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Item 1. Financial Statements

2026-05-06 compared with 2025-11-05 · 198 added, 295 removed, 378 unchanged (57% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of goods sold

8 unchanged sentences

( 2,462,500 )

( 1,581,162 )

Basic earnings per share:

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowances

Notes receivable

Accounts receivable, net of allowance for credit losses of $544,642 and $735,944 as of March 31, 2026 and December 31, 2025, respectively

Prepaid expenses

Other current assets

Total current assets

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Intangible assets, net

Deferred tax asset

Liabilities and stockholders’ equity

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60,000,000 shares authorized;

26,924,631 shares issued and 25,963,476 shares outstanding as of September 30, 2025;

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

Treasury stock at cost, 961,155 and 928,930 shares, as of September 30, 2025 and December 31, 2024, respectively

Treasury stock at cost, 961,155 and 961,155 shares, as of March 31, 2026 and December 31, 2025, respectively

( 4,757,731 )

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

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

Three Months Ended March 31,

Operating activities

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

2 unchanged sentences

Non-cash lease expense

Loss on disposal of equipment

Changes in operating assets and liabilities:

1 unchanged sentence

( 1,009,842 )

( 5,927,057 )

Prepaid expenses

1 unchanged sentence

Accrued expenses

( 1,265,537 )

Operating leases

( 1,784,927 )

( 1,585,642 )

Other liabilities

Net cash provided by operations

Net cash provided by operating activities

Investing activities

Purchase of property and equipment

( 1,037,491 )

( 2,955,024 )

Purchase of intangible assets

Proceeds from (investment in) notes receivable

Proceeds from sales of equipment

Net cash (used in) investing

( 1,085,472 )

( 3,260,717 )

Proceeds from notes receivable

Net cash (used in) investing activities

Financing activities

Payments on notes payable

( 1,036,547 )

Purchase of treasury stock

( 2,348,995 )

Net cash (used in) financing

( 1,225,455 )

( 3,290,701 )

Net cash (used in) financing activities

Net change in cash and cash equivalents

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Cash paid during the period for:

Noncash investing and financing activities

Scottsdale Transaction measurement period adjustment, addition to intangible assets, reduction to goodwill

Scottsdale Transaction measurement period adjustment, addition to property and equipment, reduction to goodwill

Scottsdale Transaction measurement period adjustment, reduction to notes payable, reduction to goodwill

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

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Stockholders’

Three Months Ended September 30, 2024

Balance as of July 1, 2024

( 3,775,534 )

Shares repurchased

Balance as of September 30, 2024

( 4,504,044 )

Treasury Stock

Preferred Stock

Stockholders’

Three Months Ended September 30, 2025

Balance as of July 1, 2025

( 4,690,149 )

Shares repurchased

Balance as of September 30, 2025

( 4,757,731 )

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

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Treasury Stock

Preferred Stock

Stockholders’

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Balance as of January 1, 2025

1 unchanged sentence

Shares repurchased

( 2,348,995 )

Balance as of September 30, 2024

Balance as of March 31, 2025

( 4,571,449 )

2 unchanged sentences

Stockholders’

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Balance as of January 1, 2026

( 4,757,731 )

Shares repurchased

Balance as of September 30, 2025

Balance as of March 31, 2026

( 4,757,731 )

3 unchanged sentences

NOTE 1 — BASIS OF PRESENTATION

These unaudited condensed consolidated financial statements of Envela Corporation, a Nevada corporation, and its subsidiaries (together with its subsidiaries, the “Company” or “Envela”), included herein have been prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States (“U.S.”) for interim financial information and with the instructions to Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X prescribed by the Securities and Exchange Commission (the “SEC”).

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.

In the opinion of management, all adjustments, which are of a normal and recurring nature except those which have been disclosed elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”), necessary for a fair presentation of the unaudited condensed consolidated financial statements for these periods, have been included.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year ended December 31, 2025 (“Fiscal 2025”).

