Exhibit 1.01
ALPHATEC HOLDINGS, INC.
Conflict Minerals Report
For the Year Ended December 31, 2018
1. | Introduction |
This Conflict Minerals Report (“Report”) of Alphatec Holdings, Inc. (“Alphatec,” the “Company,” “we,” “us” or “our”) has been prepared pursuant to Rule 13p-1 (the “Rule”) and Form SD promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1, 2018 to December 31, 2018 (the “Reporting Period”). Numerous terms in this Report are defined in the Rule and Form SD and the reader is referred to those sources and to SEC Release No. 34-67716, issued by the Securities and Exchange Commission (“SEC”) on August 22, 2012, for such definitions.
The Rule requires us to disclose annually whether any products that we manufactured or contracted to manufacture during the Reporting Period contain certain, specified minerals which are necessary to the functionality or production of the products and whether those specified minerals, if found necessary, originated in the Democratic Republic of the Congo or any adjoining country (each a “Covered Country” and collectively, the “Covered Countries”). The specific minerals at issue are cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum and tungsten (collectively, “Conflict Minerals”). If any of these Conflict Minerals originated in the Covered Countries, we are also required under the Rule to submit this Report, which describes the due diligence we performed in an effort to determine the source and chain of custody of those Conflict Minerals, among other things.
After conducting our reasonable country of origin inquiry (“RCOI”), briefly described below, we know or have reason to believe that some of our products manufactured or contracted for manufacture during the Reporting Period contain necessary Conflict Minerals that originated, or may have originated, in the Covered Countries and that they are not or may not be from recycled or scrap sources. Accordingly, we conducted due diligence on the source and chain of custody of those necessary Conflict Minerals that originated in the Covered Countries for the Reporting Period.
Certain statements in this Report contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include expectations concerning the Company’s future actions to engage suppliers, to identify to the extent possible the source of Conflict Minerals in its products and to take other actions regarding its product sourcing. The Company’s actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties including, but not limited to, decisions to make changes in the Company’s continual improvement efforts and delays or difficulties in engaging suppliers and identifying the source of Conflict Minerals contained in the Company’s products.
This Report has not been audited, nor is an independent private sector audit required for this Report under the Rule, the SEC partial stay of the Rule or existing SEC guidance and instruction.
2. | Company Overview |
We are a medical technology company focused on the design, development and promotion of products for the surgical treatment of spine disorders. Our mission is to revolutionize the approach to spine surgery. We have a broad product portfolio and pipeline that are designed to address the cervical, thoracolumbar and intervertebral regions of the spine and cover a variety of spinal disorders and surgical procedures. Our principal product offerings are focused on the U.S. market for fusion-based spinal disorder solutions. We believe that our products and systems are attractive to surgeons and patients due to innovative features and benefits that are designed to simplify surgical procedures for the surgeon and improve patient outcomes.
We are a Delaware corporation. We were incorporated in March 2005. Our principal executive office is located at 5818 El Camino Real, Carlsbad, California 92008 and our telephone number is (760) 431-9286. Our Internet address is www.atecspine.com.
3. | Reasonable Country of Origin Inquiry |
We determined after review that necessary Conflict Minerals were contained in certain of our products during the Reporting Period. This determination was made due to the anticipated presence of such minerals in parts obtained from suppliers, either contract manufacturers or original equipment manufacturers, or from utilization of conflict minerals in manufacturing processes employed by our suppliers. Because of this determination, we conducted a RCOI, which was designed to determine whether any of the necessary Conflict Minerals in our products originated or may have originated in a Covered Country or came from recycled or scrap sources.
For the Reporting Period, we used our sourcing and procurement data and internal inquiries to identify forty-two (42) suppliers who supplied us necessary Conflict Minerals during the Reporting Period. We contacted each of these suppliers and asked them to provide information on (1) the Conflict Minerals contained in each of the products manufactured for us by that supplier and (2) the source of the Conflict Minerals, including smelter/refinery information and location of mines. Each supplier was asked to complete the most current Conflict Minerals Reporting Template (“CMRT”) developed by the Conflict-Free Sourcing Initiative (the “CFSI”).
