ELA

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How ELA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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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. PART I ITEM 1.
BUSINESS OVERVIEW Envela is a leading provider of recommerce and recycling services at the forefront of the circular economy.
Our core business lines focus on extending product lifespans by buying and selling goods in the secondary market.
The Company is primarily comprised of two key operating and reportable segments: consumer and commercial.
The consumer segment focuses on selling authenticated luxury goods, including pre-owned and repurposed fine jewelry, diamonds, gemstones, luxury watches, and secondary-market bullion.
At the same time, the commercial segment provides solutions for ITAD and product returns, as well as the de-manufacturing of end-of-life electronic assets, the reclamation of base and precious metals, and other saleable materials.
Our ability to understand new market trends while also paying homage to the past with vintage pieces makes us the destination of choice for customers seeking sustainable, value-driven purchases of some of the world’s most iconic brands.
The division was formed through the consolidation of multiple retail merchants, with its roots tracing back more than half a century to the founding of its earliest predecessor in 1972.
The Company has long been associated with precious metals, trading silver since 1972 and gold since the repeal of the U.S. law limiting gold ownership in 1974.
Commercial Segment Our commercial segment operates in multiple sustainability verticals focused on the responsible disposition of end-of-life technology assets.
Our electronics recycling business was originally founded in 2009 to meet the demand for responsible electronic waste disposal.
We focus on adhering to regulations and industry standards to ensure proper de-manufacturing and recycling of electronic devices.
Our commercial segment also provides detailed asset disposition data, enabling our business partners to address their sustainability goals and responsibilities to internal and external stakeholders.
We also provide product return services to retailers and global electronics manufacturers.
Fiscal 2025 was our diamond jubilee, marking 60 years of continuous operations and delivering value to stakeholders.
While we look forward to the journey ahead, we remain grounded in our core principles of providing best-in-class service, upholding our sustainability principles, and evolving our business models to exceed the expectations of our discerning customers.
Detailed below are significant business developments that impacted the fiscal years ending December 31, 2025 and 2024: Consumer Segment In Fiscal 2025, we continued our expansion by adding 1 store, marking the culmination of our initiative to open 7 stores.
During the year, we focused on optimizing the performance of our new stores while also maintaining strong engagement with business partners and customers throughout our business verticals and strategically planning for further growth opportunities.
In Fiscal 2024, we rapidly expanded our brick-and-mortar footprint by opening 5 stores under our Four Nines brand, which also features Bijoux Exchange™, an in-store buying platform.
Personnel are dedicated to working with our business partners who are seeking to monetize their luxury hard assets due to changes in style, damage, financial need, or life events.
Commercial Segment In Fiscal 2025, we experienced the full impact of greater diversification from business lines that required the outright procurement of technology to those involving fee-for-service, which strengthened our margins.
We also continued with our disciplined approach to cost containment.
In Fiscal 2024, we completed our corporate-wide enterprise resource planning (“ERP”) system implementation, which enhanced reporting capabilities and business intelligence platforms, with a primary focus on our commercial segment.
The fourth quarter saw an uptick in our fee-for-service relationships, a trend that carried into Fiscal 2025.
These fee-for-service relationships allow our business partners to outsource the management of testing and packaging of items for resale while maintaining custody of their inventory.
MARKET Each of the Company’s reportable segments faces unique market conditions that affect its operations.
Consumer Segment Opportunity Detailed below are the key underlying market dynamics that drive our product and service offerings, engagement strategies, and interactions in these markets: Fine Jewelry Underpinning the fine jewelry market are changing consumer preferences.
Consumers are being drawn to sustainability-driven brands whose digital and brick-and-mortar buying experiences are fully aligned.
We believe our brands offer a compelling buying option for consumers seeking exceptional value and sustainably driven luxury hard assets.
We continue to seek opportunities to further build out our omnichannel marketing capabilities to enhance our buying and selling capabilities.
We are passionate about our store aesthetics and providing a luxury retail store experience.
Our stores are ideally located, secure, staffed with product and authentication experts, and provide access to the world’s most iconic brands.
Our primary interaction in the fine jewelry market centers on our in-store buying and selling experience, which provides an opportunity for business partners and customers to interact with product specialists to either value an asset for sale to us or find a piece that fits their style at their intended price point. Gold and Silver Bullion The gold and silver bullion markets are driven by macroeconomic forces, geopolitical factors, and shifting investment paradigms that drive investors into safe-haven metals.
While institutional investors drive large-scale transactions, retail investors participate through smaller-denomination transactions.
Silver also provides a unique demand thesis as it is also utilized in industrial applications.
Its demand in industrial applications is being driven by battery energy storage, AI-driven data centers, and electric vehicles.
Our primary interaction in the bullion market is twofold: we provide feedstock to refiners via unset fine jewelry and through the buying and selling of secondary market bullion.
Our bullion products are marketed through our stores and via our online platform.
Luxury Watches The luxury watch market is driven by a continued rise in wealth, collectability, craftsmanship, and investment interest.

