,564,179 ​ $ 5,245,746 ​ $ 3,471,718 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share: ​ ​ ​ ​ Net income ​ $ 0.11 ​ $ 0.06 ​ $ 0.20 ​ $ 0.13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ ​ ​ Net income ​ $ 0.11 ​ $ 0.06 ​ $ 0.20 ​ $ 0.13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ Basic ​ 25,991,979 ​ 26,248,554 ​ 25,993,802 ​ 26,333,796 Diluted ​ 25,991,979 ​ 26,263,554 ​ 25,993,802 ​ 26,348,796 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 4 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 Assets ​ (Unaudited) ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 22,851,869 ​ $ 20,609,003 Accounts receivable, net of allowances ​ 5,065,919 ​ 4,384,238 Notes receivable ​ — ​ 2,000 Inventories ​ 27,381,184 ​ 25,705,524 Prepaid expenses ​ 1,166,819 ​ 874,203 Other current assets ​ ​ 114,864 ​ ​ 28,839 Total current assets ​ 56,580,655 ​ 51,603,807 ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 13,802,440 ​ 13,515,162 Right-of-use assets from operating leases ​ 4,587,527 ​ 4,741,326 Goodwill ​ 3,621,453 ​ 3,621,453 Intangible assets, net ​ 3,780,766 ​ 4,097,778 Deferred tax asset ​ ​ 90,858 ​ ​ 49,526 Other assets ​ 252,061 ​ 241,437 ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 82,715,760 ​ $ 77,870,489 ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders’ equity ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 3,158,474 ​ $ 3,177,550 Notes payable ​ 3,374,442 ​ 3,591,351 Operating lease liabilities ​ 1,818,941 ​ 2,078,505 Accrued expenses ​ 2,382,896 ​ 3,215,343 Other current liabilities ​ 1,625,679 ​ 455,385 Total current liabilities ​ 12,360,432 ​ 12,518,134 ​ ​ ​ ​ ​ ​ ​ Notes payable, less current portion ​ 9,668,844 ​ 9,930,828 Operating lease liabilities, less current portion ​ 2,909,926 ​ 2,769,389 ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ $ 24,939,202 ​ $ 25,218,351 ​ ​ ​ ​ ​ ​ ​ Contingencies (Note 16) ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ Preferred stock, $ 0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding ​ — ​ — Common stock, $ 0.01 par value; 60,000,000 shares authorized; 26,924,631 shares issued and 25,975,038 shares outstanding as of June 30, 2025; 26,924,631 shares issued and 25,995,701 shares outstanding as of December 31, 2024 ​ 269,246 ​ 269,246 Treasury stock at cost, 949,593 and 928,930 shares, as of June 30, 2025 and December 31, 2024, respectively ​ ( 4,690,149 ) ​ ( 4,568,823 ) Additional paid-in capital ​ 40,173,000 ​ 40,173,000 Retained earnings ​ 22,024,461 ​ 16,778,715 ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ 57,776,558 ​ 52,652,138 ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 82,715,760 ​ $ 77,870,489 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 5 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, (Unaudited) 2025 2024 Operations ​ ​ ​ ​ Net income ​ $ 5,245,746 ​ $ 3,471,718 Adjustments to reconcile net income to net cash provided by operations: ​ ​ Depreciation and amortization ​ 905,752 ​ 705,832 Provision for credit losses ​ 82,366 ​ 240,166 Deferred taxes ​ ( 41,332 ) ​ ( 45,383 ) Non-cash lease expense ​ 1,208,522 ​ 985,996 Loss on disposal of equipment ​ ​ 5,491 ​ ​ — Changes in operating assets and liabilities: ​ ​ Accounts receivable ​ ( 764,047 ) ​ 2,732,769 Inventories ​ ( 1,675,660 ) ​ ( 3,633,741 ) Prepaid expenses ​ ( 292,616 ) ​ 159,517 Other assets ​ ( 96,649 ) ​ ( 18,609 ) Accounts payable ​ ( 19,076 ) ​ ( 31,919 ) Accrued expenses ​ ( 832,447 ) ​ ( 643,856 ) Operating leases ​ ( 1,173,750 ) ​ ( 1,010,247 ) Other liabilities ​ 1,170,294 ​ 90,019 ​ ​ ​ ​ ​ ​ ​ Net cash provided by operations ​ 3,722,594 ​ 3,002,262 ​ ​ ​ ​ ​ ​ ​ Investing ​ ​ Purchase of property and equipment ​ ( 831,529 ) ​ ( 965,525 ) Purchase of intangible assets ​ ( 50,630 ) ​ ( 296,496 ) Proceeds from (investment in) notes receivable ​ ​ 2,000 ​ ​ ( 2,983 ) Proceeds from sales of equipment ​ ​ 650 ​ ​ — ​ ​ ​ ​ ​ ​ ​ Net cash (used in) investing ​ ( 879,509 ) ​ ( 1,265,004 ) ​ ​ ​ ​ ​ ​ ​ Financing ​ ​ Payments on notes payable ​ ( 478,893 ) ​ ( 626,625 ) Purchase of treasury stock ​ ​ ( 121,326 ) ​ ​ ( 1,620,485 ) ​ ​ ​ ​ ​ ​ ​ Net cash (used in) financing ​ ( 600,219 ) ​ ( 2,247,110 ) ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents ​ 2,242,866 ​ ( 509,852 ) Cash and cash equivalents, beginning of period ​ 20,609,003 ​ 17,853,853 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period ​ $ 22,851,869 ​ $ 17,344,001 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures ​ ​ Cash paid during the period for: ​ ​ Interest ​ $ 218,685 ​ $ 284,796 Income Taxes ​ $ 1,732,100 ​ $ 1,352,525 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 6 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) Shares Amount Shares Amount Shares Amount Capital Earnings Equity Three Months Ended June 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of April 1, 2024 ​ 26,924,631 ​ $ 269,246 ​ ( 617,313 ) ​ $ ( 3,060,195 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 11,929,195 ​ $ 49,311,246 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 1,564,179 ​ ​ 1,564,179 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ ​ — ​ ( 152,089 ) ​ ​ ( 715,339 ) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 715,339 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2024 26,924,631 ​ $ 269,246 ( 769,402 ) ​ $ ( 3,775,534 ) — ​ $ — ​ $ 40,173,000 ​ $ 13,493,374 ​ $ 50,160,086 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Three Months Ended June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of April 1, 2025 ​ 26,924,631 ​ $ 269,246 ​ ( 929,430 ) ​ $ ( 4,571,449 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 19,272,062 ​ $ 55,142,859 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ 2,752,399 ​ 2,752,399 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ — ( 20,163 ) ​ ( 118,700 ) — ​ — ​ — ​ — ​ ( 118,700 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2025 26,924,631 ​ $ 269,246 ( 949,593 ) ​ $ ( 4,690,149 ) — ​ $ — ​ $ 40,173,000 ​ $ 22,024,461 ​ $ 57,776,558 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 7 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Six Months Ended June 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1, 2024 ​ 26,924,631 ​ $ 269,246 ​ ( 415,973 ) ​ $ ( 2,155,049 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 10,021,656 ​ $ 48,308,853 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 