Envela Corp 10-Q

ITEM 1: FINANCIAL STATEMENTS ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, (Unaudited) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Sales ​ $ 56,774,641 ​ $ 54,876,833 ​ $ 155,155,531 ​ $ 103,132,662 Cost of goods sold ​ 43,396,809 ​ 42,488,910 ​ 121,157,283 ​ 78,776,715 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ 13,377,832 ​ 12,387,923 ​ 33,998,248 ​ 24,355,947 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 7,778,113 ​ 8,672,067 ​ 16,701,905 ​ 17,076,329 Depreciation and amortization ​ 497,263 ​ 460,411 ​ 983,226 ​ 905,752 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ 8,275,376 ​ 9,132,478 ​ 17,685,131 ​ 17,982,081 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ 5,102,456 ​ 3,255,445 ​ 16,313,117 ​ 6,373,866 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ Other income ​ 324,363 ​ 394,251 ​ 494,707 ​ 599,856 Interest expense ​ ( 78,647 ) ​ ( 106,228 ) ​ ( 157,419 ) ​ ( 212,549 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 5,348,172 ​ 3,543,468 ​ 16,650,405 ​ 6,761,173 Income tax expense ​ ( 1,173,986 ) ​ ( 791,069 ) ​ ( 3,636,486 ) ​ ( 1,515,427 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 4,174,186 ​ $ 2,752,399 ​ $ 13,013,919 ​ $ 5,245,746 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 0.16 ​ $ 0.11 ​ $ 0.50 ​ $ 0.20 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 0.16 ​ $ 0.11 ​ $ 0.50 ​ $ 0.20 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 25,963,476 ​ 25,991,979 ​ 25,963,476 ​ 25,993,802 Diluted ​ 25,963,476 ​ 25,991,979 ​ 25,963,476 ​ 25,993,802 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 4 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 Assets ​ (Unaudited) ​ ​ ​ Current assets: ​ ​ ​ ​ Cash and cash equivalents ​ $ 43,441,856 ​ $ 18,154,849 Accounts receivable, net of allowance for credit losses of $527,645 and $735,944 as of June 30, 2026 and December 31, 2025, respectively ​ 3,197,115 ​ 10,984,191 Inventories ​ 29,821,724 ​ 35,065,965 Prepaid expenses ​ 953,860 ​ 1,239,483 Other current assets ​ ​ 162,500 ​ ​ — Total current assets ​ 77,577,055 ​ 65,444,488 ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 14,505,314 ​ 13,584,189 Right-of-use assets from operating leases ​ 9,014,354 ​ 9,720,925 Goodwill ​ 3,621,453 ​ 3,621,453 Intangible assets, net ​ 3,033,499 ​ 3,407,167 Other assets ​ 251,486 ​ 244,525 ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 108,003,161 ​ $ 96,022,747 ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders’ equity ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ Accounts payable ​ $ 2,614,563 ​ $ 4,294,443 Notes payable ​ 7,589,297 ​ 7,787,468 Operating lease liabilities ​ 2,352,798 ​ 1,937,295 Accrued expenses ​ 5,422,852 ​ 2,791,003 Other current liabilities ​ 314,565 ​ 1,871,215 Total current liabilities ​ 18,294,075 ​ 18,681,424 ​ ​ ​ ​ ​ ​ ​ Deferred tax liability ​ 178,796 ​ 147,381 Notes payable, less current portion ​ 2,079,426 ​ 2,137,167 Operating lease liabilities, less current portion ​ 7,376,737 ​ 7,996,567 ​ ​ ​ ​ ​ ​ ​ Total liabilities ​ ​ 27,929,034 ​ ​ 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 June 30, 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 June 30, 2026 and December 31, 2025, respectively ​ ( 4,757,731 ) ​ ( 4,757,731 ) Additional paid-in capital ​ 40,173,000 ​ 40,173,000 Retained earnings ​ 44,389,612 ​ 31,375,693 ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity ​ 80,074,127 ​ 67,060,208 ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 108,003,161 ​ $ 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, (Unaudited) ​ ​ ​ 2026 ​ ​ ​ 2025 Operating activities ​ ​ ​ ​ ​ ​ Net income ​ $ 13,013,919 ​ $ 5,245,746 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 983,226 ​ 905,752 Provision for credit losses ​ ( 205,396 ) ​ 82,366 Deferred taxes ​ 31,415 ​ ( 41,332 ) Non-cash lease expense ​ 1,537,772 ​ 1,208,522 Loss on disposal of equipment ​ ​ — ​ ​ 5,491 Changes