Envela Corp
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 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-Q
Period ended 2026-03-31; filed 2026-05-06.
0000701719-26-000013
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000701719-26-000017
ITEM 2. 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 132 previous paragraphs and 185 current paragraphs.
75 unchanged; 23 reworded; 77 added; 33 removed; 1 previous and 10 current paragraphs rearranged.
Tables are not compared: 37 previous and 53 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 (77)
Current report
Precious metals prices reached record levels in late January 2026 and declined meaningfully during the second quarter of Fiscal 2026, while remaining above average levels for the comparable prior-year period. Sustained declines in precious metal prices may reduce customer selling activity and affect inbound inventory sourcing, while elevated prices may subdue retail jewelry demand. While the current market for safe-haven metals has generally led to stronger premiums within our
Current report
Sales increased by $1,897,808, or 3.5%, during the three months ended June 30, 2026, to $56,774,641, as compared to $54,876,833 during the same period in Fiscal 2025.
Current report
Sales in the consumer segment increased by $1,555,371, or 3.6%, during the three months ended June 30, 2026, to $44,729,129, as compared to $43,173,758 during the same period in Fiscal 2025. The change was primarily attributed to the performance within our wholesale vertical. Sales in the first quarter of Fiscal 2026 benefited from exceptionally elevated precious metals prices, which drove unusually high customer selling activity and wholesale volumes. As gold and silver prices declined during the second quarter of Fiscal 2026 from their late-January peaks, customer selling activity moderated toward more typical levels. Our results were supported by stronger buying volumes at our retail stores, and we experienced more favorable pricing than in the same period in Fiscal 2025.
Current report
Sales in the commercial segment increased by $342,437, or 2.9%, during the three months ended June 30, 2026, to $12,045,512, as compared to $11,703,075 during the same period in Fiscal 2025. The change was primarily attributed to the continued strong demand for re-marketed technology assets and components during the quarter. Pricing in certain categories within our ITAD vertical remained higher than in the same period in Fiscal 2025, although these pricing benefits moderated from the first quarter of Fiscal 2026. Results were further supported by the favorable performance of our trade-in vertical and harvested component sales within our electronic waste vertical. The component cost environment supporting this demand has also led certain enterprises to extend hardware replacement cycles, which may constrain the near-term inbound supply of retired technology assets available for acquisition.
Current report
Cost of goods sold as a percentage of sales in the consumer segment was 87.6% during the three months ended June 30, 2026, as compared to 89.2% during the same period in Fiscal 2025. The change was primarily attributed to a favorable shift in product mix.
Current report
Cost of goods sold in the commercial segment increased by $218,818, or 5.5%, during the three months ended June 30, 2026, to $4,191,956, as compared to $3,973,138 during the same period in Fiscal 2025. The change was primarily attributed to the aforementioned impact of our ITAD and trade-in verticals, along with costs associated with harvested components within our electronic waste vertical.
Current report
Cost of goods sold as a percentage of sales in the commercial segment was 34.8% during the three months ended June 30, 2026, as compared to 33.9% during the same period in Fiscal 2025. The change was primarily attributed to product mix, in which we incurred lower margins related to certain personal technology assets within our asset disposition verticals and from harvested components within our electronic waste vertical.
Current report
Gross margin increased by $989,909, or 8.0%, during the three months ended June 30, 2026, to $13,377,832, as compared to $12,387,923 during the same period in Fiscal 2025. The net impact of the aforementioned increase in sales of $1,897,808 and an increase in cost of goods sold of $907,899 resulted in the $989,909 increase in gross margin.
Current report
Gross margin as a percentage of sales was 23.6% during the three months ended June 30, 2026, as compared to 22.6% during the same period in Fiscal 2025.
Current report
Gross margin in the consumer segment increased by $866,290, or 18.6%, during the three months ended June 30, 2026, to $5,524,276, as compared to $4,657,986 during the same period in Fiscal 2025. The net impact of the aforementioned increase in sales of $1,555,371 and an increase in cost of goods sold of $689,081 resulted in the $866,290 increase in gross margin.