We received CMRT responses from 42 of the suppliers who supplied us necessary Conflict Minerals during the Reporting Period. Based on those responses, we determined that Conflict Minerals present in certain of our products, as well as Conflict Minerals utilized in the production of certain of our product parts, may have originated in the Covered Countries and were not from scrap or recycled sources. Accordingly, in accordance with the Rule, we performed due diligence in an effort to determine the source and chain of custody of these necessary Conflict Minerals.
4. | Due Diligence |
We are several levels removed from the actual mining of Conflict Minerals. We do not make purchases of raw ore or unrefined Conflict Minerals, and we make no direct purchases of materials from third parties located in the Covered Countries. Because of our position in the supply chain, we designed our due diligence framework in conformity with, in all material respects, the most current criteria and five-step framework set forth in the Organization for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, Third Edition, and related Supplements on Tin, Tantalum and Tungsten and on Gold (collectively, “OECD Guidance”), specifically as it relates to our position in the minerals supply chain as a “downstream” purchaser. In this regard, we must rely on our suppliers to provide information regarding the country of origin and chain of custody of the Conflict Minerals included in products covered by the Rule.
In conformity with the OECD Guidance, below is a description of the measures we performed for the Reporting Period to exercise due diligence on the source and chain of custody of the necessary Conflict Minerals contained in our products that we had reason to believe may have originated from the Covered Countries and may not have come from recycled or scrap sources.
OECD Step 1: Establish Strong Company Management Systems
| • | We are committed to compliance with Conflict Minerals legislation and have implemented appropriate due-diligence processes to meet our obligations. We continued to review and assess our Conflict Minerals processes to ensure that we conduct all of our operations and activities in compliance with applicable Conflict Minerals legislation. |
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| • | We maintained an internal Conflict Minerals taskforce with cross functional team members and executives, to facilitate communication and supplier engagement, conduct due diligence compliance process and measurement, keep records and implement our risk management plan. |
OECD Step 2: Identify and Assess Risk in the Supply Chain
| • | We compiled a list of all suppliers who provide components that are used in the manufacturing of all Alphatec products. |
| • | We stratified the supplier list by the commodity type provided by each given supplier. |
| • | We excluded from the supplier list commodity types for which there is no risk of the use of Conflict Minerals. |
| • | We actively surveyed the remaining suppliers by submitting the CFSI CMRT and utilizing reasonable means to obtain self-declarations identifying the minerals used in the manufacture of products, the origin of any Conflict Minerals used, where applicable, included in the product(s) provided to Alphatec. |
| • | Where necessary, we followed up with those direct suppliers contacted to obtain additional information and/or responses to supply chain survey template that we identified contained incomplete or potentially inaccurate information to seek additional clarifying information. |
| • | We used the CMRT to review our direct suppliers’ due diligence activities, such as whether they had a Conflict Minerals policy, required their own suppliers to source from processing facilities validated by an independent audit firm, and implemented a review process that includes corrective action management. |
| • | We used the CMRT to identify Conflict Minerals processing facilities if reported in our supply chain by direct suppliers. |
| • | We determined if the processing facilities adhere to responsible sourcing practices by cross-checking with the list of Conflict Free Smelter Program (“CFSP”) compliant processing facilities. |
| • | We obtained countries of origin (when available) for CFSP-compliant processing facilities by relying on information provided by our direct suppliers and other public data sources. |
OECD Step 3: Design and Implement a Strategy to Respond to Risk
| • | We reported information on the source and chain of custody of Conflict Minerals in our supply chain to our Conflict Minerals working team and Conflicts Mineral taskforce on a regular basis. |
| • | We maintained a Conflict Minerals risk management plan that sets forth direct supplier-risk management strategies ranging from continued procurement to disengagement. |
| • | We provided formal and informal continuing education and training to members of our Conflict Minerals taskforce and our other employees who are involved with Conflict Minerals and suppliers. |
OECD Step 4: Third-Party Audit of Smelter/Refiner’s Due Diligence Practices
| • | Because we do not source directly from processing facilities, we rely on the publicly-available results of the CFSP, London Bullion Market Association (“LBMA”) and Responsible Jewellery Council (“RJC”) third-party audits to validate the responsible sourcing practices of processing facilities in our supply chain. |
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| • | The CFSI recognizes processing facilities as CFSP-compliant through validations conducted by the LBMA and RJC. |
OECD Step 5: Report Annually on Supply Chain Due Diligence
| • | We file a Form SD and Conflict Minerals Report with the SEC on an annual basis. Our Form SD and Conflict Minerals Report are also available on our website. |
5. | Results of Good Faith RCOI and Due Diligence Process |
Based on the information obtained pursuant to the good faith RCOI and due diligence processes described above, for the Reporting Period, we do not have sufficient information with respect to the Conflict Minerals to determine the country of origin of all of the Conflict Minerals we use to manufacture the our subject products and thus are unable to determine whether any of the Conflict Minerals originated in the Covered Countries and, if so, whether the Conflict Minerals were from recycled or scrap sources or financed conflict in the Covered Countries.
