Exhibit 1.02
QuickLogic Corporation
Conflict Minerals Report
For The Reporting Period from January 1, 2013 to December 31, 2013
This Conflict Minerals Report (the “Report”) of QuickLogic Corporation (“QuickLogic” or the “Company”) has been prepared pursuant to Rule 13p-1 and Form SD (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2013 to December 31, 2013.
The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products and the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals referred to as “Conflict Minerals” are gold, columbite-tantalite (coltan), cassiterite and wolfamite, including their derivatives which are limited to tantalum, tin and tungsten. The “Covered Countries” for purposes of the Rule and this Report are the Democratic Republic of Congo (the “DRC”), the Republic of Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.
Description of the Company’s Products Covered by this Report
This Report relates to products: (i) for which Conflict Minerals are necessary to the functionality or production of that product; (ii) that were manufactured, or contracted to be manufactured, by the Company; and (iii) for which the manufacture was completed during calendar year 2013.
These products, which are referred to in this Report collectively as the “Covered Products,” are the following:
QuickLogic Product Platform Families | Description | Status | ||
ARCTICLINK® | Semiconductor device | DRC conflict undeterminable | ||
ARCTICLINK II | Semiconductor device | DRC conflict undeterminable | ||
ARCTICLINK III BX | Semiconductor device | DRC conflict undeterminable | ||
ARCTICLINK III VX | Semiconductor device | DRC conflict undeterminable | ||
ARCTICLINK 3 S1 | Semiconductor device | DRC conflict undeterminable | ||
ECLIPSE | Semiconductor device | DRC conflict undeterminable | ||
ECLIPSE II | Semiconductor device | DRC conflict undeterminable | ||
ECLIPSE E | Semiconductor device | DRC conflict undeterminable | ||
PASIC®3 | Semiconductor device | DRC conflict undeterminable | ||
POLARPRO® | Semiconductor device | DRC conflict undeterminable | ||
POLARPRO 3 | Semiconductor device | DRC conflict undeterminable | ||
QUICKDSP | Semiconductor device | DRC conflict undeterminable | ||
QUICKPCI | Semiconductor device | DRC conflict undeterminable | ||
QUICKRAM | Semiconductor device | DRC conflict undeterminable |
Description of the Company’s Reasonable Country of Origin Inquiry
As described in this Report, we have determined that the following Conflict Minerals, namely gold, tantalum, tin and tungsten, are necessary to the functionality or production of products contracted to be manufactured by us during the calendar year 2013. As a result, we conducted in good faith a reasonable country of origin inquiry (“RCOI”) reasonably designed to determine if any of these Conflict Minerals originated in the Covered Countries and whether any of the Conflict Minerals may be from recycled or scrap sources. Our supply chain is complex, and there are many third parties in the supply chain between the ultimate manufacturer of the Covered Products and the original sources of Conflict Minerals. The Company does not directly purchase Conflict Minerals from mines, smelters or refiners. Therefore, the Company must rely on the entities we contract to manufacture the Covered Products to provide information regarding the country of origin of Conflict Minerals that are included in the Covered Products. In designing our RCOI, we employed a combination of measures to determine whether the Conflict Minerals in our Covered Products originated from the Covered Countries, and determined that the Company would survey each of its first tier contract manufacturers.
As such, our RCOI primarily consisted of submitting the conflict minerals reporting template prepared by the Electronic Industry Citizenship Coalition and Global eSustainability Initiative (“EICC-GeSI”) to the first tier contract manufacturers of our devices in 2013. Responses were reviewed for completeness, reasonableness and consistency, and we routinely followed up with our contract manufacturers for corrections and clarifications as needed.
We submitted this template to six contract manufacturers which represents 100% of our contract manufacturers. We received responses, which were periodically updated, from each of our manufactures, none of which provided sufficient information to determine the status of the facilities used to process the Conflict Minerals contained in our products.
Based on our RCOI, we were unable to determine that the Conflict Minerals did not originate in the Covered Countries, or if our Conflict Minerals came from recycled or scrap sources.