3,471,718 ​ 3,471,718 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ ​ — ​ ( 353,429 ) ​ ​ ( 1,620,485 ) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ( 1,620,485 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2024 26,924,631 ​ $ 269,246 ( 769,402 ) ​ $ ( 3,775,534 ) — ​ $ — ​ $ 40,173,000 ​ $ 13,493,374 ​ $ 50,160,086 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Six Months Ended June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1, 2025 ​ 26,924,631 ​ $ 269,246 ​ ( 928,930 ) ​ $ ( 4,568,823 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 16,778,715 ​ $ 52,652,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ 5,245,746 ​ 5,245,746 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ — ( 20,663 ) ​ ( 121,326 ) — ​ — ​ — ​ — ​ ( 121,326 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2025 26,924,631 ​ $ 269,246 ( 949,593 ) ​ $ ( 4,690,149 ) — ​ $ — ​ $ 40,173,000 ​ $ 22,024,461 ​ $ 57,776,558 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 8 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 1 — BASIS OF PRESENTATION ​ These unaudited condensed consolidated financial statements of Envela Corporation, a Nevada corporation, and its subsidiaries (together with its subsidiaries, the “Company” or “Envela”), included herein have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States (“U.S.”) for interim financial information and with the instructions to Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X prescribed by the Securities and Exchange Commission (the “SEC”). Pursuant to the SEC’s rules and regulations, Quarterly Reports do not include all of the information and notes required by U.S. GAAP. In the opinion of management, all adjustments, which are of a normal and recurring nature except those which have been disclosed elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”), necessary for a fair presentation of the unaudited condensed consolidated financial statements for these periods, have been included. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year ended December 31, 2025 (“Fiscal 2025”). Management suggests these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“Fiscal 2024”) filed with the SEC on March 26, 2025 (“2024 Annual Report”). The Company's operations are located within the contiguous U.S. and its functional and reporting currency is the U.S. Dollar (“$”). Envela files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and other information with the SEC. Such information and amendments to reports previously filed or furnished are available on the Company’s corporate website, www.envela.com, as soon as reasonably practicable after such materials are filed with or furnished to the SEC. The SEC also maintains an internet site at www.sec.gov that contains the Company’s filings. NOTE 2 — PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS Throughout this document, Envela Corporation is referred to as “we,” “us,” “our,” “Envela,” or the “Company.” Principles of Consolidation Envela serves as a holding company, conducting its operations via subsidiaries engaged in various businesses and activities within the re-commerce and recycling sectors. The Company does not have any variable interest entities requiring consolidation. All intercompany transactions and balances have been eliminated. Nature of Operations The products and services we offer are delivered by our subsidiaries under their distinct brands, rather than directly by Envela itself. Significant business activities within our operating and reportable segments are detailed below: Consumer Segment Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, along with secondary market bullion. We incorporate recycled diamonds and gemstones into our new designs meaning they were previously set and unset, producing a low-carbon and ethical origin product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items have an enduring quality, enabling them to maintain their beauty and value as they are passed from one owner to another. Commercial Segment Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the Information Technology (“IT”) asset disposition (“ITAD”) industry. The separated commodities, including metals, plastics, and glass, are sold to downstream processors where they are further processed and reintroduced into new products. ITAD services maximize the residual value of retired IT assets by adhering to a reuse-first philosophy and ensuring equipment is refurbished and re-marketed after data sanitization. The Company offers services that manage the entire lifecycle of technology products to ensure data security, regulatory compliance, and 9 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ environmental sustainability. We are proud of our role in supporting a circular economy through the responsible reuse and recycling of electronic devices. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details. See Note 3 – Accounting Policies and Estimates and Note 9 – Segment Information for further details. NOTE 3 — ACCOUNTING POLICIES AND ESTIMATES Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include revenue recognition, determining the nature and timing of satisfaction of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; the fair value of and/or potential impairment of goodwill and intangible assets for the reporting units; useful lives of our tangible and intangible assets; allowances for credit losses; the market value of, and demand for, our inventory and the potential outcome of uncertain tax positions that have been recognized on our condensed consolidated financial statements or tax returns. Actual results could differ from those estimates and assumptions. Revenue Recognition Accounting Standards Codification (“ASC”) 606, Revenue Recognition provides guidance to identify performance obligations for revenue-generating transactions. The Company applies a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations in the contract; and (5) recognizing revenue when the corresponding performance obligation is satisfied. Consumer Segment For the consumer segment, revenue from monetary transactions (i.e., cash and accounts receivable) with wholesale customers is recognized when the merchandise is delivered or at the point of sale for retail customers, and consideration for the transaction has been made either by immediate payment or through a