Our inability to reach specific and verifiable conclusions as to the products containing or utilizing Conflict Minerals, despite our efforts, primarily resulted from the following challenges or complicating factors.
| • | We are dependent on information received from our direct suppliers to conduct our good faith RCOI process. |
| • | We have a varied supplier base with differing levels of resources and sophistication, and many of our suppliers are not themselves subject to the Rule. |
| • | The information our suppliers provided was often incomplete and required significant follow-up. Nevertheless, each supplier response was evaluated and, where possible, validated to determine sufficiency, accuracy or completeness of its response. For each supplier response, we subsequently assessed whether the Conflict Minerals identified, or those Conflict Minerals that may not have been identified, were consistent with the nature and characteristics of the manufactured product or supplied part. For each supplier response that was insufficient, potentially inaccurate or incomplete, we contacted that supplier for follow up, sometimes contacting certain suppliers on multiple occasions. When a supplier EICC-GeSI response stated that Conflict Minerals were sourced from the Covered Countries and identified the smelter involved, we endeavored to verify whether the smelter referenced by the supplier was identified on the EICC-GeSI Conflict Free Smelter List. If a supplier stated that Conflict Minerals in its product were not sourced from the Covered Countries but did not substantiate that information, we proceeded to verify that supplier response. Typically, verification involved a more detailed review of the supplier’s smelter response and, where possible, discussion with the supplier. If a supplier's response could not be validated through details provided with regard to the smelter and/or smelters involved, then the supplier response in question was determined to be uncertain or unknown relative to the question of sourcing of raw material and was reflected as such in the Company’s EICC-GeSI template summary. |
| • | Suppliers provided responses at a company or divisional level, and not at a product level specific to the materials and components we use in the identified products. |
| • | As a downstream purchaser of Conflict Minerals, our due diligence measures can provide only reasonable, not absolute, assurance regarding the source and chain of custody of the necessary Conflict Minerals. Our due diligence processes are based on the necessity of seeking data from our direct suppliers and those suppliers seeking similar information within their supply chains to identify the original sources of the necessary Conflict Minerals. Our ability to influence cooperation from certain suppliers was limited when our use of these suppliers was mandated by our customers or when we were multiple tiers away from the smelter in the supply chain. |
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| • | The unavailability of country of origin and chain of custody information from our suppliers on a continuous, real-time basis. Under the Dodd-Frank Act and the Rule, a product is “DRC conflict free” if it meets the required standard every day of the reporting year; conversely, a product would “not be found to be DRC conflict free” if it does not meet the required standard even one day of the reporting year. The supply chain of commodities such as Conflict Minerals is a multi-step process operating more or less on a daily basis, with ore being delivered to smelters and refiners, with smelters and refiners smelting or refining ores into metal containing derivatives such as ingots, with the derivatives being shipped, sold and stored in numerous market locations around the world and with distributors and purchasers holding varying amounts of the derivatives in inventory for use. Since we do not have direct contractual relationships with smelters and refiners, we rely on our direct suppliers to gather and provide specific information about the date when the ore is smelted into a derivative and later shipped, stored, sold and first entered the stream of commerce. We directly seek sourcing data on a periodic basis from our direct suppliers as well as certain smelters and refiners. We ask that the data cover the entire reporting year, and we seek to use contract provisions requiring the suppliers to promptly update us in the event that the sourcing data changes. |
As a result, we have not been able to identify or verify all of the smelters from which our suppliers sourced the Conflict Minerals. For the Conflict Minerals which we were able to identify information about the smelter, we have noted that some of the smelters are currently on the conflict free smelters list published by the CFSI.
