Envela Corp 10-Q

Envela Corporation_March 31, 2026 Table of Contents ​ ​ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2026 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ For the Transition Period From to ​ Commission File Number 001-11048 Envela Corporation (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ​ ​ ​ ​ Nevada ​ ​ ​ 88-0097334 (STATE OF INCORPORATION) ​ (I.R.S. EMPLOYER IDENTIFICATION NO.) ​ ​ ​ ​ 1901 Gateway Drive , Suite 100 , Irving , Texas 75038 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) ​ ( 972 ) 587-4049 (REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE) ​ Securities registered pursuant to Section 12(b) of the Act: ​ ​ ​ ​ ​ Title of Each Class ​ ​ ​ Trading Symbol ​ ​ ​ Name of Exchange on which Registered Common Stock, par value $0.01 per share ​ ELA ​ ​ NYSE American NYSE Texas ​ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ​ ​ ​ ​ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ ​ ​ Emerging growth company ☐ ​ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of May 6, 2026 the registrant had 25,963,476 shares of common stock outstanding. ​ ​ ​ ​ Table of Contents TABLE OF CONTENTS ​ ​ ​ ​ ​ PART I. FINANCIAL INFORMATION ​ ​ ​ PAGE ​ ​ ​ ​ ITEM 1. FINANCIAL STATEMENTS ​ 4 ​ ​ ​ ​ ​ CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) ​ 4 ​ ​ ​ ​ ​ CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2026 (UNAUDITED) AND DECEMBER 31, 2025 ​ 5 ​ ​ ​ ​ ​ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) ​ 6 ​ ​ ​ ​ ​ CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED) ​ 7 ​ ​ ​ ​ ​ NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ 8 ​ ​ ​ ​ ​ NOTE 1 – BASIS OF PRESENTATION ​ 8 ​ NOTE 2 – PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS ​ 9 ​ NOTE 3 – ACCOUNTING POLICIES AND ESTIMATES ​ 9 ​ NOTE 4 – INVENTORIES ​ 16 ​ NOTE 5 – GOODWILL ​ 16 ​ NOTE 6 – PROPERTY AND EQUIPMENT, NET ​ 17 ​ NOTE 7 – INTANGIBLE ASSETS, NET ​ 18 ​ NOTE 8 – ACCRUED EXPENSES ​ 19 ​ NOTE 9 – SEGMENT INFORMATION ​ 19 ​ NOTE 10 – REVENUE ​ 20 ​ NOTE 11 – LEASES ​ 22 ​ NOTE 12 – BASIC AND DILUTED AVERAGE SHARES ​ 23 ​ NOTE 13 – DEBT ​ 24 ​ NOTE 14 – STOCK-BASED COMPENSATION ​ 25 ​ NOTE 15 – RELATED PARTY TRANSACTIONS ​ 26 ​ NOTE 16 – CONTINGENCIES ​ 26 ​ ​ ​ ​ ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ 27 ​ ​ ​ ​ ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ 44 ​ ​ ​ ​ ITEM 4. CONTROLS AND PROCEDURES ​ 44 ​ ​ ​ ​ PART II. OTHER INFORMATION ​ ​ ​ ​ ​ ​ ITEM 1. LEGAL PROCEEDINGS ​ 45 ​ ​ ​ ​ ITEM 1A. RISK FACTORS ​ 45 ​ ​ ​ ​ ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ 45 ​ ​ ​ ​ ITEM 3. DEFAULTS UPON SENIOR SECURITIES ​ 46 ​ ​ ​ ​ ITEM 4. MINE SAFETY DISCLOSURES ​ 46 2 Table of Contents ​ ​ ​ ​ ITEM 5. OTHER INFORMATION ​ 46 ​ ​ ​ ​ ITEM 6. EXHIBITS ​ 47 ​ ​ ​ ​ ​ SIGNATURE ​ 48 ​ ​ ​ ​ ​ GLOSSARY OF DEFINED TERMS ​ 49 ​ ​ ​ 3 Table of Contents PART I. FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, (Unaudited) ​ ​ ​ 2026 ​ ​ ​ 2025 Sales ​ $ 98,380,890 ​ $ 48,255,829 Cost of goods sold ​ 77,760,474 ​ 36,287,805 ​ ​ ​ ​ ​ ​ ​ Gross margin ​ 20,620,416 ​ 11,968,024 ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ Selling, general and administrative ​ 8,923,792 ​ 8,404,262 Depreciation and amortization ​ 485,963 ​ 445,341 ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 9,409,755 ​ 8,849,603 ​ ​ ​ ​ ​ ​ ​ Operating income ​ 11,210,661 ​ 3,118,421 ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ Other income ​ 170,344 ​ 205,605 Interest expense ​ ( 78,772 ) ​ ( 106,321 ) ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 11,302,233 ​ 3,217,705 Income tax expense ​ ( 2,462,500 ) ​ ( 724,358 ) ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 8,839,733 ​ $ 2,493,347 ​ ​ ​ ​ ​ ​ ​ Basic earnings per share: ​ ​ ​ ​ Net income ​ $ 0.34 ​ $ 0.10 ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ ​ ​ Net income ​ $ 0.34 ​ $ 0.10 ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ Basic ​ 25,963,476 ​ 25,995,645 Diluted ​ 25,963,476 ​ 25,995,645 ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2026 ​ 2025 ​ Assets ​ (Unaudited) ​ ​ ​ ​ Current assets: ​ ​ ​ ​ Cash and cash equivalents ​ $ 38,615,405 ​ $ 18,154,849 ​ Accounts receivable, net of allowance for credit losses of $544,642 and $735,944 as of March 31, 2026 and December 31, 2025, respectively ​ 3,590,145 ​ 10,984,191 ​ Inventories ​ 34,011,090 ​ 35,065,965 ​ Prepaid expenses ​ 1,145,788 ​ 1,239,483 ​ Total current assets ​ 77,362,428 ​ 65,444,488 ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 13,852,959 ​ 13,584,189 ​ Right-of-use assets from operating leases ​ 9,657,218 ​ 9,720,925 ​ Goodwill ​ 3,621,453 ​ 3,621,453 ​ Intangible assets, net ​ 3,220,335 ​ 3,407,167 ​ Other assets ​ 254,150 ​ 244,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 107,968,543 ​ $ 96,022,747 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders’ equity ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ Accounts payable ​ $ 3,628,552 ​ $ 4,294,443 ​ Notes payable ​ 7,688,363 ​ 7,787,468 ​ Operating lease liabilities ​ 2,359,567 ​ 1,937,295 ​ Accrued expenses ​ 6,201,656 ​ 2,791,003 ​ Other current liabilities ​ 2,106,382 ​ 1,871,215 ​ Total current liabilities ​ 21,984,520 ​ 18,681,424 ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liability ​ 84,021 ​ 147,381 ​ Notes payable, less current portion ​ 2,108,290 ​ 2,137,167 ​ Operating lease liabilities, less current portion ​ 7,891,771 ​ 7,996,567 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ $ 32,068,602 ​ $ 28,962,539 ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 25,963,476 shares outstanding as of March 31, 2026; 26,924,631 shares issued and 25,963,476 shares outstanding as of December 31, 2025 ​ 269,246 ​ 269,246 ​ Treasury stock at cost, 961,155 and 961,155 shares, as of March 31, 2026 and December 31, 2025, respectively ​ ( 4,757,731 ) ​ ( 4,757,731 ) ​ Additional paid-in capital ​ 40,173,000 ​ 40,173,000 ​ Retained earnings ​ 40,215,426 ​ 31,375,693 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ 75,899,941 ​ 67,060,208 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 107,968,543 ​ $ 96,022,747 ​ ​ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, (Unaudited) ​ ​ ​ 2026 ​ ​ ​ 2025 Operating activities ​ ​ ​ ​ ​ ​ Net income ​ $ 8,839,733 ​ $ 2,493,347 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 485,963 ​ 445,341 Provision for credit losses ​ ( 188,399 ) ​ 20,135 Deferred taxes ​ ( 63,360 ) ​ ( 16,660 ) Non-cash lease expense ​ 766,156 ​ 602,730 Changes in operating assets and liabilities: ​ ​ ​ ​ Accounts receivable ​ 7,582,445 ​ ( 1,009,842 ) Inventories ​ 1,054,875 ​ ( 418,567 ) Prepaid expenses ​ 93,695 ​ 97,167 Other assets ​ ( 9,625 ) ​ ( 181,785 ) Accounts payable ​ ( 665,891 ) ​ ( 360,096 ) Accrued expenses ​ 3,410,653 ​ ( 487,784 ) Operating leases ​ ( 384,973 ) ​ ( 589,025 ) Other liabilities ​ 235,167 ​ 536,096 ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ 21,156,439 ​ 1,131,057 ​ ​ ​ ​ ​ ​ ​ Investing activities ​ ​ ​ ​ Purchase of property and equipment ​ ( 567,901 ) ​ ( 384,444 ) Purchase of intangible assets ​ — ​ ( 543 ) Proceeds from notes receivable ​ ​ — ​ ​ 2,000 ​ ​ ​ ​ ​ ​ ​ Net cash (used in) investing activities ​ ( 567,901 ) ​ ( 382,987 ) ​ ​ ​ ​ ​ ​ ​ Financing activities ​ ​ ​ ​ Payments on notes payable ​ ( 127,982 ) ​ ( 326,182 ) Purchase of treasury stock ​ ​ — ​ ​ ( 2,626 ) ​ ​ ​ ​ ​ ​ ​ Net cash (used in) financing activities ​ ( 127,982 ) ​ ( 328,808 ) ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents ​ 20,460,556 ​ 419,262 Cash and cash equivalents, beginning of period ​ 18,154,849 ​ 20,609,003 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period ​ $ 38,615,405 ​ $ 21,028,265 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures ​ ​ ​ ​ Cash paid during the period for: ​ ​ ​ ​ Interest ​ $ 79,271 ​ $ 111,195 Income Taxes ​ $ 241 ​ $ — ​ 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 March 31, 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 — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 2,493,347 ​ ​ 2,493,347 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ ​ — ​ ( 500 ) ​ ​ ( 2,626 ) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 2,626 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of March 31, 2025 26,924,631 ​ $ 269,246 ( 929,430 ) ​ $ ( 4,571,449 ) — ​ $ — ​ $ 40,173,000 ​ $ 19,272,062 ​ $ 55,142,859 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 March 31, 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1, 2026 26,924,631 ​ $ 269,246 ​ ( 961,155 ) ​ $ ( 4,757,731 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 31,375,693 ​ $ 67,060,208 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ 8,839,733 ​ 8,839,733 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of March 31, 2026 26,924,631 ​ $ 269,246 ( 961,155 ) ​ $ ( 4,757,731 ) — ​ $ — ​ $ 40,173,000 ​ $ 40,215,426 ​ $ 75,899,941 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 7 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 1 — BASIS OF PRESENTATION ​ Presentation of Financial Results ​ These unaudited interim condensed consolidated financial statements of Envela Corporation, a Nevada corporation, and its subsidiaries (together with its subsidiaries, the “Company” or “Envela”), included herein have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial information and with the instructions to Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X prescribed by the Securities and Exchange Commission (the “SEC”). 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 consolidated financial statements for these interim periods, have been included. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the fiscal year ended December 31, 2026 (“Fiscal 2026”). Management suggests that these unaudited interim 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, 2025 (“Fiscal 2025”) filed with the SEC on March 18, 2026 (“2025 Annual Report”). ​ The Company’s operations are located within the contiguous United States of America ("U.S”) and its functional and reporting currency is the U.S. Dollar (“$”). ​ Percentages in tables have been rounded and accordingly may not add up to 100%. Certain financial data may have been rounded. As a result of such rounding, the totals of data presented in this document may vary slightly from the actual arithmetical totals of such data. ​ Throughout this Form 10-Q, financial data has been prepared in accordance with U.S. GAAP. Envela also provides certain additional non-U.S. GAAP measures and performance metrics to provide increased insight into the underlying or relative performance of the business. An explanation of each non-U.S. GAAP measure and performance metric used is provided in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. ​ Presentation of Financial Reporting Periods ​ As denoted herein, fiscal years are denoted with the word “Fiscal” and the associated year. ​ As denoted herein, the first, second, third, or fourth quarters refer to the three-month periods ended March 31, June 30, September 30, and December 31 for each respective Fiscal year. ​ References ​ Unless expressly indicated or the context requires otherwise, the terms “Envela®,” “company,” “we,” "us,” and “our” in this document refer to Envela Corporation, a Nevada corporation, and, where appropriate, its subsidiaries, operating and reportable segments, or brands. ​ Solely for convenience, our trademarks and tradenames may appear in this Form 10-Q without the ® or ™ symbol. ​ Due to the nature of the recommerce and recycling industry which is heavily predicated on the inbound sourcing of assets and commodities, we define the entity or person in which we procure or consign assets from, provide disposition or product return services to as “business partners” and those that we sell assets or commodities to through our stores, online or wholesale channels or provide certain repair services to as our “customers.” ​ Available Information ​ 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 8 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ are filed with or furnished to the SEC. The SEC maintains an internet site at www.sec.gov that contains the Company’s filings. NOTE 2 — PRINCIPLES OF CONSOLIDATION AND NATURE OF OPERATIONS ​ Principles of Consolidation ​ Envela serves as a holding company, conducting its operations via subsidiaries engaged in various businesses and activities within the recommerce and recycling sectors. The Company has no variable interest entities that require consolidation. All intercompany transactions and balances have been eliminated. ​ Nature of Operations ​ The products and services we offer are delivered by our subsidiaries under their distinct brands, rather than directly by Envela itself. Significant business activities within our reportable segments are detailed below: ​ Consumer Segment ​ Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, and secondary market bullion. We incorporate recycled diamonds and gemstones into 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”) and product returns industry. 