Current report
Gross margin as a percentage of sales in the consumer segment was 12.4% during the three months ended June 30, 2026, as compared to 10.8% during the same period in Fiscal 2025.
Current report
Gross margin in the commercial segment increased by $123,619, or 1.6%, during the three months ended June 30, 2026, to $7,853,556, as compared to $7,729,937 during the same period in Fiscal 2025. The net impact of the aforementioned increase in sales of $342,437 and an increase in cost of goods sold of $218,818 resulted in the $123,619 increase in gross margin.
Current report
Gross margin as a percentage of sales in the commercial segment was 65.2% during the three months ended June 30, 2026, as compared to 66.1% during the same period in Fiscal 2025.
Current report
Selling, general and administrative expense decreased by $893,954, or 10.3%, during the three months ended June 30, 2026, to $7,778,113, as compared to $8,672,067 during the same period in Fiscal 2025.
Current report
Selling, general and administrative expense in the consumer segment decreased by $281,928, or 7.5%, during the three months ended June 30, 2026, to $3,453,499, as compared to $3,735,427 during the same period in Fiscal 2025. The change was primarily attributed to lower human capital costs and the timing and nature of certain marketing programs.
Current report
Selling, general and administrative expense in the commercial segment decreased by $612,026, or 12.4%, during the three months ended June 30, 2026, to $4,324,614, as compared to $4,936,640 during the same period in Fiscal 2025. The change was primarily attributed to variable-cost production expenses, including human capital costs resulting from lower overall processing volumes in our electronic scrap vertical, as well as the incremental impact of the closure of the Arizona ITAD facility, which did not occur until the latter part of the second quarter of Fiscal 2025.
Current report
Depreciation and Amortization Expense
Current report
Depreciation and amortization expense increased by $36,852, or 8.0%, during the three months ended June 30, 2026, to $497,263, as compared to $460,411 during the same period in Fiscal 2025.
Current report
Depreciation and amortization expense in the consumer segment increased by $38,461, or 19.7%, during the three months ended June 30, 2026, to $234,065, as compared to $195,604 during the same period in Fiscal 2025. The change was primarily attributed to a new store that came online during the second quarter of 2026 and in the latter half of the second quarter of 2025, hence not having a full quarter of comparative depreciation expense, along with the incremental impact of allocated depreciation expense from our corporate head office improvements becoming more significant.
Current report
Other Income (Expense)
Current report
Other income in the consumer segment increased by $8,306, or 5.3%, during the three months ended June 30, 2026, to $164,464, as compared to $156,158 during the same period in Fiscal 2025. The change was primarily attributed to the proportional share of dividend and interest income. In the third quarter of Fiscal 2025, the Company began aggregating excess cash at the corporate level. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. During the second quarter of Fiscal 2026, lower working capital cash requirements and higher excess cash balances resulted in increased consolidated cash returns despite lower earned interest rates. In allocation, this compared favorably to the same period in Fiscal 2025, which included an employee retention credit.
Current report
Dividend income comprised $53,762 and $8,883 of other income during the three months ended June 30, 2026 and 2025, respectively. Interest income comprised $110,691 and $51,038 of other income during the three months ended June 30, 2026 and 2025, respectively.
Current report
Other income in the commercial segment decreased by $78,194, or 32.8%, during the three months ended June 30, 2026, to $159,899, as compared to $238,093 during the same period in Fiscal 2025. The change was primarily attributed to the proportional share of dividend and interest income. In the third quarter of Fiscal 2025, the Company began aggregating excess cash at the corporate level. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. During the second quarter of Fiscal 2026, lower working capital cash usage and higher excess cash balances increased cash returns despite lower earned interest rates. However, the allocated impact was unfavorable compared to the same period in Fiscal 2025, when excess cash balances were aggregated at the segment level.
Current report
Dividend income comprised $60,827 and $74,702 of other income during the three months ended June 30, 2026 and 2025, respectively. Interest income comprised $90,762 and $130,427 of other income during the three months ended June 30, 2026 and 2025, respectively.
Current report
Interest expense decreased by $27,581, or 26.0%, during the three months ended June 30, 2026, to $78,647, as compared to $106,228 during the same period in Fiscal 2025.
