Exhibit 1.01
GenMark Diagnostics, Inc.
Conflict Minerals Report
For The Year Ended December 31, 2013
This Conflict Minerals Report for the year ended December 31, 2013 is submitted by GenMark Diagnostics, Inc. (“GenMark” or the “Company”) as required by Rule 13p-1 under the Securities Exchange Act of 1934, as amended (the “Rule”). The Rule was adopted by the Securities and Exchange Commission (the “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 (the “Dodd-Frank Act”). The Rule imposes certain reporting obligations on SEC registrants which manufacture or contract to manufacture products containing conflict minerals that are necessary to the functionality or production of those products. Conflict minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten and gold for the purposes of this assessment and the related reporting requirements.
If a registrant can establish that the conflict minerals originated from sources other than the Democratic Republic of the Congo or an adjoining country (the “Covered Countries”), or from recycled or scrap sources, it must submit a Form SD which describes the reasonable country of origin inquiry the registrant completed in connection with making this determination.
If, however, a registrant has reason to believe that any of the conflict minerals in its supply chain may have originated in the Covered Countries, or if the registrant is unable to determine the country of origin of those conflict minerals, then the registrant must exercise due diligence to determine the conflict minerals’ source and chain of custody. In this case, the registrant must annually submit a report to the SEC which includes a description of the due diligence measures it has undertaken.
The report presented herein has not been audited by a third party because the Rule provides that if a registrant’s products are “DRC conflict undeterminable” in 2013 or 2014, the report is not subject to an independent audit.
1. Company Overview
This report has been prepared by management of GenMark. The information includes the activities of all subsidiaries that are required to be consolidated.
GenMark is a leading provider of automated, multiplex molecular diagnostic testing systems that detect and measure DNA and RNA targets to diagnose disease and optimize patient treatment. Utilizing GenMark's proprietary eSensor® detection technology, GenMark's eSensor® XT-8 system is designed to support a broad range of molecular diagnostic tests with a compact, easy-to-use workstation and self-contained, disposable test cartridges. As of December 31, 2013, GenMark had 153 employees and sold its products only within the United States. GenMark was incorporated in Delaware in February 2010 and maintains is principal executive office at 5964 La Place Court, Carlsbad, California 92008.
2. Product Overview
During 2013, the Company sold two categories of products: (1) its XT-8 instrument system, and (2) a variety of diagnostic and research consumable test cartridges for use with the Company’s XT-8 instrument. GenMark outsources manufacturing of its XT-8 instrument to a third party manufacturing partner. GenMark manufactures its proprietary XT-8 test cartridges at its headquarters in Carlsbad, California. The Company sources certain components of its XT-8 test cartridges from third party suppliers, including printed circuit boards (“PCBs”) that form part of its consumable XT-8 test cartridges. The PCB’s incorporated into GenMark’s XT-8 test cartridges contain gold electrodes to support the functionality of the Company’s proprietary eSensor® technology. GenMark’s PCBs also contain tin.
3. Reasonable Country of Origin Inquiry and Conflict Status Conclusion
The Company formed a team of individuals from its legal, supply chain and research and development departments with relevant expertise in order to perform an assessment of its products and product components and the role that relevant suppliers play throughout the Company’s manufacturing and product delivery processes. The Company then conducted an analysis of its products and determined that tin, tantalum, tungsten, and/or gold can be found in its XT-8 instrument and its consumable test cartridges. The Company defined the scope of its conflict minerals due diligence by identifying, contacting and requesting relevant information from its current suppliers that provide products or product components that are likely to contain conflict minerals.