Management suggests these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“Fiscal 2024”) filed with the SEC on March 26, 2025 (“2024 Annual Report”).

The Company's operations are located within the contiguous U.S.

and its functional and reporting currency is the U.S.

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.

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.

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 are filed with or furnished to the SEC.

The SEC also maintains an internet site at www.sec.gov that contains the Company’s filings.

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

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

Throughout this document, Envela Corporation is referred to as “we,” “us,” “our,” “Envela,” or the “Company.”

Principles of Consolidation

Envela serves as a holding company, conducting its operations via subsidiaries engaged in various businesses and activities within the re-commerce and recycling sectors.

The Company does not have any variable interest entities requiring consolidation.

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.

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The products and services we offer are delivered by our subsidiaries under their distinct brands, rather than directly by Envela itself.

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

Significant business activities within our reportable segments are detailed below:

Consumer Segment

Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, along with secondary market bullion.

We incorporate recycled diamonds and gemstones into our new designs meaning they were previously set and unset, producing a low-carbon and ethical origin product.

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.

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Commercial Segment

Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the Information Technology (“IT”) asset disposition (“ITAD”) industry.

The separated commodities, including metals, plastics, and glass, are sold to downstream processors where they are further processed and reintroduced into new products.

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.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

offers services that manage the entire lifecycle of technology products to ensure data security, regulatory compliance, and environmental sustainability.

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.

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Use of Estimates

The preparation of financial statements in conformity with U.S.

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.

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allowances for credit losses;

the market value of, and demand for, our inventory and the potential outcome of uncertain tax positions that have been recognized on our condensed consolidated financial statements or tax returns.

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.

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 to identify performance obligations for revenue-generating transactions.

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:

(1) identifying the contract with a customer;

(2) identifying the performance obligations in the contract;

(3) determining the transaction price;

(4) allocating the transaction price to the performance obligations in the contract;

and (5) recognizing revenue when the corresponding performance obligation is satisfied.

(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 (i.e., cash and accounts receivable) with wholesale customers is recognized when the merchandise is delivered or at the point of sale for retail customers, and consideration for the transaction has been made either by immediate payment or through a receivable obligation.

For 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 requiring an assay is recognized upon transfer of title, based on the determination of the underlying weight and price of the associated metals.

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.

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Commercial Segment

The commercial segment recognizes refining revenue when our inventory arrives at the destination port and the performance obligation is satisfied by transferring the control of the promised goods that are identified in the customer contract.

The 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 the guidance of ASC 606, an estimate of the variable consideration that we are expected to be entitled to is included in the transaction price stated at the estimated weight and current spot price of the metal.

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

Any adjustment from the resolution of the underlying uncertainty is netted with the settlement due from the original contract.

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.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The commercial segment provides its services according to a Scope of Work (“SOW”).

Revenue from our service offerings is recognized upon completion of the SOW at a predetermined amount based on the number of units processed and a preset price per unit or weight measurement.

The commercial segment provides freight arrangement services related to inbound asset or material movements to our facilities.

Revenue from freight arrangement services is recognized at settlement with our inbound customers, which occurs when the SOW has been completed.

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

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.

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Sales are recorded, net of expected returns.

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

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.

As of September 30, 2025, and December 31, 2024, the consumer segment’s allowance for returns was $ 10,876 and $ 11,942 , respectively.

As of September 30, 2025, and December 31, 2024, the commercial segment’s allowance for returns was $ 43,864 and $ 48,569 , respectively.

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 requiring an assay which are of short duration and settled on comparable terms.

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

Individual customer concentrations are also impacted by each customer’s production schedule, and as such, the Company identifies the most appropriate sales outlet to ensure a timely transaction settlement.

For the nine months ended September 30, 2025, two customers aggregated 51.2 % of our sales and represented 0.0 % of our accounts receivable balance.

For the nine months ended September 30, 2024, two customers aggregated 40.0 % of our sales and represented 0.0 % of our accounts receivable balance.

