Envela Corp
For the period ended Dec 31, 2025. Filed Mar 18, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 18, 2026
ELA$10.77-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-26.
0000701719-25-000007
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-18.
0000701719-26-000004
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 134 current paragraphs.
41 unchanged; 28 reworded; 63 added; 24 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 19 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (63)
Current report
Impacts of Demand for Safe-Haven Metals
Current report
While the current market for safe-haven metals has generally led to stronger premiums within our consumer segment, especially for gold and silver, demand for these metals has created industry-wide backlogs and slowed payments from refiners, which the Company has experienced. The impact on working capital is having to pay more to procure inventory, and the delayed conversion of accounts receivable from refiners. While the length of the current cycle and the steps domestic refiners will take to address processing capacity are indeterminate, the Company is closely monitoring its inbound buying practices, cash, inventory levels, and its accounts receivable exposure with its refining customers. The Company believes it has sufficient liquidity to maintain its current buying practices, yet it can adjust its buying programs to reduce exposure should these conditions materially affect its conversion of accounts receivable.
Current report
Impacts of Government Legislation
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We have evaluated the provisions of the new law and its potential effects on our effective tax rate, results of operations, and financial condition. OBBBA allows businesses to immediately deduct the full cost of qualifying assets in the year they are placed in service, rather than spreading the deduction over several years, and is effective for property acquired and placed in service after January 19, 2025. OBBBA also requires businesses to recognize the effects of tax law changes in the period of enactment, such as remeasuring estimated U.S. deferred tax assets and liabilities. The Company intends to utilize bonus depreciation, effectively reducing taxable income in the respective tax period and the cash deployed to settle such obligations. There was no material impact on the effective tax rate, financial condition, results of operations, or cash flows during the period ending December 31, 2025. In future fiscal periods, the impact of OBBBA is contingent on the continued election of bonus depreciation and the amount of qualifying assets acquired by the Company.
Current report
Impacts of Tariffs
Current report
The U.S. government has recently adopted new approaches to trade policy, announced tariffs on certain foreign goods and certain global tariffs, and signaled the possibility of significant additional tariff increases or tariff expansions. Specifically, under Section 232 of the Trade Expansion Act of 1962, tariffs were imposed on the importation of aluminum, copper, steel, and certain derivative products, but excluded gold and silver. The impact of such tariffs and retaliatory tariffs by other countries continues to evolve and requires regular monitoring and evaluation. The deemed impacts of tariffs on each of our reportable segments are detailed below:
Current report
The consumer segment does not source inventory from or sell it into international markets, so it is not directly impacted by tariffs. However, global market uncertainty caused by tariffs can increase commodity costs on safe-haven metals such as gold and silver, which may increase working capital requirements. The Company mitigates increased working capital requirements by monitoring its inventory position and turnover and by maintaining disciplined buying practices to preserve margins.
Current report
The commercial segment periodically purchases limited quantities of personal technology assets and replacement parts for resale from international markets. Tariffs may increase costs for original equipment manufacturers, retailers, and parts distributors and, as a result, may require the Company to pay more for the purchase of personal technology assets for resale and replacement parts, thereby increasing the Company’s required working capital. The Company mitigates increased working capital requirements by monitoring its inventory position and turnover, maintaining disciplined buying practices, and using optimal domestic or international sales channels to preserve margins.
Current report
Sales increased by $60,645,133, or 33.6%, during the year ended December 31, 2025, to $241,021,362, as compared to $180,376,229 during the same period in Fiscal 2024.
Current report
Sales in the consumer segment increased by $62,248,071, or 47.7%, during the year ended December 31, 2025, to $192,717,539, as compared to $130,469,468 during the same period in Fiscal 2024. The change was primarily attributed to higher transaction volumes, which were supported by the upward movement in gold and silver prices throughout the year. Overall sales benefited from favorable supply flows when compared to the same period in Fiscal 2024.
Current report
Sales in the commercial segment decreased by $1,602,938, or 3.2%, during the year ended December 31, 2025, to $48,303,823, as compared to $49,906,761 during the same period in Fiscal 2024. The change was primarily attributed to less revenue from: ITAD revenue share settlements and personal technology assets sourced from our trade-in programs, which were partially offset by increased service revenue from product returns and secured processing of end-of-life assets, electronic scrap grades and associated recoveries. Our electronic scrap grades and associated recoveries experienced a strong fourth quarter of Fiscal 2025, which was a key driver of the vertical’s full-year results.
Current report
Cost of goods sold in the consumer segment increased by $55,205,691, or 48.2%, during the year ended December 31, 2025, to $169,793,289, as compared to $114,587,598 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned higher sales volumes and the upward movement of gold and silver prices compared to the same period in Fiscal 2024.