in operating assets and liabilities: ​ ​ ​ ​ Accounts receivable ​ 7,992,472 ​ ( 764,047 ) Inventories ​ 5,244,241 ​ ( 1,675,660 ) Prepaid expenses ​ 285,623 ​ ( 292,616 ) Other assets ​ ( 169,461 ) ​ ( 96,649 ) Accounts payable ​ ( 1,679,880 ) ​ ( 19,076 ) Accrued expenses ​ 2,631,849 ​ ( 832,447 ) Operating leases ​ ( 1,035,528 ) ​ ( 1,173,750 ) Other liabilities ​ ( 1,556,650 ) ​ 1,170,294 ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ 27,073,602 ​ 3,722,594 ​ ​ ​ ​ ​ ​ ​ Investing activities ​ ​ ​ ​ Purchase of property and equipment ​ ( 1,530,683 ) ​ ( 831,529 ) Purchase of intangible assets ​ — ​ ( 50,630 ) Proceeds from notes receivable ​ ​ — ​ ​ 2,000 Proceeds from sales of equipment ​ ​ — ​ ​ 650 ​ ​ ​ ​ ​ ​ ​ Net cash (used in) investing activities ​ ( 1,530,683 ) ​ ( 879,509 ) ​ ​ ​ ​ ​ ​ ​ Financing activities ​ ​ ​ ​ Payments on notes payable ​ ( 255,912 ) ​ ( 478,893 ) Purchase of treasury stock ​ ​ — ​ ​ ( 121,326 ) ​ ​ ​ ​ ​ ​ ​ Net cash (used in) financing activities ​ ( 255,912 ) ​ ( 600,219 ) ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents ​ 25,287,007 ​ 2,242,866 Cash and cash equivalents, beginning of period ​ 18,154,849 ​ 20,609,003 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period ​ $ 43,441,856 ​ $ 22,851,869 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures ​ ​ ​ ​ Cash paid during the period for: ​ ​ ​ ​ Interest ​ $ 158,594 ​ $ 218,685 Income Taxes ​ $ 1,708,791 ​ $ 1,732,100 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 6 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Three Months Ended June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of April 1, 2025 ​ 26,924,631 ​ $ 269,246 ​ ( 929,430 ) ​ $ ( 4,571,449 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 19,272,062 ​ $ 55,142,859 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ ​ 2,752,399 ​ ​ 2,752,399 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ ​ — ( 20,163 ) ​ ​ ( 118,700 ) — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 118,700 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2025 ​ 26,924,631 ​ $ 269,246 ​ ( 949,593 ) ​ $ ( 4,690,149 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 22,024,461 ​ $ 57,776,558 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Three Months Ended June 30, 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of April 1, 2026 ​ 26,924,631 ​ $ 269,246 ​ ( 961,155 ) ​ $ ( 4,757,731 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 40,215,426 ​ $ 75,899,941 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ 4,174,186 ​ 4,174,186 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2026 26,924,631 ​ $ 269,246 ( 961,155 ) ​ $ ( 4,757,731 ) — ​ $ — ​ $ 40,173,000 ​ $ 44,389,612 ​ $ 80,074,127 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 7 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Six Months Ended June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of January 1, 2025 ​ 26,924,631 ​ $ 269,246 ​ ( 928,930 ) ​ $ ( 4,568,823 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 16,778,715 ​ $ 52,652,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income — ​ — — ​ — — ​ — ​ — ​ ​ 5,245,746 ​ ​ 5,245,746 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares repurchased — ​ ​ — ( 20,663 ) ​ ​ ( 121,326 ) — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 121,326 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2025 ​ 26,924,631 ​ $ 269,246 ​ ( 949,593 ) ​ $ ( 4,690,149 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 22,024,461 ​ $ 57,776,558 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Treasury Stock ​ Preferred Stock ​ Paid-in ​ Retained ​ Stockholders’ (Unaudited) ​ Shares ​ Amount ​ Shares ​ Amount ​ Shares ​ Amount ​ Capital ​ Earnings ​ Equity Six Months Ended June 30, 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 — ​ — — ​ — — ​ — ​ — ​ ​ 13,013,919 ​ ​ 13,013,919 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of June 30, 2026 ​ 