EX-1.02 2 franklin_sd-0102.htm CONFLICT MINERALS REPORT

Exhibit 1.02

 

Franklin Wireless Corp.

 

Conflict Minerals Report

 

For The Year Ended December 31, 2013

 

This is the Conflict Minerals Report of Franklin Wireless Corp. for the year ended December 31, 2013 in accordance with Rule 13p-1 under the Securities Exchange Act of 1934 (the “Rule”). The Rule was adopted by the Securities and Exchange Commission (SEC) to implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals which are necessary to the functionality or production of their products. Conflict Minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten, and gold (3TG) for the purposes of this assessment. These requirements apply to registrants whatever the geographic origin of the conflict minerals and whether or not they fund armed conflict. Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions to the terms used in this Report, unless otherwise defined herein.

If a registrant can establish that the Conflict Minerals originated from sources other than the Democratic Republic of the Congo (“DRC”) or certain adjoining countries (the “Covered Countries”) or from recycled or scrap sources, it must submit a Form SD which describes the reasonable country of origin inquiry completed by the registrant.

 

If a registrant has reason to believe that any of the Conflict Minerals in its supply chain may have originated in any of the Covered Countries, or if it is unable to determine the country of origin of those Conflict Minerals, then the registrant must exercise due diligence on the Conflict Minerals’ source and chain of custody. The registrant must annually submit a Conflict Minerals Report to the SEC that includes a description of those due diligence measures.

 

In accordance with the rules, Franklin Wireless Corp. exercised due diligence to determine the conflict minerals status of conflict minerals necessary to the functionality or production of the wireless data communication products we sell.

 

Franklin Wireless Corp. has determined in good faith that for calendar year 2013, its conflict minerals status resulting from its due diligence efforts shows a portion to be “DRC conflict undeterminable” and the remainder to be “DRC conflict free” (terms as defined in the Rule).

The report presented herein is not audited as Rule 13p-1 provides that if a registrant’s products are “DRC conflict undeterminable” in 2013 or 2014, the Conflict Minerals Report is not subject to an independent private sector audit.

 

Company Overview

Franklin Wireless Corp. is engaged in the design, manufacture and sale of broadband high speed wireless data communication products such as third generation (“3G”) and fourth generation (“4G”) wireless modules and modems. Our current products are focused on widely deployed cellular technologies including CDMA EVDO Rev A, HSPA, WiMAX and LTE. We were the world’s first supplier of both CDMA EVDO Rev A and dual-mode (CDMA EVDO Rev A/WiMAX) Universal Serial Bus (USB) modems. Our industry leading USB modems (which are plugged into a computer’s USB port) provide consumers with an easy and convenient way in which to wirelessly connect to the Internet from laptop or desktop computers.

 

Product Overview

We focus primarily on wireless modems and routers, which provide a flexible way for consumers to connect to wireless broadband networks from laptop or desktop computers. Our broadband wireless data communication products are positioned at the convergence of wireless communications, mobile computing and the Internet, each of which we believe represents a growing market.

 

Reasonable Country of Origin Inquiry (RCOI) and RCOI Conclusion

In order to manage the scope of this task, Franklin Wireless relied upon the manufacturers or suppliers to provide information on the origin of the necessary conflict minerals that are used for functionality and production of our wireless data communication products. Franklin Wireless Corp.’s reasonable country of origin inquiry (ROCI) employed a combination of measures used to determine whether the necessary conflict minerals in Franklin Wireless products originated from the Democratic Republic of the Congo or an adjoining country.

 

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Conflict Minerals Policy

Franklin Wireless has adopted the following Conflict Minerals policy:

 

Conflict Minerals refers to minerals (tin, tantalum, tungsten and gold) mined in the eastern provinces of the Democratic Republic of the Congo and in the adjoining countries where revenues may be directly or indirectly financing armed groups engaged in civil war resulting in serious social and environmental abuses. 

