CPS TECHNOLOGIES CORPDE

Item1C. Cybersecurity

Cybersecurity is an area of increasing concern to management of and investors in CPS. While CPS has been ITAR compliant for many years, that in itself doesnot completely mitigate the risks of a cybersecurity incident. The Company is currently also working towards full compliance with NIST800-171. In working towards this goal, CPS has retained an outside consulting firm to work through this process and help us implement the policies, processes and procedures to further mitigate cybersecurity risks. CPS generally keeps all employee personally identifiable information with its payroll service provider. Each year the provider furnishes us with their SOC report which includes their cybersecurity policies and procedures.

Management isnot aware of any previous cybersecurity incidents of any significance. Nevertheless, there is always a risk that a phishing attempt, ransomware or other attack by a bad actor could be successful. Although CPS is generally down the supply chain from prime contractors, the fact that we do work in the aerospace and defense industries does make us a potential target. Please refer to the risk factors titled “Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs”* and “If we are subject to cyber-attacks, we could incur substantial costs and, if such attacks are successful, we could incur significant liabilities, reputational harm, and disruption to our operations” in “Risk Factors” in Part I, Item1A* of this Form10-K for more information on the risks posed to us by cybersecurity threats.* Based on information currently available, management doesnot* believe that there is a reasonably likely risk of these issues, nevertheless the possibility ofone occurring cannot be completely ruled out.