The Company believes that no single customer is critical to its business as a result of having diverse revenue streams and the optionality of sales outlets primarily associated with base and precious metals.

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.

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, shipping and handling costs are accounted for as fulfillment costs within cost of goods sold.

For the three months ended September 30, 2025 and 2024, the consumer segment’s shipping and handling costs were $ 12,819 and $ 17,223 , respectively.

For the three months ended September 30, 2025 and 2024, the commercial segment’s shipping and handling costs were $ 987,918 and $ 1,128,553 , respectively.

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.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For the nine months ended September 30, 2025 and 2024, the consumer segment’s shipping and handling costs were $ 43,419 and $ 67,013 , respectively.

For the nine months ended September 30, 2025 and 2024, the commercial segment’s shipping and handling costs were $ 2,905,726 and $ 3,716,832 , respectively.

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

The consumer and commercial segment’s advertising costs are expensed as incurred.

For the three months ended September 30, 2025 and 2024, the consumer segment’s advertising costs were $ 294,509 and $ 357,151 , respectively.

For the three months ended September 30, 2025 and 2024, the commercial segment’s advertising costs were $ 102,531 and $ 59,714 , respectively.

For the nine months ended September 30, 2025 and 2024, the consumer segment’s advertising costs were $ 864,949 and $ 930,132 , respectively.

For the nine months ended September 30, 2025 and 2024, the commercial segment’s advertising costs were $ 308,539 and $ 192,691 , respectively.

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.

We determine if an arrangement is a lease at inception.

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Many of our lease agreements contain renewal options;

however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs.

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.

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If we cannot readily determine the discount rate implicit in lease agreements, we utilize our incremental borrowing rate.

For leases one-year or less the Company has elected not to record lease liabilities and right-of use assets and instead recognize the expense associated with the lease payments using the straight-line basis.

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 are accounted for under the asset and liability method prescribed by ASC 740, Income Taxes.

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Deferred tax assets and liabilities are measured using enacted tax rates expected to be applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date.

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’s deferred tax assets include certain future tax benefits.

The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company reviews the likelihood that the benefit of the deferred tax assets will be realized and the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required.

We have not taken a tax position that, if challenged, would have a material effect on the condensed consolidated financial statements or the effective tax rate for the three and nine months ended September 30, 2025 and 2024.

As of September 30, 2025, the Company had a deferred tax liability of $ 237,729 .

As of December 31, 2024, the Company had a deferred tax asset of $ 49,526 .

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

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.

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

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

The Company allocates its corporate expenses to its operating segments, including selling, general and administrative expenses, depreciation and amortization, other income, interest expense, and income tax expense.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details.

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Earnings Per Share

Basic earnings per share of our common stock, par value $ 0.01 per share (our “Common Stock”), is computed by dividing net earnings available to holders of the Common Stock by the weighted average number of shares of Common Stock outstanding for the reporting period.

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.

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The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments, including grants of stock options, based on the fair value of the award at the date of the grant.

In addition, to the extent that the Company receives an excess tax benefit upon exercise of an award, such benefit is reflected as cash flow from financing activities within the condensed consolidated statement of cash flows.

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.

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The Company’s policy is to present taxes collected from customers and remitted to governmental authorities on a net basis.

The Company records the amounts collected as a current liability and relieves such liability upon remittance to the taxing authority without impacting revenue or expenses.

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 have an interest rate that reflects current market rates.

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 potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable.

At times, cash and cash equivalents exceed federally insured limits.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

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

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.

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

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Our allowance for credit losses is primarily determined by an analysis of our accounts receivable aging, using the expected losses methodology.

The allowance for credit losses is determined based on the historical experience of collecting past due amounts, based on the degree of their aging.

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 receivables are considered delinquent when payment has not been made within contract terms.

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 September 30, 2025, and December 31, 2024, the consumer segment’s allowance for credit losses was $ 0 and $ 0 , respectively.

As of September 30, 2025, and December 31, 2024, the commercial segment’s allowance for credit losses was $ 631,547 and $ 433,159 , respectively.