receivable obligation. For e-commerce, revenue is recognized when the customer has fulfilled their obligation to pay or promise to pay, and goods have been shipped. Revenue on precious metals requiring an assay is recognized upon transfer of title, based on the determination of the underlying weight and price of the associated metals. The Company offers third-party financing for retail customers. Revenue is recognized upon transfer of title, with the promise of the third-party financing company to pay. Commercial Segment The commercial segment recognizes revenue at an amount that reflects the consideration to which we expect to be entitled to in exchange for transferring goods or services to the customer. The commercial segment recognizes refining revenue when our inventory arrives at the destination port and the performance obligation is satisfied by transferring the control of the promised goods that are identified in the customer contract. The initial invoice is recognized in full when our performance obligation is satisfied. Under the guidance of ASC 606, an estimate of the variable consideration that we are expected to be entitled to is included in the transaction price stated at the current precious metal spot price and weight of the precious metal. An adjustment to revenue is made once the underlying weight and any precious metal spot price movement is resolved, which is usually around six weeks. Any adjustment from the resolution of the underlying uncertainty is netted with the settlement due from the original contract. Historically, these amounts have not been material. 10 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The commercial segment provides its services according to a Scope of Work (“SOW”). Revenue from our service offerings is recognized upon completion of the SOW at a predetermined amount based on the number of units processed and a preset price per unit or weight measurement. The commercial segment provides freight arrangement services related to inbound asset or material movements to our facilities. Revenue from freight arrangement services is recognized at settlement with our inbound customers, which occurs when the SOW has been completed. Under the guidance of ASC 606, the Company is deemed to be a principal and as such records freight arrangement services as a component of revenue, and the associated expense is recorded as a component of cost of goods sold. The commercial segment recognizes revenue on outright sales when the terms and transaction price are agreed to, the product is shipped, and title is transferred. See Note 10 – Revenue for further details. Sales Returns and Allowances Sales are recorded, net of expected returns. In some cases, the consumer and commercial segment’s customers may return a product purchased within 30 days of receipt. Our allowance for estimated returns is based on our review of historical returns experience and reduces our reported revenues accordingly. As of June 30, 2025, and December 31, 2024, the consumer segment’s allowance for returns was $ 7,345 and $ 11,942 , respectively. As of June 30, 2025, and December 31, 2024, the commercial segment’s allowance for returns was $ 64,425 and $ 48,569 , respectively. Concentrations and Credit Risk The Company is potentially subject to concentrations of counterparty credit risk. The concentrations described herein pertain to certain domestic precious metals transactions requiring an assay which are of short duration and settled on comparable terms. Overall customer concentrations as a percentage of sales may vary as a result of the mix of product being sold within each comparative period. Individual customer concentrations are also impacted by each customer’s production schedule and as such the Company identifies the most appropriate sales outlet to ensure a timely transaction settlement. For the six months ended June 30, 2025, two customers aggregated 50.3 % of our sales and represented 19.1 % of our accounts receivable balance. For the six months ended June 30, 2024, two customers aggregated 21.0 % of our sales and represented 0.0 % of our accounts receivable balance. The Company believes that no single customer is critical to its business as a result of having diverse revenue streams and the optionality of sales outlets primarily associated with base and precious metals. Shipping and Handling Costs Within the consumer and commercial segments, shipping and handling costs are accounted for as fulfillment costs within cost of goods sold. For the three months ended June 30, 2025 and 2024, the consumer segment’s shipping and handling costs were $ 13,914 and $ 49,350 , respectively. For the three months ended June 30, 2025 and 2024, the commercial segment’s shipping and handling costs were $ 926,483 and $ 1,194,203 , respectively. 11 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ For the six months ended June 30, 2025 and 2024, the consumer segment’s shipping and handling costs were $ 30,600 and $ 49,789 , respectively. For the six months ended June 30, 2025 and 2024, the commercial segment’s shipping and handling costs were $ 1,917,808 and $ 2,588,280 , respectively. Advertising Costs The consumer and commercial segment’s advertising costs are expensed as incurred. For the three months ended June 30, 2025 and 2024, the consumer segment’s advertising costs were $ 290,277 and $ 324,868 , respectively. For the three months ended June 30, 2025 and 2024, the commercial segment’s advertising costs were $ 124,873 and $ 61,672 , respectively. For the six months ended June 30, 2025 and 2024, the consumer segment’s advertising costs were $ 570,440 and $ 572,982 , respectively. For the six months ended June 30, 2025 and 2024, the commercial segment’s advertising costs were $ 206,008 and $ 132,977 , respectively. Leases We determine if an arrangement is a lease at inception. We do not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs. In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842, Leases requires us to use the interest rate that a lessee would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. If we cannot readily determine the discount rate implicit in lease agreements, we utilize our incremental borrowing rate. For leases one-year or less the Company has elected not to record lease liabilities and right-of use assets and instead recognize the expense associated with the lease payments using the straight-line basis. Income Taxes Income taxes are accounted for under the asset and liability method prescribed by ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation of Deferred Tax Assets The Company’s deferred tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company reviews the likelihood that the benefit of the deferred tax assets will be realized and the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. We have not taken a tax position that, if challenged, would have a material effect on the condensed consolidated financial statements or the effective tax rate for the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, the Company had a deferred tax asset of $ 90,858 . As of December 31, 2024, the Company had a deferred tax asset of $ 49,526 . The Company did no t have a valuation allowance as of June 30, 2025, or December 31, 2024. 