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Item 1. Financial Statements

2023-08-02 compared with 2023-05-03 · 172 added, 105 removed, 380 unchanged (42% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of goods sold

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Operating income

Other income (expense), net

Interest expense

11 unchanged sentences

Notes receivable, net of allowances

Deferred tax asset

Current right-of-use assets from operating leases

Prepaid expenses

2 unchanged sentences

Property and equipment, net

Right-of-use assets from operating leases

Intangible assets, net

Operating lease right-of-use assets

Deferred tax asset

Liabilities and stockholders’ equity

2 unchanged sentences

Notes payable

Current operating lease liabilities

Operating lease liabilities

Accrued expenses

2 unchanged sentences

Notes payable, less current portion

Long-term operating lease liabilities, less current portion

Operating lease liabilities, less current portion

Total liabilities

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60,000,000 shares authorized;

26,924,631 shares issued and outstanding

26,924,631 shares issued and

26,897,210 shares outstanding as of June 30, 2023;

26,924,631 shares issued and outstanding as of

December 31, 2022

Treasury stock at cost, 27,421 and 0 shares, as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31,

For the Six Months Ended June 30,

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

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Trade receivables

( 2,762,524 )

( 3,755,662 )

Prepaid expenses

3 unchanged sentences

Net cash provided by operations

Payments from notes receivable

Investment in note receivable

Purchase of property and equipment

Net cash provided by (used in) investing

( 1,300,871 )

Adjustment to the purchase price of the Avail Transaction

Net cash used in investing

Payments on notes payable

Purchase of treasury stock

Payments on line of credit

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months ended March 31, 2022 and 2023

For the Three Months ended June 30, 2022 and 2023

Treasury Stock

Preferred Stock

Stockholders'

Additional Paid-in

Total Stockholders'

Balances at April 1, 2022

$ ( 10,167,704 )

Balances at June 30, 2022

$ ( 6,319,846 )

Treasury Stock

Preferred Stock

Additional Paid-in

Total Stockholders'

Balances at April 1, 2023

Shares repurchased

$ ( 194,820 )

Balances at June 30, 2023

$ ( 194,820 )

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

ENVELA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months ended June 30, 2022 and 2023

Treasury Stock

Preferred Stock

Additional Paid-in

Total Stockholders'

Balances at January 1, 2022

$ ( 12,814,929 )

Balances at March 31, 2022

Balances at June 30, 2022

$ ( 6,319,846 )

Treasury Stock

Preferred Stock

Stockholders'

Additional Paid-in

Total Stockholders'

Balances at January 1, 2023

Balances at March 31, 2023

Shares repurchased

$ ( 194,820 )

Balances at June 30, 2023

$ ( 194,820 )

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

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NOTE 1 — BASIS OF PRESENTATION

These unaudited interim condensed consolidated financial statements of Envela Corproration, 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 in the U.S.

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 accounting principles generally accepted in the 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”).

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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 (this “Form 10-Q”), necessary for a fair presentation of the consolidated financial statements for these interim periods, have been included.

Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 (“fiscal 2023”).

Operating results presented for these interim periods are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 (“fiscal 2023”).

For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“fiscal 2022”) of Envela filed with the SEC on March 16, 2023 (the “2022 Annual Report”).

Contemporaneously with filing this Form 10-Q, we updated our two reportable segments by renaming the ECHG segment the “Commercial” segment and the DGSE segment the “Consumer” segment.

Contemporaneously with filing our Quarterly Report Form 10-Q for the period ending March 31, 2023, we updated our two reportable segments by renaming the ECHG segment the “Commercial” segment and the DGSE segment the “Consumer” segment.

The segment name changes did not result in any change to the composition of the Company’s operations and therefore did not result in any change to the historical results.

Our operations conducted by each of our segments are more specifically described below.

Our operations conducted by each of our segments are more specifically described in the following notes to our condensed consolidated financial statements.

Starting January 1, 2023, expenses previously classified as other expenses related to the Company’s corporate campus overhead have been included in selling, general, and administrative expenses.

Since the presentation of these expenses changed January 1, 2023, management believes the presentation of the 2022 corporate campus overhead should be reclassified to selling, general, and administrative expense for comparison purposes for the three and six months ended June 30, 2022.