Current report
Interest expense in the consumer segment decreased by $15,666, or 29.0%, during the three months ended June 30, 2026, to $38,327, as compared to $53,993 during the same period in Fiscal 2025. The change was attributed to debt amortization and allocated interest expense from corporate debt that matured in the fourth quarter of Fiscal 2025 and from segment debt that matured in the third quarter of Fiscal 2025, resulting in less interest expense in the second quarter of Fiscal 2026.
Current report
Interest expense in the commercial segment decreased by $11,915, or 22.8%, during the three months ended June 30, 2026, to $40,320, as compared to $52,235 during the same period in Fiscal 2025. The change was attributed to debt amortization and allocated interest expense from corporate debt that matured in the fourth quarter of Fiscal 2025, resulting in less interest expense in the second quarter of Fiscal 2026.
Current report
Income Tax (Expense) Benefit
Current report
Net Income (Loss)
Current report
Net income increased by $1,421,787, or 51.7%, during the three months ended June 30, 2026, to $4,174,186, as compared to $2,752,399 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2026 and 2025 for further details.
Current report
Net income increased in the consumer segment by $870,372, during the three months ended June 30, 2026, to $1,513,743, as compared to $643,371 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2026 and 2025 for further details.
Current report
Net income increased in the commercial segment by $551,415, or 26.1%, during the three months ended June 30, 2026, to $2,660,443, as compared to $2,109,028 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended June 30, 2026 and 2025 for further details.
Current report
Comparison of the Six Months Ended June 30, 2026 and 2025
Current report
Sales
Current report
Sales increased by $52,022,869 or 50.4%, during the six months ended June 30, 2026, to $155,155,531, as compared to $103,132,662 during the same period in Fiscal 2025.
Current report
Sales in the consumer segment increased by $46,578,289, or 58.3%, during the six months ended June 30, 2026, to $126,522,651, as compared to $79,944,362 during the same period in Fiscal 2025. The change was primarily attributed to strong performance within our wholesale and retail verticals, which were most pronounced in the first quarter of Fiscal 2026, supported by higher gold and silver prices compared to the same period of Fiscal 2025. As precious metals prices declined during the second quarter of Fiscal 2026 from their late-January peaks, customer selling activity moderated toward more typical levels.
Current report
Sales in the commercial segment increased by $5,444,580, or 23.5%, during the six months ended June 30, 2026, to $28,632,880, as compared to $23,188,300 during the same period in Fiscal 2025. The change was primarily attributed to the strong demand for re-marketed technology assets and components throughout the period. Pricing in certain categories within our ITAD vertical remained higher than in the same period in Fiscal 2025, although these pricing benefits moderated from the first quarter of Fiscal 2026, and results were further supported by the favorable performance of our trade-in vertical and harvested component sales within our electronic waste vertical.
Current report
Cost of goods sold increased by $42,380,568, or 53.8%, during the six months ended June 30, 2026, to $121,157,283, as compared to $78,776,715 during the same period in Fiscal 2025.
Current report
Cost of goods sold in the consumer segment increased by $40,222,269, or 56.6%, during the six months ended June 30, 2026, to $111,297,742, as compared to $71,075,473 during the same period in Fiscal 2025. The change was primarily attributed to higher sales volumes within our wholesale vertical, which was also impacted by the upward movement in gold and silver prices over the same period in Fiscal 2025.
Current report
Cost of goods sold as a percentage of sales in the consumer segment was 88.0% during the six months ended June 30, 2026, as compared to 88.9% during the same period in Fiscal 2025. The change was primarily attributed to stronger margins within our wholesale vertical.
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Removed paragraphs (33)
Previous report
Sales increased by $50,125,061, or 103.9%, during the three months ended March 31, 2026, to $98,380,890, as compared to $48,255,829 during the same period in Fiscal 2025.
Previous report
Sales in the consumer segment increased by $45,022,918, or 122.4%, during the three months ended March 31, 2026, to $81,793,522, as compared to $36,770,604 during the same period in Fiscal 2025. The change was primarily attributed to strong performance across both our retail stores and wholesale verticals, supported by upward movements in gold and silver prices compared with the same period in Fiscal 2025.
