EX-1.01 2 franklin_frmsd-ex102.htm CONFLICT MINERALS REPORT

Exhibit 1.02

Franklin Wireless Corp.

Conflict Minerals Report

For The Year Ended December 31, 2015

 

This Conflict Minerals Report of Franklin Wireless Corp. (the "Company") has been prepared for the year ended December 31, 2015 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 who manufacture or contract to manufacture products containing 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 and submit a Conflict Minerals Report to the SEC that includes a description of those due diligence measures.

 

In accordance with the rules, the Company 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.

 

The Company has determined in good faith that for calendar year 2015, 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).

Company Overview

Franklin Wireless Corp. is a provider of intelligent wireless solutions including mobile hotspots, routers and modems as well as innovative hardware and software products that support machine-to-machine (M2M) applications and the Internet of Things (IoT). Our M2M and IoT solutions include embedded modules, modems and gateways built to deliver reliable always-on connectivity supporting a broad spectrum of applications. These products are designed to solve wireless connectivity challenges in a variety of vertical markets including video surveillance, digital signage, home security, oil and gas exploration, kiosks, fleet management, smart grid, vehicle diagnostics, telematics and many more.

Product Overview

The Company focuses primarily on wireless modems and routers, which provide a flexible way for consumers to connect to wireless broadband networks from laptop or desktop computers.

 

Reasonable Country of Origin Inquiry (RCOI) and RCOI Conclusion

In order to manage the scope of this task, the Company relied upon its manufacturers and suppliers to provide information on the origin of the necessary Conflict Minerals that are used for functionality and production of the Company's wireless data communication products. The Company’s reasonable country of origin inquiry (RCOI) employed a combination of measures used to determine whether the necessary Conflict Minerals in the Company's products originated from the Democratic Republic of the Congo or an adjoining country.

 

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.”

 

 

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Due Diligence Process

The Company's due diligence measures were based on the Electronic Industry Citizenship Coalition and Global e-Sustainability (“EICC-GeSI”) initiative, known as the Conflict-Free Sourcing Initiative (CFSI), 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 for the use of the Template is available on CFSI’s website located at www.conflictfreesourcing.org. 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 operating in the wireless communications business, the Company is several layers removed from the actual mining of 3TG. The Company 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, the Company has concluded that its supply chain remains “DRC conflict undeterminable.” Franklin Wireless Corp. makes this determination due to the complexity of the Company's supply chain, and 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, the Company 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

The Company adopted the CFSI’s industry approach and traced back the origin of 3TG by identifying smelters, refineries or recyclers and scrap supplier sources. The Company 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.

 

All suppliers and manufacturers of materials containing Conflict Minerals were contacted and more than 75% responded to the survey. As a result of the due diligence survey, the Company has gathered 209 smelters and refineries names from its supply chain. All of these smelters and refineries are identified as CFSI’s known smelters and refineries. Among these 209 smelters and refineries, 204 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 5, 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.

 

 

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

 