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. Our product returns business reintroduces products back into the supply chain, creating another opportunity for the asset to be used. 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. ​ 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 consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include revenue recognition, determining the nature and timing of satisfaction of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; the fair value of and/or potential impairment of goodwill and intangible assets for the reporting units; useful lives of our tangible and intangible assets; allowances for credit losses; the market value of, and demand for, our inventory and the potential outcome of uncertain tax positions that have been recognized on our consolidated financial statements or tax returns. Actual results could differ from those estimates and assumptions. ​ ​ 9 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ Revenue Recognition ​ Accounting Standards Codification ( “ ASC”) 606, Revenue from Contracts with Customers, provides guidance on identifying performance obligations in revenue-generating transactions. The Company applies a five step approach in determining the amount and timing of revenue to be recognized: (i) identifying the contract with a customer; (ii) identifying the performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the performance obligations in the contract; and (v) recognizing revenue when the corresponding performance obligation is satisfied. ​ Consumer Segment ​ For the consumer segment, revenue from monetary transactions (e.g., cash and accounts receivable) with wholesale customers is recognized when the merchandise is delivered or at the point of sale for retail customers, and consideration for the transaction has been made either by immediate payment or through a receivable obligation. For e-commerce, revenue is recognized when the customer has fulfilled their obligation to pay or promise to pay, and goods have been shipped. ​ Revenue on precious metals transactions that require an assay (i.e., compositional analysis of metal content) are 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 from refining when our inventory arrives at the destination port, and the performance obligation is satisfied by transferring control of the goods identified in the customer contract. The initial invoice is recognized in full when our performance obligation is satisfied. Under ASC 606, an estimate of the variable consideration to which we are entitled is included in the transaction price, based on the estimated weight and the current spot price of the metal. An adjustment to revenue is made once the underlying weight and any metal spot price movements are resolved, which usually takes around six weeks. Any adjustment arising from the resolution of the underlying uncertainty is netted against the settlement due under the original contract. Historically, these amounts have not been material. ​ The commercial segment also provides recycling and product returns services according to a Scope of Work (“SOW”). Revenue from recycling and product returns services are 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 for inbound asset or material movements to our facilities. Revenue from freight arrangement services is recognized upon settlement with our business partners, which occurs when the SOW is completed. Under the guidance of ASC 606, the Company is deemed to be a principal and, as such, records freight arrangement services as a component of revenue, and the associated expense is recorded as a component of cost of goods sold. ​ The commercial segment recognizes revenue on outright sales when terms and transaction price are agreed to, the product is shipped, and the title is transferred. ​ See Note 10 – Revenue for further details. ​ Sales Returns and Allowances ​ Sales are recorded, net of expected returns. In certain instances, the consumer and commercial segment’s customers may return a product purchased within 30 days of receipt. Our allowance for estimated returns is based on our review of historical returns experience and reduces our reported revenues accordingly. ​ 10 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ As of March 31, 2026, and December 31, 2025, the consumer segment’s allowance for returns was $ 12,532 and $ 18,190 , respectively. ​ As of March 31, 2026, and December 31, 2025, the commercial segment’s allowance for returns was $ 54,560 and $ 42,339 , 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 that require an assay prior to transaction settlement and are of short duration. Overall customer concentrations, as a percentage of sales, may vary due to the product mix sold in each comparative period. Individual customer concentrations are also affected by each customer’s production schedule; accordingly, the Company identifies the most appropriate sales outlet to ensure timely settlement of transactions. ​ For the three months ended March 31, 2026, two customers accounted for 49.7 % of our sales and represented 0.0 % of our accounts receivable balance. ​ For the three months ended March 31, 2025, two customers accounted for 51.3 % of our sales and represented 0.0 % of our accounts receivable balance. ​ The Company believes that no single customer is critical to its business, given its diverse revenue streams and the optionality of its sales outlets, which are primarily associated with base and precious metals. ​ Categorization of Costs and Allocation of Corporate Overhead ​ Critical to understanding the nature of our operations and presentation of our results of operations is the categorization of costs and allocation of corporate overhead. ​ Detailed below are the categorization of costs associated with cost of goods sold and selling, general and administrative expenses: ​ Cost of Goods Sold ​ Cost of goods sold includes the cost of commodities, harvested components from technology, and merchandise sold, as well as inbound and outbound freight costs. ​ Selling, General and Administrative Expenses ​ Selling, general, and administrative expenses include facility costs, asset and commodity processing costs, processing and store-level personnel costs, and waste disposal costs. Selling, general, and administrative expenses also include personnel costs for sourcing business partner relationships and outbound sales, as well as support and corporate overhead costs associated with accounting and finance, legal, risk management, compliance, information systems, logistics, marketing, and any third-party service providers. ​ The Company allocates its corporate overhead to its operating segments, which includes selling, general and administrative expenses, along with depreciation and amortization, other income, interest expense, and income tax expense. ​ See Note 2 – Principles of Consolidation and Nature of Operations for further details. ​ See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details. ​ Shipping and Handling Costs ​ Within the consumer and commercial segments, inbound and outbound freight costs are a component of cost of goods sold. Shipping and handling costs are accounted for as fulfillment costs. ​ 11 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ For the three months ended March 31, 2026 and 2025, the consumer segment’s shipping and handling costs were $ 41,214 and $ 16,686 , respectively. ​ For the three months ended March 31, 2026 and 2025, the commercial segment’s shipping and handling costs were $ 691,400 and $ 991,324 , respectively. ​ Advertising Costs ​ Advertising costs for the consumer and commercial segments are expensed as incurred. ​ For the three months ended March 31, 2026 and 2025, the consumer segment’s advertising costs were $ 162,252 and $ 280,163 , respectively. ​ For the three months ended March 31, 2026 and 2025, the commercial segment’s advertising costs were $ 82,213 and $ 81,135 , 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 we are reasonably certain of renewal at inception or upon a triggering event. ​ 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 of one year or less, the Company has elected not to record lease liabilities and right-of-use assets and instead recognizes the expense associated with lease payments on a straight-line basis. ​ See Note 11 – Leases for further details. ​ Store Pre-Opening Costs ​ The Company may incur significant costs associated with new store openings, including, but not limited to, advertising, employee recruitment, licenses, permits, supplies, training, travel, and general store readiness, and these costs are expensed as incurred. ​ 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 of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. ​ Valuation of Deferred Tax Assets ​ The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company reviews the likelihood that the benefit of the deferred tax assets will be realized and the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. We have not taken a tax position that, if challenged, would have a material effect on the consolidated financial statements or the effective tax rate for the three months ended March 31, 2026 and 2025. 