Description of the Company’s Due Diligence Process
Based on this information, we performed additional due diligence on the source and chain of custody of these Conflict Minerals based on the Organisation for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (“Framework”) to determine if the Conflict Minerals that may have originated in the Covered Countries benefited armed groups. After performing the RCOI and due diligence in conformity with the Framework, we determined that our Covered Products are DRC Conflict Undeterminable with regard to calendar year 2013 because, for each of our Covered Products, we were unable to comprehensively determine the origin of all Conflict Minerals used in our Covered Products, the facilities used to process them, their country of origin and their mine or location of origin.
The Company’s due diligence measures have been designed to conform to the framework in theOrganisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Second Edition, including the related supplements on gold, tin, tantalum and tungsten (the “OECD Guidance”). The OECD Guidance is an internationally recognized due diligence framework.
In accordance with the five-step OECD Guidance, the design of our due diligence includes, but is not limited to, the following five steps: (i) establishment of strong company management systems, (ii) identification and assessment of risks in the supply chain, (iii) designing and implementing a strategy to respond to identified risks, (iv) carrying out independent third-party audit of smelter/refiner’s due diligence practices and (v) reporting on supply chain due diligence. A description of certain activities undertaken by us in respect of each of the five steps of the OECD Guidance is described below.
1. | Establishment of Strong Company Management Systems |
We have completed a number of steps to establish a management system for addressing the sourcing of Conflict Minerals in our Covered Products. These actions include:
a. | Adopt and Commit to a Supply Chain Policy for Conflict Minerals: Our Conflict Minerals Policy is available athttp://www.quicklogic.com/corporate/support/conflict-minerals-policy. Our Policy underscores the Company’s commitment to ethical business conduct and the responsible sourcing of minerals and to working with our suppliers to ensure compliance with SEC regulations. |
Our Policy notes the Company’s support of the industry-wide efforts the EICC-GeSI are making to address responsible sourcing of minerals through the development of the Conflict Free Smeller Program (the “CFSP). Our policy discusses the Company’s adoption and use of the industry standard Conflict Minerals Reporting Template and Dashboard (the “Reporting Template”) developed by the EICC-GeSI to collect sourcing information related to conflict minerals as an element of our reasonable country of origin inquiry to verify the responsible sourcing of materials and to support compliance with SEC regulations.
b. | Internal Management to Support Supply Chain Due Diligence: Our Vice President of Finance and CFO, Vice President of Operations, General Counsel and Environmental Compliance Specialist (the “Conflict Minerals Team”) participate in the design and execution of our conflict minerals program and cooperate to manage and support our supply chain due diligence. The Conflict Minerals Team identified the suppliers to be contacted and adopted and approved for use the Reporting Template discussed above. The Environmental Compliance Specialist interacts directly with our contract manufacturers to obtain updated and current Reporting Templates and analyzes the information provided by each contract manufacturer on the sourcing of the conflict minerals used in the manufacture of the Covered Products. Each response is reviewed to identify missing information and unclear responses. The Environmental Compliance Specialist meets regularly with the other members of the Conflict Minerals Team to discuss the results of the due diligence efforts and appropriate follow-up measures to |
be taken with our contract manufacturers. The General Counsel and Vice President of Finance and CFO report on the status of the Company’s supply chain due diligence at all regularly scheduled meetings of the Company’s Board of Directors (five times annually). |
c. | Controls and Transparency to Support Supply Chain Diligence: We use the EICC-GeSI Reporting Template to identify the smelters and refiners that are in the supply chain of each of our contract manufactures. We periodically review and compare this list to the list of smelters and refiners identified by the EICC-GeSI to be active in the CFSP. This enables us to identify the smelters and refiners that have been determined to be conflict-free and those that are actively progressing towards an audit to determine their status. We have determined that this approach represents the most reasonable effort we can make to determine whether the minerals used in the production of our Covered Products are conflict-free. |