Metal   Smelter Name   Country
Gold   The Refinery of Shandong Gold Mining Co., Ltd.   CHINA
Gold   Metalor Technologies (Hong Kong) Ltd.   CHINA
Gold   LS-NIKKO Copper Inc.   KOREA, REPUBLIC OF
Gold   Western Australian Mint trading as The Perth Mint   AUSTRALIA
Gold   Heraeus Ltd. Hong Kong   CHINA
Gold   Rand Refinery (Pty) Ltd.   SOUTH AFRICA
Gold   Metalor Technologies SA   SWITZERLAND
Gold   Asahi Pretec Corporation   JAPAN
Gold   Dowa   JAPAN
Gold   Asahi Refining USA Inc.   UNITED STATES
Gold   Kojima Chemicals Co., Ltd.   JAPAN
Gold   Matsuda Sangyo Co., Ltd.   JAPAN
Gold   Ishifuku Metal Industry Co., Ltd.   JAPAN
Gold   JX Nippon Mining & Metals Co., Ltd.   JAPAN
Gold   Mitsubishi Materials Corporation   JAPAN
Gold   Mitsui Mining and Smelting Co., Ltd.   JAPAN
Gold   Nihon Material Co., Ltd.   JAPAN
Gold   Sumitomo Metal Mining Co., Ltd.   JAPAN
Gold   Tanaka Kikinzoku Kogyo K.K.   JAPAN
Gold   Tokuriki Honten Co., Ltd.   JAPAN
Gold   CCR Refinery - Glencore Canada Corporation   CANADA
Gold   Argor-Heraeus SA   SWITZERLAND
Gold   Asaka Riken Co., Ltd.   JAPAN
Gold   Aurubis AG   GERMANY
Gold   Chimet S.p.A.   ITALY
Gold   Materion   UNITED STATES
Gold   Aida Chemical Industries Co., Ltd.   JAPAN
Gold   Allgemeine Gold-und Silberscheideanstalt A.G.   GERMANY
Gold   AngloGold Ashanti Córrego do Sítio Mineração   BRAZIL
Gold   Asahi Refining Canada Limited   CANADA
Gold   Eco-System Recycling Co., Ltd.   JAPAN
Gold   Elemetal Refining, LLC   UNITED STATES
Gold   OJSC Novosibirsk Refinery   RUSSIAN FEDERATION
Gold   Heimerle + Meule GmbH   GERMANY
Gold   Heraeus Precious Metals GmbH & Co. KG   GERMANY
Gold   Kennecott Utah Copper LLC   UNITED STATES
Gold   Metalor Technologies (Singapore) Pte., Ltd.   SINGAPORE
Gold   Metalor USA Refining Corporation   UNITED STATES
Gold   Ohura Precious Metal Industry Co., Ltd.   JAPAN
Gold   PAMP SA   SWITZERLAND
Gold   Prioksky Plant of Non-Ferrous Metals   RUSSIAN FEDERATION
Gold   PT Aneka Tambang (Persero) Tbk   INDONESIA
Gold   PX Précinox SA   SWITZERLAND
Gold   Republic Metals Corporation   UNITED STATES
Gold   Royal Canadian Mint   CANADA
Gold   SEMPSA Joyería Platería SA   SPAIN
Gold   Shandong Zhaojin Gold & Silver Refinery Co., Ltd.   CHINA
Gold   Umicore Brasil Ltda.   BRAZIL
Gold   Valcambi SA   SWITZERLAND
Gold   SOE Shyolkovsky Factory of Secondary Precious Metals   RUSSIAN FEDERATION
Gold   Solar Applied Materials Technology Corp.   TAIWAN
Gold   Umicore SA Business Unit Precious Metals Refining   BELGIUM
Gold   United Precious Metal Refining, Inc.   UNITED STATES
Gold   Yamamoto Precious Metal Co., Ltd.   JAPAN
Gold   Yokohama Metal Co., Ltd.   JAPAN
Gold   Zhongyuan Gold Smelter of Zhongjin Gold Corporation   CHINA

 

 