Set forth below is the list of known smelters we identified through our good faith RCOI and related due diligence:
Subject Mineral | Smelter or Refiner Name | Location of Smelter/ Refiner |
Tungsten | A.L.M.T. TUNGSTEN Corp. | JAPAN |
Gold | Advanced Chemical Company | USA |
Gold | Allgemeine Gold-und Silberscheideanstalt A.G. | GERMANY |
Tin | Alpha | USA |
Tin | Alpha Metals Korea Ltd. | USA |
Gold | AngloGold Ashanti Córrego do Sítio Mineração | BRAZIL |
Gold | Argor-Heraeus S.A. | SWITZERLAND |
Gold | Asahi Pretec Corp. | JAPAN |
Gold | Asahi Refining Canada Ltd. | CANADA |
Gold | Asahi Refining USA Inc. | USA |
Gold | Asaka Riken Co., Ltd. | JAPAN |
Tungsten | ATI Tungsten Materials | USA |
Gold | Aurubis AG | GERMANY |
Gold | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | PHILIPPINES |
Gold | Boliden AB | SWEDEN |
Gold | C. Hafner GmbH + Co. KG | GERMANY |
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Caridad | MEXICO | |
Gold | CCR Refinery - Glencore Canada Corporation | CANADA |
Tantalum | Changsha South Tantalum Niobium Co., Ltd. | CHINA |
Tungsten | Chenzhou Diamond Tungsten Products Co., Ltd. | CHINA |
Tin | Chenzhou Yunxiang Mining and Metallurgy Co., Ltd. | CHINA |
Gold | Chimet S.p.A. | ITALY |
Tin | China Tin Group Co., Ltd. | CHINA |
Tungsten | Chongyi Zhangyuan Tungsten Co., Ltd. | CHINA |
Tin | Cooperativa Metalurgica de Rondônia Ltda. | BRAZIL |
Tin | CV United Smelting | INDONESIA |
Tin | CV Venus Inti Perkasa | INDONESIA |
Tantalum | D Block Metals, LLC | USA |
Tungsten | Dayu Weiliang Tungsten Co., Ltd. | CHINA |
Gold | Dowa | JAPAN |
Tin | Dowa | JAPAN |
Tantalum | Duoluoshan | CHINA |
Gold | Elemetal Refining, LLC | USA |
Tin | EM Vinto | BOLIVIA |
Tantalum | Exotech Inc. | USA |
Tantalum | F&X Electro-Materials Ltd. | CHINA |
Tin | Fenix Metals | POLAND |
Tantalum | FIR Metals & Resource Ltd. | CHINA |
Tungsten | Fujian Jinxin Tungsten Co., Ltd. | CHINA |
Tungsten | Ganzhou Huaxing Tungsten Products Co., Ltd. | CHINA |
Tungsten | Ganzhou Jiangwu Ferrotungsten Co., Ltd. | CHINA |
Tungsten | Ganzhou Seadragon W & Mo Co., Ltd. | CHINA |
Tin | Gejiu Non-Ferrous Metal Processing Co., Ltd. | CHINA |
Tantalum | Global Advanced Metals Aizu | JAPAN |
Tantalum | Global Advanced Metals Boyertown | USA |
Tungsten | Global Tungsten & Powders Corp. | USA |
Tantalum | Guangdong Rising Rare Metals-EO Materials Ltd. | CHINA |
Tantalum | Guangdong Zhiyuan New Material Co., Ltd. | CHINA |
Tantalum | H.C. Starck Co., Ltd. | THAILAND |
Tungsten | H.C. Starck GmbH | GERMANY |
Tantalum | H.C. Starck Hermsdorf GmbH | GERMANY |
Tantalum | H.C. Starck Inc. | USA |
Tantalum | H.C. Starck Ltd. | JAPAN |
Tantalum | H.C. Starck Smelting GmbH & Co. KG | GERMANY |
Tungsten | H.C. Starck Smelting GmbH & Co. KG | GERMANY |
Tantalum | H.C. Starck Tantalum and Niobium GmbH | GERMANY |
Tungsten | H.C. Starck Tungsten GmbH | GERMANY |
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Heimerle + Meule GmbH | GERMANY | |
Tantalum | Hengyang King Xing Lifeng New Materials Co., Ltd. | CHINA |
Gold | Heraeus Metals Hong Kong Ltd. | CHINA |
Gold | Heraeus Precious Metals GmbH & Co. KG | GERMANY |
Tantalum | Hi-Temp Specialty Metals, Inc. | USA |
Tin | HuiChang Hill Tin Industry Co., Ltd. | CHINA |
Tungsten | Hunan Chuangda Vanadium Tungsten Co., Ltd. Wuji | CHINA |
