ELA Envela Dashboard

Risks

• The voting power in our company is substantially controlled by a small number of stockholders, which may, among other things, delay or frustrate the removal of incumbent directors or a takeover attempt, even if such events may be beneficial to our stockholders.
• In fiscal year 2014, we came to an agreed settlement with the SEC, stemming from an investigation of accounting irregularities. As part of this settlement we agreed to a series of corporate governance reforms, which were independently verified in fiscal year 2015. If we do not comply with the corporate governance reforms, we could face additional enforcement actions by the SEC or other governmental or regulatory bodies, as well as additional shareholder lawsuits, all of which could have significant negative financial or operational implications.
• In the past, our internal controls over financial reporting and procedures related thereto have been deficient. Although we have taken significant remedial measures, our previous deficiencies could have a material adverse effect on our business and on our investors’ confidence in our reported financial information, and there is no guarantee that our internal controls over financial reporting and procedures will not fail in the future.
• The market for precious metals is inherently unpredictable.
• Adverse economic conditions in the U.S. or in other key markets, and the resulting declines in consumer confidence and spending, could have a material adverse effect on our operating results.
• The coronavirus pandemic continues to be serious threat to health and economic wellbeing affecting our business, customers and supply chain.
• We face intense competition across all markets for our products and services, which may lead to lower revenue or operating margins.
• Our DGSE wholesale and jewelry business is seasonal, with sales traditionally greater during certain holiday seasons, so events and circumstances that adversely affect holiday consumer spending will have a disproportionately adverse effect on our operational results.
• If we misjudge the demand for our products, high inventory levels could adversely affect future operating results and profitability.
• Changes in our liquidity and capital requirements and our ability to secure financing and credit could materially adversely affect our financial condition and results of operations.
• Interest-rate fluctuations could increase our interest expense.
• A failure in our information systems could prevent us from effectively managing and controlling our business or serving our customers.
• Our success depends on our ability to attract, retain and motivate qualified directors, management and other skilled employees.
• We have not paid dividends on our Common Stock in the past and do not anticipate paying dividends on our Common Stock in the foreseeable future.
• We are subject to new and existing corporate-governance and internal-control reporting requirements, and our costs related to compliance with, or our failure to comply with, existing and future requirements could adversely affect our business.
• Our websites may be vulnerable to security breaches and similar threats, which could result in our liability for damages and harm to our reputation.
• Fluctuations in the availability and pricing of commodities, particularly gold, which accounts for the majority of our merchandise costs, could adversely impact our earnings and cash availability.
• The conflict-mineral diligence process, the results from that process and the related reporting obligations could increase costs, adversely affect our reputation and adversely affect our ability to obtain merchandise.
• Our customer and vendor concentration in one significant entity could have an adverse impact on our business.