UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form SD
SPECIALIZED DISCLOSURE
REPORT
Dynasil Corporation of America
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-35011 | 22-1734088 |
| (State or Other Jurisdiction of | (Commission File Number) | (IRS Employer Identification |
| Incorporation) | Number) |
| 313 Washington St., Ste 403, Newton, MA | 02458 |
| (Address of Principal Executive Offices) | (Zip Code) |
| Patricia Kehe | (617) 668-6855 |
(Name and telephone number, including area code, of the person to
contact in connection with this report.)
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
x Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2017.
Section 1 - Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
Dynasil Corporation of America evaluated its current product lines and determined that certain products we manufacture or contract to manufacture contained conflict minerals, as defined by paragraph (d)(3) of Item 1.01 of Form SD (the “Conflict Minerals”), and that these Conflict Minerals were necessary to the functionality or production of those products. As a result, Dynasil conducted a reasonable country of origin inquiry (“RCOI”) to determine whether any of the Conflict Minerals contained in Dynasil’s products originated in the Democratic Republic of the Congo or any adjoining country (the “Covered Countries”) or were from recycled or scrap sources.
For this reason, Dynasil has filed a Conflict Minerals Report as Exhibit 1.01 to this Form SD. A copy of the Conflict Minerals Report is publicly available at: www.dynasil.com under “Corporate Governance”.
Item 1.02 Exhibit
A copy of our Conflict Minerals Report is filed as Exhibit 1.01 to this Form SD.
Section 2 Exhibits
Exhibit 1.01 - Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form SD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.
| DYNASIL CORPORATION OF AMERICA | |||
| By: | /s/ Robert J. Bowdring | ||
| Robert J. Bowdring | |||
| Chief Financial Officer | |||
| Dated: May 29, 2018 |
Exhibit 1.01
Dynasil Corporation of America
Conflict Minerals Report
For the reporting period from January 1, 2017 to December 31, 2017
This Conflict Minerals Report (the “Report”) of Dynasil Corporation of America (“Dynasil” or the “Company”) has been prepared pursuant to Rule 13p-1 and Form SD (the “Rule”) promulgated under the Securities Exchange Act of 1934 for the reporting period January 1, 2017 to December 31, 2017.
The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products for which the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals, which we collectively refer to in this Report as the “Conflict Minerals,” are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten. The “Covered Countries” for the purposes of the Rule and this Report are the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.
As described in this Report, certain of the Company’s operations manufacture, or contract to manufacture, products for which the Conflict Minerals are necessary to the functionality or production of those products.
Description of the Company’s Products Covered by this Report
This Report relates to products: (i) for which Conflict Minerals are necessary to the functionality or production of that product; (ii) that were manufactured, or contracted to be manufactured, by the Company; and (iii) for which the manufacture was completed during calendar year 2017.
These products, which are referred to in this Report collectively as the “Covered Products,” are the following:
1. Optical thin films
2. Crystals for X-ray detection
3. Optical gratings
4. Optical filters
5. Radiation detection instruments
RCOI and Due Diligence
The Company’s supply chain with respect to the Covered Products is complex, and there are many third parties in the supply chain between the ultimate manufacture of the Covered Products and the original sources of Conflict Minerals. In this regard, the Company does not purchase Conflict Minerals directly from mines, smelters or refiners. The Company must therefore rely on its suppliers to provide information regarding the origin of Conflict Minerals that are included in the Covered Products. Moreover, the Company believes that the smelters and refiners of the Conflict Minerals are best situated to identify the sources of Conflict Minerals, and therefore has taken steps to identify the applicable smelters and refiners of Conflict Minerals in the Company’s supply chain.
Conflict Mineral Policy
Dynasil adopted a policy relating to the Conflict Minerals (the “Company Policy”), incorporating the standards set forth in the Organization for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Second Edition, including the related supplements on gold, tin, tantalum and tungsten (the “OECD Guidance”). The Company Policy outlines the Company’s commitment to the responsible sourcing of its products and its expectations that its suppliers will be similarly committed to responsible sourcing in the supply chain. The Company Policy states, among other things, that suppliers: (i) should not supply us with any products or other materials that directly or indirectly finance or benefit armed groups in the Covered Countries; (ii) are expected to source Conflict Minerals only from sources that are DRC conflict-free; (iii) should develop policies, due diligence processes and management systems that are reasonably designed to prevent products or materials that are not DRC conflict free from entering the Company’s supply chain; and (iv) are expected to take steps to identify the smelter, refiner or mine from which Conflict Minerals originate, and to provide information to the Company necessary to facilitate its compliance efforts with respect to the Rule.
Our policy is publicly available on our website at www.dynasil.com under “Investors/Corporate Governance”.