d. | Supplier Engagement: We are dependent upon our contract manufactures to manufacture the Covered Products. We continue to work with our contract manufacturers to support their efforts to identify the sources and status of the Conflict Minerals used in our Covered Products and to encourage each smelter and refiner in our supply chain to become an active participant in the CFSP. We continue to actively engage with our contract manufacturers to strengthen our relationship with them and we have communicated to our contract manufacturers our commitment to sourcing Conflict Minerals in a manner that does not benefit armed groups in the Covered Countries. |
e. | Grievance Mechanism: We have grievance mechanisms in place that enable employees and suppliers to report violations of the Company’s policies. We have a compliance hotline which is operated by an independent company that may be called at any time to report grievances and invite individuals with grievances to bring these matters to the attention of the Audit Committee of our Board of Directors by written correspondence on a confidential basis. We also employ an email address by which matters may be brought at any time to the attention of our Conflict Minerals Team by sending an email toconflictminerals@quicklogic.com. |
2. | Identification and Assessment of Risks in the Supply Chain |
Because of our position within our supply chain, it is difficult for us to identify actors upstream from our first tier contract manufacturers. As discussed above, we identified each of our first tier contract manufacturers and we have relied upon them to provide us with the necessary information about the source of Conflict Minerals contained in the products they manufacture on our behalf. Our contract manufacturers are similarly reliant upon information provided by their suppliers to provide information regarding the country of origin of Conflict Minerals that are included in the Covered Products.
We requested each of our contract manufacturers to complete the Reporting Template developed by the EICC-GeSI and review the sourcing information provided in response to our requests for accuracy and completeness. In the event we find the responses to the Reporting Template unclear or incomplete, we contact the contract manufacturer in question for additional information and clarification. We intend to contact each of our contract manufacturers at least once every six months to check on the status of their continuing due diligence and to obtain updated information. We record all information obtained from the Reporting Templates to identify the smelters and refiners in our supply chain. We compare the list of the smelters and refiners in our supply chain to the lists compiled by the CFSP to determine which smelters have been determined to be compliant with the CFSP assessment protocols.
3. | Designing and Implementing a Strategy to Respond to Identified Risks |
In response to this risk assessment, the Company has an approved risk management plan which is implemented, managed and monitored through the above-described Conflict Minerals Team under the oversight of our Board of Directors. As noted above, we participate in the electronics industry’s EICC-GeSI Conflict Free Sourcing Initiative to identify smelters that provide material to our supply chain and to determine whether these smelters are compliant with the CFSI assessment protocols. We support the continued efforts of the EICC-GeSI to complete the audits of smelters that have agreed to date to participate in the CFSI and to encourage other identified smelters to become participants in the CFSI.
As a continuing part of our risk management plan, we have communicated our commitment to the use of conflict-free minerals in the manufacture of our Covered Products and our expectation that the manufacture of our Covered Products will be conflict-free.
4. | Carrying Out Independent Third-Party Audit of Supply Chain Due Diligence at Identified Points in the Supply Chain |
We do not have a direct relationship with any smelters or refiners in our supply chain and, as a result, we do not directly conduct audits. Instead, we supported the development and implementation of independent third party audits of smelters such as the Conflict-Free Smelter Program (“CFSP”) by encouraging our contract manufacturers and component suppliers to purchase materials from audited, conflict-free smelters and determined whether the smelters that were used to process these minerals were validated as conflict-free as part of the Conflict-Free Smelter Program.
5. | Reporting on Supply Chain Due Diligence |
In 2014, we publicly filed the Form SD and this Report with the SEC, and a copy of this Report and the Form SD are publicly available athttp://ir.quicklogic.com/sec.cfm.
This Report includes information about the RCOI methodology utilized by the Company, the design of our due diligence process in conformance with the OECD Guidelines, the list of known smelters utilized in our supply chain identified in our due diligence process and a description of our products that incorporate conflict minerals necessary to the functionality or production of such products.