Previous report
Sales in the commercial segment increased by $5,102,143, or 44.4%, during the three months ended March 31, 2026, to $16,587,368, as compared to $11,485,225 during the same period in Fiscal 2025. The change was primarily driven by improved pricing in certain product categories sourced from our ITAD vertical, reflecting current demand conditions and industry supply dynamics, which may not persist.
Previous report
Cost of Goods Sold
Previous report
Cost of goods sold as a percentage of sales was 88.1% during the three months ended March 31, 2026, as compared to 88.5% during the three months ended March 31, 2025. The change was primarily attributed to product mix, as our margins associated with wholesale scrap-grade precious metals and bullion were stronger in comparison to the same period in Fiscal 2025.
Previous report
Cost of goods sold in the commercial segment increased by $1,939,481, or 52.0%, during the three months ended March 31, 2026, to $5,667,585, as compared to $3,728,104 during the same period in Fiscal 2025. The change was primarily the aforementioned impact of our ITAD revenue-share settlements and parity in performance across our other commercial segment verticals.
Previous report
Cost of goods sold as a percentage of sales was 34.2% during the three months ended March 31, 2026, as compared to 32.5% during the three months ended March 31, 2025. The change was primarily attributed to product mix. In the same period in Fiscal 2025, we settled a large, high-margin ITAD revenue-share transaction and experienced a higher percentage of service-based revenue.
Previous report
Gross margin increased by $8,652,392, or 72.3%, during the three months ended March 31, 2026, to $20,620,416, as compared to $11,968,024 during the same period in Fiscal 2025.
Previous report
Gross margin in the consumer segment increased by $5,489,730, or 130.4%, during the three months ended March 31, 2026, to $9,700,633, as compared to $4,210,903 during the same period in Fiscal 2025. The net impact of the aforementioned increase in sales of $45,022,918 and increase in cost of goods sold of $39,533,188 resulted in the $5,489,730 increase in gross margin.
Previous report
Gross margin in the commercial segment increased by $3,162,662, or 40.8%, during the three months ended March 31, 2026, to $10,919,783, as compared to $7,757,121 during the same period in Fiscal 2025. The net impact of the aforementioned increase in sales of $5,102,143 and increase in cost of goods sold $1,939,481 resulted in the $3,162,662 increase in gross margin.
Previous report
Selling, General and Administrative
Previous report
Selling, general and administrative expense increased by $519,530, or 6.2%, during the three months ended March 31, 2026, to $8,923,792, as compared to $8,404,262 during the same period in Fiscal 2025.
Previous report
Selling, general and administrative expense in the consumer segment increased by $166,969, or 4.3%, during the three months ended March 31, 2026, to $4,054,875, as compared to $3,887,906 during the same period in Fiscal 2025. The change was primarily attributed to an increase in insurance costs, costs related to a new store that opened in the second
Previous report
quarter of Fiscal 2025 that were not present in the first quarter of Fiscal 2025 results, and variable-processing costs associated with supplies, and an increase in merchant services fees associated with higher transaction volumes.
Previous report
Selling, general and administrative expense in the commercial segment increased by $352,561, or 7.8%, during the three months ended March 31, 2026, to $4,868,917, as compared to $4,516,356 during the same period in Fiscal 2025. The change was primarily attributed to an increase in lease expense associated with lease renewal terms, an increase in variable-processing costs associated with supplies, and an increase in merchant services and online sales fees associated with higher transaction volumes.
Previous report
Depreciation and Amortization
Previous report
Depreciation and amortization expense increased by $40,622, or 9.1%, during the three months ended March 31, 2026, to $485,963, as compared to $445,341 during the same period in Fiscal 2025.
Previous report
Depreciation and amortization expense in the consumer segment increased by $34,468, or 19.1%, during the three months ended March 31, 2026, to $215,100, as compared to $180,632 during the same period in Fiscal 2025. The change was primarily attributed to the depreciation of assets associated with a new store that came online in the second quarter of Fiscal 2025, which was not present in the first quarter of Fiscal 2025 results.