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.

Consumer Segment

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

The cost of inventory is an amount equal to that paid for the individual asset or lot of goods.

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.

4 unchanged sentences

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

The cost of our technology assets is an amount equal to that paid for the individual asset or lot of goods, or, in instances in which we have an obligation to sell the asset before we pay for it, we utilize the retail cost method to estimate its value.

Inherent to the retail cost method are certain management judgments and estimates that may impact the ending inventory valuation of such assets, as well as the gross profit recognized at the time of sale of such assets.

We believe that our estimates related to the application of the retail cost method in valuing such assets reasonably estimates cost.

The cost of our processed and unprocessed inventory, primarily consisting of base metals and electronic scrap with grades laden with precious metals, is determined by utilizing the weighted average cost method.

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.

1 unchanged sentence

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 nine months ended September 30, 2025, requiring an interim goodwill impairment test, and the Company did not record a goodwill impairment charge in any of the periods presented.

There were no triggering events identified during the 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.

2 unchanged sentences

Property and Equipment, Net

Property and equipment are carried at cost less accumulated depreciation and are depreciated on a straight-line basis over the estimated useful lives of the assets;

except for construction in progress which has not yet been placed into service.

Property and equipment are carried at cost less accumulated depreciation and are depreciated on a straight-line basis over the estimated useful lives of the assets, except for construction in progress, which has not yet been placed into service.

The following table depicts the estimated useful lives of our property and equipment asset classes:

Building improvements

Shorter of 15 years or remaining useful life

Shorter of 15 years or the remaining useful life

Furniture and fixtures

2 unchanged sentences

Leasehold improvements

Shorter of 15 years or remaining lease term

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.

3 unchanged sentences

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.

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:

5 unchanged sentences

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

Recent Accounting Pronouncements

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):

2 unchanged sentences

The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers.

The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets.

The guidance is effective for annual and interim periods beginning after December 15, 2025, with early adoption and prospective application permitted.

The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40):

5 unchanged sentences

The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

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.

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.

1 unchanged sentence

The following table summarizes the details of the Company’s inventories:

September 30,

Trade inventories

2 unchanged sentences

The following table summarizes the details of the Company’s changes in goodwill:

September 30,

Opening balance

2 unchanged sentences

Additions (reductions)

The decrease in goodwill of $ 300 thousand for the year ended December 31, 2024, related to measurement period adjustments pertaining to the acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona (the “Scottsdale Transaction”).

ENVELA CORPORATION AND SUBSIDIARIES

2 unchanged sentences

The following table summarizes the details of the Company’s property and equipment, net:

September 30,

Building and improvements

17 unchanged sentences

accumulated depreciation

(1) As of September 30, 2025 and December 31, 2024, these assets are being constructed, have not yet been placed into service, and are not yet depreciable.

(1) As of March 31, 2026 and December 31, 2025, these assets have not yet been placed into service and are not yet depreciable.

ENVELA CORPORATION AND SUBSIDIARIES

2 unchanged sentences

The following table summarizes the details of the Company’s intangible assets, net:

September 30,

Customer lists

Trademarks/tradenames

Assets under development (1)

accumulated amortization

6 unchanged sentences

accumulated amortization

(2) As of September 30, 2025 and December 31, 2024, these intangible assets are under development, have not yet been placed into service, and are not yet amortizable.

The following table depicts the Company’s estimated future amortization expense related to intangible assets as of September 30, 2025:

The following table depicts the Company’s estimated future amortization expense related to intangible assets as of March 31, 2026:

ENVELA CORPORATION AND SUBSIDIARIES

2 unchanged sentences

The following table summarizes the details of the Company’s accrued expenses:

September 30,

Accrued interest

1 unchanged sentence

Unvouchered inventory payments

Accrued interest

Professional fees

NOTE 9 — SEGMENT INFORMATION

The CODM uses operating income to evaluate the performance of the overall business, make investing decisions, and allocate resources.