12 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ ​ As of March 31, 2026, the Company had a deferred tax liability of $ 84,021 . As of December 31, 2025, the Company had a deferred tax liability of $ 147,381 . The Company did no t have a valuation allowance as of March 31, 2026, or December 31, 2025. ​ 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. ​ 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 our 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 the exercise of an award, such benefit is reflected in 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 releases such liability upon remittance to the taxing authority, without affecting revenues 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 bear interest at rates that reflect current market rates. None of these instruments are held for trading purposes. ​ Financial instruments that may subject the Company to concentrations of credit risk include cash and cash equivalents, as well as accounts receivable. At times, cash and cash equivalents may exceed federally insured limits. ​ ​ 13 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ Cash and Cash Equivalents ​ The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. ​ Accounts Receivable, Net of Allowances ​ Accounts receivable represent amounts primarily due from customers on products and services. Our allowance for credit losses is primarily determined by an analysis of our accounts receivable aging, using the expected losses methodology. The allowance for credit losses is determined based on historical experience in collecting past-due amounts, the degree of their aging, and current economic factors impacting balances. In addition, specific accounts that are considered and expected to be uncollectible are included in the allowance for credit losses. Accounts receivable are considered delinquent when payment is not made within the contract terms. Accounts receivable are written off when all efforts to collect have been exhausted, and the potential for recovery is considered remote. ​ As of March 31, 2026, and December 31, 2025, the consumer segment’s allowance for credit losses was $ 0 and $ 0 , respectively. ​ As of March 31, 2026, and December 31, 2025, the commercial segment’s allowance for credit losses was $ 544,642 and $ 735,944 , respectively. ​ Inventories ​ Consumer Segment ​ The consumer segment states its inventory at the lower of cost and net realizable value. The cost of inventory is the amount paid for an 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 equals the amount paid for the individual asset or lot of goods, or, in instances where we have an obligation to sell the asset before we pay for it, we use the retail cost method to estimate its value. Inherent in the retail cost method are certain management judgments and estimates that may affect the ending inventory valuation of such assets and the gross profit recognized at the time of sale. We believe that our estimates, used in applying the retail cost method to value such assets, reasonably reflect their cost. The cost of our processed and unprocessed inventory, primarily consisting of base metals and electronic scrap with grades containing precious metals, is determined using 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 three months ended March 31, 2026, 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: ​ ​ ​ ​ Land ​ ​ ​ Indefinite Vehicles 5 to 7 years Buildings 39 years Building improvements Shorter of 15 years or the remaining useful life Furniture and fixtures 5 to 7 years Machinery and equipment 3 to 10 years Leasehold improvements Shorter of 15 years or the remaining lease term ​ 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, relationships, and contracts ​ ​ ​ 10 years Technology (1) 5 years Trademarks/tradenames 10 years (1) Technology consists of domain names, software assets, and enterprise resource planning systems. ​ 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. ​ New Accounting Standards 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. ​ In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 updates the accounting for internal-use software by replacing former stage-based rules with a principles-based framework. Entities will now capitalize costs associated with internal-use software only when management has authorized and committed funding, and it is probable that the project will be completed and the software will be used to perform the intended function. ASU 2025-06 also supersedes website development cost guidance, moving it to ASC 350-40. The guidance is effective for annual and interim periods beginning after December 15, 2027, with early adoption and prospective, retrospective or a modified transition application permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures. ​ 15 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 is intended to improve the navigability of guidance in ASC 270, Interim Reporting, and clarify when it applies. The amendments also provide guidance on which disclosures should be included in interim reporting periods. The guidance is effective for annual and interim periods beginning after December 15, 2027, with early adoption and prospective or retrospective application permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures. ​ In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). ASU 2025-12 addresses stakeholder suggestions regarding the ASC and makes other incremental improvements to U.S. GAAP. The update represents changes to the codification that clarify, correct errors, or make other improvements to a variety of topics that are intended to make it easier to understand and apply. The guidance is effective for annual and interim periods beginning December 15, 2026, with early adoption and prospective or retrospective application permitted. For amendments to Topic 260: Earnings Per Share, shall be applied retrospectively. 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. ​ ​ ​ NOTE 4 — INVENTORIES The following table summarizes the details of the Company’s inventories: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Consumer ​ ​ ​ ​ Trade inventories ​ $ 31,599,737 ​ $ 32,814,426 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 31,599,737 ​ 32,814,426 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Trade inventories ​ 2,411,353 ​ 2,251,539 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,411,353 ​ 2,251,539 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 34,011,090 ​ $ 35,065,965 ​ ​ NOTE 5 — GOODWILL The following table summarizes the details of the Company’s changes in goodwill: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Consumer ​ ​ ​ ​ Opening balance ​ $ — ​ $ — Additions (reductions) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ 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 ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Consumer ​ ​ ​ ​ Land ​ $ 1,824,892 ​ $ 1,824,892 Building and improvements ​ 6,209,412 ​ ​ 6,139,182 Leasehold improvements ​ 2,019,993 ​ ​ 2,019,993 Furniture and fixtures ​ 1,500,280 ​ ​ 1,488,500 Machinery and equipment ​ 1,693,308 ​ ​ 1,693,308 Vehicles ​ 53,318 ​ ​ 53,318 Construction in progress (1) ​ 192,791 ​ ​ 65,561 ​ ​ 13,493,994 ​ ​ 13,284,754 Less: accumulated depreciation ​ ( 4,083,088 ) ​ ​ ( 3,882,909 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 9,410,906 ​ ​ 9,401,845 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ Leasehold improvements ​ 153,292 ​ ​ 160,850 Furniture and fixtures ​ 74,811 ​ ​ 74,811 Machinery and equipment ​ 1,397,238 ​ ​ 1,389,680 Vehicles ​ 195,227 ​ ​ 206,556 ​ ​ 1,820,568 ​ 1,831,897 Less: accumulated depreciation ​ ( 1,419,268 ) ​ ​ ( 1,356,836 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 401,300 ​ 475,061 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Land ​ 1,106,664 ​ ​ 1,106,664 Building and improvements ​ 2,749,983 ​ ​ 2,749,983 Furniture and fixtures ​ 90,234 ​ ​ 84,877 Machinery and equipment ​ 64,290 ​ ​ 64,290 Construction in progress (1) ​ 446,006 ​ ​ 92,702 ​ ​ 4,457,177 ​ 4,098,516 Less: accumulated depreciation ​ ( 416,424 ) ​ ​ ( 391,233 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 4,040,753 ​ 3,707,283 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 13,852,959 ​ $ 13,584,189 (1) As of March 31, 2026 and December 31, 2025, these assets 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Consumer ​ ​ ​ ​ Technology ​ $ 409,896 ​ $ 409,896 Customer lists ​ ​ 13,000 ​ ​ 13,000 Trademarks/tradenames ​ ​ 3,924 ​ ​ 3,924 ​ ​ 426,820 ​ 426,820 Less: accumulated amortization ​ ( 391,351 ) ​ ( 389,025 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 35,469 ​ 37,795 ​ ​ ​ ​ ​ ​ ​ 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 ​ ( 3,664,678 ) ​ ( 3,507,313 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,886,322 ​ 3,043,687 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Technology ​ 512,636 ​ 512,636 ​ ​ 512,636 ​ 512,636 Less: accumulated amortization ​ ( 214,092 ) ​ ( 186,951 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 298,544 ​ 325,685 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,220,335 ​ $ 3,407,167 ​ The following table depicts the Company’s estimated future amortization expense related to intangible assets as of March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Corporate ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ 6,984 ​ 629,448 ​ 81,421 ​ 717,853 2027 ​ 9,312 ​ 629,448 ​ 108,562 ​ 747,322 2028 ​ 8,445 ​ 629,448 ​ 108,561 ​ 746,454 2029 ​ 3,657 ​ 446,212 ​ — ​ 449,869 2030 ​ 1,684 ​ 254,628 ​ — ​ 256,312 Thereafter ​ 5,387 ​ 297,138 ​ — ​ 302,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 35,469 ​ $ 2,886,322 ​ $ 298,544 ​ $ 3,220,335 ​ ​ ​ ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 Consumer ​ ​ ​ ​ Accrued interest ​ $ 5,629 ​ $ 5,594 Payroll ​ 220,830 ​ 169,602 Taxes ​ 162,864 ​ 162,689 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 389,323 ​ 337,885 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Accrued interest ​ 6,688 ​ 7,222 Payroll ​ 216,896 ​ 109,172 Unvouchered inventory payments ​ 1,164,858 ​ 959,340 Taxes ​ ​ 8,239 ​ — Other ​ 2,400 ​ 21,168 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 1,399,081 ​ 1,096,902 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Payroll ​ 540,625 ​ 10,788 Professional fees ​ 89,053 ​ 67,560 Taxes ​ 3,767,790 ​ 1,258,645 Other ​ 15,784 ​ 19,223 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 4,413,252 ​ 1,356,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 6,201,656 ​ $ 2,791,003 ​ ​ NOTE 9 — SEGMENT INFORMATION The CODM uses operating income to evaluate overall business performance, make investment decisions, and allocate resources. The following table depicts the Company’s segment results of operations, including significant expenses that are regularly reviewed by the CODM, for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2026 ​ 2025 ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 81,793,522 ​ $ 16,587,368 ​ $ 98,380,890 $ 36,770,604 ​ $ 11,485,225 ​ $ 48,255,829 Cost of goods sold ​ 72,092,889 ​ 5,667,585 ​ 77,760,474 32,559,701 ​ 3,728,104 ​ 36,287,805 Selling, general and administrative ​ 4,054,875 ​ 4,868,917 ​ 8,923,792 3,887,906 ​ 4,516,356 ​ 8,404,262 Depreciation and amortization ​ 215,100 ​ 270,863 ​ 485,963 180,632 ​ 264,709 ​ 445,341 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 5,430,658 ​ $ 5,780,003 ​ $ 11,210,661 $ 142,365 ​ $ 2,976,056 ​ $ 3,118,421 ​ ​ 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 March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2026 ​ 2025 ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 5,430,658 ​ $ 5,780,003 ​ $ 11,210,661 $ 142,365 ​ $ 2,976,056 ​ $ 3,118,421 Other income ​ 93,181 ​ 77,163 ​ 170,344 849 ​ 204,756 ​ 205,605 Interest expense ​ ( 38,385 ) ​ ( 40,387 ) ​ ( 78,772 ) ( 54,047 ) ​ ( 52,274 ) ​ ( 106,321 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ $ 5,485,454 ​ $ 5,816,779 ​ $ 11,302,233 $ 89,167 ​ $ 3,128,538 ​ $ 3,217,705 ​ Other significant segment items regularly reviewed by the CODM include capital expenditures, which the Company defines as purchases of property and equipment or intangible assets. The following table depicts capital expenditures for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 209,240 ​ $ 268,953 Commercial ​ — ​ — Corporate ​ 358,661 ​ 116,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 567,901 ​ $ 384,987 ​ The following table depicts the Company’s total assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 50,789,367 ​ $ 56,313,243 Commercial ​ 20,848,172 ​ 20,272,552 Corporate ​ 36,331,004 ​ 19,436,952 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 107,968,543 ​ $ 96,022,747 ​ ​ NOTE 10 — REVENUE The following table depicts the Company’s disaggregation of total sales and gross margin for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2026 ​ 2025 ​ Sales ​ ​ ​ Gross Margin ​ ​ ​ Margin ​ Sales ​ ​ ​ Gross Margin ​ ​ ​ Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 81,793,522 ​ $ 9,700,633 11.9 % $ 36,770,604 ​ $ 4,210,903 11.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 16,587,368 ​ 10,919,783 65.8 % 11,485,225 ​ 7,757,121 67.