Item 1B. Unresolved Staff Comments
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
JAKKS has adopted a cybersecurity framework to
help manage and mitigate cybersecurity risks.
JAKKS has implemented cybersecurity policies,
processes and procedures to aid in the identification, protection, detection of cyber related issues, and the response to and recovery
from cybersecurity breaches. A summary of the principal activities JAKKS has undertaken to strengthen its cybersecurity posture and mitigate
its cybersecurity risks:
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A subcommittee of the Board of Directors has been established to oversee and manage the company’s risk, response, and recovery policies, processes, and procedures related to, and stemming from, cyber-related issues;
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Purchased cybersecurity risk insurance to protect against potential losses arising from a cybersecurity incident;
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Implementation of weekly vulnerability and semi-annual penetration tests to identify, and if necessary, remediate, any potential risk to the organization;
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Maintain and review annually a Business Continuity Plan and Cyber Attack Plan ;
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Implemented a revised and updated phishing email training program semi-annually; and
As part of our cybersecurity program, the Senior
Vice President of Operations and Vice President of Information Technology, collectively referred to as our “Cybersecurity Team,”
reviews our cybersecurity posture, identifies areas in need of improvement, and helps foster a culture of compliance (including training
of all employees). Our Vice President of Information Technology has over 25 years of experience in various roles involving managing information
security, developing cybersecurity strategy, and implementing cybersecurity program. The Company’s program also includes activities
to respond to and recover from cybersecurity incidents, including processes to triage, assess severity, investigate, escalate, contain,
and remediate an incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
Our Cybersecurity Team assesses cybersecurity
risks, including those related to our supply chain and third-party service providers that have access to our systems or facilities where
JAKKS’ data is stored. The team assesses how cybersecurity risks affect or are reasonably likely to materially affect the Company,
including our operations or financial position. Our Cybersecurity Team is responsible for the Company’s risk assessment, risk management,
disaster recovery, and auditing of JAKKS overall cybersecurity program. The Cybersecurity Team meets with the Cybersecurity Subcommittee
of the Board of Directors to discuss, identify, and address cybersecurity risks and review updates to our risk management program to
ensure cybersecurity risks to the organization are mitigated. For further discussion of the risks associated with cybersecurity incidents,
see the cybersecurity risk factors beginning on page 11 of the section entitled “Item 1A. Risk Factors” in this Form 10-K.
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In December 2022, the Company learned of a cybersecurity
threat to its information technology system (“IT System”), and that certain data, including personal data of employees, had
been extracted from the Company’s IT System. Upon learning of the cybersecurity threat, the Company launched an investigation and
undertook prompt action, including employing containment protocols to mitigate the impact of the threat, engaging third-party information
technology cyber security and forensics experts and special legal counsel, and utilizing additional security measures to help safeguard
the integrity of its IT System’s infrastructure and the data contained therein. The Company has not identified any material damage
suffered from the incident.