Envela Corp 10-Q

ITEM 5. OTHER INFORMATION N o n e ​ 60 Table of Contents ITEM 6. EXHIBITS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exhibit Number ​ ​ Description ​ Filed Herein ​ Incorporated by Reference ​ Form ​ Date Filed with SEC ​ Exhibit Number 31.1 ​ Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 by John R. Loftus ​ X ​ ​ ​ ​ ​ ​ ​ ​ 31.2 ​ Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 implementing Section 302 of the Sarbanes-Oxley Act of 2002 by John G. DeLuca ​ X ​ ​ ​ ​ ​ ​ ​ ​ 32.1 ​ Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John R. Loftus ​ X ​ ​ ​ ​ ​ ​ ​ ​ 32.2 ​ Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by John G. DeLuca ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.INS ​ XBRL Instance Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.SCH ​ XBRL Taxonomy Extension Schema Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.CAL ​ XBRL Taxonomy Calculation Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.DEF ​ XBRL Taxonomy Definition Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.LAB ​ XBRL Taxonomy Label Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 101.PRE ​ XBRL Taxonomy Presentation Linkbase Document ​ X ​ ​ ​ ​ ​ ​ ​ ​ 104* ​ Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) ​ X ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 61 Table of Contents SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ​ ​ ​ ​ ​ ​ ​ ENVELA CORPORATION ​ ​ ​ (Registrant) ​ ​ ​ ​ Date: August 5, 2026 ​ ​ /s/ JOHN G. DELUCA ​ ​ ​ John G. DeLuca ​ ​ ​ Chief Financial Officer (Principal Accounting and Financial Officer) ​ ​ ​ G ​ 62 Table of Contents GLOSSARY OF DEFINED TERMS ​ The following definitions apply to terms used in this document: ​ ​ 2025 Annual Report Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 18, 2026 2025 Plan 2025 Equity Incentive Plan Adjusted Debt Obligations Adjusted Debt Obligations represents (i) Debt Obligations plus (ii) operating lease liabilities per the Balance Sheet. Adjusted Debt to Adjusted EBITDAR Leverage Ratio The Adjusted Debt to Adjusted EBITDAR Leverage Ratio is a non-U.S. GAAP measure and represents (i) Adjusted Debt Obligations divided by (ii) Adjusted EBITDAR. Adjusted Debt to Net Income Leverage Ratio The Adjusted Debt to Net Income Leverage Ratio is a non-U.S. GAAP measure and represents the sum of (i) Debt Obligations and operating lease liabilities (ii) divided by (iii) Adjusted EBITDAR. Adjusted EBITDA Adjusted EBITDA is a non-U.S. GAAP measure and is defined as Adjusted Earnings Before Interest, Tax, Depreciation, and Amortization and equals (i) net income (loss) of the Company, adjusted for additions (deductions) of (ii) interest expense, (iii) other (income) expense, (iv) income tax expense (benefit), and (v) depreciation and amortization. Adjusted EBITDAR Adjusted EBITDAR is a non-U.S. GAAP measure and equals (i) Adjusted EBITDA plus (ii) minimum fixed rent expense for properties occupied under operating leases. Adjusted Net Debt Obligations Adjusted Net Debt Obligations is a non-U.S. GAAP measure and represents the difference between (i) Adjusted Debt Obligations per the Balance Sheet and (ii) Total Cash. Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio The Adjusted Net Debt to Adjusted EBITDAR Leverage Ratio is a non-U.S. GAAP measure and represents (i) Adjusted Net Debt Obligations divided by (ii) Adjusted EBITDAR. ASC Accounting Standards Codification ASU Accounting Standards Update ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ASU 2025-06 Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements ASU 2025-12 Codification Improvements Average Inventory Average inventory is the mean value of the Company’s inventory over a specific period, calculated by (i) adding the beginning inventory and ending inventory for that period and (ii) dividing by two. Board Board of Directors Business Partner A Business Partner is defined as an entity or person from whom we procure or consign assets and provide disposition or product return services to. Capital Expenditures Capital Expenditures represent the purchase of (i) property and equipment, and (ii) intangible assets. CODM Chief Operating Decision Maker Common Stock The Company's common stock, par value $0.01 per share Company Envela Corporation, a Nevada corporation, and its subsidiaries Customers A Customer is an individual or entity to whom we have sold assets or commodities or provided certain repair services. Debt Obligations Debt Obligations represents the sum of amounts outstanding under notes payable balances per the Balance Sheet. Debt to Adjusted EBITDA Leverage Ratio The Debt to Adjusted EBITDA Leverage Ratio is a non-U.S. GAAP measure and represents (i) Debt Obligations divided by (ii) Adjusted EBITDA. Debt to Net Income Leverage Ratio The Debt to Net Income Leverage Ratio represents the leverage ratio of the Company utilizing the following U.S. GAAP measures: (i) Debt Obligations divided by (ii) Net Income. Envela Envela Corporation, a Nevada corporation, and its subsidiaries Exchange Act Securities Exchange Act of 1934 Financial Statements The Related Condensed Consolidated Statements of Income, Stockholders’ Equity, and Cash Flows 63 Table of Contents Fiscal 2025 Fiscal year ended December 31, 2025 Form 10-K Form 10-K for the fiscal year ended December 31, 2025 Form 10-Q Form 10Q for the three and six months ended June 30, 2026 Free Cash Flow Free Cash Flow is a non-U.S. GAAP measure and represents the difference between the Company’s (i) Operating Cash Flow and (ii) Capital Expenditures. FSB Farmer's State Bank of Oakley, Kansas Inventory Turnover Ratio The Inventory Turnover Ratio represents the (i) cost of goods sold less shipping and handling costs divided by (ii) Average Inventory. IT Information Technology ITAD Information Technology Asset Disposition Net Cash Net Cash is the difference between (i) cash and cash equivalents and (ii) the sum of debt obligations Net Debt Obligations Net Debt Obligations is a non-U.S. GAAP measure and represents the difference between (i) Debt Obligations per the Balance Sheet and (ii) Total Cash. Net Debt to Adjusted EBITDA Leverage Ratio The Net Debt to Adjusted EBITDA Leverage Ratio is a non-U.S. GAAP measure that represents (i) Net Debt Obligations divided by (ii) Adjusted EBITDA. NM Not Meaningful NYSE New York Stock Exchange OBBBA One Big Beautiful Bill Act Operating Cash Flow Operating Cash Flow measures the amount of cash generated from normal business operations during a specific period and is referred to as net cash provided by operations in the Statement of Cash Flows. Rent Expense Minimum fixed rent expense for properties occupied under operating leases Scottsdale Transaction September 12, 2024 purchase agreement relating to the acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona SEC U.S. Securities and Exchange Commission SOW Scope of Work TBT Texas Bank and Trust Total Cash Total Cash represents cash and cash equivalents per the Balance Sheet. Trailing Four Quarters The Trailing Four Quarters ended period is defined as the cumulative total amount of the most recent four consecutive fiscal quarters of financial results for the respective reported balance. U.S. United States of America U.S. Dollar $ U.S. GAAP United States Generally Accepted Accounting Principles ​ ​ ​ ​ ​ 64