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Gold   DODUCO GmbH   GERMANY
Gold   Schone Edelmetaal B.V.   NETHERLANDS
Gold   Umicore Precious Metals Thailand   THAILAND
Gold   Istanbul Gold Refinery   TURKEY
Gold   Japan Mint   JAPAN
Gold   JSC Ekaterinburg Non-Ferrous Metal Processing Plant   RUSSIAN FEDERATION
Gold   Kazzinc   KAZAKHSTAN
Gold   METALÚRGICA MET-MEX PEÑOLES, S.A. DE C.V   MEXICO
Gold   Nadir Metal Rafineri San. Ve Tic. A.Ş.   TURKEY
Gold   OJSC "The Gulidov Krasnoyarsk Non-Ferrous Metals Plant" (OJSC Krastsvetmet)   RUSSIAN FEDERATION
Gold   Boliden AB   SWEDEN
Gold   C. Hafner GmbH + Co. KG   GERMANY
Gold   Moscow Special Alloys Processing Plant   RUSSIAN FEDERATION
Gold   Bangko Sentral ng Pilipinas (Central Bank of the Philippines)   PHILIPPINES
Gold   Jiangxi Copper Company Limited   CHINA
Gold   JSC Uralelectromed   RUSSIAN FEDERATION
Gold   Zijin Mining Group Co., Ltd. Gold Refinery   CHINA
Gold   MMTC-PAMP India Pvt., Ltd.   INDIA
Gold   Singway Technology Co., Ltd.   TAIWAN
Gold   Sichuan Tianze Precious Metals Co., Ltd.   CHINA
Gold   T.C.A S.p.A   ITALY
Gold   Ögussa Österreichische Gold- und Silber-Scheideanstalt GmbH   AUSTRIA
Tantalum   Exotech Inc.   UNITED STATES
Tantalum   F&X Electro-Materials Ltd.   CHINA
Tantalum   Global Advanced Metals Aizu   JAPAN
Tantalum   Global Advanced Metals Boyertown   UNITED STATES
Tantalum   H.C. Starck Co., Ltd.   THAILAND
Tantalum   H.C. Starck GmbH Goslar   GERMANY
Tantalum   H.C. Starck GmbH Laufenburg   GERMANY
Tantalum   H.C. Starck Hermsdorf GmbH   GERMANY
Tantalum   H.C. Starck Inc.   UNITED STATES
Tantalum   H.C. Starck Ltd.   JAPAN
Tantalum   Mitsui Mining & Smelting   JAPAN
Tantalum   Ningxia Orient Tantalum Industry Co., Ltd.   CHINA
Tantalum   Solikamsk Magnesium Works OAO   RUSSIAN FEDERATION
Tantalum   Taki Chemicals   JAPAN
Tantalum   Ulba Metallurgical Plant JSC   KAZAKHSTAN
Tantalum   Jiujiang Tanbre Co., Ltd.   CHINA
Tantalum   Conghua Tantalum and Niobium Smeltry   CHINA
Tantalum   Telex Metals   UNITED STATES
Tantalum   Plansee SE Reutte   AUSTRIA
Tantalum   Hi-Temp Specialty Metals, Inc.   UNITED STATES
Tantalum   Changsha South Tantalum Niobium Co., Ltd.   CHINA
Tantalum   Duoluoshan   CHINA
Tantalum   Guangdong Zhiyuan New Material Co., Ltd.   CHINA
Tantalum   Zhuzhou Cemented Carbide   CHINA
Tantalum   Hengyang King Xing Lifeng New Materials Co., Ltd.   CHINA
Tantalum   Plansee SE Liezen   AUSTRIA
Tantalum   JiuJiang JinXin Nonferrous Metals Co., Ltd.   CHINA
Tantalum   LSM Brasil S.A.   BRAZIL
Tantalum   Molycorp Silmet A.S.   ESTONIA
Tantalum   RFH Tantalum Smeltry Co., Ltd.   CHINA
Tantalum   KEMET Blue Metals   MEXICO
Tantalum   KEMET Blue Powder   UNITED STATES
Tantalum   King-Tan Tantalum Industry Ltd.   CHINA
Tantalum   Metallurgical Products India Pvt., Ltd.   INDIA
Tantalum   QuantumClean   UNITED STATES
Tantalum   Yichun Jin Yang Rare Metal Co., Ltd.   CHINA
Tantalum   XinXing HaoRong Electronic Material Co., Ltd.   CHINA

 

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Tantalum   D Block Metals, LLC   UNITED STATES
Tantalum   FIR Metals & Resource Ltd.   CHINA
Tantalum   Jiangxi Dinghai Tantalum & Niobium Co., Ltd.   CHINA
Tantalum   Jiujiang Zhongao Tantalum & Niobium Co., Ltd.   CHINA
Tantalum   Tranzact, Inc.   UNITED STATES
Tin   Yunnan Tin Group (Holding) Company Limited   CHINA
Tin   PT Timah (Persero) Tbk Mentok   INDONESIA
Tin   Thaisarco   THAILAND
Tin   Malaysia Smelting Corporation (MSC)   MALAYSIA
Tin   CV United Smelting   INDONESIA
Tin   Mineração Taboca S.A.   BRAZIL
Tin   Minsur   PERU
Tin   Operaciones Metalurgical S.A.   BOLIVIA
Tin   PT Bukit Timah   INDONESIA
Tin   PT Timah (Persero) Tbk Kundur   INDONESIA
Tin   Fenix Metals   POLAND
Tin   Metallo-Chimique N.V.   BELGIUM
Tin   PT Babel Inti Perkasa   INDONESIA
Tin   PT DS Jaya Abadi   INDONESIA
Tin   PT Prima Timah Utama   INDONESIA
Tin   Rui Da Hung   TAIWAN
Tin   Soft Metais Ltda.   BRAZIL
Tin   Alpha   UNITED STATES
Tin   China Tin Group Co., Ltd.   CHINA
Tin   CV Serumpun Sebalai   INDONESIA
Tin   EM Vinto   BOLIVIA
Tin   Cooperativa Metalurgica de Rondônia Ltda.   BRAZIL
Tin   Gejiu Non-Ferrous Metal Processing Co., Ltd.   CHINA
Tin   Jiangxi Ketai Advanced Material Co., Ltd.   CHINA
Tin   Magnu's Minerais Metais e Ligas Ltda.   BRAZIL
Tin   Melt Metais e Ligas S/A   BRAZIL
Tin   O.M. Manufacturing Philippines, Inc.   PHILIPPINES
Tin   PT Artha Cipta Langgeng   INDONESIA
Tin   PT Bangka Tin Industry   INDONESIA
Tin   PT Eunindo Usaha Mandiri   INDONESIA
Tin   PT Mitra Stania Prima   INDONESIA
Tin   PT Refined Bangka Tin   INDONESIA
Tin   PT Sariwiguna Binasentosa   INDONESIA
Tin   PT Stanindo Inti Perkasa   INDONESIA
Tin   PT Tinindo Inter Nusa   INDONESIA
Tin   White Solder Metalurgia e Mineração Ltda.   BRAZIL
Tin   CV Venus Inti Perkasa   INDONESIA
Tin   PT Wahana Perkit Jaya   INDONESIA
Tin   PT Belitung Industri Sejahtera   INDONESIA
Tin   O.M. Manufacturing (Thailand) Co., Ltd.   THAILAND
Tin   PT Aries Kencana Sejahtera   INDONESIA
Tin   Elmet S.L.U. (Metallo Group)   SPAIN
Tin   PT Panca Mega Persada   INDONESIA
Tin   Metallic Resources, Inc.   UNITED STATES
Tin   PT ATD Makmur Mandiri Jaya   INDONESIA
Tin   PT BilliTin Makmur Lestari   INDONESIA
Tin   PT Inti Stania Prima   INDONESIA
Tin   PT Justindo   INDONESIA
Tin   PT Sumber Jaya Indah   INDONESIA
Tin   CV Gita Pesona   INDONESIA
Tin   CV Ayi Jaya   INDONESIA
Tin   PT Cipta Persada Mulia   INDONESIA
Tin   Resind Indústria e Comércio Ltda.   BRAZIL
Tin   PT Bangka Prima Tin   INDONESIA