Previous report
Other Income
Previous report
Other income in the consumer segment increased by $92,332, or 10,875.4%, during the three months ended March 31, 2026, to $93,181, as compared to $849 during the same period in Fiscal 2025. The change was primarily attributed to the proportional share of dividend and interest income. In the third quarter of Fiscal 2025, the Company began aggregating excess cash at the corporate level. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. During the quarter, there was greater utilization of cash for working capital, with our earned interest rate also being at a lower rate, which contributed to the unfavorable change at the consolidated level. The impact of dividend and interest income is referenced below.
Previous report
Dividend income comprised $37,048 and $0 of other income during the three months ended March 31, 2026 and 2025, respectively. Interest income comprised $55,740 and $0 of other income during the three months ended March 31, 2026 and 2025, respectively.
Previous report
Other income in the commercial segment decreased by $127,593, or 62.3%, during the three months ended March 31, 2026, to $77,163, as compared to $204,756 during the same period in Fiscal 2025. The change was primarily attributed to the proportional share of dividend and interest income. In the third quarter of Fiscal 2025, the Company began aggregating excess cash at the corporate level. Excess cash balances are now aggregated at the corporate level to optimize earnings, rather than being held at the segment level. During the quarter, there was greater utilization of cash for working capital, and our earned interest rate was also lower, which contributed to the unfavorable change at the consolidated level. The impact of dividend and interest income is referenced below.
Previous report
Dividend income comprised $43,149 and $54,864 during the three months ended March 31, 2026 and 2025, respectively. Interest income comprised $21,084 and $144,331 of other income during the three months ended March 31, 2026 and 2025, respectively.
Previous report
Interest expense in the consumer segment decreased by $15,662, or 29.0%, during the three months ended March 31, 2026, to $38,385, as compared to $54,047 during the same period in Fiscal 2025. The change was attributed to debt amortization.
Previous report
Interest expense in the commercial segment decreased by $11,887, or 22.7%, during the three months ended March 31, 2026, to $40,387, as compared to $52,274 during the same period in Fiscal 2025. The change was attributed to debt amortization.
Previous report
Income Tax Expense
Previous report
Net income increased by $6,346,386, or 254.5%, during the three months ended March 31, 2026, to $8,839,733, as compared to $2,493,347 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended March 31, 2026 and 2025 for further details.
Previous report
Net income increased in the consumer segment by $4,221,204, or 6,109.4%, during the three months ended March 31, 2026, to $4,290,298, as compared to $69,094 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended March 31, 2026 and 2025 for further details.
Previous report
Net income increased in the commercial segment by $2,125,182, or 87.7%, during the three months ended March 31, 2026, to $4,549,435, as compared to $2,424,253 during the same period in Fiscal 2025. Refer to the aforementioned attributes discussed within the Comparison of the Three Months Ended March 31, 2026 and 2025 for further details.
Previous report
The following table provides a reconciliation of the Company’s net income to Adjusted EBITDA and Adjusted EBITDAR for the three months ended March 31, 2026 and 2025:
Previous report
The following table provides a reconciliation of the Company’s net income to Adjusted EBITDA and Adjusted EBITDAR for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025:
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
The following table reconciled Free Cash Flow to the comparable U.S. GAAP financial measures for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025:
Reworded paragraphs (23)
Previous wording
This Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (this “Form 10-Q”), including but not limited to: (i) the section of this Form 10-Q entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” (ii) information concerning our business prospects or future financial performance, anticipated revenues, expenses, profitability or other financial items; and (iii) our strategies, plans and objectives, together with other statements that are not historical facts, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally can 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.” We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements other than statements of historical information provided herein are forward-looking and based on current expectations regarding important risk factors. Many of these risks and uncertainties are beyond our ability to control, and, in many cases, we cannot predict all of the risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results could differ materially from those expressed in the forward-looking statements, and 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 the section entitled “Risk Factors” in the Company’s 2025 Annual Report and any material updates are described under the section of this Form 10-Q entitled “Risk Factors” and elsewhere in this Form 10-Q. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the operations, performance, development, and results of our business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date thereon, including, without limitation, changes in our business strategy or planned capital expenditures, or store growth plans, or to reflect the occurrence of unanticipated events.