12 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ Segment Information The accounting standards for reporting information about operating segments define an operating segment as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. For the periods presented in these condensed consolidated financial statements, the Company’s CODM was identified as the Chief Executive Officer. The Company allocates its corporate expenses to its operating segments, including selling, general and administrative expenses, depreciation and amortization, other income, interest expense, and income tax expense. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details. ​ See Note 2 – Principles of Consolidation and Nature of Operations and Note 9 – Segment Information for further details. ​ Earnings Per Share Basic earnings per share of our common stock, par value $ 0.01 per share (our “Common Stock”), is computed by dividing net earnings available to holders of the Common Stock by the weighted average number of shares of Common Stock outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock. For the calculation of diluted earnings per share, the basic weighted average number of shares is increased by the dilutive effect of stock options and warrants outstanding determined using the treasury stock method. See Note 12 – Basic and Diluted Average Shares for further details. Stock-Based Compensation The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments, including grants of stock options, based on the fair value of the award at the date of the grant. In addition, to the extent that the Company receives an excess tax benefit upon exercise of an award, such benefit is reflected as cash flow from financing activities within the condensed consolidated statement of cash flows. See Note 14 – Stock-Based Compensation for further details. Taxes Collected from Customers The Company’s policy is to present taxes collected from customers and remitted to governmental authorities on a net basis. The Company records the amounts collected as a current liability and relieves such liability upon remittance to the taxing authority without impacting revenue or expenses. Financial Instruments The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amounts reported for the notes receivable and notes payable approximate fair value because the underlying instruments have an interest rate that reflects current market rates. None of these instruments are held for trading purposes. Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. At times, cash and cash equivalents exceed federally insured limits. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The carrying amounts reported in the condensed consolidated balance sheets approximate fair value. 13 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ Accounts Receivable, Net of Allowances Accounts receivable represent amounts primarily due from customers on products and services. Our allowance for credit losses is primarily determined by an analysis of our accounts receivable aging, using the expected losses methodology. The allowance for credit losses is determined based on the historical experience of collecting past due amounts, based on the degree of their aging. In addition, specific accounts that are considered and expected to be uncollectable are included in the allowance for credit losses. Accounts receivables are considered delinquent when payment has not been made within contract terms. Accounts receivables are written off when all efforts to collect have been exhausted and the potential for recovery is considered remote. As of June 30, 2025, and December 31, 2024, the consumer segment’s allowance for credit losses was $ 0 and $ 0 , respectively. As of June 30, 2025, and December 31, 2024, the commercial segment’s allowance for credit losses was $ 511,439 and $ 433,159 , respectively. Inventories Consumer Segment The consumer segment states its inventory at the lower of cost and net realizable value. The cost of inventory is an amount equal to that paid for the individual asset or lot of goods. We consider factors such as the current spot market price of precious metals and the current market demand for the items being purchased. Consigned inventory has a net-zero balance. The majority of our inventory has some component of its value that is based on the spot market price of precious metals. We monitor metals-based commodity markets to assess any adverse impact on the carrying value of our inventory. Commercial Segment The commercial segment states its inventory at the lower of cost and net realizable value. The cost of our technology assets is an amount equal to that paid for the individual asset or lot of goods, or, in instances in which we have an obligation to sell the asset before we pay for it, we utilize the retail cost method to estimate its value. The cost of our processed and unprocessed inventory, primarily consisting of base metals and electronic scrap materials, is determined by utilizing the weighted average cost method. We monitor metals-based commodity markets to assess any adverse impact on the carrying value of our inventory. See Note 4 – Inventories for further details. Goodwill Goodwill is not amortized but evaluated for impairment on an annual basis during the fourth quarter of our fiscal year, or earlier if events or circumstances indicate the carrying value may be impaired. There were no triggering events identified during the six months ended June 30, 2025, requiring an interim goodwill impairment test, and the Company did not record a goodwill impairment charge in any of the periods presented. See Note 5 – Goodwill for further details. 