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 98,380,890 ​ $ 20,620,416 21.0 % $ 48,255,829 ​ $ 11,968,024 24.8 % ​ ​ 20 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The following table lists the opening and closing balances of our contract assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts ​ ​ ​ ​ Contract ​ ​ ​ ​ Contract ​ ​ ​ Receivable ​ ​ Assets ​ ​ Liabilities Consumer ​ ​ ​ ​ ​ ​ Opening Balance - 1/1/2025 ​ $ 738,132 ​ — ​ 435,508 Closing Balance - 3/31/2025 ​ 734,362 ​ — ​ 974,185 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ Opening Balance - 1/1/2025 3,646,106 — — Closing Balance - 3/31/2025 4,639,583 — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts ​ ​ ​ ​ Contract ​ ​ ​ ​ Contract ​ ​ ​ Receivable ​ ​ Assets ​ ​ Liabilities Consumer ​ ​ ​ ​ ​ ​ Opening Balance - 1/1/2026 $ 8,404,300 ​ — ​ 1,840,637 Closing Balance - 3/31/2026 ​ 887,121 ​ — ​ 2,035,779 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ Opening Balance - 1/1/2026 2,579,891 — 30,579 Closing Balance - 3/31/2026 2,703,024 — 70,603 ​ The Company has no contract assets, and the contract liabilities are customer deposits, store credit, and gift cards, which are reported within other liabilities in the condensed consolidated balance sheets. ​ ​ 21 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 March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ Leases Consumer ​ ​ 2026 ​ $ 882,063 2027 ​ 961,983 2028 ​ 728,302 2029 ​ 610,411 2030 ​ 281,919 Thereafter ​ 33,076 ​ ​ ​ ​ Total minimum lease payments ​ 3,497,754 Less: imputed interest ​ ( 282,562 ) ​ ​ ​ ​ Sub-total ​ 3,215,192 ​ ​ ​ ​ Commercial ​ ​ 2026 ​ 1,278,127 2027 ​ 1,512,428 2028 ​ 1,535,763 2029 ​ 1,578,575 2030 ​ 1,596,986 Thereafter ​ 550,062 ​ ​ ​ ​ Total minimum lease payments ​ 8,051,941 Less: imputed interest ​ ( 1,015,795 ) ​ ​ ​ ​ Sub-total ​ 7,036,146 ​ ​ ​ ​ Total ​ 10,251,338 ​ ​ ​ ​ Less: current portion ​ 2,359,567 ​ ​ ​ ​ ​ ​ $ 7,891,771 ​ All of the Company’s leased facilities as of March 31, 2026, are non-cancellable. The leases are a combination of triple-net leases, under which the Company pays its proportionate share of common area maintenance, property taxes, and property insurance, and modified-gross leases, under which the Company pays for common area maintenance and property insurance. ​ The following table depicts supplemental cash flow information related to operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ Non-cash activities: right-of-use operating lease assets obtained in exchange for new operating lease liabilities ​ $ 323,973 ​ $ 472,720 ​ ​ ​ ​ ​ ​ ​ ​ ​ 22 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 March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2026 ​ 2025 ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 298,519 ​ $ 467,638 ​ $ 766,157 ​ $ 263,065 ​ $ 339,428 ​ $ 602,493 Variable lease cost ​ 62,796 ​ ​ 154,635 ​ 217,431 ​ 59,659 ​ ​ 145,922 ​ 205,581 Short-term lease cost ​ ​ 1,771 ​ ​ 89,586 ​ ​ 91,357 ​ ​ 30,999 ​ ​ 39,263 ​ ​ 70,262 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 363,086 ​ $ 711,859 ​ $ 1,074,945 ​ $ 353,723 ​ $ 524,613 ​ $ 878,336 ​ As of March 31, 2026, the weighted average remaining lease term and weighted average discount rate for operating leases were 4.4 years and 5.1 %. As of March 31, 2025, the weighted average remaining lease term and weighted average discount rate for operating leases were 3.2 years and 4.0 %. NOTE 12 — BASIC AND DILUTED AVERAGE SHARES The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ 2026 ​ 2025 ​ ​ ​ ​ ​ Basic weighted average shares 25,963,476 25,995,645 Effect of potential dilutive securities — — ​ ​ ​ ​ ​ Diluted weighted average shares 25,963,476 25,995,645 ​ For three months ended March 31, 2026 and 2025, there were no Common Stock options unexercised. For the three months ended March 31, 2026 and 2025, there were no anti-dilutive shares. ​ On March 14, 2023, a stock repurchase program was unanimously approved by the Company’s Board, which gave management authorization to purchase up to 1.0 million shares of the Company’s Common Stock, at a per-share price not to exceed $ 9.00 , on the open market. ​ 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 stock repurchase program expires on March 31, 2028. ​ The following table lists the repurchase of Company shares for the three months ended March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ ​ Average Price ​ ​ ​ Total Price ​ ​ ​ Shares Available Fiscal Period ​ Shares Purchased ​ Paid per Share ​ Paid ​ to Purchase Balance as of January 1, 2026 961,155 ​ $ 4.95 ​ $ 4,757,731 138,845 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1 - 31, 2026 — ​ — ​ — 138,845 February 1 - 28, 2026 — ​ — ​ — 138,845 March 1 - 31, 2026 — ​ — ​ — 138,845 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of March 31, 2026 961,155 ​ $ 4.95 ​ $ 4,757,731 138,845 ​ For the three months ended March 31, 2026, the Company had no share repurchases. 23 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 ​ March 31, ​ ​ ​ December 31, ​ 2026 ​ 2025 Consumer ​ ​ ​ ​ Note payable, FSB (1) ​ $ 2,313,856 ​ $ 2,342,485 Note payable, Truist Bank (3) ​ 752,424 ​ 762,430 Notes payable, TBT (4) ​ 1,468,088 ​ 1,486,229 Note payable, Scottsdale Transaction (5) ​ 12,500 ​ 18,750 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 4,546,868 ​ 4,609,894 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Note payable, FSB (2) ​ 5,249,785 ​ 5,314,741 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,249,785 ​ 5,314,741 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Line of credit, FSB (6) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Sub-total ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Total ​ 9,796,653 ​ 9,924,635 ​ ​ ​ ​ ​ ​ ​ Less: current portion ​ ( 7,688,363 ) ​ ( 7,787,468 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,108,290 ​ $ 2,137,167 (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 July 30, 2021, the consumer segment entered into a $ 1.772 million secured amortizing note payable with Texas Bank and Trust (“TBT”). The note payable bears interest at 3.75 % and matures on July 30, 2031. ​ (5) 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. ​ (6) 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. ​ ​ 24 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The following table depicts the Company’s future principal payments on long-term debt obligations as of March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ ​ Thereafter Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note payable, FSB (1) ​ 2,313,856 ​ - ​ - ​ - ​ - ​ - Note payable, Truist Bank (3) ​ 30,197 ​ 41,716 ​ 43,216 ​ 44,913 ​ 592,381 ​ - Notes payable, TBT (4) ​ 53,156 ​ 74,325 ​ 77,019 ​ 80,099 ​ 83,154 ​ 1,100,336 Note payable, Scottsdale Transaction (5) ​ 12,500 ​ - ​ - ​ - ​ - ​ - ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,409,709 ​ 116,041 ​ 120,235 ​ 125,012 ​ 675,535 ​ 1,100,336 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note payable, FSB (2) ​ 5,249,785 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,249,785 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Line of credit, FSB (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,659,494 ​ $ 116,041 ​ $ 120,235 ​ $ 125,012 ​ $ 675,535 ​ $ 1,100,336 ​ The Company was in compliance with all of its debt obligation covenants for the three months ended March 31, 2026 and 2025. The following table depicts the Company’s future scheduled aggregate principal payments and maturities as of March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scheduled ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal ​ Loan ​ ​ ​ Scheduled Principal Payments and Maturities by Year Payments ​ ​ ​ Maturities ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ 348,183 ​ 7,311,311 ​ 7,659,494 2027 ​ 116,041 ​ — ​ 116,041 2028 ​ 120,235 ​ — ​ 120,235 2029 ​ 125,012 ​ — ​ 125,012 2030 ​ 110,183 ​ 565,352 ​ 675,535 Thereafter ​ 65,531 ​ 1,034,805 ​ 1,100,336 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 885,185 ​ $ 8,911,468 ​ $ 9,796,653 ​ ​ 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 March 31, 2026, no awards have been granted under the 2025 Plan. No stock-based compensation expense was recognized for the three months ended March 31, 2026 and 2025. 25 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ 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, or proceedings, whether individually or in the aggregate, will have a material adverse effect on our 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 months ended March 31, 2026 and 2025. ​ 26 Table of Contents 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 March 31, 2026 (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,” “should,” “could,” “can,” “would,” “believe,” “anticipate,” “project,” “plan,” “expect,” “estimate,” “goal,” “seek,” “ensure,” “potential,” “opportunity,” “intend,” “predict,” “committed,” “likely,” “continue,” “strive,” “aim,” “scheduled,” “focused on,” “long-term,” “future,” “over time,” “ongoing,” “uncertain,” “moving forward,” or “subject to.” 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 and 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 2025 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 months ended March 31, 2026 and 2025. The following discussion and analysis provide information that management believes is relevant to assessing and understanding our financial condition, liquidity, and results of operations. The discussion should be read in conjunction with the Company’s 2025 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 2025 Annual Report. Economic Conditions ​ Impacts of Demand for Safe-Haven Metals ​ While the current market for safe-haven metals has generally led to stronger premiums within our consumer segment, especially for gold and silver, demand for these metals has created industry-wide backlogs and slowed payments from refiners, which the Company has experienced. The impact on working capital is having to pay more to procure inventory, and the delayed conversion of accounts receivable from refiners. While the length of the current cycle and the steps 27 Table of Contents domestic refiners will take to address processing capacity are indeterminate, the Company is closely monitoring its inbound buying practices, cash, inventory levels, and its accounts receivable exposure with its refining customers. The Company believes it has sufficient liquidity to maintain its current buying practices, yet it can adjust its buying programs to reduce exposure should these conditions materially affect its conversion of accounts receivable. Impacts of Government Legislation ​ On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We have evaluated the provisions of the new law and its potential effects on our effective tax rate, results of operations, and financial condition. OBBBA allows businesses to immediately deduct the full cost of qualifying assets in the year they are placed in service, rather than spreading the deduction over several years, and is effective for property acquired and placed in service after January 19, 2025. OBBBA also requires businesses to recognize the effects of tax law changes in the period of enactment, such as remeasuring estimated U.S. deferred tax assets and liabilities. The Company intends to utilize bonus depreciation, effectively reducing taxable income in the respective tax period and the cash deployed to settle such obligations. There was no material impact on the effective tax rate, financial condition, results of operations, or cash flows during the quarter ended March 31, 2026. In future fiscal periods, the impact of OBBBA is contingent on the continued election of bonus depreciation and the amount of qualifying assets acquired by the Company. ​ Impacts of Increases in Interest Rates and Inflation ​ Rising interest rates and inflation, coupled with commodity price risk, mainly associated with fluctuations in the market prices of precious metals and diamonds, could affect consumer discretionary spending. Furthermore, adverse macroeconomic conditions can also impact demand for the resale of personal 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 use its line of credit or seek additional capital. ​ Impacts of Tariffs ​ The U.S. government has recently adopted new approaches to trade policy, announced tariffs on certain foreign goods and certain global tariffs, and signaled the possibility of significant additional tariff increases or tariff expansions. Specifically, under Section 232 of the Trade Expansion Act of 1962, tariffs were imposed on the importation of aluminum, copper, steel, and certain derivative products, but excluded gold and silver. The impact of such tariffs and retaliatory tariffs by other countries continues to evolve and requires regular monitoring and evaluation. The deemed impacts of tariffs on each of our reportable segments are detailed below: ​ Consumer Segment ​ The 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 by maintaining disciplined buying practices to preserve margins. ​ Commercial Segment ​ The commercial segment periodically purchases limited quantities of personal technology assets and replacement parts for resale 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, thereby increasing the Company’s required working capital. The Company mitigates increased working capital requirements by monitoring its inventory position and turnover, maintaining disciplined buying practices, and using optimal domestic or international sales channels to preserve margins. 