The preparation of interim condensed consolidated financial statements in conformity with U.S.

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Our consumer segment primarily buys and resells or recycles luxury hard assets like jewelry, diamonds, gemstones, fine watches, rare coins and related collectibles, precious-metal bullion products, gold, silver and other precious-metals.

We operate seven jewelry stores at both the retail and wholesale levels throughout the United States via its facilities in Texas and South Carolina.

The Company expects to expand soon to Arizona, see Note 16 – Subsequent Events, to these interim condensed consolidated financial statements.

The consumer segment is currently promoting and building their Bullion Express brand into a leading on-line seller of bullion.

We operate seven jewelry stores at both the retail and wholesale levels throughout the United States via its facilities in Texas, South Carolina and Arizona.

The Company purchased a new retail building in Arizona, but has yet to open.

The consumer segment is continuing to promote and build the Bullion Express brand into a leading on-line seller of bullion.

Buying and selling items for their precious-metals content is a major method by which we are marketed.

The consumer segment also offers jewelry repair services, custom-made jewelry and consignment items, and maintains relationships with refiners for precious-metal items that are not appropriate for resale.

We also maintain a presence in the retail market through websites, www.dgse.com , www.cgdeinc.com and www.bullionexpress.com .

Our commercial segment, primarily buys electronic components from business and other organizations, such as school districts, for end-of-life recycling and resale, or to add life to electronic devices by data destruction and refurbishment for reuse.

We also conduct such recycling and resale at the retail level.

We also maintain a presence in retail markets through websites, www.dgse.com , www.cgdeinc.com and www.bullionexpress.com .

Our commercial segment primarily buys electronic components from business and other organizations, such as school districts, for end-of-life recycling and resell, or to add life to electronic devices by data destruction and refurbishment for reuse.

We also recycle and resale electronics at the retail level.

We focus on end-of-life electronics recycling and sustainability and ITAD USA provides IT equipment disposition, including compliance and data sanitization services.

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The carrying amounts reported in the condensed consolidated balance sheets for cash equivalents, trade receivables, prepaid expenses, other current assets, accounts payable, accrued expenses, customer deposits and other liabilities approximate fair value because of the immediate or short-term nature of these financial instruments.

Notes payable and line of credit approximate fair value due to the market interest rate charged.

Notes payable approximate fair value due to the market interest rate charged.

Earnings Per Share

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The Company’s goodwill is related to the commercial segment only and not the entire Company.

The commercial segment has its own, separate financial information to perform goodwill impairment testing at least annually or if events indicate that those assets may be impaired.

As a result of the current market and economic conditions related to surging inflation and the war between Ukraine and Russia, in accordance with step 1 of the guidelines set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 350-20-35-3A, management concluded there were no impairments of goodwill that resulted from those triggering events for the three months ended March 31, 2023.

The commercial segment has its own, separate financial information to perform goodwill impairment testing.

Management will continue to evaluate goodwill for the commercial segment.

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The preliminary goodwill associated with the Avail Transaction was $ 3,491,285 , which was the initial purchase price less the approximate fair value of the net assets purchased.

There have been several adjustments made to goodwill concerning the Avail Transaction during fiscal year 2022.

On May 31, 2022, an additional cash payment was made of $ 216,988 due to certain conditions being met concerning the cash balance upon a certain date.

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There have been no other adjustments or impairment charges to goodwill.

As of March 31, 2023 and December 31, 2022, goodwill as reported in the condensed consolidated balance sheets was $ 3,621,453 .

As of June 30, 2023 and December 31, 2022, goodwill as reported in the condensed consolidated balance sheets was $ 3,621,453 .

Reclassifications

Prior period amounts included in current assets, for both right-of-use assets from operating leases and deferred tax asset, have been reclassified for current period presentation, to be included in non-current assets.

The right-of-use assets from operating leases reclassified for December 31, 2022, amounted to 2.4% of the total assets at $1,683,060.

The deferred tax asset reclassified for December 31, 2022, amounted to 2.0% of the total assets at $1,488,258 .

Recent Accounting Pronouncements

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There were no effects of this standard on our financial position, results of operations or cash flows.