14 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ Property and Equipment, Net Property and equipment are carried at cost less accumulated depreciation and are depreciated on a straight-line basis over the estimated useful lives of the assets; except for construction in progress which has not yet been placed into service. The following table depicts the estimated useful lives of our property and equipment asset classes: ​ ​ ​ ​ Automobiles and trucks 5 to 7 years Buildings 39 years Building improvements Shorter of 15 years or remaining useful life Furniture and fixtures 5 to 7 years Office technology 3 to 7 years Leasehold improvements Shorter of 15 years or remaining lease term Production and material handling equipment 5 to 10 years ​ Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Expenditures for repairs and maintenance are expensed as incurred; betterments that increase the value or materially extend the life of the related assets are capitalized. See Note 6 – Property and Equipment, Net for further details. Intangible Assets, Net Finite-lived intangible assets are carried at cost less accumulated amortization and are amortized on a straight-line basis over the estimated useful lives of the assets; except for assets under development that have not yet been placed into service. The following table depicts the estimated useful lives of our property and equipment asset classes: ​ ​ ​ ​ Customer lists 10 years Domain names 5 years Enterprise resource planning systems 5 years Trade names 10 years ​ Finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Note 7 – Intangible Assets, Net for further details. Recent Accounting Pronouncements In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires an entity to disclose additional information about specific expense categories. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption and retrospective application permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures. No other recently issued or effective ASUs had, or are expected to have, a material impact on our financial position and results of operations. ​ ​ ​ 15 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 4 — INVENTORIES The following table summarizes the details of the Company’s inventories: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 Consumer ​ ​ Trade inventories ​ $ 25,221,844 ​ $ 23,973,333 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 25,221,844 ​ 23,973,333 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Trade inventories ​ 2,159,340 ​ 1,732,191 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,159,340 ​ 1,732,191 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 27,381,184 ​ $ 25,705,524 ​ ​ NOTE 5 — GOODWILL The following table summarizes the details of the Company’s changes in goodwill: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 Consumer ​ ​ Opening balance ​ $ — ​ $ 300,000 Additions (reductions) (1) ​ — ​ ( 300,000 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Opening balance ​ 3,621,453 ​ 3,621,453 Additions (reductions) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 3,621,453 ​ 3,621,453 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,621,453 ​ $ 3,621,453 (1) The decrease in goodwill of $ 300 thousand for the year ended December 31, 2024, related to measurement period adjustments pertaining to the acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona (the “Scottsdale Transaction”). 16 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 6 — PROPERTY AND EQUIPMENT, NET The following table summarizes the details of the Company’s property and equipment, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 Consumer ​ ​ Land ​ $ 1,824,892 ​ $ 1,824,892 Building and improvements ​ 6,114,344 ​ 6,078,606 Leasehold improvements ​ 1,972,648 ​ 1,736,193 Furniture and fixtures ​ 1,409,893 ​ 1,203,540 Machinery and equipment ​ 1,598,448 ​ 1,570,704 Vehicles ​ 53,318 ​ 53,318 Construction in progress (1) ​ 62,211 ​ 135,856 ​ ​ 13,035,754 ​ 12,603,109 Less: accumulated depreciation ​ ( 3,495,199 ) ​ ( 3,287,437 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 9,540,555 ​ 9,315,672 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Leasehold improvements ​ 160,850 ​ 172,391 Furniture and fixtures ​ 74,811 ​ 74,811 Machinery and equipment ​ 1,357,159 ​ 1,336,427 Vehicles ​ 206,556 ​ 206,556 ​ ​ 1,799,376 ​ 1,790,185 Less: accumulated depreciation ​ ( 1,204,173 ) ​ ( 1,112,694 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 595,203 ​ 677,491 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ Land ​ 1,106,664 ​ 1,106,664 Building and improvements ​ 2,730,138 ​ 2,688,523 Furniture and fixtures ​ 35,197 ​ — Machinery and equipment ​ 55,868 ​ 28,627 Construction in progress (1) ​ 83,185 ​ — ​ ​ 4,011,052 ​ 3,823,814 Less: accumulated depreciation ​ ( 344,370 ) ​ ( 301,815 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 3,666,682 ​ 3,521,999 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 13,802,440 ​ $ 13,515,162 (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. 17 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 7 — INTANGIBLE ASSETS, NET The following table summarizes the details of the Company’s intangible assets, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 Consumer ​ ​ Technology ​ $ 409,896 ​ $ 409,896 Customer lists ​ ​ 13,000 ​ ​ 13,000 Assets under development (1) ​ 3,924 ​ 3,381 ​ ​ 426,820 ​ 426,277 Less: accumulated amortization ​ ( 384,438 ) ​ ( 379,980 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 42,382 ​ 46,297 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Trademarks/tradenames ​ 2,869,000 ​ 2,869,000 Customer contracts ​ 1,873,000 ​ 1,873,000 Customer relationships ​ 1,809,000 ​ 1,809,000 ​ ​ 6,551,000 ​ 6,551,000 Less: accumulated amortization ​ ( 3,192,582 ) ​ ( 2,877,855 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 3,358,418 ​ 3,673,145 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ Technology ​ 512,635 ​ 462,548 ​ ​ 512,635 ​ 462,548 Less: accumulated amortization ​ ( 132,669 ) ​ ( 84,212 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 379,966 ​ 378,336 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,780,766 ​ $ 4,097,778 (1) As of June 30, 2025 and December 31, 2024, these