Envela Corp 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless the context indicates otherwise for one of our specific operating segments, references to “we,” “us,” “our,” the “Company” and “Envela” refer to the consolidated business operations of Envela Corporation, and all of its direct and indirect subsidiaries. Forward-Looking Statements This Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (this “Form 10-Q”), including but not limited to: (i) the section of this Form 10-Q entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” (ii) information concerning our business prospects or future financial performance, anticipated revenues, expenses, profitability or other financial items; and (iii) our strategies, plans and objectives, together with other statements that are not historical facts, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally can be identified by the use of forward-looking terminology, such as “may,” “will,” “would,” “expect,” “intend,” “could,” “estimate,” “should,” “anticipate”, “potential,” “continue,” “deploy” or “believe.” We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements other than statements of historical information provided herein are forward-looking based on current expectations regarding important risk factors. Many of these risks and uncertainties are beyond our ability to control, and, in many cases, we cannot predict all of the risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results could differ materially from those expressed in the forward-looking statements, and readers should not regard those statements as a representation by us or any other person that the results expressed in the statements will be achieved. Important risk factors that could cause results or events to differ from current expectations are described under the section entitled “Risk Factors” in the Company’s 2024 Annual Report and any material updates are described under the section of this Form 10-Q entitled “Risk Factors” and elsewhere in this Form 10-Q. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the operations, performance, development and results of our business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date thereon, including without limitation, changes in our business strategy or planned capital expenditures, or store growth plans, or to reflect the occurrence of unanticipated events. Introduction This section includes a discussion of our operations for the three and six months ended June 30, 2025 and 2024. The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of our financial condition and results of operations. The discussion should be read in conjunction with the Company’s 2024 Annual Report, the unaudited condensed consolidated financial statements, and the related Notes thereto included in Part I, Item 1 of this report. Critical Accounting Policies and Estimates There were no material changes to our critical accounting policies and estimates as described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Company’s 2024 Annual Report Economic Conditions Impacts of Government Legislation On July 4, 2025, the “One Big Beautiful Bill Act” was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We are currently evaluating the provisions of the new law and the potential effects on our financial position, results of operations, and cash flows. However, the Company does not expect the new law to have a material impact on the Company’s results of operations, financial condition, or liquidity. ​ 29 Table of Contents Impacts of High Interest Rates and Inflation The U.S. and other world economies are currently experiencing high interest rates and elevated levels of inflation, coupled with commodity price risk, mainly associated with variations in the market price of precious metals and diamonds, which have the potential to impact consumer discretionary spending behavior. Furthermore, adverse macroeconomic conditions can also impact demand for resale technology assets. To counterbalance economic cycles that impact market selling prices and/or underlying operating costs, we adjust the inbound purchase price of commodity-based products, luxury hard assets, and resale technology. We continuously monitor our inventory positions and associated working capital to respond to market conditions and to meet seasonal business cycles and expansionary plans. These economic cycles may from time to time require the business to utilize its line of credit or seek additional capital. Impacts of Tariffs The U.S. government has recently adopted new approaches to trade policy, and announced tariffs on certain foreign goods, certain global tariffs, and the possibility of significant additional tariff increases or expansions of tariffs. The timing and scope of such tariffs by the U.S. and retaliatory tariffs by other countries in response to such tariffs are currently uncertain. The impacts of tariffs on each of our reportable segments are detailed below: Consumer Segment The Company’s consumer segment does not source inventory from or sell it into international markets, so it is not directly impacted by tariffs. However, global market uncertainty caused by tariffs can increase commodity costs on safe-haven metals such as gold and silver, which may increase working capital requirements. The Company mitigates increased working capital requirements by monitoring its inventory position and turnover, and maintaining disciplined buying practices to maintain margin. Commercial Segment The Company’s commercial segment periodically purchases limited quantities of personal technology assets for resale and replacement parts from international markets. Tariffs may increase costs for original equipment manufacturers, retailers, and parts distributors and, as a result, may require the Company to pay more for the purchase of personal technology assets for resale and replacement parts, thus increasing the Company’s required working capital requirements. The Company mitigates increased working capital requirements by monitoring its inventory position and turnover, maintaining disciplined buying practices, and using optimal domestic and international sales channels to maintain margins. There can be no assurance that the measures we have adopted will be successful in mitigating