Current wording
This Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (this “Form 10-Q”), including but not limited to: (i) the section of this Form 10-Q entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” (ii) information concerning our business prospects or future financial performance, anticipated revenues, expenses, profitability or other financial items; and (iii) our strategies, plans and objectives, together with other statements that are not historical facts, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally can 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.” We intend that all forward-looking statements be subject to the safe harbors created by these laws. All statements other than statements of historical information provided herein are forward-looking and based on current expectations regarding important risk factors. Many of these risks and uncertainties are beyond our control, and, in many cases, we cannot predict all the risks and uncertainties that could cause our actual results to differ materially from those expressed in the forward-looking statements. Actual results could differ materially from those expressed in the forward-looking statements, and 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 the section entitled “Risk Factors” in the Company’s 2025Annual Report, and any material updates are described under the section of this Form 10-Q entitled “Risk Factors” and elsewhere in this Form 10-Q. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the operations, performance, development, and results of our business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date thereon, including, without limitation, changes in our business strategy or planned capital expenditures, or store growth plans, or to reflect the occurrence of unanticipated events.
Previous wording
This section includes a discussion of our operations for the three months ended March 31, 2026 and 2025. The following discussion and analysis provide information that management believes is relevant to assessing and understanding our financial condition, liquidity, and results of operations. The discussion should be read in conjunction with the Company’s 2025 Annual Report, the unaudited condensed consolidated financial statements, and the related Notes thereto included in Part I, Item 1 of this report.
Current wording
This section includes a discussion of our operations for the three and six months ended June 30, 2026 and 2025. The following discussion and analysis provide information that management believes is relevant to assessing and understanding our financial condition, liquidity, and results of operations. The discussion should be read in conjunction with the Company’s 2025 Annual Report, the unaudited condensed consolidated financial statements, and the related Notes thereto included in Part I, Item 1 of this report.
Previous wording
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
Current wording
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 ability to convert accounts receivable. During the six months ended June 30, 2026, the Company collected the outstanding accounts receivable from a refining customer as of December 31, 2025, reducing the working capital impact of these conditions as of the date of this report.
Previous wording
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 quarter ended March 31, 2026. 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 wording
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 three and six months ended June 30, 2026. 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.
Previous wording
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 wording
The consumer segment does not source inventory from or sell 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.
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, and secondary market bullion. We incorporate recycled diamonds and gemstones into 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
Our consumer segment primarily operates in the jewelry industry, specializing in the online and brick-and-mortar sale of authenticated high-end luxury goods, including pre-owned fine jewelry, diamonds and gemstones, luxury watches, and secondary market bullion. We incorporate recycled diamonds and gemstones into new designs, meaning they were previously set and unset, resulting in a low-carbon, ethically sourced product. The Company caters to consumers seeking environmentally responsible options for engagement rings, wedding bands, and other fine jewelry at accessible prices. Our profound commitment to extending the lifespan of luxury goods stems from our understanding that well-crafted items possess enduring quality, enabling them to maintain their beauty and value as they pass from one owner to another.
Previous wording
Cost of goods sold increased by $41,472,669, or 114.3%, during the three months ended March 31, 2026, to $77,760,474, as compared to $36,287,805 during the same period in Fiscal 2025.
Current wording
Cost of goods sold increased by $907,899, or 2.1%, during the three months ended June 30, 2026, to $43,396,809, as compared to $42,488,910 during the same period in Fiscal 2025.
Previous wording
Cost of goods sold in the consumer segment increased by $39,533,188, or 121.4%, during the three months ended March 31, 2026, to $72,092,889, as compared to $32,559,701 during the same period in Fiscal 2025. The change was primarily attributed to higher sales volumes across our retail stores and wholesale verticals, which were also impacted by the upward movement in gold and silver prices.
Current wording
Cost of goods sold in the consumer segment increased by $689,081, or 1.8%, during the three months ended June 30, 2026, to $39,204,853, as compared to $38,515,772 during the same period in Fiscal 2025. The change was primarily attributed to higher sales volumes within our wholesale vertical, which was also impacted by the upward movement in gold and silver prices over the same period in Fiscal 2025.