intangible assets are under development, have not yet been placed into service, and are not yet amortizable. The following table depicts the Company’s estimated future amortization expense related to intangible assets as of June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer Commercial Corporate Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 4,464 ​ 314,724 ​ 54,280 ​ 373,468 2026 ​ 8,928 ​ 629,448 ​ 108,562 ​ 746,938 2027 ​ 8,928 ​ 629,448 ​ 108,562 ​ 746,938 2028 ​ 8,056 ​ 629,448 ​ 108,562 ​ 746,066 2029 ​ 3,273 ​ 539,923 ​ — ​ 543,196 Thereafter ​ 4,809 ​ 615,427 ​ — ​ 620,236 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 38,458 ​ $ 3,358,418 ​ $ 379,966 ​ $ 3,776,842 ​ ​ 18 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 8 — ACCRUED EXPENSES The following table summarizes the details of the Company’s accrued expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 Consumer ​ ​ Accrued interest ​ $ 6,158 ​ $ 11,276 Payroll ​ 377,247 ​ 361,829 Taxes ​ 199,160 ​ 133,008 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 582,565 ​ 506,113 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Accrued interest ​ 6,934 ​ 7,568 Payroll ​ 453,480 ​ 457,722 Taxes ​ 17,693 ​ — Unvouchered inventory payments ​ 1,136,404 ​ 1,915,567 Other ​ 9,799 ​ 26,334 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 1,624,310 ​ 2,407,191 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ Accrued interest ​ 6,517 ​ 6,902 Payroll ​ 29,725 ​ 38,205 Taxes ​ 104,921 ​ 153,479 Professional fees ​ 1,888 ​ 81,973 Other ​ 32,970 ​ 21,480 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 176,021 ​ 302,039 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,382,896 ​ $ 3,215,343 ​ ​ NOTE 9 — SEGMENT INFORMATION The CODM uses operating income to evaluate the performance of the overall business, make investing decisions, and allocate resources. The following table depicts the Company’s segment results of operations, including significant expenses that are regularly reviewed by the CODM, for the three months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ 2025 ​ 2024 ​ Consumer Commercial Consolidated Consumer Commercial Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 43,173,758 ​ $ 11,703,075 ​ $ 54,876,833 $ 31,990,028 ​ $ 13,306,974 ​ $ 45,297,002 Cost of goods sold ​ 38,515,772 ​ 3,973,138 ​ 42,488,910 27,968,699 ​ 5,938,846 ​ 33,907,545 Selling, general and administrative ​ 3,735,427 ​ 4,936,640 ​ 8,672,067 4,009,468 ​ 5,108,580 ​ 9,118,048 Depreciation and amortization ​ 195,604 ​ 264,807 ​ 460,411 112,518 ​ 249,749 ​ 362,267 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 726,955 ​ $ 2,528,490 ​ $ 3,255,445 $ ( 100,657 ) ​ $ 2,009,799 ​ $ 1,909,142 ​ 19 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The following table depicts the reconciliation of the Company’s segment operating income to income before income taxes for the three months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2025 ​ 2024 ​ ​ Consumer Commercial Consolidated Consumer Commercial Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 726,955 ​ $ 2,528,490 ​ $ 3,255,445 $ ( 100,657 ) ​ $ 2,009,799 ​ $ 1,909,142 Other income ​ 156,158 ​ 238,093 ​ 394,251 8,003 ​ 217,414 ​ 225,417 Interest expense ​ ( 53,993 ) ​ ( 52,235 ) ​ ( 106,228 ) ( 55,697 ) ​ ( 53,444 ) ​ ( 109,141 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ $ 829,120 ​ $ 2,714,348 ​ $ 3,543,468 $ ( 148,351 ) ​ $ 2,173,769 ​ $ 2,025,418 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, ​ 2025 ​ 2024 ​ Consumer Commercial Consolidated Consumer Commercial Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 79,944,362 ​ $ 23,188,300 ​ $ 103,132,662 $ 60,216,045 ​ $ 24,938,737 ​ $ 85,154,782 Cost of goods sold ​ 71,075,473 ​ 7,701,242 ​ 78,776,715 52,645,527 ​ 10,799,114 ​ 63,444,641 Selling, general and administrative ​ 7,623,333 ​ 9,452,996 ​ 17,076,329 7,260,958 ​ 9,494,066 ​ 16,755,024 Depreciation and amortization ​ 376,236 ​ 529,516 ​ 905,752 206,194 ​ 499,638 ​ 705,832 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 869,320 ​ $ 5,504,546 ​ $ 6,373,866 $ 103,366 ​ $ 4,145,919 ​ $ 4,249,285 ​ 20 Table of Contents 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, ​ ​ 2025 ​ 2024 ​ ​ Consumer Commercial Consolidated Consumer Commercial Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 869,320 ​ $ 5,504,546 ​ $ 6,373,866 $ 103,366 ​ $ 4,145,919 ​ $ 4,249,285 Other income ​ 157,007 ​ 442,849 ​ 599,856 16,008 ​ 447,937 ​ 463,945 Interest expense ​ ( 108,040 ) ​ ( 104,509 ) ​ ( 212,549 ) ( 120,098 ) ​ ( 109,897 ) ​ ( 229,995 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ $ 918,287 ​ $ 5,842,886 ​ $ 6,761,173 $ ( 724 ) ​ $ 4,483,959 ​ $ 4,483,235 ​ Other significant segment items that are regularly reviewed by the CODM are capital expenditures, which the Company defines as any purchases of property and equipment or intangible assets. The following table depicts capital expenditures for the three months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ 2025 2024 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 291,521 ​ $ 435,671 Commercial ​ 52,271 ​ 108,222 Corporate ​ 153,380 ​ 333,139 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 497,172 ​ $ 877,032 ​ The following table depicts capital expenditures for the six months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 560,474 ​ $ 704,624 Commercial ​ 52,271 ​ 108,222 Corporate ​ 269,414 ​ 449,175 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 882,159 ​ $ 1,262,021 ​ The following table depicts the Company’s total assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ June 30, 2025 December 31, 2024 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 43,903,025 ​ $ 40,454,328 Commercial ​ 16,001,230 ​ 33,068,887 Corporate ​ 22,811,505 ​ 4,347,274 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 82,715,760 ​ $ 77,870,489 ​ ​ 21 Table of Contents 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, ​ ​ 2025 ​ 2024 ​ Sales Gross Margin Margin ​ Sales Gross Margin Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 43,173,758 ​ $ 4,657,986 10.8 % $ 31,990,028 ​ $ 4,021,329 12.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 11,703,075 ​ 7,729,937 65.5 % 13,306,974 ​ 7,368,128 65.