Envela Corp 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management, with the participation of our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025. We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to a low for timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, the Company’s principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective to provide the reasonable assurance of the foregoing. We believe, however, that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving their objectives, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected. Management’s Annual Report on Internal Control Over Financial Reporting Our management has the responsibility for establishing and maintaining adequate internal control over financial reporting and for our assessment of the effectiveness of internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act, with respect to us as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officer and effected by the Board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles that achieve certain specified controls over the records of business transactions. Because of its inherent limitations, internal control over financial reporting only provides reasonable assurance with respect to financial statement presentation and preparation. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). Based on its assessments, management has concluded that, as of December 31, 2025, the internal control over financial reporting is effective. The Company is not required to provide an attestation report of our registered public accounting firm pursuant to rules promulgated by the SEC. Changes in Internal Control Over Financial Reporting During the fiscal year ended December 31, 2025, no changes occurred that the Company’s management believes have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting. ​ 78 Table of Contents ITEM 9B. OTHER I N F O RMATION None. ​ ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. ​ 79 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information with respect to this Item will be included in our definitive Proxy Statement with respect to our 2025 Annual Meeting, which we intend to file with the SEC no later than 120 days after the end of the fiscal year covered by this annual report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION Information with respect to this Item will be included in our definitive Proxy Statement with respect to our 2025 Annual Meeting, which we intend to file with the SEC no later than 120 days after the end of the fiscal year covered by this annual report on Form 10-K. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information with respect to this Item will be included in our definitive Proxy Statement with respect to our 2025 Annual Meeting, which we intend to file with the SEC no later than 120 days after the end of the fiscal year covered by this annual report on Form 10-K. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information with respect to this Item will be included in our definitive Proxy Statement with respect to our 2025 Annual Meeting, which we intend to file with the SEC no later than 120 days after the end of the fiscal year covered by this annual report on Form 10-K. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information with respect to this Item will be included in our definitive Proxy Statement with respect to our 2025 Annual Meeting, which we intend to file with the SEC no later than 120 days after the end of the fiscal year covered by this annual report on Form 10-K. ​ 80 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following documents are filed as part of this Annual Report: (1) Financial Statements The financial statements filed as part of this Annual Report are listed on the Index to Item 8. Financial Statements and Supplementary Data on page 48. (2) Financial Statement Schedules All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable and therefore have been omitted or are contained in the applicable financial statements or the notes thereto. (3) Exhibits The following exhibits are filed as part of this Annual Report on Form10-K or are incorporated herein by reference. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exhibit Number ​ ​ ​ Description ​ ​ ​ Filed Herein ​ ​ ​ Incorporated by Reference ​ ​ ​ Form ​ ​ ​ Date Filed with SEC ​ ​ ​ Exhibit Number 3.1 ​ Amended and Restated By-laws, dated April 17, 2025 ​ ​ ​ X ​ 8-K ​ April 23, 2025 ​ 3.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.2 ​ Certificate of Amendment to Articles of Incorporation, Dated December 12, 2019 ​ ​ ​ X ​ 8-K ​ December 16, 2019 ​ 3.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4.1 ​ Specimen Common Stock Certificate, 2025 Update ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4.2 ​ Description of Capital Stock ​ ​ ​ X ​ 10-K ​ March 16, 2022 ​ 4.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10.1 ​ Amended and Restated Registration Rights Agreement, dated March 25, 2025, by and between Envela Corporation and Eduro Holdings, LLC ​ ​ ​ X ​ 10-K ​ March 26, 2025 ​ 10.