 

While we do not source these minerals directly, they may exist in the components of the products we sell.  We are therefore committed to working with our suppliers to ensure that they responsibly source the materials and components used in manufacturing of these products.  We expect suppliers to establish their own due diligence program to achieve conflict-free supply chains.  Franklin Wireless is committed to ethical practices and compliance with all applicable laws and regulations. 

 

The policy is posted on our website at www.franklinwireless.com located in “Investor Relations” and “Social Responsibility.”

 

Due Diligence Process

Franklin Wireless Corp’s due diligence measures were based on the Electronic Industry Citizenship Coalition and Global e-Sustainability (“EICC-GeSI”) initiative with the smelters and refiners of conflict minerals who provide those conflict minerals to our suppliers. We conducted a survey using a template developed jointly by EICC-GeSI known as the CFSI Reporting Template (the "Template"). The Template was developed to facilitate disclosure and communication of information regarding smelters that provide material to a company’s supply chain. It includes questions regarding a company’s conflict-free policy, engagement with its direct suppliers, and a listing of the smelters the company and its suppliers use. In addition, the template contains questions about the origin of conflict minerals included in their products, as well as supplier due diligence. Written instructions and recorded training illustrating the use of the tool is available on CFSI’s website. The Template is being widely adopted by many companies in their due diligence processes related to conflict minerals.

 

Franklin Wireless Corp.’s due diligence measures included:

  - Conducting a supply-chain survey with the manufacturers regarding the suppliers of materials containing conflict minerals using the EICC-GeSI Conflict Minerals Reporting Template to identify smelters and refiners.
  - Taking the smelters and refiners identified in the supply-chain survey and comparing them against the list of smelter facilities which have been identified as “conflict free” by programs such as the EICC/GeSI Conflict Free Smelter (CFS) program for tantalum, tin, tungsten and gold.

 

As a company in the wireless communications business, Franklin Wireless is several layers removed from the actual mining of 3TG. Franklin Wireless does not make any direct purchases of raw ore or unrefined conflict minerals and makes no purchases in the Covered Countries.

 

Despite having conducted a good faith reasonable country of origin inquiry, we have concluded that our supply chain remains “DRC conflict undeterminable”. Franklin Wireless makes this determination due to the complexity of Franklin Wireless’ supply chain, it will take some time for the suppliers of the manufacturers to conclude whether the necessary conflict minerals originated from the Covered Countries, and if so, whether the necessary conflict minerals were from recycle or scrap sources, were DRC conflict free or have not been found to be DRC conflict free.

 

In the next compliance period, Franklin Wireless Corp. intends to implement steps to improve the information gathered from its due diligence to further mitigate the risk that its necessary conflict minerals do not benefit armed groups. These efforts include:

  - Improving communication with manufacturers and suppliers to improve due diligence efforts and increase data accuracy and completion.
  - Reviewing our Conflict Minerals policy when engaging with new contracted manufacturers and suppliers.

 

Smelters or Refiners Identified

We adopted the CFSI’s industry approach and traced back the origin of 3TG by identifying smelters, refineries or recyclers and scrap supplier sources. Franklin Wireless leveraged CFSI and its CFS program to trace the mine of origin of the 3TG to its ore level. The CFS program audits smelters and refineries to ensure that all certified smelters and refineries only use the ores that are conflict free from the DRC and covered countries.

 

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As the result of our due diligence survey, we have gathered 477 smelters and refineries names from our supply chain. Of those, 179 smelters and refineries are identified as CFSI’s known smelters and refineries, and 298 smelters and refineries are not validated or verified. Among these 179 smelters and refineries, 66 are on the list of CFSI's certified Conflict Free Smelters (CFS) list and considered to be conflict free, and with respect to the other 113, the CFSI has not provided an opinion as whether or not the minerals procured from these smelters and refineries originate from the DRC or surrounding countries.