28 Table of Contents ​ 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, and secondary market bullion. We incorporate recycled diamonds and gemstones into new designs, meaning they were previously set and unset, producing a low-carbon and ethical origin product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items have an enduring quality, enabling them to maintain their beauty and value as they are passed from one owner to another. ​ Commercial Segment ​ Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the ITAD and product returns industry. 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. Our product returns business reintroduces products back into the supply chain, creating another opportunity for the asset to be used. 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. Our processing facilities are capable of managing the expansion of existing relationships and consolidation of acquisition targets within relative geographic proximity into our existing facilities. ​ Results of Operations ​ Comparison of the Three Months Ended March 31, 2026 and 2025 ​ The following table depicts our disaggregated condensed consolidated statements of income for the three months ended March 31, 2026 and 2025: ​ 29 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2026 ​ 2025 ​ ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ % of Sales (1) ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ % of Sales (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 81,793,522 ​ $ 16,587,368 ​ $ 98,380,890 100.0 % $ 36,770,604 ​ $ 11,485,225 ​ $ 48,255,829 100.0 % Cost of goods sold ​ 72,092,889 ​ ​ 5,667,585 ​ 77,760,474 79.0 % 32,559,701 ​ 3,728,104 ​ 36,287,805 75.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ 9,700,633 ​ 10,919,783 ​ 20,620,416 21.0 % 4,210,903 ​ 7,757,121 ​ 11,968,024 24.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 4,054,875 ​ 4,868,917 ​ 8,923,792 9.1 % 3,887,906 ​ 4,516,356 ​ 8,404,262 17.4 % Depreciation and amortization ​ 215,100 ​ 270,863 ​ 485,963 0.5 % 180,632 ​ 264,709 ​ 445,341 0.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 4,269,975 ​ 5,139,780 ​ 9,409,755 9.6 % 4,068,538 ​ 4,781,065 ​ 8,849,603 18.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ 5,430,658 ​ 5,780,003 ​ 11,210,661 11.4 % 142,365 ​ 2,976,056 ​ 3,118,421 6.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ 93,181 ​ 77,163 ​ 170,344 0.2 % 849 ​ 204,756 ​ 205,605 0.4 % Interest expense ​ (38,385) ​ (40,387) ​ (78,772) (0.1) % (54,047) ​ (52,274) ​ (106,321) (0.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 5,485,454 ​ 5,816,779 ​ 11,302,233 11.5 % 89,167 ​ 3,128,538 ​ 3,217,705 6.7 % Income tax expense ​ (1,195,156) ​ (1,267,344) ​ (2,462,500) (2.5) % (20,073) ​ ​ (704,285) ​ (724,358) (1.5) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 4,290,298 ​ $ 4,549,435 ​ $ 8,839,733 9.0 % $ 69,094 ​ $ 2,424,253 ​ $ 2,493,347 5.2 % (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. The individual segments reported the following for the three months ended March 31, 2026 and 2025: ​ Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 98,380,890 ​ $ 48,255,829 ​ $ 50,125,061 103.9 % % of consolidated sales ​ 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 81,793,522 ​ $ 36,770,604 ​ $ 45,022,918 122.4 % % of consumer sales ​ 100.0 % 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 16,587,368 ​ $ 11,485,225 ​ $ 5,102,143 44.4 % % of commercial sales ​ 100.0 % 100.0 % ​ ​ ​ ​ Consolidated ​ Sales increased by $50,125,061, or 103.9%, during the three months ended March 31, 2026, to $98,380,890, as compared to $48,255,829 during the same period in Fiscal 2025. ​ Consumer Segment ​ Sales in the consumer segment increased by $45,022,918, or 122.4%, during the three months ended March 31, 2026, to $81,793,522, as compared to $36,770,604 during the same period in Fiscal 2025. The change was primarily attributed to strong performance across both our retail stores and wholesale verticals, supported by upward movements in gold and silver prices compared with the same period in Fiscal 2025. ​ 30 Table of Contents Commercial Segment ​ Sales in the commercial segment increased by $5,102,143, or 44.4%, during the three months ended March 31, 2026, to $16,587,368, as compared to $11,485,225 during the same period in Fiscal 2025. The change was primarily driven by improved pricing in certain product categories sourced from our ITAD vertical, reflecting current demand conditions and industry supply dynamics, which may not persist. ​ Cost of Goods Sold ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 77,760,474 ​ $ 36,287,805 ​ $ 41,472,669 114.3 % % of consolidated sales ​ 79.0 % 75.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 72,092,889 ​ $ 32,559,701 ​ $ 39,533,188 121.4 % % of consumer sales ​ 88.1 % 88.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 5,667,585 ​ $ 3,728,104 ​ $ 1,939,481 52.0 % % of commercial sales ​ 34.2 % 32.5 % ​ ​ ​ ​ Consolidated ​ Cost of goods sold increased by $41,472,669, or 114.3%, during the three months ended March 31, 2026, to $77,760,474, as compared to $36,287,805 during the same period in Fiscal 2025. ​ Consumer Segment ​ Cost of goods sold in the consumer segment increased by $39,533,188, or 121.4%, during the three months ended March 31, 2026, to $72,092,889, as compared to $32,559,701 during the same period in Fiscal 2025. The change was primarily attributed to higher sales volumes across our retail stores and wholesale verticals, which were also impacted by the upward movement in gold and silver prices. ​ Cost of goods sold as a percentage of sales was 88.1% during the three months ended March 31, 2026, as compared to 88.5% during the three months ended March 31, 2025. The change was primarily attributed to product mix, as our margins associated with wholesale scrap-grade precious metals and bullion were stronger in comparison to the same period in Fiscal 2025. ​ Commercial Segment ​ Cost of goods sold in the commercial segment increased by $1,939,481, or 52.0%, during the three months ended March 31, 2026, to $5,667,585, as compared to $3,728,104 during the same period in Fiscal 2025. The change was primarily the aforementioned impact of our ITAD revenue-share settlements and parity in performance across our other commercial segment verticals. ​ Cost of goods sold as a percentage of sales was 34.2% during the three months ended March 31, 2026, as compared to 32.5% during the three months ended March 31, 2025. The change was primarily attributed to product mix. In the same period in Fiscal 2025, we settled a large, high-margin ITAD revenue-share transaction and experienced a higher percentage of service-based revenue. ​ ​ 31 Table of Contents Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 20,620,416 ​ $ 11,968,024 ​ $ 8,652,392 72.3 % % of consolidated sales ​ 21.0 % 24.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 9,700,633 ​ $ 4,210,903 ​ $ 5,489,730 130.4 % % of consumer sales ​ 11.9 % 11.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 10,919,783 ​ $ 7,757,121 ​ $ 3,162,662 40.8 % % of commercial sales ​ 65.8 % 67.5 % ​ ​ ​ ​ Consolidated ​ Gross margin increased by $8,652,392, or 72.3%, during the three months ended March 31, 2026, to $20,620,416, as compared to $11,968,024 during the same period in Fiscal 2025. ​ Consumer Segment ​ Gross margin in the consumer segment increased by $5,489,730, or 130.4%, during the three months ended March 31, 2026, to $9,700,633, as compared to $4,210,903 during the same period in Fiscal 2025. The net impact of the aforementioned increase in sales of $45,022,918 and increase in cost of goods sold of $39,533,188 resulted in the $5,489,730 increase in gross margin. ​ Commercial Segment ​ Gross margin in the commercial segment increased by $3,162,662, or 40.8%, during the three months ended March 31, 2026, to $10,919,783, as compared to $7,757,121 during the same period in Fiscal 2025. The net impact of the aforementioned increase in sales of $5,102,143 and increase in cost of goods sold $1,939,481 resulted in the $3,162,662 increase in gross margin. ​ Selling, General and Administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Change ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 8,923,792 ​ $ 8,404,262 ​ $ 519,530 6.2 % % of consolidated sales ​ 9.1 % 17.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 4,054,875 ​ $ 3,887,906 ​ $ 166,969 4.3 % % of consumer sales ​ 5.0 % 10.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 4,868,917 ​ $ 4,516,356 ​ $ 352,561 7.8 % % of commercial sales ​ 29.4 % 39.3 % ​ ​ ​ ​ Consolidated ​ Selling, general and administrative expense increased by $519,530, or 6.2%, during the three months ended March 31, 2026, to $8,923,792, as compared to $8,404,262 during the same period in Fiscal 2025. ​ Consumer Segment ​ Selling, general and administrative expense in the consumer segment increased by $166,969, or 4.3%, during the three months ended March 31, 2026, to $4,054,875, as compared to $3,887,906 during the same period in Fiscal 2025. The change was primarily attributed to an increase in insurance costs, costs related to a new store that opened in the second 32 Table of Contents quarter of Fiscal 2025 that were not present in the first quarter of Fiscal 2025 results, and variable-processing costs associated with supplies, and an increase in merchant services fees associated with higher transaction volumes. ​ Commercial Segment ​ Selling, general and administrative expense in the commercial segment increased by $352,561, or 7.8%, during the three months ended March 31, 2026, to $4,868,917, as compared to $4,516,356 during the same period in Fiscal 2025. The change was primarily attributed to an increase in lease expense associated with lease renewal terms, an increase in variable-processing costs associated with supplies, and an increase in merchant services and online sales fees associated with higher transaction volumes. ​ Depreciation and Amortization ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ Change ​ ​ 2026 ​ ​ ​ 2025 ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 485,963 ​ $ 445,341 ​ $ 40,622 ​ 9.1 % % of consolidated sales ​ 0.5 % 0.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 215,100 ​ $ 180,632 ​ $ 34,468 19.1 % % of consumer sales ​ 0.3 % 0.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 270,863 ​ $ 264,709 ​ $ 6,154 2.3 % % of commercial sales ​ 1.6 % 2.3 % ​ ​ ​ ​ Consolidated ​ Depreciation and amortization expense increased by $40,622, or 9.1%, during the three months ended March 31, 2026, to $485,963, as compared to $445,341 during the same period in Fiscal 2025. ​ Consumer Segment ​ Depreciation and amortization expense in the consumer segment increased by $34,468, or 19.1%, during the three months ended March 31, 2026, to $215,100, as compared to $180,632 during the same period in Fiscal 2025. The change was primarily attributed to the depreciation of assets associated with a new store that came online in the second quarter of Fiscal 2025, which was not present in the first quarter of Fiscal 2025 results. Commercial Segment ​ Depreciation and amortization expense in the commercial segment increased by $6,154, or 2.3%, during the three months ended March 31, 2026, to $270,863, as compared to $264,709 during the same period in Fiscal 2025. There was no material impact from assets capitalized or reaching maturity in each comparative period, and as such, no discussion point. ​ Other Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ Change ​ ​ 2026 ​ ​ ​ 2025 ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 170,344 ​ $ 205,605 ​ $ (35,261) (17.1) % % of consolidated sales ​ 0.2 % 0.