Current report
Cost of goods sold in the commercial segment decreased by $4,169,764, or 19.4%, during the year ended December 31, 2025, to $17,303,080, as compared to $21,472,844 during the same period in Fiscal 2024. The change was primarily attributed to the aforementioned impact of fewer ITAD revenue-share settlements and, incrementally, to the recognition of costs associated with the sale of trade-in-related personal technology assets, which was partially offset by an increase in cost of goods sold from electronic scrap grades and associated recoveries.
Current report
Cost of goods sold as a percent of sales was 35.8% during the year ended December 31, 2025, as compared to 43.0% during the year ended December 31, 2024. The change was primarily attributed to favorable margins from our ITAD revenue-share settlements and trade-in-related product mix, despite lower overall sales, while our margins on electronic waste and associated recoveries were in line with the same period in Fiscal 2024.
Current report
Selling, general and administrative expenses decreased by $655,659, or 1.9%, during the year ended December 31, 2025, to $33,949,473, as compared to $34,605,132 during the same period in Fiscal 2024.
Current report
Selling, general and administrative expenses in the consumer segment increased by $242,622, or 1.6%, during the year ended December 31, 2025, to $15,454,592, as compared to $15,211,970 during the same period in Fiscal 2024. The change was primarily attributed to new store cost structures, partially offset by reductions in store onboarding and new-store marketing costs, as well as select reductions in human capital costs.
Current report
Selling, general and administrative expenses in the commercial segment decreased by $898,281, or 4.6%, during the year ended December 31, 2025, to $18,494,881, as compared to $19,393,162 during the same period in Fiscal 2024. The change was primarily attributed to a reduction in variable-cost processing-related expenses, of which human-capital costs were a significant component, along with a reduction in lease costs and facility-related costs from the closure of our Arizona ITAD facility, which occurred in the latter part of the second quarter of Fiscal 2025. We began diverting inbound asset flow before closure, and we fully absorbed the asset flow from the former Arizona ITAD facility into our Texas ITAD facility in the third quarter of Fiscal 2025.
Current report
Depreciation and amortization expense in the consumer segment increased by $267,456, or 51%, during the year ended December 31, 2025, to $791,966, as compared to $524,510 during the same period in Fiscal 2024. The change was primarily attributed to the depreciation of assets placed into service related to our new retail stores.
Current report
Other income decreased by $16,753, or 1.6%, during the year ended December 31, 2025, to $1,020,929, as compared to $1,037,682 during the same period in Fiscal 2024.
Current report
Other income in the consumer segment increased by $247,734, or 236.9%, during the year ended December 31, 2025, to $352,295, as compared to $104,561 during the same period in Fiscal 2024. The change was primarily attributable to the proportionate share of earned dividend and interest income. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. This resulted in the segment receiving a higher allocation of earned income on excess cash balances. The segment also received an employee retention credit in Fiscal 2025, while Fiscal 2024 included the proportionate share of income from a settlement for repairs related to our corporate headquarters. The impact of dividend and interest income is referenced below.
Current report
Other income in the commercial segment decreased by $264,487, or 28.3%, during the year ended December 31, 2025, to $668,634, as compared to $933,121 during the same period in Fiscal 2024. The change was primarily attributable to the proportionate share of dividend and interest income. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. This resulted in lower segment allocation of earned income on excess cash balances. Further, the same period in Fiscal 2024 included the proportionate share of income from a settlement for repairs related to our corporate headquarters. The impact of dividend and interest income is referenced below.
Current report
Dividend income comprised $213,773 and $39,156 of other income during the years ended December 31, 2025, and December 31, 2024, respectively. Interest income comprised $391,806 and $753,315 of other income during the years ended December 31, 2025, and December 31, 2024, respectively. In aggregate, cash balances were higher in Fiscal 2025, resulting in greater overall dividend and interest income for the Company.
Current report
Interest expense in the consumer segment decreased by $24,189, or 10.6%, during the year ended December 31, 2025, to $204,603, as compared to $228,792 during the same period in Fiscal 2024. The change was primarily attributed to a loan
Current report
pay-off on a retail location that occurred in the third quarter of Fiscal 2025 and to a reduced allocation of interest expense as we paid off our loan on our corporate headquarters in the fourth quarter of Fiscal 2025.
Current report
Interest expense in the commercial segment decreased by $16,552, or 7.6%, during the year ended December 31, 2025, to $202,039, as compared to $218,591 during the same period in Fiscal 2024. The change was primarily attributable to the reduced allocation of interest expense as we paid off our loan on our corporate headquarters in the fourth quarter of Fiscal 2025.