Previous wording
Depreciation and amortization expense in the commercial segment increased by $6,154, or 2.3%, during the three months ended March 31, 2026, to $270,863, as compared to $264,709 during the same period in Fiscal 2025. 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 decreased by $1,609, or 0.6%, during the three months ended June 30, 2026, to $263,198, as compared to $264,807 during the same period in Fiscal 2025. There was no material impact from the allocation of depreciation expense or from assets capitalized or reaching maturity in each comparative period, and as such, no discussion point.
Previous wording
Other income decreased by $35,261, or 17.1%, during the three months ended March 31, 2026, to $170,344, as compared to $205,605 during the same period in Fiscal 2025.
Current wording
Other income decreased by $69,888, or 17.7%, during the three months ended June 30, 2026, to $324,363, as compared to $394,251 during the same period in Fiscal 2025.
Previous wording
Income tax expense increased by $1,738,142, or 240.0%, during the three months ended March 31, 2026, to $2,462,500, as compared to $724,358 during the same period in Fiscal 2025. The Company has a deferred tax liability reflecting a future obligation to pay taxes. 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 21.8% and 22.5% for the three months ended March 31, 2026 and 2025, 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 Company for the decrease for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
Current wording
Income tax expense increased by $382,917, or 48.4%, during the three months ended June 30, 2026, to $1,173,986, as compared to $791,069 during the same period in Fiscal 2025. Currently, the Company has a deferred tax liability reflecting a future obligation to pay taxes. 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 22.0% and 22.3% for the three months ended June 30, 2026 and 2025, 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 decrease for the three months ended June 30, 2026 and 2025.
Previous wording
Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.24, or 240.0%, during the three months ended March 31, 2026 to $0.34, as compared to $0.10 same period in Fiscal 2025.
Current wording
Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.05, or 45.5%, during the three months ended June 30, 2026, to $0.16, as compared to $0.11 during the same period in Fiscal 2025.
Previous wording
Interest expense decreased by $27,549, or 25.9%, during the three months ended March 31, 2026, to $78,772, as compared to $106,321 during the same period in Fiscal 2025.
Current wording
Interest expense decreased by $55,130, or 25.9%, during the six months ended June 30, 2026, to $157,419, as compared to $212,549 during the same period in Fiscal 2025.
Previous 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.
Current wording
Within this management discussion and analysis, we use supplemental measures of our financial 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. 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 financial position, results of operations, liquidity, and ability to meet financial obligations.
Previous wording
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 wording
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. The Company also presents certain non-U.S. GAAP financial measures and its nearest financial measure utilizing U.S. GAAP for the trailing four quarters period ended June 30, 2026. Management considers the trailing four quarters period ended June 30, 2026, to be helpful in understanding historical financial results, trends, the calculation of leverage ratios, and free cash flow. The non-U.S. GAAP and U.S. GAAP financial measures for the trailing four quarters period ended June 30, 2026, are compared against the most recent fiscal period ended December 31, 2025, which is the nearest twelve-month reporting period under U.S. GAAP. These financial measure comparisons, along with comparisons utilizing three- and six-month periods for non-U.S. GAAP and its nearest financial measure utilizing U.S. GAAP may differ materially from those reported for the fiscal period ended December 31, 2025.