26,924,631 ​ $ 269,246 ​ ( 961,155 ) ​ ​ ( 4,757,731 ) ​ — ​ $ — ​ $ 40,173,000 ​ $ 44,389,612 ​ $ 80,074,127 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 8 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 1 — BASIS OF PRESENTATION ​ These unaudited 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 and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the fiscal year ended December 31, 2026 (“Fiscal 2026”). Management suggests 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 are filed with or furnished to the SEC. The SEC maintains an internet site at www.sec.gov that contains the Company’s filings. 9 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ 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, resulting in a low-carbon, ethically sourced 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 possess enduring quality, enabling them to maintain their beauty and value as they pass 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. ​ 10 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, along with the third-party financing company's promise 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 to 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 return services in accordance with a Scope of Work (“SOW”). Revenue from recycling and product return services 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 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, customers in the consumer and commercial segments 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. ​ 11 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ As of June 30, 2026, and December 31, 2025, the consumer segment’s allowance for returns was $ 11,463 and $ 18,190 , respectively. As of June 30, 2026, and December 31, 2025, the commercial segment’s allowance for returns was $ 54,831 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 six months ended June 30, 2026, two customers aggregated 50.8 % of our sales and represented 0.0 % of our accounts receivable balance. For the six months ended June 30, 2025, two customers aggregated 50.3 % of our sales and represented 19.1 % of our accounts receivable balance. 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, including authenticated high-end luxury goods, secondary-market bullion, and re-marketed technology assets, as well as inbound and outbound freight costs. ​ Selling, General and Administrative Expense ​ Selling, general, and administrative expense includes 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 include selling, general, and administrative expense, depreciation and amortization expense, 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. ​ ​ 12 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ 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. ​ For the three months ended June 30, 2026 and 2025, the consumer segment’s shipping and handling costs were $ 5,900 and $ 13,914 , respectively. For the three months ended June 30, 2026 and 2025, the commercial segment’s shipping and handling costs were $ 906,493 and $ 926,483 , respectively. For the six months ended June 30, 2026 and 2025, the consumer segment’s shipping and handling costs were $ 47,114 and $ 30,600 , respectively. For the six months ended June 30, 2026 and 2025, the commercial segment’s shipping and handling costs were $ 1,597,893 and $ 1,917,808 , respectively. Advertising Costs Advertising costs for the consumer and commercial segments are expensed as incurred. ​ For the three months ended June 30, 2026 and 2025, the consumer segment’s advertising costs were $ 91,967 and $ 290,278 , respectively. For the three months ended June 30, 2026 and 2025, the commercial segment’s advertising costs were $ 46,202 and $ 124,874 , respectively. For the six months ended June 30, 2026 and 2025, the consumer segment’s advertising costs were $ 254,219 and $ 570,440 , respectively. For the six months ended June 30, 2026 and 2025, the commercial segment’s advertising costs were $ 128,415 and $ 206,008 , 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. ​ 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. ​ ​ 13 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ 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 condensed consolidated financial statements or the effective tax rate for the three and six months ended June 30, 2026 and 2025. As of June 30, 2026, the Company had a deferred tax liability of $ 178,796 . 