Current report
Net income increased by $7,839,919, or 116%, during the year ended December 31, 2025 to $14,596,978, as compared to $6,757,059 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of the Years Ended December 31, 2025 and 2024 for further details.
Current report
Net income increased in the consumer segment by $5,317,621, or 32,541.6%, during the year ended December 31, 2025 to $5,333,962, as compared to $16,341 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of Years Ended December 31, 2025 and 2024 for further details.
Current report
These non-U.S. GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with U.S. GAAP. Each of these non-U.S. GAAP financial measures is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparing performance among different companies.
Current report
We have included the definitions of our non-U.S. GAAP financial measures and reconciliations to the most comparable U.S. GAAP financial measures in the following tables below.
Current report
Adjusted EBITDA and Adjusted EBITDAR
Current report
Adjusted EBITDAR is defined as (i) Adjusted EBITDA plus (ii) minimum fixed rent expense for properties occupied under operating leases. Management considers Adjusted EBITDAR to be a key financial measure to assess our overall operating performance, excluding the impact of variability in leasing methods and capital structures.
Current report
These measures are also inputs into the Company’s leverage ratios.
Current report
The Company’s Adjusted EBITDA and Adjusted EBITDAR are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, “net income” or other financial measures of operating performance calculated in accordance with U.S. GAAP.
Current report
Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA Leverage Ratios
Current report
The Company’s Debt to Adjusted EBITDA Leverage Ratio is defined as the Company’s (i) Debt Obligations divided by (ii) Adjusted EBITDA. Debt Obligations are defined as the sum of amounts outstanding under notes payable balances.
Current report
The Company’s Net Debt to Adjusted EBITDA Leverage Ratio is defined as the Company’s (i) Net Debt Obligations divided by (ii) Adjusted EBITDA. Net Debt Obligations are defined as the difference between the Company’s (i) Debt Obligations and (ii) Total Cash.
Current report
Management considers these financial measures to be helpful in understanding the Company’s ability to service Debt Obligations, excluding, and including the impact of Total Cash available to service such obligations.
Current report
The Company’s Debt to Adjusted Leverage Ratio and Net Debt to Adjusted EBITDA Leverage Ratio are considered non-U.S. GAAP financial measures and are not calculated in accordance with, or preferable to, other financial measures utilized to assess our ability to service “notes payable” in accordance with U.S. GAAP. The Company considers the Debt to Net Income Leverage Ratio, defined as (i) Debt Obligations divided by (ii) net income, to be the representative financial measure of our ability to service “notes payable” utilizing U.S. GAAP-derived financial statement balances and is incorporated into the presentation below.
Current report
The following table reconciles components of the Debt to Adjusted EBITDA Leverage Ratio and Net Debt to Adjusted EBITDA Leverage Ratio for the years ended December 31, 2025 and 2024:
Current report
Adjusted Debt to Adjusted EBITDAR Leverage and Adjusted Net Debt to Adjusted EBITDAR Leverage Ratios
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Removed paragraphs (24)
Previous report
Changes in Disclosure of Results of Operations
Previous report
The Company previously disaggregated revenue and gross margin by resale and recycle for each segment within the results of operations. The Company’s revenue and gross margin are now comprised of more diverse revenue and gross margin streams associated with service offerings and as such to continue reporting under the prior disclosure methodology would be less representative of how the business operates. The Company believes that this change has no material impact on the interpretation of our results of operations.
Previous report
Adjusted EBITDA
Previous report
Net Cash is defined as the difference between (i) cash and cash equivalents and (ii) the sum of debt obligations. We believe that presenting Net Cash is useful to investors as a measure of our liquidity and leverage profile, as cash and cash equivalents can be used, among other things, to repay indebtedness.
Previous report
Sales increased by $5,112,403, or 2.9%, during the year ended December 31, 2024, to $180,376,229, as compared to $175,263,826 during the same period in Fiscal 2023.
Previous report
Sales in the consumer segment increased by $1,055,799, or 0.8%, during the year ended December 31, 2024, to $130,469,468, as compared to $129,413,669 during the same period in Fiscal 2023. The change was primarily attributed to stronger sales of scrap grade precious metals inventory which were more pronounced in the third and fourth quarters of Fiscal 2024, which was offset by softer market conditions for bullion that was most prevalent in the first and second quarters of Fiscal 2024; which also impacted store performance. Our sales of scrap grade precious metals were favorably impacted by exceptional inbound material flow from our in-store buying programs. While Fiscal 2024 produced favorable movements in the spot price of gold it was not sufficient to offset the impact of lower bullion demand.