 

Set forth below is the list of identified smelters and refineries identified by CFSI identified by our supply chain so far and their country of origin:

 

         

Metal

  

Smelter Name

  

Country

Gold   AGR Matthey(Australia)   AUSTRALIA
Gold   Aida Chemical Industries Co., Ltd.   JAPAN
Gold   Allgemeine Gold- und Silberscheideanstalt A.G.   GERMANY
Gold   Almalyk Mining and Metallurgical Complex (AMMC)   UZBEKISTAN
Gold   AngloGold Ashanti Mineração Ltda   BRAZIL
Gold   Argor-Heraeus SA   SWITZERLAND
Gold   Asahi Pretec Corporation   JAPAN
Gold   Asaka Riken Co Ltd   JAPAN
Gold   Atasay Kuyumculuk Sanayi Ve Ticaret A.S.   TURKEY
Gold   Aurubis AG   GERMANY
Gold   Bangko Sentral ng Pilipinas (Central Bank of the Philippines)   PHILIPPINES
Gold   Boliden AB   SWEDEN
Gold   Caridad   MEXICO
Gold   Cendres & Métaux SA   SWITZERLAND
Gold   Central Bank of the DPR of Korea   KOREA, REPUBLIC OF
Gold   Chimet SpA   ITALY
Gold   Chugai Mining Co.,Ltd   JAPAN
Gold   Codelco   CHILE
Gold   Daejin Indus Co. Ltd   KOREA, REPUBLIC OF
Gold   DaeryongENC   KOREA, REPUBLIC OF
Gold   Do Sung Corporation   KOREA, REPUBLIC OF
Gold   Dowa   JAPAN
Gold   Heimerle + Meule GmbH   GERMANY
Gold   Heraeus Ltd Hong Kong   HONG KONG
Gold   Heraeus Precious Metals GmbH & Co. KG   GERMANY
Gold   Hwasung CJ Co. Ltd   KOREA, REPUBLIC OF
Gold   Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited   CHINA
Gold   Ishifuku Metal Industry Co., Ltd.   JAPAN
Gold   Istanbul Gold Refinery   TURKEY
Gold   Japan Mint   JAPAN
Gold   Jiangxi Copper Company Limited   CHINA
Gold   Johnson Matthey Inc   UNITED STATES
Gold   Johnson Matthey Limited   CANADA
Gold   JSC Ekaterinburg Non-Ferrous Metal Processing Plant   RUSSIAN FEDERATION
Gold   JSC Uralectromed   RUSSIAN FEDERATION
Gold   JX Nippon Mining & Metals Co., Ltd.   JAPAN
Gold   Kazzinc Ltd   KAZAKHSTAN
Gold   Kojima Chemicals Co. Ltd   JAPAN
Gold   Korea Metal   KOREA, REPUBLIC OF
Gold   Kyrgyzaltyn JSC   KYRGYZSTAN
Gold   L' azurde Company For Jewelry   SAUDI ARABIA
Gold   LS-Nikko Copper Inc   KOREA, REPUBLIC OF
Gold   Materion   UNITED STATES
Gold   Matsuda Sangyo Co. Ltd   JAPAN
Gold   Metalor Technologies (Hong Kong) Ltd   HONG KONG
Gold   Metalor Technologies SA   SWITZERLAND
Gold   Metalor USA Refining Corporation   UNITED STATES
Gold   Met-Mex Peñoles, S.A.   MEXICO
Gold   Mistubishi Materials Corporation   JAPAN
Gold   Mitsui Mining and Smelting Co., Ltd.   JAPAN
Gold   Moscow Special Alloys Processing Plant   RUSSIAN FEDERATION
Gold   Nadir Metal Rafineri San. Ve Tic. A.Ş.   TURKEY
Gold   Navoi Mining and Metallurgical Combinat   UZBEKISTAN
Gold   Nihon Material Co. LTD   JAPAN
Gold   Ohio Precious Metals LLC.   UNITED STATES