the aforementioned risks. Our Business Envela serves as a holding company, conducting its operations via subsidiaries engaged in various businesses and activities within the recommerce and recycling sectors. The products and services we offer are delivered by our subsidiaries under their distinct brands, rather than directly by Envela itself. Significant business activities within our reportable segments are detailed below: Consumer Segment Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, along with secondary market bullion. We incorporate recycled diamonds and gemstones into our new designs meaning they were previously set and unset, producing a low-carbon and ethical origin product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our 30 Table of Contents profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items have an enduring quality, enabling them to maintain their beauty and value as they are passed from one owner to another. Commercial Segment Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the ITAD industry. The separated commodities, including metals, plastics, and glass, are sold to downstream processors where they are further processed and reintroduced into new products. ITAD services maximize the residual value of retired IT assets by adhering to a reuse-first philosophy and ensuring equipment is refurbished and re-marketed after data sanitization. The Company offers services that manage the entire lifecycle of technology products to ensure data security, regulatory compliance, and environmental sustainability. We are proud of our role in supporting a circular economy through the responsible reuse and recycling of electronic devices. Segment Activities The Company believes it is well positioned to take advantage of its overall capital structure. Consumer Segment Our strategy is to expand the number of locations we operate by opening new locations throughout the U.S. Likewise, we continue to evaluate opportunities related to complementary product and service offerings for our stores and online business. Commercial Segment Our strategy is to expand both organically and through acquisitions. The Company has taken considerable steps to bolster its management team and operating systems to position itself for growth. Our production facilities are capable of managing the expansion of existing relationships and consolidation of acquisition targets within relative geographic proximity to our existing facilities. ​ 31 Table of Contents Results of Operations Comparison of the Three Months Ended June 30, 2025 and 2024 The following table depicts our disaggregated condensed consolidated statements of income for the three months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2025 ​ 2024 ​ Consumer Commercial Consolidated % of Sales (1) Consumer Commercial Consolidated % of Sales (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 43,173,758 ​ $ 11,703,075 ​ $ 54,876,833 100.0 % $ 31,990,028 ​ $ 13,306,974 ​ $ 45,297,002 100.0 % Cost of goods sold ​ 38,515,772 ​ $ 3,973,138 ​ 42,488,910 77.4 % 27,968,699 ​ 5,938,846 ​ 33,907,545 74.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ 4,657,986 ​ 7,729,937 ​ 12,387,923 22.6 % 4,021,329 ​ 7,368,128 ​ 11,389,457 25.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 3,735,427 ​ 4,936,640 ​ 8,672,067 15.8 % 4,009,468 ​ 5,108,580 ​ 9,118,048 20.1 % Depreciation and amortization ​ 195,604 ​ 264,807 ​ 460,411 0.8 % 112,518 ​ 249,749 ​ 362,267 0.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 3,931,031 ​ 5,201,447 ​ 9,132,478 16.6 % 4,121,986 ​ 5,358,329 ​ 9,480,315 20.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ 726,955 ​ 2,528,490 ​ 3,255,445 5.9 % (100,657) ​ 2,009,799 ​ 1,909,142 4.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ Other income ​ 156,158 ​ 238,093 ​ 394,251 0.7 % 8,003 ​ 217,414 ​ 225,417 0.5 % Interest expense ​ (53,993) ​ (52,235) ​ (106,228) (0.2) % (55,697) ​ (53,444) ​ (109,141) (0.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before income taxes ​ 829,120 ​ 2,714,348 ​ 3,543,468 6.5 % (148,351) ​ 2,173,769 ​ 2,025,418 4.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax (expense) benefit ​ (185,749) ​ (605,320) ​ (791,069) (1.4) % (29,607) ​ ​ (431,632) ​ (461,239) (1.0) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 643,371 ​ $ 2,109,028 ​ $ 2,752,399 5.0 % $ (177,958) ​ $ 1,742,137 ​ $ 1,564,179 3.5 % ​ (1) The “% of Sales” figures present the proportion of each line item to the total consolidated sales for the respective period, which management believes is relevant to an assessment and understanding of our financial condition and results of operations. Due to rounding, percentages presented may not add up precisely to the totals provided. The individual segments reported the following for the three months ended June 30, 2025 and 2024: Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 54,876,833 ​ $ 45,297,002 ​ $ 9,579,831 21.1 % % of consolidated sales ​ 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 43,173,758 ​ $ 31,990,028 ​ $ 11,183,730 35.0 % % of consumer sales ​ 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 11,703,075 ​ $ 13,306,974 ​ $ (1,603,899) (12.1) % % of commercial sales ​ 100.0 % 100.0 % ​ ​ 32 Table of Contents Consolidated Sales increased by $9,579,831, or 21.1%, during the three months ended June 30, 2025, to $54,876,833, as compared to $45,297,002 during the same period in Fiscal 2024. Consumer Segment Sales in the consumer segment increased by $11,183,730, or 35.0%, during the three months ended June 30, 2025, to $43,173,758, as compared to $31,990,028 during the same period in Fiscal 2024. The change was primarily attributed to stronger volumes and pricing on our wholesale precious metals transactions. Our wholesale precious metals transactions were impacted by favorable inbound material flow from our in-store buying programs. Our retail stores business also achieved favorable sales results. Commercial Segment Sales in the commercial segment decreased by $1,603,899, or 12.1%, during the three months ended June 30, 2025, to $11,703,075, as compared to $13,306,974 during the same period in Fiscal 2024. The change was primarily attributed to the unfavorable performance from our electronic scrap grades and associated recoveries attributable to significant inbound material flow from a single supplier that was present in the same period in Fiscal 2024 and less sales of personal technology assets and from ITAD revenue share settlements during the current period in Fiscal 2025, which were offset by continued growth in our product returns business. Cost of Goods Sold ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 42,488,910 ​ $ 33,907,545 ​ $ 8,581,365 25.3 % % of consolidated sales ​ 77.4 % 74.