Previous report
Sales in the commercial segment increased by $4,056,604, or 8.8%, during the year ended December 31, 2024, to $49,906,761, as compared to $45,850,157 during the same period in Fiscal 2023. The change was primarily attributed to the favorable performance from almost all of our verticals with the most significant being the sale of personal technology assets and sales generated through our ITAD business. While the sales of electronic scrap grades and associated recoveries were strong through to the third quarter of Fiscal 2024 they dropped off in the fourth quarter resulting in relative parity to Fiscal 2023. Electronic scrap grade sales were primarily impacted by inbound material flows from a single customer’s shipping schedule in the fourth quarter of Fiscal 2024.
Previous report
Cost of goods sold in the consumer segment increased by $822,487, or 0.7%, during the year ended December 31, 2024, to $114,587,598, as compared to $113,765,111 during the same period in Fiscal 2023. The change was primarily attributed to the aforementioned increase in sales attributed to lower margin scrap grade precious metals, which were more pronounced in the third and fourth quarters of Fiscal 2024. These sales allowed the consumer segment to reduce its inventory position from an intra-year high of $27,866,050 as of September 30, 2024 to $23,973,333 as of December 31, 2024.
Previous report
Cost of goods sold in the commercial segment increased by $1,630,659, or 8.2%, during the year ended December 31, 2024, to $21,472,844, as compared to $19,842,185 during the same period in Fiscal 2023. The change was primarily attributed to the relief of inventory associated with lower margin electronic scrap grades and revenue sharing, ITAD settlements, and incrementally from the relief of inventory associated with personal technology assets. Our ITAD business had a strong fourth quarter in Fiscal 2024 resulting in this vertical having a greater impact on cost of goods sold than was evident through the nine months ended September 30, 2024.
Previous report
Cost of goods sold as a percent of sales was 43.0% during the year ended December 31, 2024, as compared to 43.3% during the year ended December 31, 2023. The change was primarily attributed to the product mix that was relieved during the fourth quarter of Fiscal 2024 as our costs of goods sold as a percent of sales for the nine months ended September 30, 2024 had been unfavorable to the same period in Fiscal 2023. In the fourth quarter of 2024 the commercial segment experienced stronger margins on the sale of personal technology assets that moved its cost of goods sold as a percent of sales into a favorable variance for the year ended December 31, 2024.
Previous report
Selling, general and administrative expense increased by $3,067,455, or 9.7%, during the year ended December 31, 2024, to $34,605,132, as compared to $31,537,677 during the same period in Fiscal 2023.
Previous report
Selling, general and administrative expense in the consumer segment increased by $4,571,130, or 43.0%, during the year ended December 31, 2024, to $15,211,970, as compared to $10,640,840 during the same period in Fiscal 2023. The change was primarily attributed to incurring operational cost structures from our new Arizona and Texas stores along with travel costs associated with preparing those stores for opening. However, travel costs consecutively declined in both the third and fourth quarters of Fiscal 2024. During the year, processes and procedures were developed to create efficiencies in rolling out new stores in geographically dispersed locations that can be utilized in future store openings.
Previous report
Selling, general and administrative expense in the commercial segment decreased by $1,503,675, or 7.2%, during the year ended December 31, 2024, to $19,393,162, as compared to $20,896,837 during the same period in Fiscal 2023. The change was primarily attributed to the operational focus on human capital costs and processing efficiencies at our production facilities during Fiscal 2024. Albeit, we did experience some intra-year increases in human capital costs associated with overall higher processing volumes and associated with a new retail returns client, the spend correlated to an increase in gross margin.
Previous report
Depreciation and amortization expense in the consumer segment increased by $199,283, or 61.3%, during the year ended December 31, 2024, to $524,510, as compared to $325,227 during the same period in Fiscal 2023. The change was primarily attributed to our Arizona and Texas stores that were placed into service as well as the depreciation and amortization expense related to the assets acquired in the Scottsdale Transaction.
Previous report
Other income increased by $309,900, or 42.6%, during the year ended December 31, 2024, to $1,037,682, as compared to $727,782 during the same period in Fiscal 2023.
Previous report
Other income in the consumer segment increased by $20,755, or 24.8%, during the year ended December 31, 2024, to $104,561, as compared to $83,806 during the same period in Fiscal 2023. The change was primarily attributed to the proportional allocation of the proceeds from a settlement related to repairs to the Company’s corporate headquarters, and the Employee Retention Tax Credit (“ERTC”), and to the consumer segment’s higher working capital requirements from the aforementioned launching of our Arizona and Texas stores which has decreased the excess cash flow available to sweep into an interest-bearing account. The impact on interest income is referenced below.