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 54,876,833 ​ $ 12,387,923 22.6 % $ 45,297,002 ​ $ 11,389,457 25.1 % ​ The following table depicts the Company’s disaggregation of total sales and gross margin for the six months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2025 ​ 2024 ​ Sales Gross Margin Margin ​ Sales Gross Margin Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 79,944,362 ​ $ 8,868,889 11.1 % $ 60,216,045 ​ $ 7,570,518 12.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 23,188,300 ​ 15,487,058 66.8 % 24,938,737 ​ 14,139,623 56.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 103,132,662 ​ $ 24,355,947 23.6 % $ 85,154,782 ​ $ 21,710,141 25.5 % ​ The following table lists the opening and closing balances of our contract assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts ​ Contract ​ Contract ​ ​ ​ Receivable ​ ​ Assets ​ ​ Liabilities Consumer ​ ​ ​ Opening Balance - 1/1/2024 ​ $ 3,411,501 ​ $ — $ 185,348 Closing Balance - 6/30/2024 ​ 396,415 ​ — ​ 299,613 ​ ​ ​ ​ ​ ​ ​ Commercial Opening Balance - 1/1/2024 4,399,658 — — Closing Balance - 6/30/2024 4,441,809 — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts ​ Contract ​ Contract ​ ​ ​ Receivable ​ ​ Assets ​ ​ Liabilities Consumer ​ ​ ​ Opening Balance - 1/1/2025 $ 738,132 $ — $ 435,508 Closing Balance - 6/30/2025 ​ 1,395,486 ​ — ​ 1,601,699 ​ ​ ​ ​ ​ ​ ​ Commercial Opening Balance - 1/1/2025 3,646,106 — — Closing Balance - 6/30/2025 3,670,433 — 3,623 ​ The Company has no contract assets, and the contract liabilities are customer deposits and gift cards, which are reported within other liabilities in the condensed consolidated balance sheets. 22 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 11 — LEASES The following table depicts the Company’s future minimum lease payments as of June 30, 2025: ​ ​ ​ ​ ​ ​ Operating ​ ​ Leases Consumer ​ 2025 ​ $ 503,126 2026 ​ 1,186,142 2027 ​ 887,803 2028 ​ 652,641 2029 ​ 533,234 Thereafter ​ 203,191 ​ ​ ​ ​ Total minimum lease payments ​ 3,966,137 Less: imputed interest ​ ( 342,884 ) ​ ​ ​ ​ Sub-total ​ 3,623,253 ​ ​ ​ ​ Commercial ​ 2025 ​ 621,338 2026 ​ 474,320 2027 ​ 33,454 2028 ​ — 2029 ​ — Thereafter ​ — ​ ​ ​ ​ Total minimum lease payments ​ 1,129,112 Less: imputed interest ​ ( 23,498 ) ​ ​ ​ ​ Sub-total ​ 1,105,614 ​ ​ ​ ​ Total ​ 4,728,867 ​ ​ ​ ​ Less: current portion ​ 1,818,941 ​ ​ ​ ​ ​ ​ $ 2,909,926 ​ All of the Company’s leased facilities as of June 30, 2025, are non-cancellable. The leases are a combination of triple net leases, for which the Company pays its proportionate share of common area maintenance, property taxes, and property insurance, and modified gross leases, for which the Company directly pays for common area maintenance and property insurance. Lease costs are comprised of a combination of minimum lease payments and variable lease costs. The following table depicts supplemental cash flow information related to operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 ​ ​ ​ ​ ​ ​ ​ Non-cash activities: right-of-use operating lease assets obtained in exchange for new operating lease liabilities ​ $ 951,464 ​ $ 660,087 ​ ​ ​ ​ ​ ​ ​ ​ 23 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The following table depicts the Company’s leasing costs for the three months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ 2025 2024 ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 605,553 ​ $ 511,346 Variable lease cost ​ 215,083 ​ 127,177 Short-term lease cost ​ 31,191 ​ 129,379 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 851,827 ​ $ 767,902 ​ The following table depicts the Company’s leasing costs for the six months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 1,208,522 ​ $ 984,880 Variable lease cost ​ 420,664 ​ 387,028 Short-term lease cost ​ 100,977 ​ 180,729 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,730,163 ​ $ 1,552,637 ​ As of June 30, 2025, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.8 years and 4.2 %. As of June 30, 2024, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.5 years and 3.8 %. NOTE 12 — BASIC AND DILUTED AVERAGE SHARES The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the three months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ June 30, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ Basic weighted average shares 25,991,979 26,248,554 Effect of potential dilutive securities — 15,000 ​ ​ ​ ​ ​ Diluted weighted average shares 25,991,979 26,263,554 ​ 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 ​ ​ June 30, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ Basic weighted average shares 25,993,802 26,333,796 Effect of potential dilutive securities — 15,000 ​ ​ ​ ​ ​ Diluted weighted average shares 25,993,802 26,348,796 ​ 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. 24 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ On March 14, 2023, a stock repurchase program was unanimously approved by the Company’s Board of Directors (the “Board”), which gave management authorization to purchase up to 1.0 million shares of the Company’s stock, at a per-share price not to exceed $ 9.00 , on the open market. The plan expires on March 31, 2026. On March 27, 2025, the Board unanimously approved the repurchase of an additional 100 thousand shares of the Common Stock, bringing the total authorization under the existing repurchase program to 1.1 million shares. The following table lists the repurchase of Company shares for the three and six months ended June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Average Price Total Price Shares Available Fiscal Period ​ Shares Purchased ​ Paid per Share ​ Paid ​ to Purchase Balance as of January 1, 2025 928,930 ​ $ 4.92 ​ $ 4,568,823 71,070 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1 - 31, 2025 — ​ — ​ — 71,070 February 1 - 28, 2025 — ​ — ​ — 71,070 March 1 - 31, 2025 500 ​ 5.25 ​ 2,626 170,570 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of March 31, 2025 929,430 ​ $ 4.92 ​ $ 4,571,449 170,570 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ April 1 - 30, 2025 — ​ — ​ — 170,570 May 1 - 31, 2025 — ​ — ​ — 170,570 June 1 - 30, 2025 20,163 ​ 5.89 ​ 118,700 150,407 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2025 949,593 ​ $ 4.94 ​ $ 4,690,149 150,407 ​ 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 . 