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 38,515,772 ​ $ 27,968,699 ​ $ 10,547,073 37.7 % % of consumer sales ​ 89.2 % 87.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 3,973,138 ​ $ 5,938,846 ​ $ (1,965,708) (33.1) % % of commercial sales ​ 33.9 % 44.6 % ​ ​ Consolidated Cost of goods sold increased by $8,581,365, or 25.3%, during the three months ended June 30, 2025, to $42,488,910, as compared to $33,907,545 during the same period in Fiscal 2024. Consumer Segment Cost of goods sold in the consumer segment increased by $10,547,073, or 37.7%, during the three months ended June 30, 2025, to $38,515,772, as compared to $27,968,699 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned higher sales volumes and rising gold prices compared to the same period in Fiscal 2024. Cost of goods sold as a percentage of sales was 89.2% during the three months ended June 30, 2025, as compared to 87.4% during the three months ended June 30, 2024. The change was primarily attributed to a greater mix of lower margin wholesale precious metals transactions in our overall cost of goods sold and incrementally from product mix at our retail stores. 33 Table of Contents Commercial Segment Cost of goods sold in the commercial segment decreased by $1,965,708, or 33.1%, during the three months ended June 30, 2025, to $3,973,138, as compared to $5,938,846 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned lower sales volumes across most of our segment verticals. Cost of goods sold as a percentage of sales was 33.9% during the three months ended June 30, 2025, as compared to 44.6% during the three months ended June 30, 2024. The change was primarily attributed to our sales mix during Fiscal 2025 in which we experienced higher overall margins from the sale of personal technology assets and ITAD revenue share settlements coupled with continued growth in revenue from our service-related product returns business, which does not have a cost of goods sold component as the associated inventory remains with the client. Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 12,387,923 ​ $ 11,389,457 ​ $ 998,466 8.8 % % of consolidated sales ​ 22.6 % 25.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 4,657,986 ​ $ 4,021,329 ​ $ 636,657 15.8 % % of consumer sales ​ 10.8 % 12.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 7,729,937 ​ $ 7,368,128 ​ $ 361,809 4.9 % % of commercial sales ​ 66.1 % 55.4 % ​ ​ Consolidated Gross margin increased by $998,466, or 8.8%, during the three months ended June 30, 2025, to $12,387,923, as compared to $11,389,457 during the same period in Fiscal 2024. Consumer Segment Gross margin in the consumer segment increased by $636,657, or 15.8%, during the three months ended June 30, 2025, to $4,657,986, as compared to $4,021,329 during the same period in Fiscal 2024. The net impact of the aforementioned increase in sales of $11,183,730 and increase in cost of goods sold of $10,547,073 resulted in the $636,657 increase in gross margin. Commercial Segment Gross margin in the commercial segment increased by $361,809, or 4.9%, during the three months ended June 30, 2025, to $7,729,937, as compared to $7,368,128 during the same period in Fiscal 2024. The net impact of the aforementioned decrease in sales of $1,603,899 and decrease in cost of goods sold $1,965,708 resulted in the $361,809 increase in gross margin. 34 Table of Contents Selling, General and Administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 8,672,067 ​ $ 9,118,048 ​ $ (445,981) (4.9) % % of consolidated sales ​ 15.8 % 20.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 3,735,427 ​ $ 4,009,468 ​ $ (274,041) (6.8) % % of consumer sales ​ 8.7 % 12.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 4,936,640 ​ $ 5,108,580 ​ $ (171,940) (3.4) % % of commercial sales ​ 42.2 % 38.4 % ​ ​ Consolidated Selling, general and administrative expense decreased by $445,981, or 4.9%, during the three months ended June 30, 2025, to $8,672,067, as compared to $9,118,048 during the same period in Fiscal 2024. Consumer Segment Selling, general and administrative expense in the consumer segment decreased by $274,041, or 6.8%, during the three months ended June 30, 2025, to $3,735,427, as compared to $4,009,468 during the same period in Fiscal 2024. The change was primarily attributed to cost reductions associated with store onboarding that occurred in the same period in Fiscal 2024 along with select reductions in production and non-production human capital costs associated with optimizing our headcount during the current period in Fiscal 2025, which was partially offset by the full cost structures related to our new stores. Commercial Segment Selling, general and administrative expense in the commercial segment decreased by $171,940, or 3.4%, during the three months ended June 30, 2025, to $4,936,640, as compared to $5,108,580 during the same period in Fiscal 2024. The change was primarily attributed to onboarding support services associated with our enterprise resource planning system (“ERP”) that occurred during the same period in Fiscal 2024 as well as a reduction in variable-cost production expenses that scale with sales volumes, which was partially offset by an increase in non-production human capital costs during the current period in Fiscal 2025. Depreciation and Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2025 2024 ​ Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 460,411 ​ $ 362,267 ​ $ 98,144 ​ 27.1 % % of consolidated sales ​ 0.8 % 0.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 195,604 ​ $ 112,518 ​ $ 83,086 73.8 % % of consumer sales ​ 0.5 % 0.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 264,807 ​ $ 249,749 ​ $ 15,058 6.0 % % of commercial sales ​ 2.3 % 1.9 % ​ ​ Consolidated Depreciation and amortization expense increased by $98,144, or 27.1%, during the three months ended June 30, 2025, to $460,411, as compared to $362,267 during the same period in Fiscal 2024. 