Previous report
Other income in the commercial segment increased by $289,145, or 44.9%, during the year ended December 31, 2024, to $933,121, as compared to $643,976 during the same period in Fiscal 2023. The change was primarily attributed to the proportional allocation of the proceeds from a settlement related to repairs to the Company’s corporate headquarters, the ERTC, and to the continued focus on reducing working capital which has increased the excess cash flow available to sweep into an interest-bearing account. The impact on interest income is referenced below.
Previous report
Interest expense in the consumer segment increased by $36,399, or 18.9%, during the year ended December 31, 2024, to $228,792, as compared to $192,393 during the same period in Fiscal 2023. The change was primarily attributed to the impact of the allocation of corporate interest expense.
Previous report
Interest expense in the commercial segment decreased by $52,217, or 19.3%, during the year ended December 31, 2024, to $218,591, as compared to $270,808 during the same period in Fiscal 2023. The change was primarily attributed to the impact of the allocation of corporate interest expense.
Previous report
Net income decreased by $390,393, or 5.5%, during the year ended December 31, 2024 to $6,757,059, as compared to $7,147,452 during the same period in Fiscal 2023. Refer to the aforementioned attributes discussed within the Comparison of Years Ended December 31, 2024 and 2023 for further details.
Previous report
Net income decreased in the consumer segment by $3,630,406, or 99.6%, during the year ended December 31, 2024 to $16,341, as compared to $3,646,747 during the same period in Fiscal 2023. Refer to the aforementioned attributes discussed within the Comparison of Years Ended December 31, 2024 and 2023 for further details.
Previous report
Cash flows provided by operations increased by $4,347,932, or 74.4%, during the year ended December 31, 2024, to $10,190,640, as compared to $5,842,708 during the same period in Fiscal 2023. The increase in cash provided by operations for the year ended December 31, 2024, was primarily attributed to the impacts of a decrease in net income, an increase in depreciation and amortization, a decrease in non-cash charges relating to deferred taxes, an increase in non-cash lease expense, a decrease accounts receivable associated with the settlement of a large SOW with a recurring customer, an increased inventory position associated with the expansion of the consumer business, an increase in accrued expenses primarily associated with our payroll accrual and unvouchered payments related to estimated settlement liabilities for inbound ITAD customers, and an increase in other liabilities associated with customer deposits and gift cards.
Previous report
Cash flows (used in) investing activities increased by $2,000,543, or 113.7%, during the year ended December 31, 2024, to $3,760,404, as compared to $1,759,861 during the same period in Fiscal 2023. The increase in cash (used in) investing activities during the year ended December 31, 2024, was primarily attributed to the purchase of property and equipment, including real estate associated with one of our Arizona stores, the build-out of our Arizona and Texas stores, the purchase of production assets within our commercial recycling business, and the continued development of intangible assets associated with our enterprise resource planning system.
Previous report
In Fiscal 2024, the consumer segment primarily expended capital in relation to store expansion. In Fiscal 2025, we will look to optimize the performance of our new retail stores along with identifying new market opportunities. The Company believes it has the liquidity and capital resources to fund capital outlays of the aforementioned.
Reworded paragraphs (28)
Previous wording
This section includes a discussion of our operations for the years ended December 31, 2024, and December 31, 2023. The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of our financial condition and results of operations.
Current wording
This management’s discussion and analysis provides comparisons of material changes in the consolidated financial statements for the years ended December 31, 2025, and December 31, 2024. The following discussion and analysis also provides information that management believes is relevant to the assessment and understanding of our results of operation, financial condition, liquidity, and capital resources.
Previous wording
Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The preparation of these financial statements requires our management to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material. References to fiscal years herein are denoted with the word “Fiscal” and the associated year.
Current wording
Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires our management to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors we believe are reasonable under the circumstances, and the results of which form the basis for judgments about the carrying value of assets and liabilities that are not readily determinable from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions, and any such differences may be material.
Previous wording
The U.S. and other world economies are currently experiencing high interest rates and high levels of inflation, coupled with commodity price risk, mainly associated with variations in the market price of precious metals and diamonds which have the potential to impact consumer discretionary spending behavior. Furthermore, adverse macroeconomic conditions can also impact demand for resale technology assets.
Current wording
The U.S. and other global economies are currently experiencing high interest rates and elevated inflation, coupled with commodity price risk, mainly associated with fluctuations in the market prices of precious metals and diamonds, which could affect consumer discretionary spending. Furthermore, adverse macroeconomic conditions can also impact demand for the resale of personal technology assets.
Previous wording
As to counterbalance economic cycles that impact market selling prices and/or underlying operating costs we adjust the inbound purchase price of commodity-based products, luxury hard assets, and resale technology.
Current wording
To counterbalance economic cycles that impact market selling prices and/or underlying operating costs, we adjust the inbound purchase price of commodity-based products, luxury hard assets, and resale technology.
