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 we have processes in place to identify and oversee 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 with 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 to evaluate our security infrastructure, strategies, and incident management processes.

Ourmanagement team is briefed regularly on information security, including discussions of processes such as those listed above to monitor and manage the prevention, detection, mitigation, and remediation of cybersecurity incidents. Our Board is charged with overseeing our risk management strategies. 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 risks from cybersecurity threats, including, but not limited to, exploitation of vulnerabilities, ransomware, denial-of-service attacks, or other similar threats, may have material adverse effects on the execution of our business strategies, reputation, financial condition, and results of operations.

Refer to Item 1A. Risk Factors, Risks Related to Cyber Threats and Rapid Advancements in AI for further details.