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 93,181 ​ $ 849 ​ $ 92,332 10,875.4 % % of consumer sales ​ 0.1 % 0.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 77,163 ​ $ 204,756 ​ $ (127,593) (62.3) % % of commercial sales ​ 0.5 % 1.8 % ​ ​ ​ ​ 33 Table of Contents Consolidated ​ Other income decreased by $35,261, or 17.1%, during the three months ended March 31, 2026, to $170,344, as compared to $205,605 during the same period in Fiscal 2025. ​ Consumer Segment ​ Other income in the consumer segment increased by $92,332, or 10,875.4%, during the three months ended March 31, 2026, to $93,181, as compared to $849 during the same period in Fiscal 2025. The change was primarily attributed to the proportional share of dividend and interest income. In the third quarter of Fiscal 2025, the Company began aggregating excess cash at the corporate level. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. During the quarter, there was greater utilization of cash for working capital, with our earned interest rate also being at a lower rate, which contributed to the unfavorable change at the consolidated level. The impact of dividend and interest income is referenced below. ​ Dividend income comprised $37,048 and $0 of other income during the three months ended March 31, 2026 and 2025, respectively. Interest income comprised $55,740 and $0 of other income during the three months ended March 31, 2026 and 2025, respectively. ​ Commercial Segment ​ Other income in the commercial segment decreased by $127,593, or 62.3%, during the three months ended March 31, 2026, to $77,163, as compared to $204,756 during the same period in Fiscal 2025. The change was primarily attributed to the proportional share of dividend and interest income. In the third quarter of Fiscal 2025, the Company began aggregating excess cash at the corporate level. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. During the quarter, there was greater utilization of cash for working capital, and our earned interest rate was also lower, which contributed to the unfavorable change at the consolidated level. The impact of dividend and interest income is referenced below. ​ Dividend income comprised $43,149 and $54,864 during the three months ended March 31, 2026 and 2025, respectively. Interest income comprised $21,084 and $144,331 of other income during the three months ended March 31, 2026 and 2025, respectively. ​ Interest Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ Change ​ ​ 2026 ​ ​ ​ 2025 ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ (78,772) ​ $ (106,321) ​ $ 27,549 (25.9) % % of consolidated sales ​ (0.1) % (0.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ (38,385) ​ $ (54,047) ​ $ 15,662 (29.0) % % of consumer sales ​ 0.0 % (0.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ (40,387) ​ $ (52,274) ​ $ 11,887 (22.7) % % of commercial sales ​ (0.2) % (0.5) % ​ ​ ​ ​ Consolidated ​ Interest expense decreased by $27,549, or 25.9%, during the three months ended March 31, 2026, to $78,772, as compared to $106,321 during the same period in Fiscal 2025. ​ Consumer Segment ​ Interest expense in the consumer segment decreased by $15,662, or 29.0%, during the three months ended March 31, 2026, to $38,385, as compared to $54,047 during the same period in Fiscal 2025. The change was attributed to debt amortization. ​ 34 Table of Contents Commercial Segment ​ Interest expense in the commercial segment decreased by $11,887, or 22.7%, during the three months ended March 31, 2026, to $40,387, as compared to $52,274 during the same period in Fiscal 2025. The change was attributed to debt amortization. ​ Income Tax Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ Change ​ ​ 2026 ​ ​ ​ 2025 ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ (2,462,500) ​ $ (724,358) ​ $ (1,738,142) 240.0 % % of consolidated sales ​ (2.5) % (1.5) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ (1,195,156) ​ $ (20,073) ​ $ (1,175,083) 5,854.0 % % of consumer sales ​ (1.5) % (0.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ (1,267,344) ​ $ (704,285) ​ $ (563,059) 79.9 % % of commercial sales ​ (7.6) % (6.1) % ​ ​ ​ ​ Consolidated ​ Income tax expense increased by $1,738,142, or 240.0%, during the three months ended March 31, 2026, to $2,462,500, as compared to $724,358 during the same period in Fiscal 2025. The Company has a deferred tax liability reflecting a future obligation to pay taxes. 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 21.8% and 22.5% for the three months ended March 31, 2026 and 2025, 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 case for the Company for the decrease for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. ​ Net Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ Change ​ ​ 2026 ​ ​ ​ 2025 ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 8,839,733 ​ $ 2,493,347 ​ $ 6,346,386 254.5 % % of consolidated sales ​ 9.0 % 5.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 4,290,298 ​ $ 69,094 ​ $ 4,221,204 6,109.4 % % of consumer sales ​ 5.2 % 0.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 4,549,435 ​ $ 2,424,253 ​ $ 2,125,182 87.7 % % of commercial sales ​ 27.4 % 21.1 % ​ ​ ​ ​ Consolidated ​ Net income increased by $6,346,386, or 254.5%, during the three months ended March 31, 2026, to $8,839,733, as compared to $2,493,347 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended March 31, 2026 and 2025 for further details. ​ Consumer Segment ​ Net income increased in the consumer segment by $4,221,204, or 6,109.4%, during the three months ended March 31, 2026, to $4,290,298, as compared to $69,094 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended March 31, 2026 and 2025 for further details. ​ ​ 35 Table of Contents Commercial Segment ​ Net income increased in the commercial segment by $2,125,182, or 87.7%, during the three months ended March 31, 2026, to $4,549,435, as compared to $2,424,253 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended March 31, 2026 and 2025 for further details. ​ Earnings Per Share ​ The following table depicts the Company’s earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ Change ​ ​ 2026 ​ ​ ​ 2025 ​ Amount ​ ​ ​ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ $ 0.34 ​ $ 0.10 ​ $ 0.24 240.0 % ​ Consolidated ​ Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.24, or 240.0%, during the three months ended March 31, 2026 to $0.34, as compared to $0.10 same period in Fiscal 2025. ​ Non-U.S. GAAP Financial Measures ​ In this management discussion and analysis, we use supplemental measures of our financial performance derived from our consolidated financial information that are not presented in our consolidated financial statements prepared in accordance with U.S. GAAP. When evaluated in conjunction with U.S. GAAP financial measures, the Company believes that these non-U.S. GAAP financial measures add meaningful insight into our results of operations, financial condition, liquidity, and ability to meet financial obligations. ​ These non-U.S. GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with U.S. GAAP. Each of these non-U.S. GAAP financial measures is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparing performance among different companies. ​ We have included the definitions of our non-U.S. GAAP financial measures and reconciliations to the most comparable U.S. GAAP financial measures in the following tables below. ​ Adjusted EBITDA and Adjusted EBITDAR ​ Adjusted EBITDA is defined as the sum of (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. Management considers Adjusted EBITDA to be a key financial measure to assess our overall operating performance. ​ Adjusted EBITDAR is defined as (i) Adjusted EBITDA plus (ii) minimum fixed rent expense for properties occupied under operating leases. Management considers Adjusted EBITDAR to be a key financial measure to assess our overall operating performance, excluding the impact of variability in leasing methods and capital structures. ​ These measures are also inputs into the Company’s leverage ratios. ​ The Company’s Adjusted EBITDA and Adjusted EBITDAR are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, “net income” or other financial measures of operating performance calculated in accordance with U.S. GAAP. ​ ​ 36 Table of Contents The following table provides a reconciliation of the Company’s net income to Adjusted EBITDA and Adjusted EBITDAR for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2026 ​ 2025 ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated Adjusted EBITDA Reconciliation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 4,290,298 ​ $ 4,549,435 ​ $ 8,839,733 ​ $ 69,094 ​ $ 2,424,253 ​ $ 2,493,347 Addition (deduction): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 215,100 ​ 270,863 ​ 485,963 ​ 180,632 ​ 264,709 ​ 445,341 Other income ​ (93,181) ​ (77,163) ​ (170,344) ​ (849) ​ (204,756) ​ (205,605) Interest expense ​ 38,385 ​ 40,387 ​ 78,772 ​ 54,047 ​ 52,274 ​ 106,321 Income tax expense ​ 1,195,156 ​ 1,267,344 ​ 2,462,500 ​ 20,073 ​ 704,285 ​ 724,358 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 5,645,758 ​ $ 6,050,866 ​ $ 11,696,624 ​ $ 322,997 ​ $ 3,240,765 ​ $ 3,563,762 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDAR Reconciliation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ $ 5,645,758 ​ $ 6,050,866 ​ $ 11,696,624 ​ $ 322,997 ​ $ 3,240,765 ​ $ 3,563,762 Addition : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rent expense (1) ​ 298,519 ​ 467,638 ​ 766,157 ​ 263,065 ​ 339,428 ​ 602,493 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 5,944,277 ​ $ 6,518,504 ​ $ 12,462,781 ​ $ 586,062 ​ $ 3,580,193 ​ $ 4,166,255 (1) The table below depicts the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable U.S. GAAP financial measure for the three months ended March 31, 2026 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2026 ​ 2025 ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total lease costs, per ASC 842 ​ $ 363,086 ​ $ 711,859 ​ $ 1,074,945 ​ $ 353,723 ​ $ 524,613 ​ $ 878,336 Less: variable lease cost ​ (62,796) ​ (154,635) ​ (217,431) ​ (59,659) ​ (145,922) ​ (205,581) Less: short-term lease cost ​ (1,771) ​ (89,586) ​ (91,357) ​ (30,999) ​ (39,263) ​ (70,262) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 298,519 ​ $ 467,638 ​ $ 766,157 ​ $ 263,065 ​ $ 339,428 ​ $ 602,493 ​ ​ 37 Table of Contents The following table provides a reconciliation of the Company’s net income to Adjusted EBITDA and Adjusted EBITDAR for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Trailing Four Quarters Ended ​ Year Ended ​ ​ ​ ​ June 30, September 30, ​ December 31, ​ March 31, March 31, ​ December 31, ​ ​ 2025 2025 ​ 2025 ​ 2026 2026 ​ 2025 Adjusted EBITDA Reconciliation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 2,752,399 ​ $ 3,356,920 ​ $ 5,994,312 ​ $ 8,839,733 ​ $ 20,943,364 ​ $ 14,596,978 Addition (deduction): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 460,411 ​ 472,524 ​ 488,313 ​ 485,963 ​ 1,907,211 ​ 1,866,589 Other income ​ (394,251) ​ (233,642) ​ (187,431) ​ (170,344) ​ (985,668) ​ (1,020,929) Interest expense ​ 106,228 ​ 105,757 ​ 88,336 ​ 78,772 ​ 379,093 ​ 406,642 Income tax expense ​ 791,069 ​ 972,493 ​ 1,638,320 ​ 2,462,500 ​ 5,864,382 ​ 4,126,240 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,715,856 ​ $ 4,674,052 ​ $ 8,021,850 ​ $ 11,696,624 ​ $ 28,108,382 ​ $ 19,975,520 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDAR Reconciliation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ $ 3,715,856 ​ $ 4,674,052 ​ $ 8,021,850 ​ $ 11,696,624 ​ $ 28,108,382 ​ $ 19,975,520 Addition : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rent expense (1) ​ 605,553 ​ 630,586 ​ 727,648 ​ 766,157 ​ 2,729,944 ​ 2,566,280 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 4,321,409 ​ $ 5,304,638 ​ $ 8,749,498 ​ $ 12,462,781 ​ $ 30,838,326 ​ $ 22,541,800 (1) The table below depicts the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable U.S. GAAP financial measure for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Trailing Four Quarters Ended ​ Year Ended ​ ​ ​ ​ June 30, September 30, ​ December 31, ​ March 31, March 31, ​ December 31, ​ ​ 2025 2025 ​ 2025 ​ 2026 2026 ​ 2025 Total lease costs, per ASC 842 ​ $ 605,553 ​ $ 630,586 ​ $ 727,648 ​ $ 766,157 ​ $ 2,729,944 ​ $ 2,566,280 Less: variable lease cost ​ 215,083 ​ 103,682 ​ 196,266 ​ 217,431 ​ 732,462 ​ 720,612 Less: short-term lease cost ​ 31,191 ​ 37,456 ​ 43,502 ​ 91,357 ​ 203,506 ​ 182,411 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 851,827 ​ $ 771,724 ​ $ 967,416 ​ $ 1,074,945 ​ $ 3,665,912 ​ $ 3,469,303 ​ Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Leverage Ratios ​ The Company’s Debt to Adjusted EBITDA Leverage Ratio is defined as the Company’s (i) Debt Obligations divided by (ii) Adjusted EBITDA. Debt Obligations are defined as the sum of amounts outstanding under notes payable balances. The Company’s Net Debt to Adjusted EBITDA Leverage Ratio is defined as the Company’s (i) Net Debt Obligations divided by (ii) Adjusted EBITDA. Net Debt Obligations are defined as the difference between the Company’s (i) Debt Obligations and (ii) Total Cash. ​ Management considers these financial measures to be helpful in understanding the Company’s ability to service Debt Obligations, excluding, and including the impact of Total Cash available to service such obligations. ​ The Company’s Debt to Adjusted Leverage Ratio and Net Debt to Adjusted EBITDA Leverage Ratio are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, other financial measures utilized to assess our ability to service “notes payable” in accordance with U.S. GAAP. The Company considers the Debt to Net Income Leverage Ratio, defined as (i) Debt Obligations divided by (ii) net income, to be the representative financial measure of our ability to service “notes payable” utilizing U.S. GAAP-derived financial statement balances and is incorporated into the presentation below. ​ 38 Table of Contents The following table reconciles components of the Debt to Adjusted EBITDA Leverage Ratio and Net Debt to Adjusted EBITDA Leverage Ratio for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ Debt Obligations (a) $ 9,796,653 ​ $ 9,924,635 ​ Total Cash ​ (38,615,405) ​ (18,154,849) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Debt Obligations (b) $ (28,818,752) ​ $ (8,230,214) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (1) (c) $ 20,943,364 ​ $ 14,596,978 ​ Adjusted EBITDA (1) (d) $ 28,108,382 ​ $ 19,975,520 ​ ​ ​ ​ ​ ​ ​ ​ ​ Leverage Ratios ​ ​ ​ ​ ​ ​ ​ Debt to Net Income Leverage: (a) divided by (c) ​ ​ 0.47 x ​ 0.68 x ​ ​ ​ ​ ​ ​ ​ ​ Debt to Adjusted EBITDA Leverage: (a) divided by (d) ​ ​ 0.35 x ​ 0.50 x Net Debt to Adjusted EBITDA Leverage: (b) divided by (d) ​ ​ (1.03) x ​ (0.41) x (1) The presentation of net income and Adjusted EBITDA for March 31, 2026, represents the total amount of net income and Adjusted EBITDA for the trailing four quarters ended March 31, 2026. ​ Adjusted Debt to Adjusted EBITDAR Leverage and Adjusted Net Debt to Adjusted EBITDAR Leverage Ratios ​ The Company’s Adjusted Debt to Adjusted EBITDAR Leverage Ratio is defined as the Company’s (i) Adjusted Debt Obligations divided by (ii) Adjusted EBITDAR. Adjusted Debt Obligations are defined as the sum of the Company’s (i) Debt Obligations and (ii) operating lease liabilities. ​ The Company’s Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio is defined as the Company’s (i) Adjusted Net Debt Obligations divided by (ii) Adjusted EBITDAR. Adjusted Net Debt Obligations are defined as the difference between the Company’s (i) Adjusted Debt Obligations and (ii) Total Cash. ​ Management considers these financial measures to be helpful in understanding the Company’s ability to service debt and operating lease obligations, excluding and including the impact of Total Cash available to service such obligations. ​ The Company’s Adjusted Debt to Adjusted EBITDAR Leverage Ratio and Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, other financial measures utilized to assess our ability to service “notes payable” and “operating lease liabilities” in accordance with U.S. GAAP. The Company considers the Adjusted Debt to Net Income Leverage Ratio, defined as the sum of (i) Debt Obligations and (ii) operating lease liabilities divided by (iii) net income, to be the representative financial measure of our ability to service “notes payable” and “operating leases” utilizing U.S. GAAP-derived financial statement balances and is incorporated into the presentation below. ​ ​ 39 Table of Contents The following table reconciles components of the Adjusted Debt to Adjusted EBITDAR Leverage Ratio and Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ Debt Obligations ​ $ 9,796,653 ​ $ 9,924,635 ​ Operating lease liabilities ​ 10,251,338 ​ 9,933,862 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Debt Obligations (a) $ 20,047,991 ​ $ 19,858,497 ​ Total Cash ​ ​ (38,615,405) ​ ​ (18,154,849) ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Net Debt Obligations (b) $ (18,567,414) ​ $ 1,703,648 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (1) (c) $ 20,943,364 ​ $ 14,596,978 ​ Adjusted EBITDAR (1) (d) $ 30,838,326 ​ $ 22,541,800 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Leverage Ratios ​ ​ ​ ​ ​ ​ ​ Adjusted Debt to Net Income Leverage: (a) divided by (c) ​ ​ 0.96 x ​ 1.36 x ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Debt to Adjusted EBITDAR Leverage: (a) divided by (d) ​ ​ 0.65 x ​ 0.88 x Adjusted Net Debt to Adjusted EBITDAR Leverage: (b) divided by (d) ​ ​ (0.60) x ​ 0.08 x (1) The presentation of net income and Adjusted EBITDAR for March 31, 2026, represents the total amount of net income and Adjusted EBITDAR for the trailing four quarters ended March 31, 2026. ​ 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. ​ The following table depicts the Company’s Net Cash to its comparable U.S. GAAP financial measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ ​ ​ 2026 ​ 2025 ​ ​ ​ ​ ​ ​ ​ Total Cash ​ $ 38,615,405 ​ $ 18,154,849 Less: Debt Obligations ​ (9,796,653) ​ (9,924,635) ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 28,818,752 ​ $ 8,230,214 ​ Free Cash Flow ​ Free Cash Flow is defined as the difference between the Company’s (i) net cash provided by operations (“Operating Cash Flow”) and (ii) Capital Expenditures. ​ Management considers this financial measure to be helpful in understanding the amount of Free Cash Flow that the Company can utilize to meet its financing needs. ​ The Company’s Free Cash Flow is considered a non-U.S. GAAP financial measure and is not calculated in accordance with, or preferable to, “net cash provided by operations” or other financial measures of cash flow available to meet financing needs calculated in accordance with U.S. GAAP. ​ ​ 40 Table of Contents The following table reconciles Free Cash Flow to the comparable U.S. GAAP financial measures for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ Operating Cash Flow ​ $ 21,156,439 ​ $ 1,131,057 Capital Expenditures ​ (567,901) ​ ​ (384,987) ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 20,588,538 ​ $ 746,070 ​ The following table reconciled Free Cash Flow to the comparable U.S. GAAP financial measures for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Trailing Four Quarters Ended ​ Year Ended ​ ​ ​ ​ June 30, September 30, ​ December 31, ​ March 31, March 31, ​ December 31, ​ ​ 2025 2025 ​ 2025 ​ 2026 2026 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Cash Flow ​ $ 2,591,537 ​ $ 2,403,744 ​ $ 4,064,302 ​ $ 21,156,439 ​ $ 30,216,022 ​ $ 2,580,794 Capital Expenditures ​ (497,172) ​ (205,963) ​ (2,670,282) ​ (567,901) ​ (3,941,318) ​ (1,251,146) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,094,365 ​ $ 2,197,781 ​ $ 1,394,020 ​ $ 20,588,538 ​ $ 26,274,704 ​ $ 1,329,648 ​ Performance Metrics ​ In addition to non-U.S. GAAP financial measures, management utilizes certain performance metrics to assess its operations. A key performance metric that is calculated consistently across our reportable segments is the Inventory Turnover Ratio. As a purveyor of recommerce assets and recycling-grade base and precious metals, our ability to acquire inventory with appropriate margin, turn over our inventory, and redeploy sale proceeds is critical to our success. Appropriate inventory turns also reduce our exposure to changing consumer preferences and commodity market volatility. ​ The Company defines its Inventory Turnover Ratio as (i) cost of goods sold less shipping and handling costs divided by (ii) Average Inventory. The Company excludes shipping and handling costs in the definition of Inventory Turnover. ​ The Company defines Average Inventory as 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. When evaluated in conjunction with our consolidated financial statements, the Company believes that these performance metrics provide meaningful insight into our results of operations, financial condition, and ability to meet financial obligations. ​ These performance metrics should not be considered a substitute for, nor superior to, our financial results. These performance metrics are not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparing performance among different companies. ​ ​ 41 Table of Contents The following table reconciles the components of the Company’s Inventory Turnover for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Trailing Four Quarters Ended ​ Year Ended ​ ​ ​ ​ June 30, September 30, ​ December 31, ​ March 31, March 31, ​ December 31, ​ ​ 2025 2025 ​ 2025 ​ 2026 2026 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold (a) $ 42,488,911 ​ $ 44,321,480 ​ $ 63,998,172 ​ $ 77,760,474 ​ $ 228,569,037 ​ $ 187,096,369 ​ Less: shipping and handling costs (b) (940,397) ​ (1,000,737) ​ (1,023,888) ​ (732,614) ​ (3,697,636) ​ (3,973,033) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) $ 41,548,514 ​ $ 43,320,743 ​ $ 62,974,284 ​ $ 77,027,860 ​ $ 224,871,401 ​ $ 183,123,336 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning inventory (d) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 26,124,092 ​ $ 25,705,524 ​ Ending inventory (e) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 34,011,090 ​ ​ 35,065,965 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Inventory: (d) plus (e) divided by 2 (f) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 30,067,591 ​ $ 30,385,745 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory Turnover Ratio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory Turnover: (c) divided by (f) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7.48 x ​ 6.03 x ​ The following table reconciles the components of the Consumer and Commercial segment’s Inventory Turnover for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025: ​ Consumer Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Trailing Four Quarters Ended ​ Year Ended ​ ​ ​ ​ June 30, September 30, ​ December 31, ​ March 31, March 31, ​ December 31, ​ ​ 2025 2025 ​ 2025 ​ 2026 2026 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold (a) $ 38,515,773 ​ $ 39,866,966 ​ $ 58,850,849 ​ $ 72,092,889 ​ $ 209,326,477 ​ $ 169,793,289 ​ Less: shipping and handling costs (b) (13,914) ​ (12,819) ​ (24,889) ​ (41,214) ​ (92,836) ​ (68,309) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) $ 