Previous wording
We continuously monitor our inventory positions and associated working capital to respond to market conditions and to meet seasonal business cycles and expansionary plans. These economic cycles may from time to time require the business to utilize its line of credit or seek additional capital.
Current wording
We continuously monitor our inventory positions and associated working capital to respond to market conditions and to meet seasonal business cycles and expansionary plans. These economic cycles may, from time to time, require the business to use its line of credit or seek additional capital.
Previous wording
Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, along with secondary market bullion. We incorporate recycled diamonds and gemstones into our new designs meaning they were previously set and unset, producing a low-carbon and ethical origin product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items have an enduring quality, enabling them to maintain their beauty and value as they are passed from one owner to another.
Current wording
previously set and unset, producing a low-carbon and ethical origin product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items have an enduring quality, enabling them to maintain their beauty and value as they are passed from one owner to another.
Previous wording
Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the ITAD industry. The 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. 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 responsible reuse and recycling of electronic devices.
Current wording
Our commercial segment specializes in the de-manufacturing of end-of-life electronic assets to reclaim commodities and other materials, while also engaging in the ITAD and product returns industry. Separated commodities, including metals, plastics, and glass, are sold to downstream processors where they are further processed and reintroduced into new products. ITAD services maximize the residual value of retired IT assets by adhering to a reuse-first philosophy and ensuring equipment is refurbished and re-marketed after data sanitization. Our product returns business reintroduces products back into the supply chain, creating another opportunity for the asset to be used. The Company offers services that manage the entire lifecycle of technology products to ensure data security, regulatory compliance, and environmental sustainability. We are proud of our role in supporting a circular economy through the responsible reuse and recycling of electronic devices.
Previous wording
Our strategy is to expand both organically and through acquisitions. The Company has taken considerable steps to bolster its management team and operating systems to position itself for growth. Our production facilities are capable of managing the expansion of existing relationships and consolidation of acquisition targets within relative geographic proximity into our existing facilities.
Current wording
Our strategy is to expand both organically and through acquisitions. Our processing facilities are capable of managing the expansion of existing relationships and consolidation of acquisition targets within relative geographic proximity into our existing facilities.
Previous wording
Cost of goods sold increased by $2,453,146, or 1.8%, during the year ended December 31, 2024, to $136,060,442, as compared to $133,607,296 during the same period in Fiscal 2023.
Current wording
Cost of goods sold increased by $51,035,927, or 37.5%, during the year ended December 31, 2025, to $187,096,369, as compared to $136,060,442 during the same period in Fiscal 2024.
Previous wording
Cost of goods sold as a percent of sales was 87.8% during the year ended December 31, 2024, as compared to 87.9% during the year ended December 31, 2023. The change was primarily attributed to the product mix, as the relief of inventory associated with lower margin scrap grade precious metals and bullion was almost fully offset by higher margin luxury goods.
Current wording
Cost of goods sold as a percent of sales was 88.1% during the year ended December 31, 2025, as compared to 87.8% during the year ended December 31, 2024. The change was primarily attributed to a greater impact from the recognition of costs associated with wholesale precious metals transactions.
Previous wording
Gross margin increased by $2,659,257, or 6.4%, during the year ended December 31, 2024, to $44,315,787, as compared to $41,656,530 during the same period in Fiscal 2023.
Current wording
Gross margin increased by $9,609,206, or 21.7%, during the year ended December 31, 2025, to $53,924,993, as compared to $44,315,787 during the same period in Fiscal 2024.
Previous wording
Gross margin in the consumer segment increased by $233,312, or 1.5%, during the year ended December 31, 2024, to $15,881,870, as compared to $15,648,558 during the same period in Fiscal 2023. The net impact of the aforementioned increase in sales of $1,055,799 and increase in cost of goods sold of $822,487 resulted in the $233,312 increase in gross margin.
Current wording
Gross margin in the consumer segment increased by $7,042,380, or 44.3%, during the year ended December 31, 2025, to $22,924,250, as compared to $15,881,870 during the same period in Fiscal 2024. The net impact of the aforementioned increase in sales of $62,248,071 and increase in cost of goods sold of $55,205,691 resulted in the $7,042,380 increase in gross margin.
Previous wording
Gross margin in the commercial segment increased by $2,425,945, or 9.3%, during the year ended December 31, 2024, to $28,433,917, as compared to $26,007,972 during the same period in Fiscal 2023. The net impact of the aforementioned increase in sales of $4,056,604 and increase in cost of goods sold of $1,630,659 resulted in the $2,425,945 increase in gross margin.
