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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