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 June 30, 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. ​ 14 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ 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. ​ 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 June 30, 2026, and December 31, 2025, the consumer segment’s allowance for credit losses was $ 0 and $ 0 , respectively. As of June 30, 2026, and December 31, 2025, the commercial segment’s allowance for credit losses was $ 527,645 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. ​ 15 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ Goodwill Goodwill is not amortized but evaluated for impairment on an annual basis during the fourth quarter of our fiscal year, or earlier if events or circumstances indicate the carrying value may be impaired. There were no triggering events identified during the six months ended June 30, 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. 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 and 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. ​ 16 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ 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): 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. ​ 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 across a variety of topics, 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. ​ 17 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ ​ ​ NOTE 4 — INVENTORIES The following table summarizes the details of the Company’s inventories: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Consumer ​ ​ ​ ​ Trade inventories ​ $ 27,483,645 ​ $ 32,814,426 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 27,483,645 ​ 32,814,426 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Trade inventories ​ 2,338,079 ​ 2,251,539 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,338,079 ​ 2,251,539 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 29,821,724 ​ $ 35,065,965 ​ NOTE 5 — GOODWILL The following table summarizes the details of the Company’s changes in goodwill: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ 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 ​ 18 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 6 — PROPERTY AND EQUIPMENT, NET The following table summarizes the details of the Company’s property and equipment, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Consumer ​ ​ ​ ​ Land ​ $ 1,824,892 ​ $ 1,824,892 Building and improvements ​ 6,209,412 ​ 6,139,182 Leasehold improvements ​ 2,143,310 ​ 2,019,993 Furniture and fixtures ​ 1,640,125 ​ 1,488,500 Machinery and equipment ​ 1,749,826 ​ 1,693,308 Vehicles ​ 53,318 ​ 53,318 Construction in progress (1) ​ 34,438 ​ 65,561 ​ ​ 13,655,321 ​ 13,284,754 Less: accumulated depreciation ​ ( 4,293,622 ) ​ ( 3,882,909 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 9,361,699 ​ 9,401,845 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Leasehold improvements ​ 153,292 ​ 160,850 Furniture and fixtures ​ 74,811 ​ 74,811 Machinery and equipment ​ 1,412,085 ​ 1,389,680 Vehicles ​ 195,227 ​ 206,556 ​ ​ 1,835,415 ​ 1,831,897 Less: accumulated depreciation ​ ( 1,485,805 ) ​ ( 1,356,836 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 349,610 ​ 475,061 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Land ​ 1,106,664 ​ 1,106,664 Building and improvements ​ 3,813,044 ​ 2,749,983 Furniture and fixtures ​ 91,408 ​ 84,877 Machinery and equipment ​ 64,290 ​ 64,290 Construction in progress (1) ​ 168,379 ​ 92,702 ​ ​ 5,243,785 ​ 4,098,516 Less: accumulated depreciation ​ ( 449,780 ) ​ ( 391,233 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 4,794,005 ​ 3,707,283 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 14,505,314 ​ $ 13,584,189 (1) As of June 30, 2026 and December 31, 2025, these assets are being constructed, have not yet been placed into service, and are not yet depreciable. 