Findings and Conclusions
Based on the information that was provided by the Company’s contract manufacturers and otherwise obtained through the due diligence process, the Company believes that, to the extent reasonably determinable by the Company, the facilities that were used to process the Conflict Minerals contained in the Covered Products include the smelters and refiners listed below, including whether such smelters participate in the CFSP.
Standard Smelter Name | Former Smelter ID | Current Smelter ID | CFSP | Country | ||||
Gold | ||||||||
Aida Chemical Industries Co. Ltd. | 1JPN072 | CID000019 | N | Japan | ||||
Allgemeine Gold- und Silberscheideanstalt A.G. | 1DEU001 | CID000035 | CF | Germany | ||||
Argor-Heraeus SA | 1CHE004 | CID000077 | CF | Switzerland | ||||
Asahi Pretec Corporation | 1JPN005 | CID000082 | CF | Japan | ||||
Asaka Riken Co Ltd | 1JPN073 | CID000090 | N | Japan | ||||
Caridad | 1MEX010 | CID000180 | N | Mexico | ||||
Xstrata Canada Corporation | 1CAN064 | CID000185 | CF | Canada | ||||
Chugai Mining | 1JPN078 | CID000264 | N | Japan | ||||
Dowa | 1JPN015 | CID000401 | CF | Japan | ||||
Heraeus Ltd Hong Kong | 1HKG019 | CID000707 | CF | Hong Kong | ||||
Heraeus Precious Metals GmbH & Co. KG | 1DEU018 | CID000711 | CF | Germany | ||||
Ishifuku Metal Industry Co., Ltd. | 1JPN021 | CID000807 | CF | Japan | ||||
Jiangxi Copper Company Limited | 1CHN023 | CID000855 | N | China | ||||
Johnson Matthey Inc | 1USA025 | CID000920 | CF | USA | ||||
Johnson Matthey Limited | 1CAN024 | CID000924 | CF | Canada | ||||
JX Nippon Mining & Metals Co., Ltd | 1JPN028 | CID000937 | CF | Japan | ||||
Kennecott Utah Copper LLC | 1USA088 | CID000969 | CF | USA | ||||
Kojima Chemicals Co. Ltd | 1JPN074 | CID000981 | CF | Japan | ||||
LS-Nikko Copper Inc. | 1KOR032 | CID001078 | CF | Korea | ||||
Materion | 1USA033 | CID001113 | CF | USA | ||||
Matsuda Sangyo Co. Ltd | 1JPN034 | CID001119 | CF | Japan | ||||
Metalor Technologies (Hong Kong) Ltd | 1HKG036 | CID001149 | CF | Hong Kong | ||||
Metalor Technologies SA | 1CHE035 | CID001153 | CF | Switzerland | ||||
Mitsubishi Materials Corporation | 1JPN039 | CID001188 | CF | Japan | ||||
Mitsui Mining and Smelting Co., Ltd. | 1JPN040 | CID001193 | CF | Japan |
Navoi Mining and Metallurgical Combinat | 1UZB042 | CID001236 | N | Uzbekistan | ||||
Nihon Material Co. LTD | 1JPN071 | CID001259 | CF | Japan | ||||
PAMP SA | 1CHE045 | CID001352 | CF | Switzerland | ||||
Royal Canadian Mint | 1CAN050 | CID001534 | CF | Canada | ||||
SEMPSA Joyeria Plateria SA | 1ESP052 | CID001585 | CF | Spain | ||||
Shandong Zhaojin Gold & Silver Refinery Co. Ltd | 1CHN054 | CID001622 | N | China | ||||
Solar Applied Materials Technology Corp. | 1TWN056 | CID001761 | CF | Taiwan | ||||
Sumitomo Metal Mining Co. Ltd. | 1JPN057 | CID001798 | CF | Japan | ||||
Tanaka Kikinzoku Kogyo K.K. | 1JPN058 | CID001875 | CF | Japan | ||||
The Refinery of Shandong Gold Mining Co. Ltd | 1CHN053 | CID001916 | N | China | ||||