38,501,859 ​ $ 39,854,147 ​ $ 58,825,960 ​ $ 72,051,675 ​ $ 209,233,641 ​ $ 169,724,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning inventory (d) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 24,776,023 ​ $ 23,973,333 ​ Ending inventory (e) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 31,599,737 ​ ​ 32,814,426 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Inventory: (d) plus (e) divided by 2 (f) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 28,187,880 ​ $ 28,393,880 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory Turnover Ratio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory Turnover: (c) divided by (f) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 7.42 x ​ 5.98 x ​ ​ 42 Table of Contents Commercial Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Trailing Four Quarters Ended ​ Year Ended ​ ​ ​ ​ June 30, September 30, ​ December 31, ​ March 31, March 31, ​ December 31, ​ ​ 2025 2025 ​ 2025 ​ 2026 2026 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold (a) $ 3,973,138 ​ $ 4,454,514 ​ $ 5,147,323 ​ $ 5,667,585 ​ $ 19,242,560 ​ $ 17,303,080 ​ Less: shipping and handling costs (b) (926,483) ​ (987,918) ​ (998,999) ​ (691,400) ​ (3,604,800) ​ (3,904,724) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) $ 3,046,655 ​ $ 3,466,596 ​ $ 4,148,324 ​ $ 4,976,185 ​ $ 15,637,760 ​ $ 13,398,356 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning inventory (d) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,348,069 ​ $ 1,732,191 ​ Ending inventory (e) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,411,353 ​ ​ 2,251,539 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Inventory: (d) plus (e) divided by 2 (f) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,879,711 ​ $ 1,991,865 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory Turnover Ratio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventory Turnover: (c) divided by (f) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 8.32 x ​ 6.73 x ​ Liquidity and Capital Resources ​ The following table summarizes the Company’s condensed consolidated statement of cash flows for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Change ​ ​ 2026 ​ 2025 ​ Amount ​ % Net cash provided by (used in): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ 21,156,439 ​ $ 1,131,057 ​ $ 20,025,382 1,770.5 % Investing activities ​ (567,901) ​ (382,987) ​ ​ (184,914) 48.3 % Financing activities ​ (127,982) ​ (328,808) ​ 200,826 (61.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase in cash and cash equivalents ​ $ 20,460,556 ​ $ 419,262 ​ $ 20,041,294 4,780.1 % ​ Operating Activities ​ Cash flows provided by operations increased by $20,025,382, or 1,770.5%, during the three months ended March 31, 2026, to $21,156,439, as compared to $1,131,057 during the same period in Fiscal 2025. 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: ● Accounts receivable: a $8,592,287 net decrease primarily attributed to the conversion of accounts receivable to cash in relation to a refining customer within our consumer segment that occurred in the first quarter of Fiscal 2026. ● Inventories: a $1,473,442 net decrease primarily attributed to a reduction in inventory within our consumer segment in the first quarter of Fiscal 2026. ● Prepaid expenses: a $3,472 net increase primarily attributed to commercial segment prepaids resulting from increases in costs of certain service providers, along with inclusion of amortization related to the cost to obtain a contract, which began in the second quarter of Fiscal 2025. ● Other assets: a $172,160 net decrease primarily attributed to an earnest money deposit within our commercial segment that was subsequently returned in the second quarter of Fiscal 2025. ● Accounts payable: a $305,795 net decrease primarily attributed to a greater reduction in accounts payable in the normal with the consumer segment in the first quarter of Fiscal 2026. 43 Table of Contents ● Accrued expenses: a $3,898,437 net increase primarily attributed to our income tax accruals at the corporate level. ● Operating leases: a $204,052 net increase primarily attributed to entering a new lease within our consumer segment in the first quarter of Fiscal 2026 and a lease extension that occurred within our commercial segment in the third quarter of Fiscal 2025. ● Other liabilities: a $300,929 net decrease primarily attributed to our consumer segment, in which there was a lesser increase in customer gift cards during the first quarter of Fiscal 2026. ​ Investing Activities ​ Cash flows (used in) investing activities increased by $184,914, or 48.3%, during the three months ended March 31, 2026, to $567,901, as compared to $382,987 during the same period in Fiscal 2025. The increase in cash (used in) investing activities was primarily attributed to maintenance-related capital improvements to our corporate head office and in relation to the build-out of a new store within our consumer segment. ​ Financing Activities ​ Cash flows (used in) financing activities decreased by $200,826, or 61.1%, during the three months ended March 31, 2026, to $127,982, as compared to $328,808 during the same period in Fiscal 2025. The decrease in cash (used in) financing activities was primarily attributed to normal course debt repayment. ​ Capital Resources ​ Although the Company has access to a line of credit, our primary source of liquidity and capital resources currently consists of cash generated from our operating activities. We do not anticipate needing to fund our operations through the line of credit, and we have no amounts drawn as of March 31, 2026 . 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 ​ The Company continuously monitors capital deployment and primarily funds capital expenditures with cash flow from operating activities. Where appropriate, the Company may use debt financing on select capital projects. When this occurs, the Company further evaluates the project's future cash flows to ensure that the debt tenure and payback period are aligned and that the rate of return is appropriate. As of March 31, 2026, 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 are 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. ITEM 4. CONTROLS AND PROCEDURES ​ Evaluation of Disclosure Controls and Procedures ​ Our management, with the participation of our principal executive officer and our 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 March 31, 2026. 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 allow for timely decisions regarding required disclosure. Based on the 44 Table of Contents evaluation of our disclosure controls and procedures as of March 31, 2026, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective to provide reasonable assurance of the foregoing. ​ We believe, however, that a control system, no matter how well designed and operated, cannot provide absolute assurance of achieving its 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. ​ Changes in Internal Control over Financial Reporting ​ There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting. ​ PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are various claims, lawsuits, and pending actions against the Company arising in the normal course of the Company’s business. It is the opinion of management that the ultimate resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flow. Management is also not aware of any legal proceedings contemplated by government agencies of which the outcome is reasonably likely to have a material adverse effect on the Company’s financial condition, results of operations, or cash flow. ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed under Part I, Item 1A, “Risk Factors” in the Company’s 2025 Annual Report. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES Repurchases ​ The following lists the repurchase of Company shares for the three months ended March 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ ​ ​ ​ ​ ​ ​ Maximum Number ​ ​ as Part of Publicly ​ ​ ​ ​ ​ ​ ​ of Shares that May ​ ​ Announced Plan ​ Average Price ​ Total Price ​ Yet be Purchased Fiscal Period ​ or Program (1) (2) ​ Paid Per Share ($) ​ Paid ​ Under the Plan (1) Balance as of January 1,2026 961,155 ​ $ 4.95 ​ $ 4,757,731 138,845 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ January 1 - 31, 2026 — ​ — ​ — 138,845 February 1 - 28, 2026 — ​ — ​ — 138,845 March 1 - 31, 2026 — ​ — ​ — 138,845 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of March 31, 2026 961,155 ​ $ 4.95 ​ $ 4,757,731 138,845 (1) All shares were purchased in open-market transactions through the stock repurchase program unanimously approved by the Board on March 14, 2023, for the repurchase of up to one million shares of the Common Stock. On March 27, 2025, the Board authorized 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. ​ (2) The stock repurchase program was publicly announced on May 3, 2023, and expires March 31, 2028. Repurchases under the stock repurchase program began on May 10, 2023. ​ 45 Table of Contents The timing and amount of any Common Stock repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable ITEM 4. MINE SAFETY DISCLOSURES Not applicable ITEM 5. OTHER INFORMATION N o n e ​ 46 Table of Contents ITEM 6. EXHIBITS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exhibit Number ​ ​ Description ​ Filed Herein ​ Incorporated by Reference ​ Form ​ Date Filed with SEC ​ Exhibit Number 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 ​ ​ ​ ​ ​ ​ ​ ​ 101.INS ​ XBRL Instance Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.SCH ​ XBRL Taxonomy Extension Schema Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.CAL ​ XBRL Taxonomy Calculation Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.DEF ​ XBRL Taxonomy Definition Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.LAB ​ XBRL Taxonomy Label Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.PRE ​ XBRL Taxonomy Presentation Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 104* ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 47 Table of Contents SIGNATURE Pursuant to the requirements 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) ​ ​ ​ ​ Date: May 6, 2026 ​ ​ /s/ JOHN G. DELUCA ​ ​ ​ John G. DeLuca ​ ​ ​ Chief Financial Officer (Principal Accounting and Financial Officer) ​ ​ ​ ​ 48 Table of Contents G GLOSSARY OF DEFINED TERMS ​ The following definitions apply to terms used in this document: ​ ​ 2025 Annual Report Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 18, 2026 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. ASC Accounting Standards Codification ASU Accounting Standards Update ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ASU 2025-06 Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements ASU 2025-12 Codification Improvements 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. 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. Envela Envela Corporation, a Nevada corporation, and its subsidiaries Exchange Act Securities Exchange Act of 1934 Financial Statements The Related Condensed Consolidated Statements of Income, Stockholders’ Equity, and Cash Flows 49 Table of Contents Fiscal 2025 Fiscal year ended December 31, 2025 Form 10-K Form 10-K for the fiscal year ended December 31, 2025 Form 10-Q Form 10-Q for the three months ended March 31, 2026 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 Inventory Turnover Ratio The Inventory Turnover Ratio represents the (i) cost of goods sold less shipping and handling costs divided by (ii) Average Inventory. IT Information Technology ITAD Information Technology Asset Disposition 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. 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 SEC U.S. Securities and Exchange Commission SOW Scope of Work TBT Texas Bank and 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. U.S. United States of America U.S. Dollar $ U.S. GAAP United States Generally Accepted Accounting Principles ​ ​ ​ ​ 50