The Company adopted the standard conflict minerals reporting templates established by the Electronic Industry Citizenship Coalition and the Global e-Sustainability Initiative and required that each of its relevant suppliers provide the information included within the reporting template, which included the following, among other information:
| |
| • | the identification of any conflict minerals necessary to the functionality of products or product components manufactured for GenMark; |
| |
| • | whether conflict minerals within the products or product components supplied to GenMark originate from the Covered Countries; |
| |
| • | whether such minerals come from a recycler or scrap supplier; |
| |
| • | whether the applicable supplier has received completed conflict mineral reporting templates from all of its sub-suppliers; |
| |
| • | whether the supplier has identified the applicable smelters it and its sub-suppliers use to supply products or product components to GenMark, and, if so, the identity of such smelters; |
| |
| • | whether the supplier has a policy in place that includes conflict-free sourcing; |
| |
| • | whether the supplier requires its sub-suppliers to be conflict-free; |
| |
| • | whether the supplier has implemented due diligence measures for conflict-free sourcing; |
| |
| • | whether the supplier requests that its sub-suppliers complete a similar conflict mineral reporting template; and |
| |
| • | whether the supplier verifies the due diligence materials received from their sub-suppliers, and, if so, whether this process includes corrective action management. |
Despite having conducted a good faith reasonable country of origin inquiry and the resulting due diligence on its supply chain, GenMark has concluded that its products are “DRC conflict undeterminable.” The Company has reached this conclusion because it has been unable to determine the origin of all conflict minerals used in its products. Due to the breadth and complexity of GenMark’s products and respective supply chain, it will take time for the Company’s relevant suppliers to verify the origin of all of the conflict minerals they use in manufacturing products or product components for GenMark. GenMark’s suppliers are themselves dependent on responses from their suppliers.
5. Due Diligence Program
Pursuant to the Dodd-Frank Act, publicly traded companies are required to exercise reasonable due diligence to determine if conflict minerals used in their products are being sourced from mines within the Covered Countries. GenMark supports industry initiatives to encourage a conflict-free supply chain and seeks to develop and establish supply arrangements with companies that exercise reasonable measures to ensure the products they supply to GenMark do not support armed conflict within the Covered Countries. The Company continues to evaluate its supply chain strategy to support this objective, which it expects may include developing additional policies and processes toward preventing the use of conflict minerals in Company products, minimizing the knowing procurement of materials that are not conflict-free (if conflict-free sources are reasonably available), and further communicating to its suppliers the Company’s expectations that they establish policies, due diligence frameworks, and management systems that are designed to accomplish this goal.
GenMark seeks to establish and maintain long-term relationships with its key suppliers. However, GenMark will carefully evaluate any supply arrangement which it determines may finance or benefit armed groups through the sourcing of conflict minerals within the Covered Countries. In such instances, GenMark may require the supplier to commit to devise and undertake appropriate corrective action to move to a conflict-free source, or the Company may consider other appropriate sources for the product.
6. Survey Responses
GenMark’s PCB suppliers have certified that the conflict minerals included in GenMark’s PCBs do not originate from the Covered Countries. In addition, these suppliers have identified the smelters used by such suppliers in connection with their supply of GenMark’s PCBs, which are identified on Table 1 attached hereto.
GenMark’s XT-8 instrument supplier has certified that it is uncertain whether the conflict minerals included in the Company’s XT-8 instrument originated from the Covered Countries. This supplier has identified the smelters it uses to manufacture its products, which are also identified on Table 1 attached hereto. GenMark’s XT-8 instrument supplier has committed to (a) sourcing components and materials from companies that share values regarding respect for human rights, integrity and environmental responsibility, (b) complying with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, which provides guidance to suppliers in establishing policies, due diligence frameworks and management systems, and (c) requiring that its suppliers (1) commit to being or becoming “conflict-free” (which means that such supplier does not source conflict minerals) and sourcing only from conflict-free smelters, and (2) provide completed declarations (using the EICC-GeSI reporting template) evidencing such commitment and documenting the countries of origin from which the supplier directly or indirectly sources tin, tantalum, tungsten and gold, as well as the compliance structure that the supplier has implemented.
As the Company further enhances its due diligence program, it intends to increase supplier communication and training and develop an escalation process to improve due diligence data accuracy and completion. Because of the Company’s size, the complexity of its products, and the continuing evolution of its supply chain, it is difficult to identify actors downstream from its direct suppliers. GenMark has relied on the responses of its suppliers to provide information about the source of conflict minerals contained in the products and product components supplied to the Company. GenMark’s direct suppliers are similarly reliant upon information provided by their suppliers. GenMark supports suppliers who seek to implement measures to source minerals from conflict-free smelters.