19 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 7 — INTANGIBLE ASSETS, NET The following table summarizes the details of the Company’s intangible assets, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Consumer ​ ​ ​ ​ Technology ​ $ 409,896 ​ $ 409,896 Customer lists ​ ​ 13,000 ​ ​ 13,000 Trademarks and tradenames ​ ​ 3,924 ​ ​ 3,924 ​ ​ 426,820 ​ 426,820 Less: accumulated amortization ​ ( 393,681 ) ​ ( 389,025 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 33,139 ​ 37,795 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Trademarks and 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 ​ ( 3,822,043 ) ​ ( 3,507,313 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,728,957 ​ 3,043,687 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Technology ​ 512,636 ​ 512,636 ​ ​ 512,636 ​ 512,636 Less: accumulated amortization ​ ( 241,233 ) ​ ( 186,951 ) ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 271,403 ​ 325,685 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 3,033,499 ​ $ 3,407,167 ​ The following table depicts the Company’s estimated future amortization expense related to intangible assets as of June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Corporate ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 $ 4,656 ​ ​ 314,724 ​ 54,280 $ 373,660 2027 ​ 9,312 ​ ​ 629,448 ​ 108,562 ​ 747,322 2028 ​ 8,443 ​ ​ 629,448 ​ 108,561 ​ 746,452 2029 ​ 3,657 ​ ​ 539,916 ​ — ​ 543,573 2030 ​ 1,684 ​ ​ 254,628 ​ — ​ 256,312 Thereafter ​ 5,387 ​ ​ 360,793 ​ ​ — ​ 366,180 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 33,139 ​ $ 2,728,957 ​ $ 271,403 ​ $ 3,033,499 ​ ​ 20 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 8 — ACCRUED EXPENSES The following table summarizes the details of the Company’s accrued expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 Consumer ​ ​ ​ ​ Accrued interest ​ $ 5,037 ​ $ 5,594 Payroll ​ 363,199 ​ 169,602 Taxes ​ 254,074 ​ 162,689 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 622,310 ​ 337,885 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Accrued interest ​ 6,605 ​ 7,222 Payroll ​ 352,602 ​ 109,172 Unvouchered inventory payments ​ 846,898 ​ 959,340 Taxes ​ 16,479 ​ — Other ​ 51,756 ​ 21,168 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 1,274,340 ​ 1,096,902 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Payroll ​ 261,459 ​ 10,788 Professional fees ​ 81,285 ​ 67,560 Taxes ​ 3,156,469 ​ 1,258,645 Other ​ 26,989 ​ 19,223 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 3,526,202 ​ 1,356,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 5,422,852 ​ $ 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 June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ ​ ​ 2026 ​ 2025 ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 44,729,129 ​ $ 12,045,512 ​ $ 56,774,641 $ 43,173,758 ​ $ 11,703,075 ​ $ 54,876,833 Cost of goods sold ​ 39,204,853 ​ 4,191,956 ​ 43,396,809 38,515,772 ​ 3,973,138 ​ 42,488,910 Selling, general and administrative ​ 3,453,499 ​ 4,324,614 ​ 7,778,113 3,735,427 ​ 4,936,640 ​ 8,672,067 Depreciation and amortization ​ 234,065 ​ 263,198 ​ 497,263 195,604 ​ 264,807 ​ 460,411 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 1,836,712 ​ $ 3,265,744 ​ $ 5,102,456 $ 726,955 ​ $ 2,528,490 ​ $ 3,255,445 ​ 21 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The following table depicts the reconciliation of the Company’s segment operating income to income before income taxes for the three months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2026 ​ 2025 ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 1,836,712 ​ $ 3,265,744 ​ $ 5,102,456 $ 726,955 ​ $ 2,528,490 ​ $ 3,255,445 Other income ​ 164,464 ​ 159,899 ​ 324,363 156,158 ​ 238,093 ​ 394,251 Interest expense ​ ( 38,327 ) ​ ( 40,320 ) ​ ( 78,647 ) ( 53,993 ) ​ ( 52,235 ) ​ ( 106,228 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ $ 1,962,849 ​ $ 3,385,323 ​ $ 5,348,172 $ 829,120 ​ $ 2,714,348 ​ $ 3,543,468 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table depicts the Company’s segment results of operations, including significant expenses that are regularly reviewed by the CODM, for the six months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ 2026 ​ 2025 ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ $ 126,522,651 ​ $ 28,632,880 ​ $ 155,155,531 $ 79,944,362 ​ $ 23,188,300 ​ $ 103,132,662 Cost of goods sold ​ 111,297,742 ​ 9,859,541 ​ 121,157,283 71,075,473 ​ 7,701,242 ​ 78,776,715 Selling, general and administrative ​ 7,508,374 ​ 9,193,531 ​ 16,701,905 7,623,333 ​ 9,452,996 ​ 17,076,329 Depreciation and amortization ​ 449,165 ​ 534,061 ​ 983,226 376,236 ​ 529,516 ​ 905,752 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 7,267,370 ​ $ 9,045,747 ​ $ 16,313,117 $ 869,320 ​ $ 5,504,546 ​ $ 6,373,866 ​ 22 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The following table depicts the reconciliation of the Company’s segment operating income to income before income taxes for the six months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2026 ​ 2025 ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income ​ $ 7,267,370 ​ $ 9,045,747 ​ $ 16,313,117 $ 869,320 ​ $ 5,504,546 ​ $ 6,373,866 Other income ​ 257,645 ​ 237,062 ​ 494,707 157,007 ​ 442,849 ​ 599,856 Interest expense ​ ( 76,712 ) ​ ( 80,707 ) ​ ( 157,419 ) ( 108,040 ) ​ ( 104,509 ) ​ ( 212,549 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ $ 7,448,303 ​ $ 9,202,102 ​ $ 16,650,405 $ 918,287 ​ $ 5,842,886 ​ $ 6,761,173 ​ Other significant segment items that are regularly reviewed by the CODM are Capital Expenditures, which the Company defines as any purchases of property and equipment or intangible assets. The following table depicts Capital Expenditures for the three months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 161,328 ​ $ 291,521 Commercial ​ 14,847 ​ 52,271 Corporate ​ 786,607 ​ 153,380 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 962,782 ​ $ 497,172 ​ The following table depicts Capital Expenditures for the six months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 370,568 ​ $ 560,474 Commercial ​ 14,847 ​ 52,271 Corporate ​ 1,145,268 ​ 269,414 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,530,683 ​ $ 882,159 ​ The following table depicts the Company’s total assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ ​ June 30, 2026 ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 47,592,679 ​ $ 56,313,243 Commercial ​ 18,655,947 ​ 20,272,552 Corporate ​ 41,754,535 ​ 19,436,952 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 108,003,161 ​ $ 96,022,747 ​ ​ 23 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 10 — REVENUE The following table depicts the Company’s disaggregation of total sales and gross margin for the three months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2026 ​ 2025 ​ Sales ​ ​ ​ Gross Margin ​ ​ ​ Margin ​ Sales ​ ​ ​ Gross Margin ​ ​ ​ Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 44,729,129 ​ $ 5,524,276 12.4 % $ 43,173,758 ​ $ 4,657,986 10.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 12,045,512 ​ 7,853,556 65.2 % 11,703,075 ​ 7,729,937 66.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 56,774,641 ​ $ 13,377,832 23.6 % $ 54,876,833 ​ $ 12,387,923 22.6 % ​ The following table depicts the Company’s disaggregation of total sales and gross margin for the six months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2026 ​ 2025 ​ ​ ​ ​ Sales ​ ​ ​ Gross Margin ​ ​ ​ Margin ​ Sales ​ ​ ​ Gross Margin ​ ​ ​ Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ $ 126,522,651 ​ $ 15,224,909 12.0 % $ 79,944,362 ​ $ 8,868,889 11.