Tungsten | Hunan Chunchang Nonferrous Metals Co., Ltd. | CHINA |
Tungsten | Hydrometallurg, JSC | RUSSIAN FEDERATION |
Gold | Istanbul Gold Refinery | TURKEY |
Tungsten | Jiangwu H.C. Starck Tungsten Products Co., Ltd. | CHINA |
Tantalum | Jiangxi Dinghai Tantalum & Niobium Co., Ltd. | CHINA |
Tungsten | Jiangxi Gan Bei Tungsten Co., Ltd. | CHINA |
Tungsten | Jiangxi Minmetals Gao'an Non-ferrous Metals Co., Ltd. | CHINA |
Tungsten | Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd. | CHINA |
Tantalum | Jiangxi Tuohong New Raw Material | CHINA |
Tungsten | Jiangxi Xinsheng Tungsten Industry Co., Ltd. | CHINA |
Tungsten | Jiangxi Xiushui Xianggan Nonferrous Metals Co., Ltd. | CHINA |
Tungsten | Jiangxi Yaosheng Tungsten Co., Ltd. | CHINA |
Tantalum | JiuJiang JinXin Nonferrous Metals Co., Ltd. | CHINA |
Tantalum | Jiujiang Nonferrous Metals Smelting Company Limited | CHINA |
Tantalum | Jiujiang Zhongao Tantalum & Niobium Co., Ltd. | CHINA |
Tantalum | KEMET Blue Metals | MEXICO |
Tantalum | KEMET Blue Powder | USA |
Tungsten | Kennametal Fallon | USA |
Tungsten | Kennametal Huntsville | USA |
Gold | Kennecott Utah Copper LLC | USA |
Gold | KGHM Polska Miedź Spółka Akcyjna | POLAND |
Tantalum | King-Tan Tantalum Industry Ltd. | CHINA |
Tantalum | LSM Brasil S.A. | BRAZIL |
Tin | Malaysia Smelting Corporation (MSC) | MALAYSIA |
Gold | Materion | USA |
Tin | Metallo Belgium N.V. | BELGIUM |
Tin | Metallo-Chimique N.V. | BELGIUM |
Tantalum | Metallurgical Products India Pvt., Ltd. | INDIA |
Gold | Metalor Technologies (Hong Kong) Ltd. | CHINA |
Gold | Metalor Technologies (Singapore) Pte., Ltd. | SINGAPORE |
Gold | Metalor Technologies (Suzhou) Ltd. | CHINA |
Gold | Metalor Technologies S.A. | SWITZERLAND |
Gold | Metalor USA Refining Corporation | USA |
Gold | Metalúrgica Met-Mex Peñoles S.A. De C.V. | MEXICO |
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Mineração Taboca S.A. | BRAZIL | |
Tin | Mineração Taboca S.A. | BRAZIL |
Tin | Minsur | PERU |
Tin | Mitsubishi Materials Corporation | JAPAN |
Tantalum | Mitsui Mining & Smelting | JAPAN |
Tungsten | Niagara Refining LLC | USA |
Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. | CHINA |
Tungsten | Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC | VIETNAM |
Gold | Ögussa Österreichische Gold- und Silber-Scheideanstalt GmbH | AUSTRIA |
Tin | Operaciones Metalurgical S.A. | BOLIVIA |
Gold | PAMP S.A. | SWITZERLAND |
Tantalum | Power Resources Ltd. | MACEDONIA |
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 Eunindo Usaha Mandiri | INDONESIA |
Tin | PT Inti Stania Prima | 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 Timah (Persero) Tbk Kundur | INDONESIA |
Tin | PT Timah (Persero) Tbk Mentok | INDONESIA |
Tin | PT Tinindo Inter Nusa | INDONESIA |
Tantalum | QuantumClean | USA |
Tantalum | Resind Indústria e Comércio Ltda. | BRAZIL |
Tantalum | RFH Tantalum Smeltry Co., Ltd. | CHINA |
Gold | Royal Canadian Mint | CANADA |
Tin | Rui Da Hung | TAIWAN |
Gold | Shandong Zhaojin Gold & Silver Refinery Co., Ltd. | CHINA |
Tantalum | Solikamsk Magnesium Works OAO | RUSSIAN FEDERATION |
Tantalum | Taki Chemical Co., Ltd. | JAPAN |
Gold | Tanaka Kikinzoku Kogyo K.K. | JAPAN |
Tungsten | Tejing (Vietnam) Tungsten Co., Ltd. | VIETNAM |
Tantalum | Telex Metals | USA |