The following table depicts the Company’s segment results of operations, including significant expenses that are regularly reviewed by the CODM, for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

Cost of goods sold

Selling, general and administrative

Depreciation and amortization

Operating income (loss)

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 September 30, 2025 and 2024:

Three Months Ended September 30,

Operating income (loss)

Interest expense

Income (loss) before income taxes

The following table depicts the Company’s segment results of operations, including significant expenses that are regularly reviewed by the CODM, for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

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,

Cost of goods sold

1 unchanged sentence

Depreciation and amortization

Operating income (loss)

Operating income

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table depicts the reconciliation of the Company’s segment operating income to income before income taxes for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

Operating income (loss)

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,

Operating income

Interest expense

Income (loss) before income taxes

Other significant segment items that are regularly reviewed by the CODM are Capital Expenditures, which the Company defines as any purchases of property and equipment or intangible assets.

The following table depicts Capital Expenditures for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

The following table depicts Capital Expenditures for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

Income before income taxes

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,

The following table depicts the Company’s total assets:

September 30, 2025

March 31, 2026

December 31, 2025

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,

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 10 — REVENUE

The following table depicts the Company’s disaggregation of total sales and gross margin for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

The following table depicts the Company’s disaggregation of total sales and gross margin for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

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

7 unchanged sentences

Closing Balance - 3/31/2026

The Company has no contract assets, and the contract liabilities are customer deposits, store credit, and gift cards, which are reported within other current liabilities in the condensed consolidated balance sheets.

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.

ENVELA CORPORATION AND SUBSIDIARIES

1 unchanged sentence

NOTE 11 — LEASES

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

The following table depicts the Company’s future minimum lease payments as of March 31, 2026:

Total minimum lease payments

4 unchanged sentences

current portion

All of the Company’s leased facilities as of September 30, 2025, are non-cancellable.

The leases are a combination of triple net leases, for which the Company pays its proportionate share of common area maintenance, property taxes, and property insurance, and modified gross leases, for which the Company directly pays for common area maintenance and property insurance.

Lease costs are comprised of a combination of minimum lease payments and variable lease costs.

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:

Nine Months Ended September 30,

Three Months Ended March 31,

Non-cash activities:

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Three Months Ended September 30,

Operating lease cost

Variable lease cost

Short-term lease cost

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

Nine Months Ended September 30,

The following table depicts the Company’s leasing costs for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Operating lease cost

1 unchanged sentence

Short-term lease cost

As of September 30, 2025, the weighted average remaining lease term and weighted average discount rate for operating leases were 4.8 years and 5.1 %.

As of September 30, 2024, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.5 years and 3.8 %.

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 September 30, 2025 and 2024:

The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the three months ended March 31, 2026 and 2025:

Three Months Ended

September 30,

Basic weighted average shares

1 unchanged sentence

Diluted weighted average shares

The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the nine months ended September 30, 2025 and 2024:

Nine Months Ended

September 30,

Basic weighted average shares

Effect of potential dilutive securities

Diluted weighted average shares

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For three and nine months ended September 30, 2025 and 2024, there were 0 and 15 thousand Common Stock options unexercised, respectively.

For the three and nine months ended September 30, 2025 and 2024, there were no anti-dilutive shares.

On March 14, 2023, a stock repurchase program was unanimously approved by the Company’s Board of Directors (the “Board”), which gave management authorization to purchase up to 1.0 million shares of the Company’s stock, at a per-share price not to exceed $ 9.00 , on the open market.

The plan expires on March 31, 2026.

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 following table lists the repurchase of Company shares for the three and nine months ended September 30, 2025:

Total Number of

Average Price

Shares Available

Fiscal Period

Shares Purchased

Paid per Share

Balance as of January 1, 2025

January 1 - 31, 2025

February 1 - 28, 2025

March 1 - 31, 2025

Balance as of March 31, 2025

April 1 - 30, 2025

May 1 - 31, 2025

June 1 - 30, 2025

Balance as of June 30, 2025

July 1 - 31, 2025

August 1 - 31, 2025

September 1 - 30, 2025

Balance as of September 30, 2025

For the three months ended September 30, 2025, the Company repurchased 11,562 shares for $ 67,582 , for an average price of $ 5.85 .

