Backblaze

Cybersecurity attacks impact businesses and organizations of all sizes and sectors on a global basis. At Backblaze, we recognize the importance of developing, implementing and maintaining a cybersecurity risk management program. Our customers rely on our solutions to store, use and protect their files, which may include confidential or personally identifiable information, critical business information, and other meaningful content. A successful cybersecurity attack could adversely affect the confidentiality, integrity, and availability of our information systems or any data residing therein.

We dedicate significant effort and resources to protect our systems and data, as well as the data of our customers from cybersecurity threats. We are dependent on internal and external information technology systems and infrastructure to securely process, transmit, and store critical information. Our Audit Committee is responsible for overseeing our cybersecurity, which represents an important component of the company’s enterprise risk management (“ERM”). We seek to reduce cybersecurity risks through a variety of control activities that are designed to identify, assess, manage and mitigate these risks.

Risk Management Strategy

The company’s cybersecurity risk management program is focused on the following key areas:

•Governance: As more fully described in the section titled “Governance” below, the cybersecurity risk management program is led by our Chief Information Security Officer (“CISO”), with oversight from the Audit Committee of our Board of Directors and input from the Risk Management Advisory Committee (the “Risk Management Committee”). Our Risk Management Advisory Committee is a cross-functional committee comprised of our executives and other leaders of various departments that consists of our Chief Executive Officer, Chief Financial Officer, Head of Legal and Compliance, CISO, other members of management, and other employees from selected key functions of the company.

•Approach: We use a cross-functional approach to identify, assess, treat, and monitor cybersecurity risks, while also implementing controls and procedures that are designed to provide for the prompt escalation of cybersecurity incidents and support appropriate public disclosure and reporting of incidents as required in a timely manner. Our cybersecurity program includes the selection, implementation, testing, and monitoring of a layered set of administrative (including policies and procedures), technical, and physical controls, including access controls, endpoint protection, vulnerability management, independent testing, and monitoring capabilities, designed to reduce the likelihood and impact of cybersecurity threats.

•Incident Response Planning: We maintain an incident response plan that includes defined processes, roles, communications, responsibilities and procedures for responding to cybersecurity incidents and other events that impact our operations. Our incident response plans are tested and evaluated on a regular basis.

•Third-Party Risk Management: Our business relies on various services from third-party service providers that could adversely impact the security of our systems and business. We have implemented processes designed to identify and assess cybersecurity risks associated with our use of third-party service providers. We generally conduct a security risk assessment based on the potential risk to the company and its customers prior to onboarding of any such new services and include security and privacy addenda to our contracts where applicable.

•Education and Awareness: We have established a security and privacy awareness program that runs throughout the year and includes training for all company personnel to enhance employee awareness of how to detect and respond to cybersecurity threats as well as more targeted training for company personnel that have increased responsibility for mitigating certain potential cybersecurity risks.

We regularly review and update our policies, procedures, processes and practices to address changes in the threat landscape and as a result of lessons learned from suspected, actual or simulated incidents. We conduct tabletop exercises, and engage third-party services to conduct evaluations of our security controls through penetration testing and independent audits. We also review industry best practices to assist in evaluating responses to new challenges and risks. These evaluations include testing the design and operational effectiveness of security controls. The state of the cybersecurity program is reported by the CISO to the Audit Committee.

Governance

Our Board of Directors, with input from the Risk Management Committee, oversees our enterprise risk management process, including the risks associated with AI and cybersecurity threats. Our cybersecurity risk management program is managed by our CISO, whose security team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, controls, and processes. Cybersecurity risks are evaluated alongside other enterprise risks and inform prioritization of mitigation activities and resource allocation. Our CISO also provides updates to the Audit Committee on our cybersecurity program, including recent developments, key initiatives to strengthen our systems, applicable industry standards, vulnerability assessments, third-party vendor risk, and independent security framework alignment and compliance maturity, AI, and other information security considerations. The Audit Committee also receives information regarding cybersecurity incidents, including prompt updates for any cybersecurity incidents that may be deemed material and which might require public disclosure. Management is responsible for the day-to-day operation of the cybersecurity program, while the Audit Committee provides oversight. Our CISO and other key personnel also frequently engage with key vendors, industry groups, and law enforcement communities as part of our continuing efforts to improve our cybersecurity program.

Experience

Our CISO has more than 30 years of experience in cybersecurity, IT, governance, risk management, regulatory compliance, and data protection and privacy program design and implementation. He has served in CISO roles for over 15 years, including leadership positions at a publicly traded cloud services company and organizations supporting highly regulated federal healthcare programs, and previously served as Director of IT Security at a publicly traded international satellite radio company. He is an IAPP Fellow of Information Privacy and holds recognized security, privacy, audit, and risk management certifications relevant to data protection and regulatory compliance.

Cybersecurity Risks

While we dedicate significant efforts and resources to our cybersecurity program, we may be unable to successfully identify threats, prevent attacks, satisfactorily resolve cybersecurity incidents, or implement adequate mitigating controls. Any breach of our network security and information systems or other cybersecurity-related incidents that results in, or may result in, the loss, theft or unauthorized disclosure of data, or any delay in determining the full extent of a potential breach, could have a material adverse impact on our business, results of operations, and financial condition, including harm to our reputation and brand, reduced demand for our solutions, time-consuming and expensive litigation, fines, penalties, and other damages. As is common in industry, we experience periodic phishing and DDoS attacks. To date and except as otherwise may be noted in this Annual Report on Form 10-K, we do not believe that any cybersecurity threats, including as a result of any previous cybersecurity incidents have materially affected, or are reasonably likely to materially affect the company, including its business strategy, results of operations or financial condition. For more information relating to cybersecurity risks and uncertainties, please see the risk factor entitled “If our information technology systems, including the data of our customers stored in our systems, are breached or subject to cybersecurity attacks, our reputation and business may be harmed” in Part I, Item 1A, and other risk factors in this Annual Report on Form 10-K.