Gold   OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet)   RUSSIAN FEDERATION
Gold   OJSC Kolyma Refinery   RUSSIAN FEDERATION
Gold   PAMP SA   SWITZERLAND
Gold   Pan Pacific Copper Co. LTD   JAPAN
Gold   Perth Mint   AUSTRALIA
Gold   Perth Mint (Western Austrila Mint)   AUSTRALIA
Gold   Prioksky Plant of Non-Ferrous Metals   RUSSIAN FEDERATION
Gold   PT Aneka Tambang (Persero) Tbk   INDONESIA
Gold   PX Précinox SA   SWITZERLAND
Gold   Rand Refinery (Pty) Ltd   SOUTH AFRICA
Gold   Royal Canadian Mint   CANADA
Gold   Sabin Metal Corp.   UNITED STATES
Gold   Schone Edelmetaal   NETHERLANDS
Gold   SEMPSA Joyeria Plateria SA   SPAIN
Gold   Shandong Zhaojin Gold & Silver Refinery Co. Ltd   CHINA
Gold   Solar Applied Materials Technology Corp.   TAIWAN
Gold   Tanaka Kikinzoku Kogyo K.K.   JAPAN
Gold   The Great Wall Gold and Silver Refinery of China   CHINA
Gold   The Refinery of Shandong Gold Mining Co., Ltd   CHINA
Gold   Tokuriki Honten Co. Ltd   JAPAN
Gold   Torecom   KOREA, REPUBLIC OF
Gold   Umicore Brasil Ltda   BRAZIL
Gold   Umicore SA Business Unit Precious Metals Refining   BELGIUM
Gold   United Precious Metal Refining Inc.   UNITED STATES
Gold   Valcambi SA   SWITZERLAND
Gold   Western Australian Mint trading as The Perth Mint   AUSTRALIA
Gold   Zhongyuan Gold Smelter of Zhongjin Gold Corporation   CHINA
Gold   Zijin Mining Group Co. Ltd   CHINA
Tantalum   Conghua Tantalum & Niobium Smeltery   CHINA
Tantalum   Duoluoshan   CHINA
Tantalum   Exotech Inc.   UNITED STATES
Tantalum   F&X Electro-Materials Limited   CHINA
Tantalum   Gannon & Scott   UNITED STATES
Tantalum   Global Advanced Metals   UNITED STATES
Tantalum   H.C. Starck GmbH   GERMANY
Tantalum   Hi-Temp   UNITED STATES
Tantalum   JiuJiang JinXin Nonferrous Metals Co. Ltd.   CHINA
Tantalum   Kemet Blue Powder   UNITED STATES
Tantalum   Mitsui Mining & Smelting   JAPAN
Tantalum   Ningxia Orient Tantalum Industry Co., Ltd.   CHINA
Tantalum   Plansee   AUSTRIA
Tantalum   Solikamsk Metal Works   RUSSIAN FEDERATION
Tantalum   Taki Chemical   JAPAN
Tantalum   Telex   UNITED STATES
Tantalum   Ulba   KAZAKHSTAN
Tantalum   Zhuzhou Cement Carbide   CHINA
Tin   CNMC (Guangxi) PGMA Co. Ltd.   CHINA
Tin   Cookson   UNITED STATES
Tin   Cooper Santa   BRAZIL
Tin   CV Duta Putra Bangka   INDONESIA
Tin   CV JusTindo   INDONESIA
Tin   CV Makmur Jaya   INDONESIA
Tin   CV Nurjanah   INDONESIA
Tin   CV Prima Timah Utama   INDONESIA
Tin   CV Serumpun Sebalai   INDONESIA
Tin   CV United Smelting   INDONESIA
Tin   CV United Smelting   INDONESIA
Tin   EM Vinto   BOLIVIA
Tin   EM Vinto   BOLIVIA
Tin   FENIX METALS   POLAND
Tin   Geiju Non-Ferrous Metal Processing Co. Ltd.   CHINA
Tin   Gejiu Zi-Li   CHINA
Tin   Gold Bell Group   CHINA