35 Table of Contents Consumer Segment Depreciation and amortization expense in the consumer segment increased by $83,086, or 73.8%, during the three months ended June 30, 2025, to $195,604, as compared to $112,518 during the same period in Fiscal 2024. The change was primarily attributed to the depreciation of assets placed into service related to our new retail stores. Commercial Segment Depreciation and amortization expense in the commercial segment increased by $15,058, or 6.0%, during the three months ended June 30, 2025, to $264,807, as compared to $249,749 during the same period in Fiscal 2024. There was no material change in depreciation or amortization expense from the same period in Fiscal 2024, and as such, no discussion point. Other Income (Expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2025 2024 ​ Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 394,251 ​ $ 225,417 ​ $ 168,834 74.9 % % of consolidated sales ​ 0.7 % 0.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 156,158 ​ $ 8,003 ​ $ 148,155 1,851.2 % % of consumer sales ​ 0.4 % 0.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 238,093 ​ $ 217,414 ​ $ 20,679 9.5 % % of commercial sales ​ 2.0 % 1.6 % ​ ​ ​ Consolidated Other income increased by $168,834, or 74.9%, during the three months ended June 30, 2025, to $394,251, as compared to $225,417 during the same period in Fiscal 2024. Consumer Segment Other income in the consumer segment increased by $148,155, or 1,851.2%, during the three months ended June 30, 2025, to $156,158, as compared to $8,003 during the same period in Fiscal 2024. The change was primarily attributed to the receipt of an employee retention credit and incrementally from the earnings on excess cash balances. The impact of dividend and interest income are referenced below. Dividend income comprised $8,883 and $0 of other income during the three months ended June 30, 2025 and 2024, respectively. Interest income comprised $51,038 and $2 of other income during the three months ended June 30, 2025 and 2024, respectively. Commercial Segment Other income in the commercial segment increased by $20,679, or 9.5%, during the three months ended June 30, 2025, to $238,093, as compared to $217,414 during the same period in Fiscal 2024. The change was primarily attributed to the earnings on excess cash balances. The impact of dividend and interest income are referenced below. Dividend income comprised $74,702 and $0 other income during the three months ended June 30, 2025 and 2024, respectively. Interest income comprised $130,427 and $199,960 of other income during the three months ended June 30, 2025 and 2024, respectively. 36 Table of Contents Interest Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2025 2024 ​ Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ (106,228) ​ $ (109,141) ​ $ 2,913 (2.7) % % of consolidated sales ​ (0.2) % (0.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ (53,993) ​ $ (55,697) ​ $ 1,704 (3.1) % % of consumer sales ​ (0.1) % (0.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ (52,235) ​ $ (53,444) ​ $ 1,209 (2.3) % % of commercial sales ​ (0.4) % (0.4) % ​ ​ Consolidated Interest expense decreased by $2,913, or 2.7%, during the three months ended June 30, 2025, to $106,228, as compared to $109,141 during the same period in Fiscal 2024. Consumer Segment Interest expense in the consumer segment decreased by $1,704, or 3.1%, during the three months ended June 30, 2025, to $53,993, as compared to $55,697 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point. Commercial Segment Interest expense in the commercial segment decreased by $1,209, or 2.3%, during the three months ended June 30, 2025, to $52,235, as compared to $53,444 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point. Income Tax Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2025 2024 ​ Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ (791,069) ​ $ (461,239) ​ $ (329,830) 71.5 % % of consolidated sales ​ (1.4) % (1.0) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ (185,749) ​ $ (29,607) ​ $ (156,142) 527.4 % % of consumer sales ​ (0.4) % (0.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ (605,320) ​ $ (431,632) ​ $ (173,688) 40.2 % % of commercial sales ​ (5.2) % (3.2) % ​ ​ Consolidated Income tax expense increased by $329,830, or 71.5%, during the three months ended June 30, 2025, to $791,069, as compared to $461,239 during the same period in Fiscal 2024. Currently, the Company has a deferred tax asset reflecting a future tax benefit that the Company expects to receive. The Company has a federal tax rate of approximately 21.0%, in addition to other state and local taxes, on net income. The effective income tax rate was 22.3% and 22.8% for the three months ended June 30, 2025 and 2024, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the result of state taxes and non-deductible expenses, as was the Company’s case for the increase for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. 37 Table of Contents Net Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2025 2024 ​ Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 2,752,399 ​ $ 1,564,179 ​ $ 1,188,220 76.0 % % of consolidated sales ​ 5.0 % 3.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 643,371 ​ $ (177,958) ​ $ 821,329 NM ​ % of consumer sales ​ 1.5 % (0.6) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 2,109,028 ​ $ 1,742,137 ​ $ 366,891 21.1 % % of commercial sales ​ 18.0 % 13.1 % ​ ​ NM – Not Meaningful Consolidated Net income increased by $1,188,220, or 76%, during the three months ended June 30, 2025, to $2,752,399, as compared to $1,564,179 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2025 and 2024 for further details. Consumer Segment Net income (loss) increased in the consumer segment by $821,329, during the three months ended June 30, 2025, to net income of $643,371, as compared to net loss of $177,958 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2025 and 2024 for further details. Commercial Segment Net income increased in the commercial segment by $366,891, or 21.1%, during the three months ended June 30, 2025, to $2,109,028, as compared to $1,742,137 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2025 and 2024 for further details. Earnings Per Share The following table depicts the Company’s earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2025 2024 ​ Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 0.11 ​ $ 0.06 ​ $ 0.05 83.3 % ​ Consolidated Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.05, or 83.3%, during the three months ended June 30, 2025, to $0.11, as compared to $0.06 during the same period in Fiscal 2024. 