There were no other new accounting standards that had a material impact on the Company’s consolidated financial statements during the three-month period ended March 31, 2023, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of March 31, 2023 that the Company expects to have a material impact on its consolidated financial statements.

There were no other new accounting standards that had a material impact on the Company’s consolidated financial statements during the three and six-month period ended June 30, 2023.

There were no other new accounting standards or pronouncements that were issued but not yet effective as of June 30, 2023 that the Company expects to have a material impact on its consolidated financial statements.

NOTE 4 — INVENTORIES

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accumulated depreciation

On May 4, 2023, DGSE closed the purchase of a new retail building located at 6030 North 19 th Avenue in Phoenix, Arizona for $ 1,231,150 .

The purchase was paid through operating cash flow without the use of borrowed funds.

The building will begin to be depreciated once it is put into use.

NOTE 7 — INTANGIBLE ASSETS

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(3) Intangibles relate to the Avail Transaction on October 29, 2021.

The following table outlines the estimated future amortization expense related to intangible assets held as of March 31, 2023:

2023 (excluding the three months ending March 31, 2023)

The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2023:

2023 (excluding the six months ending June 30, 2023)

NOTE 8— ACCRUED EXPENSES

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Property taxes

Other administrative expenss

Other administrative expenses

Accrued interest

Unvouchered payables - inventory

Material & shipping costs - COGS

Unvouchered payables - inventory/COGS

Other accrued expenses

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Professional fees

Other administrative expenses

Federal Income tax

State income tax

Federal & state Income tax

NOTE 9 — SEGMENT INFORMATION

As stated in Note 1 – Basis of Presentation, we updated our two reportable segments by renaming the ECHG segment to the “Commercial” segment and the DGSE segment to the “Consumer” segment.

The segment name changes did not result in any change to the composition of the Company’s operations and therefore did not result in any change to the historical results.

The segment name changes did not result in any change to the composition of the Company’s operations and therefore did not result in any changes to historical results.

Our operations conducted by each of our segments are more specifically described below.

We determine our business segments based upon an internal reporting structure.

Our financial performance is based on the following segments:

The Company’s financial performance is based on the following segments:

consumer and commercial.

The consumer segment includes Dallas Gold & Silver Exchange, which has six retail stores in the Dallas/Fort Worth Metroplex (“DFW”), and Charleston Gold & Diamond Exchange, which has one retail store in Mt.

The consumer segment includes Dallas Gold & Silver Exchange, which has six operating retail stores in the Dallas/Fort Worth Metroplex (“DFW”), one retail location in Phoenix, Arizona, as stated in a footnote to Note 6 – Property and Equipment, that has not yet opened, and Charleston Gold & Diamond Exchange, which has one retail store in Mt.

Pleasant, South Carolina.

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These five companies are involved in recycling and the reuse of electronic components.

We allocate a portion of certain corporate costs and expenses, including information technology as well as rental income and expenses relating to our corporate headquarters, to our business segments.

A portion of certain corporate costs and expenses is allocated, including information technology as well as rental income and expenses relating to our corporate headquarters, to the business segments.

These income and expenses are included in selling, general and administrative (“SG&A”) expenses, depreciation and amortization, other income, interest expense and income tax expense.

Our management team evaluates each segment and makes decisions about the allocation of resources according to each segment’s profit.

The management team evaluates each segment and makes decisions about the allocation of resources according to each segment’s profit.

Allocation amounts are generally agreed upon by management and may differ from arms-length allocations.

The following separates the consumer and the commercial financial results of operations for the three months ended March 31, 2023 and 2022:

For The Three Months Ended March 31,

$ 36,704,397 $ 11,684,643 $ 48,389,040 $ 35,782,872 $ 11,632,226 $ 47,415,098

The following separates the consumer and the commercial financial results of operations for the three months ended June 30, 2023 and 2022:

For The Three Months Ended June 30,

Cost of goods sold

32,719,429 4,259,709 36,979,138 31,559,410 6,144,654 37,704,064

3,984,968 7,424,934 11,409,902 4,223,462 5,487,572 9,711,034

Selling, general and administrative expenses (1)

2,396,025 5,509,278 7,905,303 2,137,949 4,421,806 6,559,755

Depreciation and amortization

98,134 256,217 354,351 106,963 184,984 291,947

2,494,159 5,765,495 8,259,654 2,244,912 4,606,790 6,851,702

Operating income

1,490,809 1,659,439 3,150,248 1,978,550 880,782 2,859,332

Other income/expense:

Other income (1)

Interest expense

Income before income taxes

Income tax expense

(1) Starting January 1, 2023, expenses previously classified as other expenses related to the Company’s corporate campus overhead have been included in selling, general, and administrative expenses.

