Fusemachines Inc. 10-K cybersecurity disclosure (Item 1C), fiscal 2025

Item

1C. Cybersecurity.

Risk

management and strategy

We

recognize the critical importance of developing, implementing, and maintaining cybersecurity measures to safeguard our information systems

and protect the confidentiality, integrity , and availability of our data.

Managing

Material Risks & Integrated Overall Risk Management

We

have implemented tools, processes, and strategies to promote a company-wide culture of cybersecurity risk management. This ensures that

cybersecurity considerations are integrated into our decision-making processes to monitor and manage risk. Our IT Department works closely

with our leadership and key operating personnel to evaluate and address cybersecurity risks in alignment with our business objectives

and operational needs.

Engage

Third-parties on Risk Management

Due

to the complexity and evolving nature of cybersecurity threats, we engaged with a cybersecurity assessment firm as an external expert,

to evaluate and test our risk management systems. This partnership enables us to leverage specialized knowledge and insights, of dedicated

cybersecurity firms. Our collaborations with this third-party include regular system audits, threat assessments, 24-hour monitoring,

and consultation on security enhancements.

Oversee

Third-party Risk

Because

we are aware of the risks associated with third-party service providers, we conduct security assessments of all third-party providers

before engagement to ensure compliance with industry cybersecurity standards and frameworks. This includes assessments performed by our

Head of Technology, who oversees the Company's cybersecurity function.

Risks

from Cybersecurity Threats

The

Company does not believe that it has experienced any cybersecurity threats or incidents that have materially affected or are reasonably

likely to materially affect the Company and its business strategy, results of operations and/or financial condition. These types of events,

which could lead to business disruptions, unplanned downtimes or outages, particularly in critical systems or services, may impact our

ability to operate efficiently, affecting business continuity.

Governance

We

have implemented standard operating procedures to define the channels by which cybersecurity threats are communicated to the Board. This

ensures that Board has oversight and effective governance in managing risks associated with cybersecurity threats.

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, which we believe equips

them to oversee cybersecurity and other risks effectively.

Management's

Role Managing Risk

The

Head of Technology plays a pivotal role in informing the Audit Committee on cybersecurity risks. This role provides briefings to the

Audit Committee on a regular basis, with a minimum frequency of once per year. These briefings encompass a broad range of topics, including:

● current

cybersecurity landscape and emerging threats;

● status

of ongoing cybersecurity initiatives and strategies;

● incident

reports and learnings from any cybersecurity events; and

● compliance

with regulatory requirements and industry standards.

Risk

Management Personnel

Primary

responsibility for assessing, monitoring and managing our cybersecurity risks rests with the Head of Technology and department staff.

Our IT team oversees our governance programs, tests our compliance with standards, remediates known risks, stays informed of significant

developments in the cybersecurity domain, and leads our employee training program.

Monitor

Cybersecurity Incidents

The

Head of Technology is continually informed about the latest developments in cybersecurity, including potential threats and innovative

risk management techniques. This ongoing knowledge acquisition is crucial for the effective prevention, detection, mitigation, and remediation

of cybersecurity incidents. Under his direction, the IT department implements and oversees processes for the regular monitoring of our

information systems. This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities.

In the event of a cybersecurity incident, the IT department is equipped with a well-defined written procedure. This plan includes immediate

actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.

Reporting

to Board of Directors

The

Head of Technology consistently communicates with the Audit Committee regarding critical cybersecurity risks and incidents, ensuring

that the organization's highest governance bodies remain well-informed about our cybersecurity status and potential vulnerabilities.

Moreover, matters of significant cybersecurity importance, along with strategic risk management decisions, are promptly escalated to

the Board of Directors. This process ensures that the Board maintains thorough oversight and is equipped to offer informed guidance on

critical cybersecurity issues.