38 Table of Contents Comparison of the Six Months Ended June 30, 2025 and 2024 The following table depicts our disaggregated condensed consolidated statements of income for the six months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 ​ ​ Consumer Commercial Consolidated % of Sales (1) Consumer Commercial Consolidated % of Sales (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 79,944,362 ​ $ 23,188,300 ​ $ 103,132,662 100.0 % $ 60,216,045 ​ $ 24,938,737 ​ $ 85,154,782 100.0 % Cost of goods sold ​ 71,075,473 ​ 7,701,242 ​ 78,776,715 76.4 % 52,645,527 ​ 10,799,114 ​ 63,444,641 74.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ 8,868,889 ​ 15,487,058 ​ 24,355,947 23.6 % 7,570,518 ​ 14,139,623 ​ 21,710,141 25.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 7,623,333 ​ 9,452,996 ​ 17,076,329 16.6 % 7,260,958 ​ 9,494,066 ​ 16,755,024 19.7 % Depreciation and amortization ​ 376,236 ​ 529,516 ​ 905,752 0.9 % 206,194 ​ 499,638 ​ 705,832 0.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 7,999,569 ​ 9,982,512 ​ 17,982,081 17.5 % 7,467,152 ​ 9,993,704 ​ 17,460,856 20.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ 869,320 ​ 5,504,546 ​ 6,373,866 6.1 % 103,366 ​ 4,145,919 ​ 4,249,285 5.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ Other income ​ 157,007 ​ 442,849 ​ 599,856 0.6 % 16,008 ​ 447,937 ​ 463,945 0.5 % Interest expense ​ (108,040) ​ (104,509) ​ (212,549) (0.2) % (120,098) ​ (109,897) ​ (229,995) (0.3) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 918,287 ​ 5,842,886 ​ 6,761,173 6.6 % (724) ​ 4,483,959 ​ 4,483,235 5.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense ​ (205,822) ​ (1,309,605) ​ (1,515,427) (1.5) % (88,758) ​ (922,759) ​ (1,011,517) (1.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 712,465 ​ $ 4,533,281 ​ $ 5,245,746 5.1 % $ (89,482) ​ $ 3,561,200 ​ $ 3,471,718 4.1 % ​ (1) The “% of Sales” figures present the proportion of each line item to the total consolidated sales for the respective period, which management believes is relevant to an assessment and understanding of our financial condition and results of operations. Due to rounding, percentages presented may not add up precisely to the totals provided. The individual segments reported the following for the six months ended June 30, 2025 and 2024: Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 103,132,662 ​ $ 85,154,782 ​ $ 17,977,880 21.1 % % of consolidated sales ​ 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 79,944,362 ​ $ 60,216,045 ​ $ 19,728,317 32.8 % % of consumer sales ​ 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 23,188,300 ​ $ 24,938,737 ​ $ (1,750,437) (7.0) % % of commercial sales ​ 100.0 % 100.0 % ​ ​ Consolidated Sales increased by $17,977,880 or 21.1%, during the six months ended June 30, 2025, to $103,132,662, as compared to $85,154,782 during the same period in Fiscal 2024. 39 Table of Contents Consumer Segment Sales in the consumer segment increased by $19,728,317, or 32.8%, during the six months ended June 30, 2025, to $79,944,362, as compared to $60,216,045 during the same period in Fiscal 2024. The change was primarily attributed to the stronger volumes and pricing on our wholesale precious metals transactions that has been consistent throughout Fiscal 2025 as well as stronger contributions from our historical and new retail store footprint. Commercial Segment Sales in the commercial segment decreased by $1,750,437, or 7.0%, during the six months ended June 30, 2025, to $23,188,300, as compared to $24,938,737 during the same period in Fiscal 2024. The change was primarily attributed to less sales of personal technology assets and from ITAD revenue share settlements that occurred throughout Fiscal 2025 and incrementally from lower volumes of our electronic scrap grades and associated recoveries which was most pronounced in our second quarter of Fiscal 2025. Offsetting these unfavorable variances was the strong performance of our service-related product returns business. Cost of Goods Sold ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, Change ​ ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 78,776,715 ​ $ 63,444,641 ​ $ 15,332,074 24.2 % % of consolidated sales ​ 76.4 % 74.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 71,075,473 ​ $ 52,645,527 ​ $ 18,429,946 35.0 % % of consumer sales ​ 88.9 % 87.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 7,701,242 ​ $ 10,799,114 ​ $ (3,097,872) (28.7) % % of commercial sales ​ 33.2 % 43.3 % ​ ​ Consolidated Cost of goods sold increased by $15,332,074, or 24.2%, during the six months ended June 30, 2025, to $78,776,715, as compared to $63,444,641 during the same period in Fiscal 2024. Consumer Segment Cost of goods sold in the consumer segment increased by $18,429,946, or 35.0%, during the six months ended June 30, 2025, to $71,075,473, as compared to $52,645,527 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned higher wholesale precious metals transactions compared to the same period in Fiscal 2024. Cost of goods sold as a percentage of sales was 88.9% during the six months ended June 30, 2025, as compared to 87.4% during the six months ended June 30, 2024. The change was primarily attributed to a greater mix of lower margin wholesale precious metals transactions in our overall cost of goods sold and incrementally from product mix at our retail stores. Commercial Segment Cost of goods sold in the commercial segment decreased by $3,097,872, or 28.7%, during the six months ended June 30, 2025, to $7,701,242, as compared to $10,799,114 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned lower sales volumes across most of our segment verticals. Cost of goods sold as a percentage of sales was 33.2% during the six months ended June 30, 2025, as compared to 43.3% during the six months ended June 30, 2024. The change was primarily attributed to our sales mix during Fiscal 2025 in which we experienced higher overall margins from the sale of personal technology assets and ITAD revenue share 40 Table of Contents settlements coupled with continued growth in revenue from our service-related product returns business, which does not have a cost of goods sold component as the associated inventory remains with the client. Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 24,355,947 ​ $ 21,710,141 ​ $ 2,645,806 12.2 % % of consolidated sales ​ 23.6 % 25.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 8,868,889 ​ $ 7,570,518 ​ $ 1,298,371 17.2 % % of consumer sales ​ 11.1 % 12.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 15,487,058 ​ $ 14,139,623 ​ $ 1,347,435 9.5 % % of commercial sales ​ 66.8 % 56.7 % ​ ​ Consolidated Gross margin increased by $2,645,806, or 12.2%, during the six months ended June 30, 2025, to $24,355,947, as compared to $21,710,141 during the same period in Fiscal 2024. Consumer Segment Gross margin in the consumer segment increased by $1,298,371, or 17.2%, during the six months ended June 30, 2025, to $8,868,889, as compared to $7,570,518 during the same period in Fiscal 2024. The net impact of the aforementioned increase in sales of $19,728,317 and increase in cost of goods sold of $18,429,946 resulted in the $1,298,371 increase in gross margin. Commercial Segment Gross margin in the commercial segment increased by $1,347,435, or 9.5%, during the six months ended June 30, 2025, to $15,487,058, as compared to $14,139,623 during the same period in Fiscal 2024. The net impact of the aforementioned decrease in sales of $1,750,437 and decrease in cost of goods sold of $3,097,872 resulted in the $1,347,435 increase in gross margin. Selling, General and Administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 17,076,329 ​ $ 16,755,024 ​ $ 321,305 1.9 % % of consolidated sales ​ 16.6 % 19.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 7,623,333 ​ $ 7,260,958 ​ $ 362,375 5.0 % % of consumer sales ​ 9.5 % 12.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 9,452,996 ​ $ 9,494,066 ​ $ (41,070) (0.4) % % of commercial sales ​ 40.8 % 38.1 % ​ ​ Consolidated Selling, general and administrative expense increased by $321,305, or 1.9%, during the six months ended June 30, 2025, to $17,076,329, as compared to $16,755,024 during the same period in Fiscal 2024. 41 Table of Contents Consumer Segment Selling, general and administrative expense in the consumer segment increased by $362,375, or 5.0%, during the six months ended June 30, 2025, to $7,623,333, as compared to $7,260,958 during the same period in Fiscal 2024. The change was primarily attributed to the full cost structures related to our new stores and partially offset by a reduction in costs associated with store onboarding that occurred in the same period in Fiscal 2024 along with select reductions in production human capital costs associated with optimizing our headcount which was more impactful in the second quarter of Fiscal 2025. Commercial Segment Selling, general and administrative expense in the commercial segment decreased by $41,070, or 0.4%, during the six months ended June 30, 2025, to $9,452,996, as compared to $9,494,066 during the same period in Fiscal 2024. The business has been able to maintain its cost structure over the same period in Fiscal 2024, and as such, no discussion point. Depreciation and Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 905,752 ​ $ 705,832 ​ $ 199,920 28.3 % % of consolidated sales ​ 0.9 % 0.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 376,236 ​ $ 206,194 ​ $ 170,042 82.5 % % of consumer sales ​ 0.5 % 0.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 529,516 ​ $ 499,638 ​ $ 29,878 6.0 % % of commercial sales ​ 2.3 % 2.0 % ​ ​ Consolidated Depreciation and amortization expense increased by $199,920, or 28.3%, during the six months ended June 30, 2025, to $905,752, as compared to $705,832 during the same period in Fiscal 2024. Consumer Segment Depreciation and amortization expense in the consumer segment increased by $170,042, or 82.5%, during the six months ended June 30, 2025, to $376,236, as compared to $206,194 during the same period in Fiscal 2024. The change was primarily attributed to the depreciation of assets placed into service related to our new retail stores. Commercial Segment Depreciation and amortization expense in the commercial segment increased by $29,878, or 6.0%, during the six months ended June 30, 2025, to $529,516, as compared to $499,638 during the same period in Fiscal 2024. There was no material impact from assets capitalized or reaching maturity in each comparative period, and as such, no discussion point. 42 Table of Contents Other Income (Expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 599,856 ​ $ 463,945 ​ $ 135,911 ​ 29.3 % % of consolidated sales ​ 0.6 % 0.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 157,007 ​ $ 16,008 ​ $ 140,999 880.8 % % of consumer sales ​ 0.2 % 0.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 442,849 ​ $ 447,937 ​ $ (5,088) (1.1) % % of commercial sales ​ 1.9 % 1.8 % ​ ​ Consolidated Other income increased by $135,911, or 29.3%, during the six months ended June 30, 2025, to $599,856, as compared to $463,945 during the same period in Fiscal 2024. Consumer Segment Other income in the consumer segment increased by $140,999, or 880.8%, during the six months ended June 30, 2025, to $157,007, as compared to $16,008 during the same period in Fiscal 2024. The change was primarily attributed to the receipt of an employee retention credit and incrementally from the earnings on excess cash balances. The impact of dividend and interest income is referenced below. Dividend income comprised $8,883 and $0 of other income during the six months ended June 30, 2025 and 2024, respectively. Interest income comprised $51,038 and $8 of other income during the six months ended June 30, 2025 and 2024, respectively. Commercial Segment Other income in the commercial segment decreased by $5,088, or 1.1%, during the six months ended June 30, 2025, to $442,849, as compared to $447,937 during the same period in Fiscal 2024. The change was primarily attributed to a reduction in earned interest rates associated with our interest bearing account and from rental income being present in our first quarter of Fiscal 2024 results. The impact of dividend and interest income is referenced below. Dividend income comprised $129,567 and $0 of other income during the six months ended June 30, 2025 and 2024, respectively. Interest income comprised $274,758 and $396,522 of other income during the six months ended June 30, 2025 and 2024, respectively. Interest Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ 2025 2024 Amount % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ (212,549) ​ $ (229,995) ​ $ 17,446 ​ (7.6) % % of consolidated sales ​ (0.2) % (0.3) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ (108,040) ​ $ (120,098) ​ $ 12,058 (10.0) % % of consumer sales ​ (0.1) % (0.