Tokuriki Honten Co. Ltd | 1JPN060 | CID001938 | CF | Japan | ||||
Umicore SA Business Unit Precious Metals Refining | 1BEL062 | CID001980 | CF | Belgium | ||||
United Precious Metal Refining, Inc. | 1USA076 | CID001993 | CF | USA | ||||
Valcambi SA | 1CHE063 | CID002003 | CF | Switzerland | ||||
Western Australian Mint trading as The Perth Mint | 1AUS046 | CID002030 | N | Australia | ||||
Yamamoto Precious Metal Co., Ltd | CID002100 | N | Japan | |||||
Yokohama Metal Co Ltd | 1JPN077 | CID002129 | N | Japan | ||||
Pan Pacific Copper Co. LTD | 1JPN080 | N | Japan | |||||
Tantalum | ||||||||
Exotech Inc. | 3USA002 | CID000456 | CF | USA | ||||
F&X | 3CHN003 | CID000460 | CF | China | ||||
Global Advanced Metals | 3USA005 | CID000564 | CF | USA | ||||
H.C. Starck GmbH | 3DEU006 | CID000654 | CF | Germany | ||||
Ningxia Orient Tantalum Industry Co., Ltd. | 3CHN009 | CID001277 | CF | China | ||||
Solikamsk Metal Works | 3RUS012 | CID001769 | CF | Russian Federation | ||||
Taki Chemicals | 3JPN023 | CID001869 | CF | Japan | ||||
Ulba | 3KAZ014 | CID001969 | CF | Kazakhstan | ||||
Tin | ||||||||
CNMC (Guangxi) PGMA Co. Ltd. | 2CHN050 | CID000278 | N | China | ||||
Cookson | 2USA001 | CID000292 | CF | USA | ||||
Cooper Santa | 2BRA063 | CID000295 | AU | Brazil | ||||
CV Serumpun Sebalai | 2IDN008 | CID000313 | N | Indonesia | ||||
CV United Smelting | 2IDN009 | CID000315 | AU | Indonesia | ||||
EM Vinto | 2BOL010 | CID000438 | AU | Bolivia | ||||
Fenix Metals | 2POL064 | CID000468 | AU | Poland | ||||
Geiju Non-Ferrous Metal Processing Co. Ltd. | 2CHN012 | CID000538 | CF | China | ||||
Gejiu Zi-Li | 2CHN011 | CID000555 | N | China | ||||
Huichang Jinshunda Tin Co. Ltd | 2CHN052 | CID000760 | N | China | ||||
Linwu Xianggui Smelter Co | 2CHN055 | CID001063 | N | China | ||||
Liuzhou China Tin | 2CHN015 | CID001070 | AU | China |
Malaysia Smelting Corporation (MSC) | 2MYS016 | CID001105 | CF | Malaysia | ||||
Metallo Chimique | 2BEL017 | CID001143 | N | Belgium | ||||
Mineração Taboca S.A. | 2BRA018 | CID001173 | CF | Brazil | ||||
Minmetals Ganzhou Tin Co. Ltd. | 2CHN051 | CID001179 | N | China | ||||
Minsur | 2PER019 | CID001182 | CF | Peru | ||||
Mitsubishi Materials Corporation | 2JPN020 | CID001191 | CF | Japan | ||||
Novosibirsk Integrated Tin Works | 2RUS021 | CID001305 | N | Russian Federation | ||||
OMSA | 2BOL022 | CID001337 | CF | Bolivia | ||||
PT Babel Inti Perkasa | 2IDN025 | CID001402 | N | Indonesia | ||||
PT Bangka Putra Karya | 2IDN028 | CID001412 | AU | Indonesia | ||||
PT Bangka Tin Industry | 2IDN058 | CID001419 | AU | Indonesia | ||||
PT Belitung Industri Sejahtera | 2IDN030 | CID001421 | N | Indonesia | ||||
PT Bukit Timah | 2IDN032 | CID001428 | CF | Indonesia | ||||
PT DS Jaya Abadi | 2IDN059 | CID001434 | N | Indonesia | ||||
PT Mitra Stania Prima | 2IDN037 | CID001453 | N | Indonesia | ||||
PT Refined Banka Tin | 2IDN038 | CID001460 | AU | Indonesia | ||||
PT Stanindo Inti Perkasa | 2IDN040 | CID001468 | AU | Indonesia | ||||
PT Tambang Timah | 2IDN049 | CID001477 | CF | Indonesia | ||||