 

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Tin   VQB Mineral and Trading Group JSC   VIET NAM
Tin   PT Tommy Utama   INDONESIA
Tungsten   H.C. Starck Smelting GmbH & Co.KG   GERMANY
Tungsten   H.C. Starck GmbH   GERMANY
Tungsten   A.L.M.T. TUNGSTEN Corp.   JAPAN
Tungsten   Chongyi Zhangyuan Tungsten Co., Ltd.   CHINA
Tungsten   Ganzhou Huaxing Tungsten Products Co., Ltd.   CHINA
Tungsten   Ganzhou Non-ferrous Metals Smelting Co., Ltd.   CHINA
Tungsten   Ganzhou Seadragon W & Mo Co., Ltd.   CHINA
Tungsten   Global Tungsten & Powders Corp.   UNITED STATES
Tungsten   Guangdong Xianglu Tungsten Co., Ltd.   CHINA
Tungsten   Hunan Chunchang Nonferrous Metals Co., Ltd.   CHINA
Tungsten   Hydrometallurg, JSC   RUSSIAN FEDERATION
Tungsten   Japan New Metals Co., Ltd.   JAPAN
Tungsten   Kennametal Huntsville   UNITED STATES
Tungsten   Pobedit, JSC   RUSSIAN FEDERATION
Tungsten   Tejing (Vietnam) Tungsten Co., Ltd.   VIET NAM
Tungsten   Wolfram Bergbau und Hütten AG   AUSTRIA
Tungsten   Xiamen Tungsten (H.C.) Co., Ltd.   CHINA
Tungsten   Xiamen Tungsten Co., Ltd.   CHINA
Tungsten   Fujian Jinxin Tungsten Co., Ltd.   CHINA
Tungsten   Vietnam Youngsun Tungsten Industry Co., Ltd.   VIET NAM
Tungsten   Ganzhou Jiangwu Ferrotungsten Co., Ltd.   CHINA
Tungsten   Jiangxi Gan Bei Tungsten Co., Ltd.   CHINA
Tungsten   Chenzhou Diamond Tungsten Products Co., Ltd.   CHINA
Tungsten   Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC   VIET NAM
Tungsten   Xinhai Rendan Shaoguan Tungsten Co., Ltd.   CHINA
Tungsten   Dayu Weiliang Tungsten Co., Ltd.   CHINA
Tungsten   Malipo Haiyu Tungsten Co., Ltd.   CHINA
Tungsten   Hunan Chuangda Vanadium Tungsten Co., Ltd. Yanglin   CHINA
Tungsten   Jiangxi Xiushui Xianggan Nonferrous Metals Co., Ltd.   CHINA
Tungsten   Dayu Jincheng Tungsten Industry Co., Ltd.   CHINA
Tungsten   Ganzhou Yatai Tungsten Co., Ltd.   CHINA
Tungsten   Asia Tungsten Products Vietnam Ltd.   VIET NAM
Tungsten   Niagara Refining LLC   UNITED STATES

 

 

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