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ 28,632,880 ​ 18,773,339 65.6 % 23,188,300 ​ 15,487,058 66.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 155,155,531 ​ $ 33,998,248 21.9 % $ 103,132,662 ​ $ 24,355,947 23.6 % ​ 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 - 6/30/2025 ​ 1,395,486 ​ — ​ 1,601,699 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ Opening Balance - 1/1/2025 3,646,106 — — Closing Balance - 6/30/2025 3,670,433 — 3,623 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts ​ ​ ​ ​ Contract ​ ​ ​ ​ Contract ​ ​ ​ Receivable ​ ​ Assets ​ ​ Liabilities Consumer ​ ​ ​ ​ ​ ​ Opening Balance - 1/1/2026 $ 8,404,299 $ — $ 1,840,637 Closing Balance - 6/30/2026 ​ 863,155 ​ — ​ 305,499 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ Opening Balance - 1/1/2026 2,579,891 — 30,579 Closing Balance - 6/30/2026 2,333,960 ​ — ​ 9,066 ​ 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. 24 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 11 — LEASES The following table depicts the Company’s future minimum lease payments as of June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ Leases Consumer ​ ​ 2026 ​ $ 586,694 2027 ​ 961,983 2028 ​ 728,302 2029 ​ 610,411 2030 ​ 281,919 Thereafter ​ 33,076 ​ ​ ​ ​ Total minimum lease payments ​ 3,202,385 Less: imputed interest ​ ( 247,350 ) ​ ​ ​ ​ Sub-total ​ 2,955,035 ​ ​ ​ ​ Commercial ​ ​ 2026 ​ 922,941 2027 ​ 1,512,428 2028 ​ 1,535,763 2029 ​ 1,578,575 2030 ​ 1,596,986 Thereafter ​ 550,062 ​ ​ ​ ​ Total minimum lease payments ​ 7,696,756 Less: imputed interest ​ ( 922,256 ) ​ ​ ​ ​ Sub-total ​ 6,774,500 ​ ​ ​ ​ Total ​ 9,729,535 ​ ​ ​ ​ Less: current portion ​ 2,352,798 ​ ​ ​ ​ ​ ​ $ 7,376,737 ​ All of the Company’s leased facilities as of June 30, 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ Non-cash activities: right-of-use operating lease assets obtained in exchange for new operating lease liabilities ​ $ 323,973 ​ $ 951,464 ​ ​ ​ ​ ​ ​ ​ ​ 25 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ The following table depicts the Company’s leasing costs for the three months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ ​ ​ 2026 ​ 2025 ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 304,481 ​ $ 467,134 ​ $ 771,615 ​ $ 281,099 ​ $ 324,454 ​ $ 605,553 Variable lease cost ​ 65,536 ​ ​ 151,371 ​ 216,907 ​ 58,209 ​ ​ 156,874 ​ 215,083 Short-term lease cost ​ ​ 1,566 ​ ​ 7,131 ​ ​ 8,697 ​ ​ — ​ ​ 31,191 ​ ​ 31,191 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 371,583 ​ $ 625,636 ​ $ 997,219 ​ $ 339,308 ​ $ 512,519 ​ $ 851,827 ​ The following table depicts the Company’s leasing costs for the six months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ 2026 ​ 2025 ​ ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ Consumer ​ ​ ​ Commercial ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 603,000 ​ $ 934,772 ​ $ 1,537,772 ​ $ 544,164 ​ $ 663,882 ​ $ 1,208,046 Variable lease cost ​ 128,332 ​ ​ 306,006 ​ 434,338 ​ 117,868 ​ ​ 302,796 ​ 420,664 Short-term lease cost ​ ​ 3,337 ​ ​ 96,717 ​ ​ 100,054 ​ ​ 30,999 ​ ​ 70,454 ​ ​ 101,453 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 734,669 ​ $ 1,337,495 ​ $ 2,072,164 ​ $ 693,031 ​ $ 1,037,132 ​ $ 1,730,163 ​ As of June 30, 2026, the weighted average remaining lease term and weighted average discount rate for operating leases were 4.2 years and 5.2 %. As of June 30, 2025, the weighted average remaining lease term and weighted average discount rate for operating leases were 2.8 years and 4.2 %. NOTE 12 — BASIC AND DILUTED AVERAGE SHARES The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the three months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ June 30, ​ ​ 2026 ​ 2025 ​ ​ ​ ​ ​ Basic weighted average shares 25,963,476 25,991,979 Effect of potential