For the nine months ended September 30, 2025, the Company repurchased 32,225 shares for $ 188,908 , for an average price of $ 5.86 .

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table lists the repurchase of Company shares for the three and nine months ended September 30, 2024:

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

9 unchanged sentences

Balance as of March 31, 2026

April 1 - 30, 2024

May 1 - 31, 2024

June 1 - 30, 2024

Balance as of June 30, 2024

July 1 - 31, 2024

August 1 - 31, 2024

September 1 - 30, 2024

Balance as of September 30, 2024

For the three months ended September 30, 2024, the Company repurchased 147,195 shares for $ 728,510 , for an average price of $ 4.95 .

For the nine months ended September 30, 2024, the Company repurchased 500,624 shares for $ 2,348,995 , for an average price of $ 4.69 .

For the three months ended March 31, 2026, the Company had no share repurchases.

ENVELA CORPORATION AND SUBSIDIARIES

3 unchanged sentences

Outstanding Balance

September 30,

Note payable, FSB (1)

3 unchanged sentences

Note payable, FSB (2)

Note payable, Avail Transaction (7)

Line of credit, FSB (6)

Note payable, TBT (9)

current portion

7 unchanged sentences

The note payable bears interest at 3.65 % and matures on July 9, 2030.

(4) On September 14, 2020, the consumer segment entered into a $ 496 thousand secured amortizing note payable with Texas Bank & Trust (“TBT”).

The note payable incurred interest at 3.75 % and matured on September 14, 2025.

(5) On July 30, 2021, the consumer segment entered into a $ 1.772 million secured amortizing note payable with TBT.

(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.

2 unchanged sentences

The note payable’s imputed interest is 3.10 % and matures on September 30, 2026.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(7) On October 29, 2021, the consumer segment entered into a $ 2.000 million secured amortizing note payable in relation to the acquisition of Avail Recovery Solutions, LLC on October 29, 2021 (“Avail Transaction”).

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

(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.

(9) On November 4, 2020, a wholly owned subsidiary of Envela entered into a $ 2.960 million secured amortizing note payable with TBT.

The note payable incurred interest at 3.25 % , matured and was paid off on November 3, 2025.

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

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:

Note payable, FSB (1)

3 unchanged sentences

Note payable, FSB (2)

Note payable, Avail Transaction (7)

Line of credit, FSB (6)

Note payable, TBT (9)

Refer to (1) through (9) below the previous table for descriptions of the Company’s Debt Obligations.

The Company was in compliance with all of its debt obligation covenants for the three and nine months ended September 30, 2025 and 2024.

The following table depicts the Company’s future scheduled aggregate principal payments and maturities as of September 30, 2025:

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 Payments and Maturities by Year

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 14 — STOCK-BASED COMPENSATION

2 unchanged sentences

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 September 30, 2025, no awards have been granted under the 2025 Plan.

In the 2024 comparative period, there was no stock-based compensation activity under any prior plans.

As a result, no stock-based compensation expense was recognized for the three and nine months ended September 30, 2025 and 2024.

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.

ENVELA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 15 — RELATED PARTY TRANSACTIONS

5 unchanged sentences

We review the need to accrue for any loss contingency and establish a liability when, in the opinion of management, it is probable that a matter would result in a liability and the amount of loss, if any, can be reasonably estimated.

We do not believe that the resolution of any currently pending lawsuits, claims, and proceedings, either individually or in the aggregate, will have a material adverse effect on financial position, results of operations, or liquidity.

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 and nine months ended September 30, 2025 and 2024.

There are no loss contingencies subject to reporting for the three months ended March 31, 2026 and 2025.

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

What changed 10-Q

Item 1. Financial Statements