Item 1B. Unresolved Staff Comments
Item
1B. UNRESOLVED STAFF COMMENTS
None.
Item
1C. Cybersecurity
Risk management and strategy.
While no organization can eliminate cybersecurity risk, the Company
employs a cybersecurity strategy that is designed to mitigate cybersecurity and information technology risk. The Company and its contracted
providers have implemented practices consistent with the National Institute of Standards and Technology (NIST) methodology for security.
These efforts are designed to protect against, and mitigate the effects of, among other things, cybersecurity incidents where unauthorized
parties attempt to access confidential, sensitive, or personal information; potentially hold such information for ransom; destroy data;
disrupt or delay our operations or systems; or otherwise cause harm to the Company, our customers, employees, vendors, or other key stakeholders.
Managing Material Risks & Integrated Overall Risk Management
Cybersecurity is part of the Company’s enterprise risk management
scope. In addition, the Company has comprehensive monitoring and employee training, underscored by a set of policies and procedures that
directly or indirectly relate to cybersecurity, such as policies related to encryption standards, antivirus protection, remote access,
multifactor authentication, confidential information and the use of the internet, social media, email and wireless devices. Members of
the Company’s management work closely with the IT department and its contracted providers to continuously evaluate and address cybersecurity
risks and policies in alignment with the Company’s business objectives and operational needs.
Use of Third Parties
The Company engages cybersecurity consultants and service providers
to assess and enhance its cybersecurity practices, and to monitor its infrastructure in real time for threats. These third parties conduct
penetration testing and risk assessments to identify weaknesses and recommend improvements. Additionally, the Company leverages a number
of third-party tools, training and technologies as part of its efforts to enhance cybersecurity functions. This includes a managed security
service provider to augment the Company’s dedicated security operations team, an endpoint detection and response system for continuous
monitoring, detection, and response capabilities, and a security information and event management solution to automate real-time threat
detection, investigation, and prioritization.
We also rely on technology integration with third party vendors to
support and conduct our business and operations, which may include processing of confidential and other sensitive data. We require contractually
and operationally that appropriate data security and cybersecurity practices are in place. Despite our efforts, it’s important to note
that service providers are ultimately responsible to establish and uphold their respective cybersecurity programs. We have limited ability
to monitor the cybersecurity practices of our service providers and there can be no assurance that we can prevent or mitigate the risk
of any compromise or failure in the information systems, software, networks, or other assets owned or controlled by outside service providers,
which could have an adverse effect on the security of our information systems.
Monitoring and Response to Cybersecurity Incidents
The Company’s IT security stakeholders regularly monitor alerts
and meet to discuss threat levels, trends, and remediation. The team prepares a monthly report on cybersecurity threats and risk areas
and conducts an annual risk assessment. This ongoing knowledge acquisition and continuing education is crucial for the effective prevention,
detection, mitigation, and remediation of cybersecurity incidents. If a security event is alerted, upper management and the incident response
team are notified and the steps identified in the Incident Response Plan, or IRP, are initiated. This plan includes immediate actions
to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
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Risks from Cybersecurity Threats
The Company faces risks from cybersecurity threats that could have
a material adverse effect on its business, financial condition, results of operations, cash flows or reputation. For more information
about the cybersecurity risks the company faces, see the risk factor entitled “Information technology risks, including the risk
of cyberattacks, may disrupt our business, result in losses or limit our growth.” in Item 1A., Risk Factors. The Company has not
encountered cybersecurity challenges that have materially impaired its operations or financial standing.
Cybersecurity
Governance
The Board is acutely aware of the critical nature of managing risks
associated with cybersecurity threats and recognizes the significance of these threats to the Company’s operational integrity and
shareholder confidence.
Risk Management Personnel
The Company’s Chief Operating Officer and Director of IT are
responsible for developing and implementing the Company’s information security program. Additionally, the Vice President of Safety
and Risk Management leads the enterprise risk management (ERM) for the Company and guides the handling of all material risks, including
cybersecurity. The Chief Operating Officer and VP of Safety and Risk Management have overseen risk management programs in multiple environments
and the Director of IT has represented companies in IT integration, SaaS businesses, data, application and server security.
Board of Directors Oversight
The Audit Committee is central to the Board’s oversight of cybersecurity
risks and bears the primary responsibility for this domain. The Audit Committee is composed of board members with diverse expertise including
risk management and finance, equipping them to oversee this scope effectively.
Management’s Role Managing Risk and Reporting to the Board
The Chief Operating Officer has primary interface with the Audit Committee
on cybersecurity risks, supported by management and its contracted experts. Briefings to the Audit Committee take place on a regular basis,
with a minimum frequency of once per year to cover topics, including:
● Current cybersecurity landscape and emerging threats;
● Actions being taken by the Company to minimize or address such threats;
● Status of ongoing cybersecurity initiatives and strategies;
● Incident reports and learnings from any cybersecurity events, if any; and
● Compliance with regulatory requirements and industry standards.
The Audit Committee will conduct an annual review of the Company’s
cybersecurity posture and the effectiveness of its risk management strategies. This review helps in identifying areas for improvement
and ensuring the alignment of cybersecurity efforts within the overall risk management framework.