25 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 13 — DEBT The following table summarizes the details of the Company’s long-term debt obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding Balance ​ June 30, December 31, ​ 2025 ​ 2024 Consumer ​ ​ Note payable, FSB (1) ​ $ 2,399,094 ​ $ 2,455,043 Note payable, Truist Bank (3) ​ 781,942 ​ 801,175 Notes payable, TBT (4,5) ​ 1,929,792 ​ 1,979,730 Note payable, Scottsdale Transaction (6) ​ 50,000 ​ 50,000 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,160,828 ​ 5,285,948 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ Note payable, FSB (2) ​ 5,442,691 ​ 5,569,171 Note payable, Avail Transaction (7) ​ — ​ 166,667 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,442,691 ​ 5,735,838 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ Line of credit, FSB (8) ​ — ​ — Note payable, TBT (9) ​ 2,439,767 ​ 2,500,393 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,439,767 ​ 2,500,393 ​ ​ ​ ​ ​ ​ ​ Total ​ 13,043,286 ​ 13,522,179 ​ ​ ​ ​ ​ ​ ​ Less: current portion ​ ( 3,374,442 ) ​ ( 3,591,351 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 9,668,844 ​ $ 9,930,828 (1) On November 23, 2021, the consumer segment entered into a $ 2.781 million secured amortizing note payable with Farmer’s State Bank of Oakley, Kansas (“FSB”). The note payable bears interest at 3.10 % and matures on November 15, 2026. (2) On November 23, 2021, the commercial segment entered into a $ 6.309 million secured amortizing note payable with FSB. The note payable bears interest at 3.10 % and matures on November 15, 2026. (3) On July 9, 2020, the consumer segment entered into a $ 956 thousand secured amortizing note payable with Truist Bank. The note payable bears interest at 3.65 % and matures on July 9, 2030. (4) On September 14, 2020, the consumer segment entered into a $ 496 thousand secured amortizing note payable with Texas Bank & Trust (“TBT”). The note payable 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. 26 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ (7) On October 29, 2021, the consumer segment entered into a $ 2.000 million secured amortizing note payable in relation to the acquisition of Avail Recovery Solutions, LLC on October 29, 2021 (“Avail Transaction”). The note payable’s imputed interest was 3.10 % and matured on January 1, 2025. (8) On November 8, 2024, the Company entered into a $ 3.800 million secured line of credit with FSB. The line of credit bears interest at our rate of deposit + 1.00 % with a floor of 3.10 % and matures on November 23, 2027. (9) On November 4, 2020, a wholly owned subsidiary of Envela entered into a $ 2.960 million secured amortizing note payable with TBT. The note payable bears interest at 3.25 % and matures on November 3, 2025. The following table depicts the Company’s future principal payments on long-term debt obligations as of June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 2029 Thereafter Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note payable, FSB (1) ​ 56,612 ​ 2,342,481 ​ — ​ — ​ — ​ — Note payable, Truist Bank (3) ​ 19,511 ​ 40,203 ​ 41,716 ​ 43,216 ​ 44,913 ​ 592,381 Notes payable, TBT (4,5) ​ 443,246 ​ 71,593 ​ 74,324 ​ 77,018 ​ 80,098 ​ 1,183,516 Note payable, Scottsdale Transaction (6) ​ 31,250 ​ 18,750 ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 550,619 ​ 2,473,027 ​ 116,040 ​ 120,234 ​ 125,011 ​ 1,775,897 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ Note payable, FSB (2) ​ 127,986 ​ 5,314,705 ​ — ​ — ​ — ​ — Note payable, Avail Transaction (7) ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 127,986 ​ 5,314,705 ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ ​ ​ Line of Credit, FSB (8) ​ — ​ — ​ — ​ — ​ — ​ — Note payable, TBT (9) ​ 2,439,767 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,439,767 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,118,372 ​ $ 7,787,732 ​ $ 116,040 ​ $ 120,234 ​ $ 125,011 ​ $ 1,775,897 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 ​ Loan ​ ​ ​ Scheduled Principal Payments and Maturities by Year Payments Maturities Total 2025 ​ 325,939 ​ 2,792,433 ​ 3,118,372 2026 ​ 476,475 ​ 7,311,257 ​ 7,787,732 2027 ​ 116,040 ​ — ​ 116,040 2028 ​ 120,234 ​ — ​ 120,234 2029 ​ 125,011 ​ — ​ 125,011 Thereafter ​ 175,713 ​ 1,600,184 ​ 1,775,897 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,339,412 ​ $ 11,703,874 ​ $ 13,043,286 ​ ​ 27 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 14 — STOCK-BASED COMPENSATION On June 25, 2025, our shareholders approved the adoption of the 2025 Equity Incentive Plan (the “2025 Plan”), effective June 25, 2025. The 2025 Plan provides for the grant of up to 1.1 million shares of Common Stock pursuant to awards granted under the plan. The 2025 Plan will remain in effect for a term of 10 years from the effective date, unless sooner terminated by the Board of Directors. As of June 30, 2025, no awards have been granted under the 2025 Plan. As a result, no stock-based compensation expense was recognized for the three and six months ended June 30, 2025 and 2024. NOTE 15 — RELATED PARTY TRANSACTIONS The Company has a corporate policy governing the identification, review, consideration, and approval or ratification of transactions with related persons. Under this policy, all related party transactions are identified and approved prior to consummation of the transaction to ensure they are consistent with the Company’s best interests and the best interests of its shareholders. The Company utilizes a space owned by a related party, for the secure processing and handling of materials before distribution. No consideration is exchanged between the parties, but the Company estimates that, if costs were incurred, they would be immaterial to its condensed consolidated financial statements. NOTE 16 — CONTINGENCIES We review the need to accrue for any loss contingency and establish a liability when, in the opinion of management, it is probable that a matter would result in a liability and the amount of loss, if any, can be reasonably estimated. We do not believe that the resolution of any currently pending lawsuits, claims, and proceedings, either individually or in the aggregate, will have a material adverse effect on financial position, results of operations, or liquidity. However, the outcomes of any currently pending lawsuits, claims, and proceedings cannot be predicted, and therefore, there can be no assurance that this will be the case. There are no loss contingencies subject to reporting for the three and six months ended June 30, 2025 and 2024. ​ ​ ​ ​ ​ 28 Table of Contents