Tin   Huichang Jinshunda Tin Co. Ltd   CHINA
Tin   Jiangxi Nanshan   CHINA
Tin   Liuzhou China Tin   CHINA
Tin   Malaysia Smelting Corp   MALAYSIA
Tin   Metallo Chimique   BELGIUM
Tin   Mineração Taboca S.A.   BRAZIL
Tin   Minsur   PERU
Tin   Mitsubishi Materials Corp   JAPAN
Tin   Novosibirsk Integrated Tin Works   RUSSIAN FEDERATION
Tin   OMSA   BOLIVIA
Tin   PT Alam Lestari Kencana   INDONESIA
Tin   PT Artha Cipta Langgeng   INDONESIA
Tin   PT Babel Inti Perkasa   INDONESIA
Tin   PT Babel Surya Alam Lestari   INDONESIA
Tin   PT Bangka Kudai Tin   INDONESIA
Tin   PT Bangka Putra Karya   INDONESIA
Tin   PT Bangka Timah Utama Sejahtera   INDONESIA
Tin   PT Belitung Industri Sejahtera   INDONESIA
Tin   PT BilliTin Makmur Lestari   INDONESIA
Tin   PT Bukit Timah   INDONESIA
Tin   PT DS Jaya Abadi   INDONESIA
Tin   PT Eunindo Usaha Mandiri   INDONESIA
Tin   PT Fang Di MulTindo   INDONESIA
Tin   PT HP Metals Indonesia   INDONESIA
Tin   PT Koba Tin   INDONESIA
Tin   PT Mitra Stania Prima   INDONESIA
Tin   PT Refined Banka Tin   INDONESIA
Tin   PT Sariwiguna Binasentosa   INDONESIA
Tin   PT Stanindo Inti Perkasa   INDONESIA
Tin   PT Sumber Jaya Indah   INDONESIA
Tin   PT Supra Sukses Trinusa   INDONESIA
Tin   PT Tambang Timah   INDONESIA
Tin   PT Timah   INDONESIA
Tin   PT Timah Nusantara   INDONESIA
Tin   PT Tinindo Inter Nusa   INDONESIA
Tin   PT Yinchendo Mining Industry   INDONESIA
Tin   Thaisarco   THAILAND
Tin   White Solder Metalurgia e Mineração Ltda.   BRAZIL
Tin   Yunnan Chengfeng Non-Ferrous Metals Co Ltd   CHINA
Tin   Yunnan Tin Company Limited   CHINA
Tungsten   Allied Material (A.L.M.T) Corp   JAPAN
Tungsten   ATI Tungsten Materials   UNITED STATES
Tungsten   Chaozhou Xianglu Tungsten Industry Co Ltd   CHINA
Tungsten   China Minmetals Nonferrous Metals Co Ltd   CHINA
Tungsten   Chongyi Zhangyuan Tungsten Co Ltd   CHINA
Tungsten   Dayu Weiliang Tungsten Co., Ltd.   CHINA
Tungsten   Fujian Jinxin Tungsten Co. Ltd   CHINA
Tungsten   Ganzhou Grand Sea W & Mo Group Co. Ltd   CHINA
Tungsten   Global Tungsten & Powders Corp   UNITED STATES
Tungsten   HC Starck GmbH   GERMANY
Tungsten   Hunan Chenzhou Mining Group Co   CHINA
Tungsten   Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd.   CHINA
Tungsten   Japan New Metals Co Ltd   JAPAN
Tungsten   Jiangxi Rare Earth & Rare Metals Tungsten Group Corp   CHINA
Tungsten   Jiangxi Tungsten Industry Co Ltd   CHINA
Tungsten   Kennemetal Inc.   UNITED STATES
Tungsten   Tejing (Vietnam) Tungsten Co Ltd   VIETNAM
Tungsten   Wolfram Bergbau und Hütten AG   AUSTRIA
Tungsten   Wolfram Company CJSC   RUSSIAN FEDERATION
Tungsten   Xiamen Tungsten Co Ltd   CHINA
Tungsten   Zhuzhou Cemented Carbide Group Co Ltd   CHINA