References
Unless expressly indicated or the context requires otherwise, the terms “Envela®,” “company,” “we,” “us,” and “our” in this document refer to Envela Corporation, a Nevada corporation, and, where appropriate, its subsidiaries, operating and reportable segments, or brands.
Solely for convenience, our trademarks and tradenames may appear in this Form 10-K without the ® or ™ symbol.
References to fiscal years herein are denoted with the word “Fiscal” and the associated year.
Due to the nature of the recommerce and recycling industry which is heavily predicated on the inbound sourcing of assets and commodities, we define the entity or person in which we procure or consign assets from, provide disposition or product return services to as “business partners” and those that we sell assets or commodities to through our stores, online or wholesale channels or provide certain repair services to as our “customers.”
Presentation of Financial Reporting Periods
As denoted herein, Fiscal 2025 and Fiscal 2024 refer to the twelve-month periods ended December 31, 2025 and 2024, respectively.
As denoted herein, the first, second, third, or fourth quarters refer to the three-month periods ended March 31, June 30, September 30, and December 31 for each respective fiscal year.
As denoted herein, Holiday Months refer to the collective one-month periods ended November 30 and December 31 for each respective fiscal year.
Presentation of Financial Results
The Company’s operations are located within the contiguous United States of America (“U.S”) and its functional and reporting currency is the U.S. Dollar (“$”).
Percentages in tables have been rounded and accordingly may not add up to 100%. Certain financial data may have been rounded. As a result of such rounding, the totals of data presented in this document may vary slightly from the actual arithmetical totals of such data.
Throughout this annual report on Form 10-K for the fiscal year ended December 31, 2025 (this “Form 10-K”), financial data has been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Envela also provides certain additional non-U.S. GAAP measures and performance metrics to provide increased insight into the underlying or relative performance of the business. An explanation of each non-U.S. GAAP measure and performance metric used is provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements
This Form 10-K and the information incorporated by reference into this Form 10-K include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include forward-looking statements with respect to our business and industry in general. Forward-looking statements can generally be identified by the use of forward-looking terminology, such as “may,” “will,” “should,” “could,” “can,” “would,” “believe,” “anticipate,” “project,” “plan,” “expect,” “estimate,” “goal,” “seek,” “ensure,” “potential,” “opportunity,” “intend,” “predict,” “committed,” “likely,” “continue,” “strive,” “aim,” “scheduled,” “focused on,” “long-term,” “future,” “over time,” “ongoing,” “uncertain,” “moving forward,” or “subject to.” All statements other than statements of historical information
provided herein are forward-looking and may contain information about financial results, economic conditions, trends, and known uncertainties.
All forward-looking statements are based on management’s current expectations and beliefs. Forward-looking statements address matters that are subject to risks and uncertainties, many of which are beyond our ability to control or predict. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements. We believe these factors include, but are not limited to, the following:
| ● | An inability to reasonably budget or forecast our commercial and operational performance and liquidity requirements may make it difficult to meaningfully compare our results of operations between periods; |
| ● | An inability to attract new customers, turn existing customers into repeat customers, maintain relationships with significant business partners, or renew contracts with them on favorable terms; |
| ● | The market for precious metals is inherently unpredictable; |
| ● | An inability to increase retail prices to reflect higher commodity costs; |
| ● | Adverse economic conditions in the U.S. or in other key markets where we sell into may result in declines in consumer confidence and spending; |
| ● | The consumer wholesale and retail jewelry business is seasonal; |
| ● | Intense competition across all markets for our products and services; |
| ● | Demand for our products and services may decrease, and there can be no assurances that the Company will be able to adapt to such decreases; |
| ● | Misjudging consumer demand may strain our operating cash flow and have other negative impacts on our business; |
| ● | Changing consumer buying preferences toward lab-grown diamonds; |
| ● | Consumer acceptance of near-perfect counterfeit products may result in increased competition; |
| ● | The proliferation of near-perfect counterfeit products may erode consumer confidence; |
| ● | The voting power in the Company is substantially controlled by a small number of shareholders, which may, among other things, impede the removal of incumbent directors or a takeover attempt, even if such events may be beneficial to shareholders; |
| ● | Our status as a “controlled company” could make our shares of common stock, par value $0.01 per share (the “Common Stock”), less attractive to some investors or otherwise harm our stock price; |
| ● | The Company is and will be subject to new and existing corporate governance, internal control, and reporting requirements; |
| ● | The Company is subject to maintaining an anti-money laundering (“AML”) compliance program, and the failure to comply could adversely affect the Company’s reputation and ability to obtain merchandise; |