The following separates the consumer and the commercial financial results of operations for the six months ended June 30, 2023 and 2022:

For The Six Months Ended June 30,

Cost of goods sold

Selling, general and administrative expenses (1)

Depreciation and amortization

Operating income

Other income/expense:

23,534 187,245 210,779 ( 27,992 ) ( 30,584 ) ( 58,576 )

Other income (1)

Interest expense

59,618 57,446 117,064 61,241 61,998 123,239

Income before income taxes

1,454,725 1,789,238 3,243,963 1,889,317 788,200 2,677,517

Income tax expense

317,841 399,805 717,646 13,177 17,115 30,292

$ 1,136,884 $ 1,389,433 $ 2,526,317 $ 1,876,140 $ 771,085 $ 2,647,225

NOTE 10 — REVENUE RECOGNITION

Accounting Standards Codification (“ASC 606”) provides guidance to identify performance obligations for revenue-generating transactions.

ASC 606 provides guidance to identify performance obligations for revenue-generating transactions.

The initial step is to identify the contract with a customer created with the sales invoice or a repair ticket.

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The final step in the guidance is to recognize revenue as each performance obligation is satisfied.

The following disaggregation of total revenue is listed by sales category and segment for the three months ended March 31, 2023 and 2022:

Three Months Ended March 31,

For the consumer segment, revenue for monetary transactions (i.e., cash and receivables) with dealers and the retail public are recognized when the merchandise is delivered, and payment has been made either by immediate payment or through a receivable obligation at one of our over-the-counter retail stores.

The following disaggregation of total revenue is listed by sales category and segment for the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

The following disaggregation of total revenue is listed by sales category and segment for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

For the consumer segment, revenue for monetary transactions (i.e., cash and receivables) with wholesale dealers and the retail public are recognized when the merchandise is delivered, and payment has been made either by immediate payment or through a receivable obligation at one of our over-the-counter retail stores.

Revenue is recognized upon the shipment of goods when retail and wholesale customers have fulfilled their obligation to pay, or promise to pay, through e-commerce or phone sales.

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Revenue is recognized from the sale once the performance obligation is satisfied.

In limited circumstances, merchandise is exchanged for similar merchandise and/or monetary consideration with both dealers and retail customers, for which revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 845, Nonmonetary Transactions.

When merchandise is exchanged for similar merchandise and there is no monetary component to the exchange, there is no revenue recognized.

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Returns are accounted for as a reversal of the original transaction, with the effect of reducing revenues, and cost of sales, and returning the merchandise to inventory.

DGSE has established an allowance for estimated returns based on our review of historical returns experience and reduces our reported revenues and cost of sales accordingly.

For the three months ended March 31, 2023 and 2022, our allowance for returns remained the same at approximately $ 28,000 for both years.

A significant amount of revenue stems from sales to two precious metal partners.

One partner constitutes 24.5%, and the second partner constitutes 23.7%, of the revenues for the three months ended March 31, 2023.

The consumer segment has established an allowance for estimated returns based on our review of historical returns experience and reduces our reported revenues and cost of sales accordingly.

For the three and six months ended June 30, 2023 and 2022, the allowance for returns remained the same at approximately $ 28,000 .

A significant amount of revenue stems from sales to two precious metal refining and bullion partners.

One partner constitutes 24.5% and 28.9% of the revenues for the three and six months ended June 30, 2023, respectively.

The second partner constitutes 23.7% and 10.4%, of the revenues for the three and six months ended June 30, 2023, respectively.

However, the Company believes that the products it sells is marketable to numerous sources at competitive prices.

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

The consumer segment had no allowance for doubtful accounts balance as of March 31, 2023 and December 31, 2022.

The consumer segment had no allowance for doubtful accounts balance as of June 30, 2023 and December 31, 2022.

