Envela Corp

ITEM IC. CYBERSECURITY

The Company recognizes the importance of developing, implementing, and maintaining cybersecurity measures to ensure the security of our information systems and networks and the confidentiality, availability, and integrity of our data. We believe that we have processes in place to oversee and identify material risks from cybersecurity threats. We review our security plans and strategies as threats and conditions evolve.

The Company depends on theproper functioning, availability, and security of its information systems, including financial, data processing, communications, and operating systems. Several information systems are software applications provided bythird parties.

Ourinformation technology team under the direction of our Systems Engineer who has over 15 years of experience, evaluates and addresses cybersecurity risks in alignment with our risk profile, business objectives, and operational needs. In support of these processes, we employ cybersecurity technologies, including automated tools, designed to monitor, identify, and address cybersecurity risks. Employees receive periodic training on cybersecurity, including tests on “phishing” and “social engineering”, to assess the effectiveness of the cybersecurity training program and enhance awareness of cybersecurity threats among employees. Further, we may engage third-party advisors, from time to time, in evaluating our security infrastructure, strategies, and incident management processes.

Ourmanagement team is briefed regularly on information security, including discussion of processes such as those listed above to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. Our Board is charged with providing oversight of our risk management process. Periodically, our Board reviews risk assessments, including cybersecurity risks, prepared by management and/or third-party providers.

There have beenno previous cybersecurity incidents that have materially affected us to date, including our business strategy, results of operations, or financial condition. However, any future potential risks from cybersecurity threats,

including but not limited to exploitation of vulnerabilities, ransomware, denial of service, or other similar threats may have material adverse effects on the execution of our business strategies, reputation, financial position, and results of operations.

Refer to Item 1A. Risk Factors, Risks Related to Cyber Threats for further details.