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Risk Factors” below and elsewhere in this Form 10-K.
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, segment growth plans, or to reflect the occurrence of unanticipated events.
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. PART I ITEM 1.
BUSINESS OVERVIEW Envela is a leading provider of recycling and recommerce services at the forefront of the circular economy.
Our core business lines focus extending the lifespan of products through buying and selling goods in the secondary market.
The company is comprised primarily of two key operating and reportable segments: consumer and commercial.
The consumer segment focuses on selling authenticated high-end luxury goods, including pre-owned and repurposed fine jewelry, diamonds, gemstones, luxury watches, and secondary market bullion.
At the same time, the commercial segment provides solutions for de-manufacturing end-of-life electronic assets, reclaiming base and precious metals, and other saleable materials, while also expanding our presence in the ITAD industry.
Our ability to understand new market trends, while also paying homage to the past with vintage pieces, allows us to be the destination of choice for customers seeking a sustainable and value-driven purchase of some of the world’s most iconic brands.
Operating as a multi-brand retailer we aim to maximize our market reach, the division was formed through the consolidation of multiple retail merchants, with its roots tracing back more than half a century to the founding of its earliest predecessor in 1972.
The Company has long been associated with precious metals, with a history of trading silver since 1972 and trading gold since the repeal of the U.S. law limiting gold ownership in 1974.
Commercial Our commercial segment operates in multiple sustainability verticals focused on the responsible disposition of end-of-life technology assets.
Our electronics recycling business was originally founded in 2009 on the premise of addressing the demand for responsible electronic waste disposal.
We focus on adhering to regulations and industry standards, ensuring the proper dismantling and recycling of electronic devices.
Our commercial segment also provides detailed asset disposition data that enables our customers to address their sustainability goals and responsibilities to internal and external stakeholders.
In 2025, Envela will be celebrating its diamond jubilee, marking 60 years, and we are looking forward to recognizing our employees, customers, and stakeholders who have contributed to our journey.
Detailed below are significant business developments that impacted fiscal years ending December 31, 2024 and 2023.
Consumer Segment On September 12, 2024, the consumer segment entered into a purchase agreement relating to the acquisition of the assets of a bespoke fabricator of jewelry in Scottsdale, Arizona (the “Scottsdale Transaction”).
See Note 4 – Changes in Business for further details.
In Fiscal 2024, we rapidly expanded our bricks-and-mortar footprint by opening 5 stores under our Four Nines brand which also features Bijoux Exchange an in-store buying platform.
Personnel are dedicated to customers seeking to monetize their luxury hard assets due to changes in style, damage, financial need, or life events.
Commercial Segment In Fiscal 2023, the commercial segment began to optimize its overall business model as the commercial segment was born from a series of acquisitions.
The business began to focus on unifying its systems, enhancing its business intelligence platforms in support of its commercial and operations teams as well as aligning its cost structure with margin achievement which became steady state in Fiscal 2024.
Additionally, the business has focused on diversifying its business lines from those requiring the outright procurement of technology to those involving fees for services.
These fee-for-service relationships allow our clients to outsource the management of the testing and packaging of items destined for secondary sales outlets while maintaining control over their inventory.
MARKET Each of the Company’s reportable segments has unique market conditions that impact their respective operations.
Consumer Segment Many online and brick-and-mortar retailers are of significant size with substantial resources.
We compete to buy and sell pre-owned luxury hard assets such as fine jewelry, luxury watches, diamonds and gemstones, and bullion against established retailers, auction houses, secondary market online platforms, as well as other resale goods marketplaces.
Our customers seek to maximize the value of their purchases and have multiple options to evaluate our value and service proposition.
Our sales of outright precious metals to refiners and diamonds and gemstones to wholesalers take place at near-spot market values and, as such are not subject to peer competition, but are impacted by macroeconomic conditions impacting their respective markets.
All of our products are sourced and sold domestically.
Commercial Segment Our competition is primarily attributed to the inbound procurement of IT assets and commodities; albeit we do experience certain levels of competition on outright sales of IT assets to consumers.
Our sales of outright IT assets are primarily marketed through online channels on which our customers can compare like goods against an array of purveyors, with select IT assets being sold wholesale into international markets.
Our sales of outright base and precious metals-laden materials are sold at near-spot market values and, as such, are not subject to peer competition but are inherently impacted by macroeconomic market conditions.
The commercial segment’s business is also subject to both multi-year and spot transactions, of which the multi-year contracts may be subject to cancellation on short notice.
CYCLICALITY AND SEASONALITY Each of the Company’s reportable segments has aspects of cyclicality stemming from macroeconomic conditions consumer behavior, and commodity markets, but also from seasonality within a given fiscal year.
Consumer Segment The consumer segment business experiences seasonality with the fourth quarter holiday months of November and December typically being the highest volume months of the year.
However, seasonality is less pronounced than traditional luxury goods retailers as a result of our business being underpinned by our precious metals business, which is driven by the perception of market trends and global economic activity.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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