Some of commercial segment’s customers are on payment terms, and although low risk, occasionally the need may arise to record an allowance for receivables that are deemed high risk using the new expected loss methodology.

The commercial segment’s allowance for doubtful accounts, as of March 31, 2023 and December 31, 2022 was $ 0 and $ 51,734 .

The commercial segment’s allowance for doubtful accounts, as of June 30, 2023 and December 31, 2022 was $ 186,288 and $ 51,734 , respectively.

The increase in allowance for doubtful accounts ending June 30, 2023, as compared to December 31, 2022 is primarily due to the commercial segment and the new forward looking methodology of estimating future expected losses.

Income Taxes :

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During fiscal 2022, management determined that it was more likely than not the tax asset would be reduced by future taxable income, therefore, the remaining valuation allowance at December 31, 2022, was released.

As of March 31, 2023, we had a tax deferred asset of $ 1,140,002 with $ 0 offsetting valuation allowance.

As of March 31, 2022, the Company had a deferred tax asset of $ 3,928,134 with an offsetting valuation allowance of $ 3,928,134 , netting the tax asset to $ 0 .

As of June 30, 2023, we had a deferred tax asset of $ 612,832 with $ 0 offsetting valuation allowance.

As of December 31, 2022, the Company had a deferred tax asset of $ 1,488,258 with an offsetting valuation allowance of $ 0 .

We account for our position in tax uncertainties in accordance with ASC 740, Income Taxes.

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First, we must determine whether any amount of the tax benefit may be recognized.

Second, we determine how much of the tax benefit should be recognized (this would only apply to tax positions that qualify for recognition.).

We have not taken a tax position that, if challenged, would have a material effect on the financial statements or the effective tax rate for the three months ended March 31, 2023 and 2022.

Second, we determine how much of the tax benefit should be recognized (this would only apply to tax positions that qualify for recognition.) We have not taken a tax position that, if challenged, would have a material effect on the financial statements or the effective tax rate for the three and six months ended June 30, 2023 and 2022.

NOTE 11 — LEASES

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

The Company has nine operating leases as of March 31, 2023—five in DFW, two in Mt.

The Company has nine operating leases as of June 30, 2023—five in DFW, two in Mt.

Pleasant, South Carolina and two in Chandler, Arizona.

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1) the flagship store located at 13022 Preston Road, Dallas, Texas expiring on January 31, 2027, with an option to extend the lease for an additional five years, at the prevailing market rate for comparable space in comparable buildings in the vicinity;

2) the Grand Prairie, Texas lease which was renewed starting July 1, 2022, expiring June 30, 2027, with an option to extend the lease for an additional five years;

2) the Grand Prairie, Texas lease expiring June 30, 2027, with an option to extend the lease for an additional five years;

3) the two leases for the Mt.

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and 3) the two leases for the Avail location in Chandler, Arizona expiring on May 31, 2025, with no additional renewal options.

All of the Company’s nine leases as of March 31, 2023 are triple net, for which it pays its proportionate share of common area maintenance, property taxes and property insurance.

Leasing costs for the three months ended March 31, 2023 and 2022 was $ 659,616 and $ 622,863 respectively, comprised of a combination of minimum lease payments and variable lease costs.

As of March 31, 2023, the weighted average remaining lease term and weighted average discount rate for operating leases was 3.3 years and 4.4 %, respectively.

For the three months ended March 31, 2023 and 2022, the Company’s cash paid for operating lease liabilities was $ 656,520 and $ 616,097 respectively.

Future annual minimum lease payments as of March 31, 2023:

2023 (excluding the three months ending March 31, 2023)

All of the Company’s nine leases as of June 30, 2023 are triple net, for which it pays its proportionate share of common area maintenance, property taxes and property insurance.

Leasing costs for the three months ended June 30, 2023 and 2022 were $ 705,365 and $ 659,860 respectively, comprised of a combination of minimum lease payments and variable lease costs.

Leasing costs for the six months ended June 30, 2023 and 2022 were $ 1,361,885 and $ 1,282,723 , respectively, comprised of a combination of minimum lease payments and variable lease costs.

As of June 30, 2023, the weighted average remaining lease term and weighted average discount rate for operating leases was 2.8 years and 4.4 %, respectively.