Previous wording
The following table depicts the Company’s Net Cash to its comparable U.S. GAAP financial measures:
Current wording
The following table reconciles Net Cash to its comparable U.S. GAAP financial measures:
Previous wording
The following table reconciles the components of the Consumer and Commercial segment’s Inventory Turnover for the trailing four quarters ended March 31, 2026 and for the year ended December 31, 2025:
Current wording
The following table reconciles the components of the consumer segment’s Inventory Turnover for the trailing four quarters ended June 30, 2026 and for the year ended December 31, 2025:
Previous wording
The following table summarizes the Company’s condensed consolidated statement of cash flows for the three months ended March 31, 2026 and 2025:
Current wording
The following table summarizes the Company’s condensed consolidated statement of cash flows:
Previous wording
Cash flows provided by operations increased by $20,025,382, or 1,770.5%, during the three months ended March 31, 2026, to $21,156,439, as compared to $1,131,057 during the same period in Fiscal 2025. The increase in cash provided by operations was primarily attributed to an increase in net income, certain non-cash adjustments to reconcile net income to operating cash flow (as detailed in the condensed consolidated statements of cash flows), and the following significant net changes in operating assets and liabilities:
Current wording
Cash flows provided by operations increased by $23,351,008, or 627.3%, during the six months ended June 30, 2026, to $27,073,602, as compared to $3,722,594 during the same period in Fiscal 2025. The increase in cash provided by operations was primarily attributed to an increase in net income, certain non-cash adjustments to reconcile net income to operating cash flow (as detailed in the condensed consolidated statements of cash flows), and the following significant net changes in cash associated with operating assets and liabilities:
Previous wording
Cash flows (used in) investing activities increased by $184,914, or 48.3%, during the three months ended March 31, 2026, to $567,901, as compared to $382,987 during the same period in Fiscal 2025. The increase in cash (used in) investing activities was primarily attributed to maintenance-related capital improvements to our corporate head office and in relation to the build-out of a new store within our consumer segment.
Current wording
Cash flows (used in) investing activities increased by $651,174, or 74.0%, during the six months ended June 30, 2026, to $1,530,683, as compared to $879,509 during the same period in Fiscal 2025. The increase in cash (used in) investing activities during the six months ended June 30, 2026, was primarily attributed to maintenance-related capital improvements to our corporate head office and the build-out of a new store within our consumer segment.
Previous wording
Cash flows (used in) financing activities decreased by $200,826, or 61.1%, during the three months ended March 31, 2026, to $127,982, as compared to $328,808 during the same period in Fiscal 2025. The decrease in cash (used in) financing activities was primarily attributed to normal course debt repayment.
Current wording
Cash flows (used in) financing activities decreased by $344,307, or 57.4%, during the six months ended June 30, 2026, to $255,912, as compared to $600,219 during the same period in Fiscal 2025. The decrease in cash (used in) financing activities during the six months ended June 30, 2026, was primarily attributed to debt repayments, which were less in Fiscal 2026 as a result of debt maturities that occurred in the third and fourth quarters of 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 needing to fund our operations through the line of credit, and we have no amounts drawn as of March 31, 2026. 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 the need to fund our operations via the line of credit and we do not have any amounts drawn as of June 30, 2026. 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 do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to our stockholders.
Current wording
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
The impact of dividend and interest income is referenced below.
Current report — wording carried from elsewhere
The impact of dividend and interest income is referenced below.
Current report — wording carried from elsewhere
The following table depicts our disaggregated condensed consolidated statements of income for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
The individual segments reported the following for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Depreciation and amortization expense in the commercial segment increased by $4,545, or 0.9%, during the six months ended June 30, 2026, to $534,061, as compared to $529,516 during the same period in Fiscal 2025. There was no material impact from the impact of allocated corporate depreciation expense or from assets capitalized or reaching maturity in each comparative period, and as such, no discussion point.
Current report — wording carried from elsewhere
Income tax expense increased by $2,121,059, or 140.0%, during the six months ended June 30, 2026, to $3,636,486, as compared to $1,515,427 during the same period in Fiscal 2025. 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 21.8% and 22.4% for the six months ended June 30, 2026 and 2025, 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 Company for the decrease for the six months ended June 30, 2026, and 2025.
Current report — wording carried from elsewhere
The following table depicts the Company’s earnings per share:
Current report — wording carried from elsewhere
Basic and diluted earnings per share attributable to holders of our Common Stock increased by $0.30, or 150.0%, during the six months ended June 30, 2026, to $0.50, as compared to $0.20 during the same period in Fiscal 2025.
Current report — wording carried from elsewhere
The following table reconciles Free Cash Flow to the comparable U.S. GAAP financial measures for the trailing four quarters ended June 30, 2026 and for the year ended December 31, 2025:
Current report — wording carried from elsewhere
The following table reconciles the components of the commercial segment’s Inventory Turnover for the trailing four quarters ended June 30, 2026 and for the year ended December 31, 2025
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.