PT Timah | 2IDN042 | CID001482 | CF | Indonesia | ||||
PT Tinindo Inter Nusa | 2IDN044 | CID001490 | AU | Indonesia | ||||
Thaisarco | 2THA046 | CID001898 | CF | Thailand | ||||
White Solder Metalurgia | 2BRA054 | CID002036 | CF | Brazil | ||||
Yunnan Chengfeng | 2CHN047 | CID002158 | AU | China | ||||
Yunnan Tin Company Limited | 2CHN048 | CID002180 | CF | China | ||||
Metahub Industries Sdn. Bhd. | N | Malaysia | ||||||
PT Bangka Kudai Tin | 2IDN027 | N | Indonesia | |||||
PT Bangka Timah Utama Sejahtera | 2IDN029 | N | Indonesia | |||||
PT BilliTin Makmur Lestari | 2IDN031 | N | Indonesia | |||||
PT Koba Tin | 2IDN036 | N | Indonesia | |||||
PT Timah Nusantara | 2IDN043 | N | Indonesia | |||||
Tungsten | ||||||||
A.L.M.T. Corp. | 4JPN020 | CID000004 | AU | Japan | ||||
ATI Tungsten Materials | 4USA001 | CID000105 | N | USA | ||||
Chongyi Zhangyuan Tungsten Co Ltd | 4CHN004 | CID000258 | N | China | ||||
Global Tungsten & Powders Corp | 4USA007 | CID000568 | CF | USA | ||||
HC Starck GmbH | 4DEU008 | CID000683 | AU | Germany | ||||
Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd. | 4CHN023 | CID000769 | AU | China | ||||
Jiangxi Rare Earth & Rare Metals Tungsten Group Corp | 4CHN009 | CID000868 | N | China | ||||
Jiangxi Tungsten Industry Group Co Ltd | 4CHN010 | CID000875 | AU | China | ||||
Wolfram Bergbau und Hütten AG | 4AUT012 | CID002044 | AU | Austria | ||||
Wolfram Company CJSC | 4RUS013 | CID002047 | AU | Russian Federation | ||||
Xiamen Tungsten Co Ltd | 4CHN014 | CID002082 | AU | China |
Zhuzhou Cemented Carbide Group Co Ltd | 4CHN015 | CID002236 | N | China | ||||
Xiamen Tungsten Co Ltd | 4CHN028 | CID002320 | AU | China | ||||
China Minmetals Nonferrous Metals Co Ltd | 4CHN003 | N | China | |||||
Ganzhou Grand Sea W & Mo Group Co Ltd | 4CHN016 | N | China | |||||
ALMT | 4CHN020 | N | China |
“CF” indicates that as of May 22, 2014, the smelter participates in the CFSP and has been certified and audited by the CFSI.
“AU” indicates that the smelter has agreed to participate in the CFSP, but that as of May 22, 2014, the audit process has not yet been completed.
“N” indicates that as of May 22, 2014, the smelter is not listed by the CFSP as having agreed to participate in the CFSP.
DRC Conflict Undeterminable
After exercising the due diligence described above, the Company was unable to determine whether or not each of the Covered Products qualify as “DRC conflict free,” as defined under the Rule. Accordingly, the Company has reasonably determined that each of the Covered Products is “DRC conflict undeterminable,” as defined in the Rule.
Future Steps
We have communicated our expectations, as reflected in our Conflict Minerals Policy, to our contract manufacturers and other suppliers. Since the end of 2013, we have continued to engage with our first-tier suppliers to update their information on the source and chain of custody of conflict minerals in our supply chain and to require that all smelters utilized agree to participate in the CFSP.