Current wording
Gross margin in the commercial segment increased by $2,566,826, or 9.0%, during the year ended December 31, 2025, to $31,000,743, as compared to $28,433,917 during the same period in Fiscal 2024. The net impact of the aforementioned decrease in sales of $1,602,938 and decrease in cost of goods sold of $4,169,764 resulted in the $2,566,826 increase in gross margin.
Previous wording
Depreciation and amortization expense increased by $189,710, or 13.9%, during the year ended December 31, 2024, to $1,551,774, as compared to $1,362,064 during the same period in Fiscal 2023.
Current wording
Depreciation and amortization expense increased by $314,815, or 20.3%, during the year ended December 31, 2025, to $1,866,589, as compared to $1,551,774 during the same period in Fiscal 2024.
Previous wording
Depreciation and amortization expense in the commercial segment decreased by $9,573, or 0.9%, during the year ended December 31, 2024, to $1,027,264, as compared to $1,036,837 during the same period in Fiscal 2023. There was no material impact from assets capitalized or reaching maturity in each comparative period and, as such, no discussion point.
Current wording
Depreciation and amortization expense in the commercial segment increased by $47,359, or 4.6%, during the year ended December 31, 2025, to $1,074,623, as compared to $1,027,264 during the same period in Fiscal 2024. There was no material impact from assets being capitalized or reaching maturity in each comparative period; as such, there was no discussion point.
Previous wording
Interest income comprised $2,304 and $77,936 of other income during the years ended December 31, 2024, and December 31, 2023, respectively.
Current wording
Dividend income comprised $90,710 and $0 of other income during the years ended December 31, 2025, and December 31, 2024, respectively. Interest income comprised $165,105 and $2,304 of other income during the years ended December 31, 2025, and December 31, 2024, respectively. In aggregate, cash balances were higher in Fiscal 2025, resulting in greater overall dividend and interest income for the Company.
Previous wording
Interest expense decreased by $15,818, or 3.4%, during the year ended December 31, 2024, to $447,383, as compared to $463,201 during the same period in Fiscal 2023.
Current wording
Interest expense decreased by $40,741, or 9.1%, during the year ended December 31, 2025, to $406,642, as compared to $447,383 during the same period in Fiscal 2024.
Previous wording
Income tax expense, for both segments, for the year ended December 31, 2024, was $1,992,121, an increase of $118,203, as compared to income tax expense of $1,873,918 for the year ended December 31, 2023. Currently, the Company has a deferred tax asset reflecting a future tax benefit that the Company expects to receive. The Company has a federal tax rate of approximately 21.0%, in addition to other state and local taxes, on net income. The effective income tax rate was 22.8% and 20.8% for the years ended December 31, 2024 and 2023, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the result of state taxes and non-deductible expenses, as was the Company’s case for the increase for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Current wording
Income tax expense, for both segments, for the year ended December 31, 2025, was $4,126,240, an increase of $2,134,119, as compared to income tax expense of $1,992,121 for the year ended December 31, 2024. Currently, the Company has a deferred tax liability reflecting a future obligation to pay taxes. The Company is subject to a federal tax rate of approximately 21.0% on net income, in addition to state and local taxes. The effective income tax rate was 22.0% and 22.8% for the years ended December 31, 2025 and 2024, respectively. Differences between our effective income tax rate and the U.S. federal statutory rate are the result of state taxes and non-deductible expenses, as was the case for the decrease for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Previous wording
Net income increased in the commercial segment by $3,240,013, or 92.6%, during the year ended December 31, 2024 to $6,740,718, as compared to $3,500,705 during the same period in Fiscal 2023. Refer to the aforementioned attributes discussed within the Comparison of Years Ended December 31, 2024 and 2023 for further details.
Current wording
Net income increased in the commercial segment by $2,522,298, or 37.4%, during the year ended December 31, 2025 to $9,263,016, as compared to $6,740,718 during the same period in Fiscal 2024. Refer to the aforementioned attributes discussed within the Comparison of Years Ended December 31, 2025 and 2024 for further details.
Previous wording
Basic and diluted earnings per share attributable to holders of our Common Stock decreased by $0.01, or 3.7%, during the year ended December 31, 2024 to $0.26, as compared to $0.27 during the same period in Fiscal 2023.
Current wording
Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.30, or 115.4%, during the year ended December 31, 2025 to $0.56, as compared to $0.26 during the same period in Fiscal 2024.
Previous wording
Within this management discussion and analysis, we use supplemental measures of our performance, which are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with U.S. GAAP. We believe that providing these non-U.S. GAAP financial measures adds a meaningful presentation of our operating and financial performance. See the reconciliation of net income to adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) and Net Cash, in Non-U.S. GAAP Financial Measures below.