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ (104,509) ​ $ (109,897) ​ $ 5,388 (4.9) % % of commercial sales ​ (0.5) % (0.4) % ​ ​ 43 Table of Contents Consolidated Interest expense decreased by $17,446, or 7.6%, during the six months ended June 30, 2025, to $212,549, as compared to $229,995 during the same period in Fiscal 2024. Consumer Segment Interest expense in the consumer segment decreased by $12,058, or 10%, during the six months ended June 30, 2025, to $108,040, as compared to $120,098 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point. Commercial Segment Interest expense in the commercial segment decreased by $5,388, or 4.9%, during the six months ended June 30, 2025, to $104,509, as compared to $109,897 during the same period in Fiscal 2024. There was no material change in debt amortization from the same period in Fiscal 2024, and as such, no discussion point. Income Tax Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ ​ 2025 ​ 2024 ​ Amount ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated $ (1,515,427) $ (1,011,517) $ (503,910) 49.8 % % of consolidated sales ​ (1.5) % (1.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ (205,822) ​ $ (88,758) ​ $ (117,064) 131.9 % % of consumer sales ​ (0.3) % (0.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ (1,309,605) ​ $ (922,759) ​ $ (386,846) 41.9 % % of commercial sales ​ (5.6) % (3.7) % ​ ​ Consolidated Income tax expense increased by $503,910, or 49.8%, during the six months ended June 30, 2025, to $1,515,427, as compared to $1,011,517 during the same period in Fiscal 2024. Currently, the Company has a deferred tax asset reflecting a future tax benefit that the Company expects to receive. The Company has a federal tax rate of approximately 21.0%, in addition to other state and local taxes, on net income. The effective income tax rate was 22.4% and 22.6% for the six months ended June 30, 2025 and 2024, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the result of state taxes and non-deductible expenses, as was the Company’s case for the increase for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. ​ 44 Table of Contents Net Income (Loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ ​ 2025 ​ 2024 ​ Amount ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated $ 5,245,746 $ 3,471,718 $ 1,774,028 51.1 % % of consolidated sales ​ 5.1 % 4.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 712,465 ​ $ (89,482) ​ $ 801,947 NM ​ % of consumer sales ​ 0.9 % (0.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 4,533,281 ​ $ 3,561,200 ​ $ 972,081 27.3 % % of commercial sales ​ 19.5 % 14.3 % ​ ​ NM – Not Meaningful Consolidated Net income increased by $1,774,028, or 51.1%, during the six months ended June 30, 2025, to $5,245,746, as compared to $3,471,718 during the same period in Fiscal 2024. Consumer Segment Net income (loss) increased in the consumer segment by $801,947, during the six months ended June 30, 2025, to net income of $712,465, as compared to net loss of $89,482 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Six Months Ended June 30, 2025 and 2024 for further details. Commercial Segment Net income increased in the commercial segment by $972,081, or 27.3%, during the six months ended June 30, 2025, to $4,533,281, as compared to $3,561,200 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Six Months Ended June 30, 2025 and 2024 for further details. Earnings Per Share The following table depicts the Company’s earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ ​ 2025 ​ 2024 ​ Amount ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated $ 0.20 $ 0.13 $ 0.07 53.8 % ​ Consolidated Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.07, or 53.8%, during the six months ended June 30, 2025, to $0.20, as compared to $0.13 during the same period in Fiscal 2024. Non-U.S. GAAP Financial Measures Within this management discussion and analysis, we use supplemental measures of our performance, which are derived from our consolidated financial information, but which are not presented in our condensed consolidated financial statements prepared in accordance with U.S. GAAP. We believe that providing these non-U.S. GAAP financial measures adds a meaningful presentation of our operating and financial performance. See the reconciliation of net income to adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) and Net Cash, in Non-U.S. GAAP Financial Measures below. 45 Table of Contents Adjusted EBITDA Adjusted EBITDA is defined as the sum of net income (loss) of the Company, adjusted for additions (deductions) of interest expense, other (income) expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA is a key performance measure that management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure as an overall assessment of our performance, to evaluate the effectiveness of our strategies and for planning purposes. The following table provides a reconciliation of net income to Adjusted EBITDA for the three months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2025 ​ 2024 ​ Consumer Commercial Consolidated Consumer Commercial Consolidated Adjusted EBITDA Reconciliation: ​ ​ ​ ​ ​ Net income (loss) ​ $ 643,371 ​ $ 2,109,028 ​ $ 2,752,399 ​ $ (177,958) ​ $ 1,742,137 ​ $ 1,564,179 Addition (deduction): ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 195,604 ​ 264,807 ​ 460,411 ​ 112,518 ​ 249,749 ​ 362,267 