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10.2 ​ Form of Indemnification Agreement between E nvela Corporation and each Officer and director of Envela Corporation ​ ​ ​ X ​ 10-K ​ March 26, 2025 ​ 10.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10.3 ​ Form of Stock Option Award Agreement ​ ​ ​ X ​ S-8 ​ August 13, 2025 ​ 4.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10.4 ​ Envela Corporation 2025 Equity Plan ​ ​ ​ X ​ S-8 ​ August 13, 2025 ​ 4.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 14.1 ​ Business Conduct & Ethics Policy ​ ​ ​ X ​ 10-K ​ March 26, 2025 ​ 14.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 21.1 ​ Subsidiaries of the Registrant ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 81 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exhibit Number ​ ​ ​ Description ​ ​ ​ Filed Herein ​ ​ ​ Incorporated by Reference ​ ​ ​ Form ​ ​ ​ Date Filed with SEC ​ ​ ​ Exhibit Number 23.1 ​ Consent of Whitley Penn LLP ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 31.1 ​ Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 by John R. Loftus ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 31.2 ​ Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 by John G. DeLuca ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 32.1 ​ Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John R. Loftus ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 32.2 ​ Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John G. DeLuca ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 97.1 ​ Clawback Policy ​ ​ ​ X ​ 10-K ​ March 21, 2024 ​ 97.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 101.INS ​ Inline XBRL Instance Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 101.SCH ​ Inline XBRL Taxonomy Extension Schema Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 101.CAL ​ Inline XBRL Taxonomy Calculation Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 101.DEF ​ Inline XBRL Taxonomy Definition Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 101.LAB ​ Inline XBRL Taxonomy Label Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 101.PRE ​ Inline XBRL Taxonomy Presentation Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 104* ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ITEM 16. FORM 10-K SUMMARY None. 82 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ENVELA CORPORATION (Registrant) ​ ​ ​ ​ ​ By: /s/ JOHN R. LOFTUS ​ Dated: March 18, 2026 ​ John R. Loftus ​ ​ ​ Chairman of the Board, Chief Executive Officer, and President ​ ​ (Principal Executive Officer) ​ ​ ​ ​ ​ ​ ​ ​ ​ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. ​ ​ ​ ​ ​ By: /s/ JOHN R. LOFTUS ​ Dated: March 18, 2026 ​ John R. Loftus ​ ​ ​ Chairman of the Board, Chief Executive Officer, and President ​ ​ (Principal Executive Officer) ​ ​ ​ ​ ​ ​ By: /s/ JOHN G. DELUCA ​ Dated: March 18, 2026 ​ John G. DeLuca ​ ​ ​ Chief Financial Officer, Secretary, and Treasurer ​ ​ (Principal Accounting Officer) ​ ​ ​ ​ ​ ​ By: /s/ VINCE A. ACKERSON ​ Dated: March 18, 2026 ​ Vince A. Ackerson ​ ​ ​ Director ​ ​ ​ ​ ​ ​ By: /s/ ALEXANDRA C. GRIFFIN ​ Dated: March 18, 2026 ​ Alexandra C. Griffin ​ ​ ​ Director ​ ​ ​ ​ ​ ​ By: /s/ JIM R. RUTH ​ Dated: March 18, 2026 ​ Jim R. Ruth ​ ​ ​ Director ​ ​ ​ ​ ​ ​ By: /s/ RICHARD D. SCHEPP ​ Dated: March 18, 2026 ​ Richard D. Schepp ​ ​ ​ Director ​ ​ ​ ​ ​ ​ By: /s/ VICKY A. TEHERANI ​ Dated: March 18, 2026 ​ Vicky A. Teherani ​ ​ ​ Director ​ ​ ​ ​ ​ 83 Table of Contents ​ GLOSSARY OF CERTAIN DEFINED TERMS ​ The following definitions apply to terms used in this document: ​ ​ ​ 2025 Plan 2025 Equity Incentive Plan Adjusted Debt Obligations Adjusted Debt Obligations represents (i) Debt Obligations plus (ii) operating lease liabilities per the Balance Sheet. Adjusted Debt to Adjusted EBITDAR Leverage Ratio The Adjusted Debt to Adjusted EBITDAR Leverage Ratio is a non-U.S. GAAP measure and represents (i) Adjusted Debt Obligations divided by (ii) Adjusted EBITDAR. Adjusted Debt to Net Income Leverage Ratio The Adjusted Debt to Net Income Leverage Ratio is a non-U.S. GAAP measure and represents the sum of (i) Debt Obligations and operating lease liabilities (ii) divided by (iii) Adjusted EBITDAR. Adjusted EBITDA Adjusted EBITDA is a non-U.S. GAAP measure and is defined as Adjusted Earnings Before Interest, Tax, Depreciation, and Amortization and equals (i) net income (loss) of the Company, adjusted for additions (deductions) of (ii) interest expense, (iii) other (income) expense, (iv) income tax expense (benefit), and (v) depreciation and amortization. Adjusted EBITDAR Adjusted EBITDAR is a non-U.S. GAAP measure and equals (i) Adjusted EBITDA plus (ii) minimum fixed rent expense for properties occupied under operating leases. Adjusted Net Debt Obligations Adjusted Net Debt Obligations is a non-U.S. GAAP measure and represents the difference between (i) Adjusted Debt Obligations per the Balance Sheet and (ii) Total Cash. Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio The Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio is a non-U.S. GAAP measure and represents (i) Adjusted Net Debt Obligations divided by (ii) Adjusted EBITDAR. AI Artificial Intelligence AML Anti-Money Laundering ASC Accounting Standards Codification ASU Accounting Standards Update ASU 2024-03 ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ASU 2025-05 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ASU 2025-06 Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software Avail Transaction The acquisition of Avail Recovery Solutions, LLC on October 29, 2021 Average Inventory Average inventory is the mean value of the Company’s inventory over a specific period, calculated by (i) adding the beginning inventory and ending inventory for that period and (ii) dividing by two. Board Board of Directors Business Partner A Business Partner is defined as an entity or person from whom we procure or consign assets and provide disposition or product return services to. Capital Expenditures Capital Expenditures represent the purchase of (i) property and equipment, and (ii) intangible assets. CODM Chief Operating Decision Maker Common Stock The Company's common stock, par value $0.01 per share Company Envela Corporation, a Nevada corporation, and its subsidiaries Customers A Customer is an individual or entity to whom we have sold assets or commodities or provided certain repair services. DCP Defined Contribution 401(k) Plan 84 Table of Contents Debt Obligations Debt Obligations represents the sum of amounts outstanding under notes payable balances per the Balance Sheet. Debt to Adjusted EBITDA Leverage Ratio The Debt to Adjusted EBITDA Leverage Ratio is a non-U.S. GAAP measure and represents (i) Debt Obligations divided by (ii) Adjusted EBITDA. Debt to Net Income Leverage Ratio The Debt to Net Income Leverage Ratio represents the leverage ratio of the Company utilizing the following U.S. GAAP measures: (i) Debt Obligations divided by (ii) Net Income. Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 Eduro Eduro Holdings, LLC Envela Envela Corporation, a Nevada corporation, and its subsidiaries ERTC Employee Retention Tax Credit ESG Environmental, Social, and Governance Exchange Act Securities Exchange Act of 1934 Financial Statements The Related Consolidated Statements of Income, Stockholders’ Equity, and Cash Flows Fiscal 2024 Fiscal year ended December 31, 2024 Fiscal 2025 Fiscal year ended December 31, 2025 Form 10-K Form 10-K for the fiscal year ended December 31, 2024 Form 10-Q Form 10-Q for the three and nine months ended September 30, 2025 Free Cash Flow Free Cash Flow is a non-U.S. GAAP measure and represents the difference between the Company’s (i) Operating Cash Flow and (ii) Capital Expenditures. FSB Farmer's State Bank of Oakley, Kansas Holiday Months The collective one-month periods ended November 30 and December 31 of the respective fiscal year. Indemnification Agreement March 25, 2025 indemnification agreement between Envela Corporation and its directors and officers Indemnitee The directors and officers subject to the Indemnification Agreement Inventory Turnover Ratio The Inventory Turnover Ratio represents the (i) cost of goods sold less shipping and handling costs divided by (ii) Average Inventory. IRS Internal Revenue Service ISO Incentive Stock Options IT Information Technology ITAD Information Technology Asset Disposition LTIFR Lost Time Injury Frequency Rate ([Number of Lost Time Injuries in the Reporting Period x 200,000]/(Total Hours Worked in the Reporting Period) Metric ton 1 metric ton equals 2,204.62 pounds N10TR N10TR, LLC Net Cash Net Cash is the difference between (i) cash and cash equivalents and (ii) the sum of debt obligations Net Debt Obligations Net Debt Obligations is a non-U.S. GAAP measure and represents the difference between (i) Debt Obligations per the Balance Sheet and (ii) Total Cash. Net Debt to Adjusted EBITDA Leverage Ratio The Net Debt to Adjusted EBITDA Leverage Ratio is a non-U.S. GAAP measure that represents (i) Net Debt Obligations divided by (ii) Adjusted EBITDA. NM Not Meaningful NYSE New York Stock Exchange OBBBA One Big Beautiful Bill Act Operating Cash Flow Operating Cash Flow measures the amount of cash generated from normal business operations during a specific period and is referred to as net cash provided by operations in the Statement of Cash Flows. PCAOB Public Company Accounting Oversight Board PCI DSS Payment Card Industry Data Security Standards Rent Expense Minimum fixed rent expense for properties occupied under operating leases Scottsdale Transaction September 12, 2024 purchase agreement relating to the acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona 85 Table of Contents SEC U.S. Securities and Exchange Commission SKUs Stock Keeping Units SOW Scope of Work TBT Texas Bank & Trust Total Cash Total Cash represents cash and cash equivalents per the Balance Sheet. Trailing Four Quarters The Trailing Four Quarters ended period is defined as the cumulative total amount of the most recent four consecutive fiscal quarters of financial results for the respective reported balance. TRIFR Total Recordable Injury Frequency Rate ([Number of Injuries in the Reporting Period x 200,000]/(Total Hours Worked in the Reporting Period) U.S. United States U.S. Dollar $ U.S. GAAP United States Generally Accepted Accounting Principles ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 86