Reasonable Country of Origin Inquiry
The Company conducted a good faith reasonable country of origin inquiry (“RCOI”) regarding the Conflict Minerals as described in the Company’s Form SD to which this Report is an exhibit. This good faith RCOI was designed to determine whether any of the Conflict Minerals originated in the Covered Countries and whether any of the Conflict Minerals may be from recycled or scrap sources. The Company’s RCOI consisted of the following:
| 1. | Educating internal employees about Conflict Minerals and the Company’s reporting obligation; |
| 2. | Listing all products and the component parts and materials containing Conflict Minerals, or using engineering knowledge, that would be expected to use Conflict Minerals during production; |
| 3. | Excluding parts which were manufactured before 2017 since any Conflict Minerals contained in these products were smelted before 2017; |
| 4. | Identifying the suppliers from which the Company purchases Conflict Minerals; |
| 5. | Communicating the Company’s sourcing policy and commitments to suppliers; |
| 6. | Educating suppliers about the Conflict Minerals reporting obligation; |
| 7. | Requesting information from suppliers regarding the Conflict Mineral content of the components they provide and their knowledge on the source of any Conflict Minerals, including whether the Conflict Minerals come from recycled or scrap sources (the “Survey”); and |
| 8. | Collecting and analyzing information from suppliers who responded to the Survey. |
We identified and contacted a total of eighteen suppliers of Conflict Mineral related products and materials. All of these suppliers responded to our request for country of origin information, although not all of these suppliers were able to provide the actual country of origin. As a result of the RCOI, the Company was unable to determine that none of the Conflict Minerals contained in the Covered Products originated in the Covered Countries or were from recycled or scrap sources.
Due Diligence Process
Based on the results of the RCOI, the Company exercised due diligence on the source and chain of custody of the Conflict Minerals. The Company’s due diligence process was designed to both gather information on the country of origin and to educate our internal staff and suppliers regarding this initiative.
The Company’s due diligence process is based on the following five-step framework provided by the OECD Guidance:
| · | Establishing strong company management systems |
| · | Identifying and assessing risks in the supply chain |
| · | Designing and implementing a strategy to respond to identified risks |
| · | Carrying out an independent third-party audit of supply chain due diligence at identified points in the supply chain |
| · | Reporting annually on supply chain due diligence |
Findings and Conclusions
Based on the information obtained pursuant to the RCOI and the due diligence process, Dynasil does not have sufficient information with respect to the Covered Products to determine the country of origin of all the Conflict Minerals in the Covered Products; however, based on the information that was provided by the responding suppliers and otherwise obtained by Dynasil through the due diligence process, the Company believes that, to the extent reasonably determinable by the Company, the facilities that were used to process the Conflict Minerals contained in some of the Covered Products included the smelters and refiners listed below:
| Metal | Refiner or Smelter Name | Country Location |
| Gold | Advanced Chemical Company | UNITED STATES OF AMERICA |
| Gold | Argor-Heraeus S.A. | SWITZERLAND |
| Gold | Asahi Pretec Corp. | JAPAN |
| Gold | Asahi Refining USA Inc. | UNITED STATES OF AMERICA |
| Gold | CCR Refinery - Glencore Canada Corporation | CANADA |
| Gold | Heraeus Precious Metals GmbH & Co. KG | GERMANY |
| Gold | Kennecott Utah Copper LLC | UNITED STATES OF AMERICA |
| Gold | Materion | UNITED STATES OF AMERICA |
| Gold | Metalor Technologies S.A. | SWITZERLAND |
| Gold | Metalor USA Refining Corporation | UNITED STATES OF AMERICA |
| Gold | Royal Canadian Mint | CANADA |
| Gold | Shandong Zhaojin Gold & Silver Refinery Co., Ltd. | CHINA |
| Gold | The Refinery of Shandong Gold Mining Co., Ltd. | CHINA |
| Gold | United Precious Metal Refining, Inc. | UNITED STATES OF AMERICA |
| Gold | Western Australian Mint (T/a The Perth Mint) | AUSTRALIA |
| Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. | CHINA |
| Tin | Alpha | UNITED STATES OF AMERICA |
| Tin | China Tin Group Co., Ltd. | CHINA |
| Tin | CV Gita Pesona | INDONESIA |
| Tin | CV Serumpun Sebalai | INDONESIA |
| Tin | CV United Smelting | INDONESIA |
| Tin | CV Venus Inti Perkasa | INDONESIA |
| Tin | Dowa | JAPAN |
| Tin | EM Vinto | BOLIVIA |
| Tin | Fenix Metals | POLAND |
| Tin | Gejiu Kai Meng Industry and Trade LLC | CHINA |
| Tin | Gejiu Non-Ferrous Metal Processing Co., Ltd. | CHINA |