For the three months ended June 30, 2023 and 2022, the Company’s cash paid for operating lease liabilities was $ 706,372 and $ 650,606 respectively.

For the six months ended June 30, 2023 and 2022, the Company’s cash paid for operating lease liabilities was $ 1,362,892 and $ 1,266,703 , respectively.

Future annual minimum lease payments as of June 30, 2023:

2023 (excluding the six months ending June 30, 2023)

2027 and thereafter

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Consumer Sub-Total

2023 (excluding the three months ending March 31, 2023)

2023 (excluding the six months ending June 30, 2023)

2027 and thereafter

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NOTE 12 — BASIC AND DILUTED AVERAGE SHARES

A reconciliation of basic and diluted weighted average common shares for the three months ended March 31, 2023 and 2022 is as follows:

A reconciliation of basic and diluted weighted average common shares for the three months ended June 30, 2023 and 2022 is as follows:

For the Three Months Ended

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Diluted weighted average shares

For the three months ended March 31, 2023 and 2022, there was a total of 15,000 common stock options, warrants, and Restricted Stock Units (RSUs) unexercised, respectively.

For the three months ended March 31, 2023 and 2022, there were no anti-dilutive shares.

On March 14, 2023, a stock repurchase program was unanimously approved by the Company’s Board of Directors, with gives management authorization to purchase up to one million ( 1,000,000 ) shares of the Company’s stock, of a per-share price not to exceed $ 9 , on the open market.

For the three months ended June 30, 2023 and 2022, there was a total of 15,000 common stock options, warrants, and Restricted Stock Units (RSUs) unexercised.

For the three months ended June 30, 2023 and 2022, there were no anti-dilutive shares.

A reconciliation of basic and diluted weighted average common shares for the six months ended June 30, 2023 and 2022 is as follows:

For the Six Months Ended

Basic weighted average shares

Effect of potential dilutive securities

Diluted weighted average shares

For the six months ended June 30, 2023 and 2022, there was a total of 15,000 common stock options, warrants, and Restricted Stock Units (RSUs) unexercised.

For the six months ended June 30, 2023 and 2022, 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”), that gave management authorization to purchase up to one million ( 1,000,000 ) shares of the Company’s stock, of a per-share price not to exceed $ 9 , on the open market.

The plan expires on March 31, 2026.

The following lists the repurchase of Company shares for the three and six months ended June 30, 2023:

Shares available

Total Number of

Average Price

to purchase under

Fiscal Period

Shares Purchased

Paid per Share

Total $ Purchase

April 1 - 30, 2023

May 1 - 31, 2023

June 1 - 30, 2023

NOTE 13 — LONG-TERM DEBT

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(5) On November 23, 2021, the Company secured a 36-month line of credit from FSB for $ 3,500,000 at 3.1 % annual interest rate.

As of March 31, 2023 and December 31, 2022, the outstanding balance of the line of credit was $ 0 .

As of June 30, 2023 and December 31, 2022, the outstanding balance of the line of credit was $ 0 .

(6) On October 29, 2021, the commercial segment entered into the Avail Transaction to purchase all of the assets, liabilities and rights and interests of Avail AZ, for $ 4.5 million.

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The Installment note payable for the Avail Transaction imputed at 3.1%

(7) On November 4, 2020, 1901 Gateway Holdings, LLC, a wholly owned subsidiary of Envela Corporation, closed on the purchase of its new corporate office building located at 1901 Gateway Drive, Irving, Texas for $ 3.521 million.

(7) On November 4, 2020, 1901 Gateway Holdings, LLC, a wholly owned subsidiary of Envela Corporation, closed on the purchase of its corporate office building located at 1901 Gateway Drive, Irving, Texas for $ 3.521 million.

The building was partially financed through a $ 2.96 million, five-year loan, bearing an interest rate of 3.25 %, amortized over 20 years, payable to Texas Bank & Trust.

The note has monthly interest and principal payments of $ 16,792 .

Future scheduled principal payments of our notes payable as of March 31, 2023 are as follows:

Future scheduled principal payments of our notes payable as of June 30, 2023 are as follows:

CONSUMER SEGMENT

1 unchanged sentence

Year Ending December 31,

2023 (excluding the three months ended March 31, 2023)