Current wording
In this management discussion and analysis, we use supplemental measures of our financial performance derived from our consolidated financial information that are not presented in our consolidated financial statements prepared in accordance with U.S. GAAP. When evaluated in conjunction with U.S. GAAP financial measures, the Company believes that these non-U.S. GAAP financial measures add meaningful insight into our results of operations, financial condition, liquidity, and ability to meet financial obligations.
Previous wording
Adjusted EBITDA is defined as the sum of net income (loss) of the Company, adjusted for additions (deductions) of interest expense, other (income) expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA is a key performance measure that management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure as an overall assessment of our performance, to evaluate the effectiveness of our strategies and for planning purposes.
Current wording
Adjusted EBITDA is defined as the sum of (i) net income (loss) of the Company, adjusted for additions (deductions) of (ii) interest expense, (iii) other (income) expense, (iv) income tax expense (benefit), and (v) depreciation and amortization. Management considers Adjusted EBITDA to be a key financial measure to assess our overall operating performance.
Previous wording
The following table provides a reconciliation of net income to Adjusted EBITDA for the years ended December 31, 2024 and 2023:
Current wording
The following table provides a reconciliation of net income to Adjusted EBITDA and Adjusted EBITDAR for the years ended December 31, 2025 and 2024:
Previous wording
The following table depicts the Company’s Net Cash:
Current wording
The Company’s Net Cash is considered a non-U.S. GAAP financial measure and is not calculated in accordance with, or preferable to, “cash and cash equivalents” and amounts outstanding under “notes payable” balances or other financial measures of liquidity calculated in accordance with U.S. GAAP.
Previous wording
Cash flows (used in) financing activities increased by $276,123, or 8.1%, during the year ended December 31, 2024, to $3,675,086, as compared to $3,398,963 during the same period in Fiscal 2023. The increase in cash (used in) financing activities during the year ended December 31, 2024, was primarily due to our share buyback plan as principal payments on debt were in relative parity.
Current wording
Cash flows (used in) financing activities increased by $111,366, or 3.0%, during the year ended December 31, 2025, to $3,786,452, as compared to $3,675,086 during the same period in Fiscal 2024. The increase in cash (used in) financing activities during the year ended December 31, 2025, was primarily attributed to a greater use of cash in the repayment of two notes payable in Fiscal 2025, while cash utilized in Fiscal 2024 was primarily attributed to share buybacks, which were substantially less in Fiscal 2025.
Previous wording
Although the Company has access to a line of credit our primary source of liquidity and capital resources currently consists of cash generated from our operating activities. We do not anticipate the need to fund our operations via the line of credit and we do not have any amounts drawn as of December 31, 2024. We have historically renewed, extended, or replaced short-term debt as it matures, and management believes that we will be able to continue to do so in the near future.
Current wording
Although the Company has access to a line of credit, our primary source of liquidity and capital resources currently consists of cash generated from our operating activities. We do not anticipate needing to fund our operations through the use of our line of credit, and we have no amounts drawn as of December 31, 2025. We have historically renewed, extended, or replaced short-term debt as it matures, and management believes that we will be able to continue to do so in the near future.
Previous wording
We regularly identify growth opportunities and business optimizations that require capital deployment. The Company continuously monitors its deployment of capital and primarily funds capital expenditures through cash flow from operating activities. Where appropriate the Company may use debt financing on select projects. When this occurs, the Company further evaluates future cash flows of the project to ensure the debt tenure and pay-back period are in alignment as well as the appropriateness of the rate of return.
Current wording
We regularly identify growth opportunities and business optimizations that require capital deployment. The Company continuously monitors its capital deployment and primarily funds capital expenditures with cash flow from operating activities. Where appropriate, the Company may use debt financing on select projects. When this occurs, the Company further evaluates the project's future cash flows to ensure the debt tenure and payback period are aligned, as well as the appropriateness of the rate of return.
Previous wording
In Fiscal 2024, the commercial segment primarily expended capital in relation to production assets and was the primary beneficiary of our capital spend associated with our enterprise resource planning system. In Fiscal 2025, we will look to identify opportunities for growth of service offerings, evaluate expansion, and maintain our production assets. The Company believes it has the liquidity and capital resources to fund capital outlays of the aforementioned.
Current wording
In Fiscal 2025, the commercial segment primarily expended capital on facility-related items. In Fiscal 2024, the commercial segment primarily expended capital on processing assets and was the primary beneficiary of our ERP system capital spend.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Impacts of High Interest Rates and Inflation
Current report — wording carried from elsewhere
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 our new designs, meaning they were
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest income comprised $753,315 and $455,665 of other income during the years ended December 31, 2024, and December 31, 2023, respectively.