| Tin | Huichang Jinshunda Tin Co., Ltd. | CHINA |
| Tin | Jiangxi Ketai Advanced Material Co., Ltd. | CHINA |
| Tin | Magnu's Minerais Metais e Ligas Ltda. | BRAZIL |
| Tin | Malaysia Smelting Corporation (MSC) | MALAYSIA |
| Tin | Melt Metais e Ligas S.A. | BRAZIL |
| Tin | Metallo Belgium N.V. | BELGIUM |
| Tin | Mineracao Taboca S.A. | BRAZIL |
| Tin | Minsur | PERU |
| Tin | Mitsubishi Materials Corporation | JAPAN |
| Tin | O.M. Manufacturing (Thailand) Co., Ltd. | THAILAND |
| Tin | O.M. Manufacturing Philippines, Inc. | PHILIPPINES |
| Tin | Operaciones Metalurgical S.A. | BOLIVIA |
| Tin | PT Aries Kencana Sejahtera | INDONESIA |
| Tin | PT Artha Cipta Langgeng | INDONESIA |
| Tin | PT ATD Makmur Mandiri Jaya | INDONESIA |
| Tin | PT Babel Inti Perkasa | INDONESIA |
| Tin | PT Bangka Tin Industry | INDONESIA |
| Tin | PT Belitung Industri Sejahtera | INDONESIA |
| Tin | PT Bukit Timah | INDONESIA |
| Tin | PT DS Jaya Abadi | INDONESIA |
| Tin | PT Eunindo Usaha Mandiri | INDONESIA |
| Tin | PT Inti Stania Prima | INDONESIA |
| Tin | PT Karimun Mining | INDONESIA |
| Tin | PT Mitra Stania Prima | INDONESIA |
| Tin | PT Panca Mega Persada | INDONESIA |
| Tin | PT Prima Timah Utama | INDONESIA |
| Tin | PT Refined Bangka Tin | INDONESIA |
| Tin | PT Sariwiguna Binasentosa | INDONESIA |
| Tin | PT Stanindo Inti Perkasa | INDONESIA |
| Tin | PT Sumber Jaya Indah | INDONESIA |
| Tin | PT Timah (Persero) Tbk Kundur | INDONESIA |
| Tin | PT Timah (Persero) Tbk Mentok | INDONESIA |
| Tin | PT Tinindo Inter Nusa | INDONESIA |
| Tin | PT Tommy Utama | INDONESIA |
| Tin | Resind Industria e Comercio Ltda. | BRAZIL |
| Tin | Rui Da Hung | TAIWAN, PROVINCE OF CHINA |
| Tin | Soft Metais Ltda. | BRAZIL |
| Tin | Thaisarco | THAILAND |
| Tin | White Solder Metalurgia e Mineracao Ltda. | BRAZIL |
| Tin | Yunnan Tin Company Limited | CHINA |
| Tungsten | Chongyi Zhangyuan Tungsten Co., Ltd. | CHINA |
| Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd. | CHINA |
| Tungsten | Global Tungsten & Powders Corp. | UNITED STATES OF AMERICA |
| Tungsten | H.C. Starck Smelting GmbH & Co. KG | GERMANY |
| Tungsten | H.C. Starck Tungsten GmbH | GERMANY |
| Tungsten | Hunan Chenzhou Mining Co., Ltd. | CHINA |
| Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. | CHINA |
| Tungsten | Japan New Metals Co., Ltd. | JAPAN |
| Tungsten | Jiangxi Gan Bei Tungsten Co., Ltd. | CHINA |
| Tungsten | Jiangxi Xinsheng Tungsten Industry Co., Ltd. | CHINA |
| Tungsten | Jiangxi Yaosheng Tungsten Co., Ltd. | CHINA |
| Tungsten | Kennametal Huntsville | UNITED STATES OF AMERICA |
| Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. | VIET NAM |
| Tungsten | Wolfram Bergbau und Hutten AG | AUSTRIA |
| Tungsten | Xiamen Tungsten (H.C.) Co., Ltd. | CHINA |
| Tungsten | Xiamen Tungsten Co., Ltd. | CHINA |
| Tungsten | Xinhai Rendan Shaoguan Tungsten Co., Ltd. | CHINA |
Our efforts to determine the mine or location of origin of the Conflict Minerals in the Covered Products consisted of the due diligence measures described in this Report. In particular, because independent third party audit programs validate whether sufficient evidence exists regarding country, mine and/or location of origin of the Conflict Minerals that the audited smelter or refiner facilities have processed, we relied on the information made available by such programs for the smelters and refiners in our supply chain. Dynasil was unable to ascertain the country of origin and/or chain of custody of all necessary Conflict Minerals processed by these facilities because, for this reporting period, certain smelter and refiner facilities had not yet received a “conflict free” designation from an independent third party audit program. Incomplete Survey responses, even when combined with the Company’s further diligence efforts, meant that the Company was not able to conclude whether the Conflict Minerals originated in the Covered Countries, and if so, whether the Conflict Minerals were from recycled or scrap sources, were DRC conflict-free or had not been found to be DRC conflict-free.
Independent Private Sector Audit
This Report has not been subject to an independent private sector audit as permitted under Rule 13p-1 and recent SEC guidance.
Risk Mitigation Steps
Dynasil has taken and expects to continue to take the following steps, among others, to improve its due diligence measures and to further mitigate the risk that the necessary Conflict Minerals contained in our products benefit armed groups in the Covered Countries:
| - | continue to engage suppliers to obtain current, accurate and complete information about the supply chain; |
| - | encourage suppliers to implement responsible sourcing and to have them encourage smelters and refiners to obtain a “conflict-free” designation from an independent, third-party auditor; and |
| - | engage in industry initiatives encouraging “conflict-free” supply chains. |