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 tax expense ​ 185,749 ​ 605,320 ​ 791,069 ​ 29,607 ​ 431,632 ​ 461,239 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 922,559 ​ $ 2,793,297 ​ $ 3,715,856 ​ $ 11,861 ​ $ 2,259,548 ​ $ 2,271,409 ​ The following table provides a reconciliation of net income to Adjusted EBITDA for the six months ended June 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2025 ​ 2024 ​ Consumer Commercial Consolidated Consumer Commercial Consolidated Adjusted EBITDA Reconciliation: ​ ​ ​ ​ ​ Net income ​ $ 712,465 ​ $ 4,533,281 ​ $ 5,245,746 ​ $ (89,482) ​ $ 3,561,200 ​ $ 3,471,718 Addition (deduction): ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 376,236 ​ 529,516 ​ 905,752 ​ 206,194 ​ 499,638 ​ 705,832 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 tax expense ​ 205,822 ​ 1,309,605 ​ 1,515,427 ​ 88,758 ​ 922,759 ​ 1,011,517 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,245,556 ​ $ 6,034,062 ​ $ 7,279,618 ​ $ 309,560 ​ $ 4,645,557 ​ $ 4,955,117 ​ Net Cash Net Cash is defined as the difference between (i) cash and cash equivalents and (ii) the sum of debt obligations. We believe that presenting Net Cash is useful to investors as a measure of our liquidity and leverage profile, as cash and cash equivalents can be used, among other things, to repay indebtedness. 46 Table of Contents The following table depicts the Company’s Net Cash: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 ​ ​ ​ ​ ​ ​ ​ Total cash ​ $ 22,851,869 ​ $ 20,609,003 Less: debt obligations ​ (13,043,286) ​ (13,522,179) ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 9,808,583 ​ $ 7,086,824 ​ Liquidity and Capital Resources The following table summarizes the Company’s condensed consolidated statement of cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ ​ 2025 ​ 2024 ​ Amount ​ % Net cash provided by (used in): ​ ​ ​ ​ Operating activities ​ $ 3,722,594 ​ $ 3,002,262 ​ $ 720,332 24.0 % Investing activities ​ (879,509) ​ (1,265,004) ​ ​ 385,495 (30.5) % Financing activities ​ (600,219) ​ (2,247,110) ​ 1,646,891 (73.3) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ​ $ 2,242,866 ​ $ (509,852) ​ $ 2,752,718 NM ​ ​ NM – Not Meaningful Operating Activities Cash flows provided by operations increased by $720,332, or 24.0%, during the six months ended June 30, 2025, to $3,722,594, as compared to $3,002,262 during the same period in Fiscal 2024. The increase in cash provided by operations was primarily attributed to an increase in net income, certain non-cash adjustments to reconcile net income to operating cash flow (as detailed in the condensed consolidated statements of cash flows), and the following significant net changes in operating assets and liabilities, from the six months ended June 30, 2024 to the same period during Fiscal 2025: ● Accounts receivable: a $3,496,816 net increase primarily attributed to our commercial segment, due to an increase in accounts receivable in the normal course of operations in Fiscal 2025, offset by significant collections from a services customer in Fiscal 2024. ● Inventories: a $1,958,081 net decrease primarily attributed to our consumer segment, due to a lesser increase in inventory in Fiscal 2025 than from that incurred in Fiscal 2024 as a result of greater purchases of inventory to support the onboarding of our new stores. ● Prepaid expenses: a $452,133 net increase primarily attributed to our commercial segment, resulting from incurring costs in Fiscal 2025 to obtain a contract and from a reduction in prepaid freight associated with our ITAD revenue share settlements in Fiscal 2024. ● Accrued expenses: a $188,591 net decrease primarily attributed to our commercial segment, resulting from a reduction in unvouchered inventory purchases on assets still in evaluation phase in Fiscal 2025, partially offset by a greater reduction in accrued payroll and accrued tax in Fiscal 2024. ● Other liabilities: a $1,080,275 net increase primarily attributed to our consumer segment, resulting from purchased gift cards that occurred in Fiscal 2025. ​ Investing Activities Cash flows (used in) investing activities decreased by $385,495, or 30.5%, during the six months ended June 30, 2025, to $879,509, as compared to $1,265,004 during the same period in Fiscal 2024. The decrease in cash (used in) investing activities during the six months ended June 30, 2025 was primarily attributed to a reduction in costs spent on our ERP and was partially offset by an increase in new store capital expenditures. 47 Table of Contents Financing Activities Cash flows (used in) financing activities decreased by $1,646,891, or 73.3%, during the six months ended June 30, 2025, to $600,219, as compared to $2,247,110 during the same period in Fiscal 2024. The decrease in cash (used in) financing activities during the six months ended June 30, 2025, was primarily due to a reduction in share buybacks. Capital Resources Although the Company has access to a line of credit our primary source of liquidity and capital resources currently consist of cash generated from our operating activities. We do not anticipate the need to fund our operations via the line of credit and we do not have any amounts drawn as of June 30, 2025 . We have historically renewed, extended, or replaced short-term debt as it matures, and management believes that we will be able to continue to do so in the near future. Capital Expenditures In Fiscal 2025, the Company is focused on optimizing our new store performance, along with the continued focus on growing our Commercial business organically and evaluating opportunities for strategic growth. The Company continuously monitors the deployment of capital and primarily funds capital expenditures through cash flow from operating activities. Where appropriate, the Company may use debt financing on select projects. When this occurs, the Company further evaluates future cash flows of the project to ensure the debt tenure and pay-back period are in alignment, as well as the appropriateness of the rate of return. As of June 30, 2025, the Company had no commitments for capital expenditures. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Because we are a “smaller reporting company,” we are not required to disclose the information required by this item.