Table 1
Table 1 below lists the facilities which, to the extent known, processed conflict minerals for GenMark’s products:
|
| | |
| Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd | CHINA |
| Tin | Yunnan Tin Company Limited | CHINA |
| Tin | PT Timah | INDONESIA |
| Tin | Mineração Taboca S.A. | BRAZIL |
| Tin | EM Vinto | BOLIVIA |
| Tin | Cooper Santa | BRAZIL |
| Tin | Thaisarco | THAILAND |
| Tin | Yunnan Tin Company Limited | CHINA |
| Tin | Minsur | PERU |
| Tin | Malaysia Smelting Corp | MALAYSIA |
| Gold | Royal Canadian Mint | CANADA |
| Gold | Caridad | MEXICO |
| Gold | Metalor USA Refining Corporation | UNITED STATES |
| Gold | Kennecott Utah Copper | UNITED STATES |
| 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 | JAPAN |
| Gold | Codelco | CHILE |
| Gold | Do Sung Corporation | KOREA, REPUBLIC OF |
| Gold | Dowa | JAPAN |
| Gold | FSE Novosibirsk Refinery | RUSSIAN FEDERATION |
| Gold | Heimerle + Meule GmbH | GERMANY |
| Gold | Heraeus Ltd Hong Kong | HONG KONG |
| Gold | Heraeus Precious Metals GmbH & Co. KG | GERMANY |
| 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 Co. Ltd | 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 | Mitsubishi 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 | 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 | SAMWON METALS Corp. | KOREA, REPUBLIC OF |
| Gold | Schone Edelmetaal | NETHERLANDS |
| Gold | SEMPSA Joyeria Plateria SA | SPAIN |
| Gold | Shandong Zhaojin Gold & Silver Refinery Co. Ltd | CHINA |
| Gold | SOE Shyolkovsky Factory of Secondary Precious Metals | RUSSIAN FEDERATION |
| Gold | Solar Applied Materials Technology Corp. | TAIWAN |
| Gold | Sumitomo Metal Mining Co. Ltd. | JAPAN |
| Gold | Suzhou Xingrui Noble | CHINA |
| 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 | Xstrata Canada Corporation | CANADA |
|
| | |
| Gold | Yokohama Metal Co Ltd | JAPAN |
| Gold | Zhongyuan Gold Smelter of Zhongjin Gold Corporation | CHINA |
| Gold | Zijin Mining Group Co. Ltd | CHINA |
| Tantalum | Exotech Inc. | UNITED STATES |
| Tantalum | F&X | CHINA |
| Tantalum | Gannon & Scott | UNITED STATES |
| Tantalum | Global Advanced Metals | UNITED STATES |
| Tantalum | H.C. Starck GmbH | GERMANY |
| Tantalum | Hi-Temp | UNITED STATES |
| Tantalum | Kemet Blue Powder | UNITED STATES |
| Tantalum | Mitsui Mining & Smelting | JAPAN |
| Tantalum | Ningxia Orient Tantalum Industry Co., Ltd. | CHINA |
| Tantalum | Plansee | AUSTRIA |
| Tantalum | RFH | CHINA |
| Tantalum | Solikamsk Metal Works | RUSSIAN FEDERATION |
| Tantalum | Taki Chemicals | JAPAN |
| Tantalum | Tantalite Resources | SOUTH AFRICA |
| 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 | 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 | Linwu Xianggui Smelter Co | CHINA |
| Tin | Liuzhou China Tin | CHINA |
| Tin | Malaysia Smelting Corporation (MSC) | MALAYSIA |
| Tin | Metallo Chimique | BELGIUM |
| Tin | Mineração Taboca S.A. | BRAZIL |
| Tin | Minmetals Ganzhou Tin Co. Ltd. | CHINA |
| Tin | Minsur | PERU |
| Tin | Mitsubishi Materials Corporation | 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 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 | BRAZIL |
| Tin | Yunnan Chengfeng | CHINA |
| Tin | Yunnan Tin Company Limited | CHINA |
| Tungsten | 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 | 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 | Jiangxi Rare Earth & Rare Metals Tungsten Group Corp | CHINA |
| Tungsten | Jiangxi Tungsten Industry Group Co Ltd | CHINA |
| 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 |
| Tin | PT Indra Eramulti Logam industri | INDONESIA |
| Gold | The Hutti Gold Company | INDIA |