| ● | The conflict-mineral diligence process, the results from that process, and the related reporting obligations could increase costs, adversely affecting the Company’s reputation and our ability to obtain merchandise; |
| ● | Governments may refuse to renew or grant licenses and permits, thus restricting our ability to operate; |
| ● | Changes to environmental, social, and governance (“ESG”) regulations may impact our reputation and financial results; |
| ● | U.S. governmental regulation and environmental, health, and safety requirements may adversely affect our business; |
| ● | The Company’s websites or portals may be vulnerable to security breaches and similar threats, which could result in liability for damages and harm to the Company’s reputation; |
| ● | A failure of our information systems could prevent the Company from effectively managing and controlling operations and serving our business partners and customers; |
| ● | A failure to maintain the security of our business partners', customers', employees', or vendors' information, or to comply with privacy laws, could expose us to litigation, government enforcement actions, and costly response measures; |
| ● | Challenges or failures in maintaining or updating our existing technology, or in implementing new technologies; |
| ● | The Company may be subject to business, compliance, and reputational risks associated with artificial intelligence (“AI”); |
| ● | Outbreaks of epidemics, pandemics, or other public health emergencies have disrupted, and could in the future disrupt our operations; |
| ● | We may incur losses due to unforeseen or catastrophic events, terrorist attacks, extreme weather, or natural disasters; |
| ● | Geopolitical conflicts, military action, and civil unrest could result in global supply chain disruptions and uncertain economic conditions; |
| ● | The impact of inventory shrinkage; |
| ● | We must carefully manage our inventory to prevent a negative impact on our operating cash flows, profitability, and financial condition; |
| ● | The impact of inventory curation related to store expansion may increase our carrying costs, reduce our inventory turnover, and expose us to margin volatility; |
| ● | The failure to protect our reputation; |
| ● | Legal proceedings may cause us to incur unexpected liabilities; |
| ● | Asserting our rights to ownership of our tradenames, trademarks, and other intellectual property may result in unexpected costs, and failure to protect these rights may harm our ability to compete effectively; |
| ● | The impact of implementing accounting standards, rules, and regulations established by the Securities and Exchange Commission (“SEC”), New York Stock Exchange (“NYSE”) American and NYSE Texas could increase our operating costs and result in changes to our financial statements; |
| ● | Changes in liquidity and the ability to secure capital at reasonably economic terms could hinder our ability to operate and expand our business; |
| ● | Sustained high interest rates have increased the cost of borrowing for the Company; |
| ● | The Company’s expansion into new geographic regions may increase the difficulty of hiring and retaining employees across a geographically diverse workforce; |
| ● | The Company’s success depends on its ability to attract, retain, and motivate qualified directors, management, and other skilled employees; |
| ● | Legal or regulatory changes, including, but not limited to, minimum wage increases or changes in salary levels required for certain overtime-exempt positions, may increase the Company’s labor costs; |
| ● | Our business depends significantly on strategies, initiatives, and investments designed to increase sales and profitability, improve operational efficiency, and contain costs; |
| ● | The Company may assume additional liabilities in connection with acquisitions or may be unable to successfully integrate such acquisitions; |
| ● | The success of our online merchandising initiatives for the sale of bullion and luxury hard assets is not assured; |
| ● | Our ability to procure real estate on reasonably economic terms, the timeliness of new store openings, and the risks associated with store placement may be limiting factors in the expansion of our business; |
| ● | Our electronic device and harvested parts business is subject to the risk of declines in value related to changes in consumer preferences, foreign trade risks, export compliance, and the length of time inventory is held; |
| ● | We may incur losses because of a failure to manage and protect our clients’ assets throughout the information technology (“IT”) asset disposition (“ITAD”) process; |
| ● | We may incur higher taxes as a result of changes in tax rules; |
| ● | Various states may assert that the Company is liable for sales and use, commerce, or similar taxes; and |
| ● | We may incur increased costs or loss of certain insurance coverages. |
It is difficult to predict the effect of known risk factors on future results, and we cannot anticipate all risk factors that may be important to financial statement readers. Actual results could differ materially from those expressed in the forward-looking statements, and financial statement readers should not regard those statements as a representation by us or any other person that the results expressed in the statements will be achieved.
Important risk factors that could cause results or events to differ from current expectations are described under “Item 1A. Risk Factors” below and elsewhere in this Form 10-K, including, without limitation, in conjunction with the forward-looking statements themselves and under “Note 3 – Accounting Policies and Estimates.” These risk factors are not intended to be an all-encompassing list of risks and uncertainties that may affect our reputation, financial condition, results of operations, or liquidity.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the Company expressly disclaims an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