dilutive securities — — ​ ​ ​ ​ ​ Diluted weighted average shares 25,963,476 25,991,979 ​ The following table is a reconciliation of the Company’s basic and diluted weighted average common shares for the six months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 30, ​ ​ 2026 ​ 2025 ​ ​ ​ ​ ​ Basic weighted average shares 25,963,476 25,993,802 Effect of potential dilutive securities — — ​ ​ ​ ​ ​ Diluted weighted average shares 25,963,476 25,993,802 ​ For three and six months ended June 30, 2026 and 2025, there were no Common Stock options unexercised. For the three and six months ended June 30, 2026 and 2025, there were no anti-dilutive shares. 26 Table of Contents ENVELA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ​ NOTE 13 — DEBT The following table summarizes the details of the Company’s long-term debt obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding Balance ​ June 30, ​ ​ ​ December 31, ​ 2026 ​ 2025 Consumer ​ ​ ​ ​ Note payable, FSB (1) ​ $ 2,284,999 ​ $ 2,342,485 Note payable, Truist Bank (3) ​ 742,477 ​ 762,430 Notes payable, TBT (4) ​ 1,450,686 ​ 1,486,229 Note payable, Scottsdale Transaction (5) ​ 6,250 ​ 18,750 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 4,484,412 ​ 4,609,894 ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ Note payable, FSB (2) ​ 5,184,311 ​ 5,314,741 ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,184,311 ​ 5,314,741 ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ Line of credit, FSB (6) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Sub-total ​ — ​ — ​ ​ ​ ​ ​ ​ ​ Total ​ 9,668,723 ​ 9,924,635 ​ ​ ​ ​ ​ ​ ​ Less: current portion ​ ( 7,589,297 ) ​ ( 7,787,468 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,079,426 ​ $ 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 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. 27 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 June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ ​ Thereafter Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note payable, FSB (1) $ 2,284,999 $ — $ — $ — $ — $ — Note payable, Truist Bank (3) ​ 20,251 ​ 41,716 ​ 43,216 ​ 44,913 ​ 592,381 ​ — Notes payable, TBT (4) ​ 35,757 ​ 74,325 ​ 77,019 ​ 80,099 ​ 83,155 ​ 1,100,331 Note payable, Scottsdale Transaction (5) ​ 6,250 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 2,347,257 ​ 116,041 ​ 120,235 ​ 125,012 ​ 675,536 ​ 1,100,331 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note payable, FSB (2) ​ 5,184,311 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ 5,184,311 ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Line of credit, FSB (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sub-total ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,531,568 ​ $ 116,041 ​ $ 120,235 ​ $ 125,012 ​ $ 675,536 ​ $ 1,100,331 ​ The Company was in compliance with all of its debt obligation covenants for the three and six months ended June 30, 2026 and 2025. The following table depicts the Company’s future scheduled aggregate principal payments and maturities as of June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scheduled ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal ​ Loan ​ ​ ​ Scheduled Principal Payments and Maturities by Year Payments ​ ​ ​ Maturities ​ ​ ​ Total 2026 $ 220,256 $ 7,311,312 $ 7,531,568 2027 ​ 116,041 ​ — ​ 116,041 2028 ​ 120,235 ​ — ​ 120,235 2029 ​ 125,012 ​ — ​ 125,012 2030 ​ 110,184 ​ 565,352 ​ 675,536 Thereafter ​ 65,531 ​ 1,034,800 ​ 1,100,331 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 757,259 ​ $ 8,911,464 ​ $ 9,668,723 ​ ​ 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 (the “Board”). As of June 30, 2026 and 2025, no awards have been granted under the 2025 Plan. No stock-based compensation expense was recognized for the three and six months ended June 30, 2026 and 2025. 28 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 and six months ended June 30, 2026 and 2025. ​ ​ ​ ​ ​ 29 Table of Contents