Tin | Thaisarco | THAILAND |
Gold | The Refinery of Shandong Gold Mining Co., Ltd. | CHINA |
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Tranzact, Inc. | USA | |
Tantalum | Ulba Metallurgical Plant JSC | KAZAKHSTAN |
Gold | Umicore S.A. Business Unit Precious Metals Refining | BELGIUM |
Gold | United Precious Metal Refining, Inc. | USA |
Tungsten | Vietnam Youngsun Tungsten Industry Co., Ltd. | VIETNAM |
Gold | Western Australian Mint trading as The Perth Mint | AUSTRALIA |
Tin | White Solder Metalurgia e Mineracao Ltda. | BRAZIL |
Tungsten | Wolfram Bergbau und Hütten AG | AUSTRIA |
Tungsten | Xiamen Tungsten Co., Ltd. | CHINA |
Tungsten | Xinhai Rendan Shaoguan Tungsten Co., Ltd. | CHINA |
Tantalum | XinXing HaoRong Electronic Material Co., Ltd. | CHINA |
Tantalum | Yichun Jin Yang Rare Metal Co., Ltd. | CHINA |
Gold | Yokohama Metal Co., Ltd. | JAPAN |
Tin | Yunnan Chengfeng Non-ferrous Metals Co., Ltd. | CHINA |
Tin | Yunnan Tin Company Limited | CHINA |
Tantalum | Zhuzhou Cemented Carbide Group Co., Ltd. | CHINA |
Despite our good faith, reasonable country of origin inquiries, due to the number of suppliers for which we have not received confirmed responses from for all of our questions regarding the source and chain of custody of the necessary Conflict Minerals in our Products, we currently have not obtained sufficient information from all of our suppliers to determine the origin, name and location of the facilities used to process all of the necessary Conflict Minerals.
Despite the foregoing conclusion, we undertook and continue to undertake the due diligence measures and procedures to attempt to determine the applicable facilities and countries of origin for the necessary Conflict Minerals for the Products, including making numerous follow up inquiries of the applicable suppliers who were nonresponsive and/or who indicated to us that they were still attempting to independently determine the smelter or source of the Conflict Minerals obtained by such suppliers.
6. | Risk Mitigation |
We are committed to complying with the provisions of the Rule and Form SD and expect to continue our efforts to improve our conflict minerals program and related due diligence. Our supply chain management next steps may include, but are not limited to the following:
| • | continue to work with suppliers that provided incomplete responses or that did not provide responses for 2018 to help ensure that they provide requested information for 2019; |
| • | continue to request information and supporting data from each supplier manufacturing products for Alphatec that are subject to reporting requirements by utilizing any revised CMRT; and will pursue a completed template response that identifies material down to the smelter and mine; |
| • | continue to refine our Conflict Minerals risk management strategy based on the results of our due diligence on products manufactured and procured in 2018; |
| • | continue our due diligence process to review and validate supplier responses that are obtained in support of our Conflict Minerals reporting; and |
| • | provide continuing education and training to members of our Conflict Minerals taskforce and our other employees who are involved with Conflict Minerals and suppliers. |
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