Ubiquiti (UI) SDConflict minerals disclosure

Exhibit 1.01

 

Conflict Minerals Report

 

This Conflict Minerals Report (“Report”) has been prepared pursuant to Rule 13p-1 (the “Rule”) under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1, 2021 to December 31, 2021. 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 requires SEC registrants to determine whether “conflict minerals” are necessary to the functionality or production of products they manufacture or contract to manufacture. “Conflict Minerals” are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives (tin, tantalum, and tungsten).

 

Based upon a reasonable country of origin inquiry (“RCOI”), if the SEC registrant knows that any of its necessary Conflict Minerals originated from sources in the Democratic Republic of the Congo or an adjoining country (the “Covered Countries”) and are not from recycled or scrap sources, or has reason to believe that its necessary Conflict Minerals may have originated in the Covered Countries and has reason to believe that they may not be from recycled or scrap sources, the SEC registrant must exercise due diligence on the source of the Conflict Minerals and chain of custody, conforming to a nationally or internationally recognized due diligence framework.

 

 

 

This Report has been prepared by the management of Ubiquiti Inc. (the “Company,” “we,” “us,” or “our”), with respect to the Company and its subsidiaries and consolidated entities.

 

We retain contract manufacturers to manufacture, control the quality of and ship our products. While components and supplies are generally available from a variety of sources, we and our contract manufacturers currently depend on a single or limited number of suppliers for several components for our products. As a downstream company, we rely on our contract manufacturers and component suppliers (collectively, the “Product Suppliers”) to provide information on the origins of Conflict Minerals necessary to the functionality or production of our products. We have no business relationship with any of the smelters or refiners involved in producing Conflict Minerals or with any of their respective suppliers.

 

 

We conducted an analysis of our products and found that Conflict Minerals (tin, tantalum, tungsten, and gold regardless of country of origin) are necessary to the functionality or production of certain of the products that we contract to manufacture. Therefore, we are subject to the reporting obligations of the Rule.

To perform our RCOI, we surveyed our Product Suppliers. In the survey, we asked the Product Suppliers (a) whether the products they supply to us (or their components) contained Conflict Minerals, and (b) if they did, to provide information regarding the source of Conflict Minerals contained in those products and components. We relied on our Product Suppliers to provide us with information about the source of Conflict Minerals contained in the products and components they supplied to us.

  

Due to the complexity of our supply chain, it is time consuming and difficult to verify the origin of all of the Conflict Minerals in our products. Although we have been able to achieve a significant level of transparency as a result of our supply chain due diligence processes, we have been unable to determine the origin of all of the Conflict Minerals used in our products with absolute certainty.

We have adopted the following Conflict Minerals Policy:

As directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the U.S. Securities and Exchange Commission has adopted rules requiring publicly traded companies to disclose whether the products they manufacture or contract to manufacture contain “Conflict Minerals” that are “necessary to the functionality or production” of those products. The definition of “Conflict Minerals” refers to gold, as well as tin, tantalum and tungsten (which are derivatives of cassiterite, columbite-tantalite, and wolframite), regardless of where they are sourced, processed or sold. The U.S. Secretary of State may designate other minerals in the future. The rules are intended to help curtail the violence and human rights violations connected with the mining of Conflict Minerals from locations in the Democratic Republic of the Congo and adjoining countries (the “Conflict Region”). We support these requirements to further the humanitarian goals of ending human rights violations associated with the mining of Conflict Minerals and ending violent conflict in the Conflict Region that may be financed by the exploitation and trade of Conflict Minerals. Like many other companies, Ubiquiti does not directly purchase minerals from smelters or other mineral processors, and is several layers removed from these processors within the supply chain. However, we are committed to taking steps to determine that products we receive from our suppliers are responsibly sourced.

 

 

 

 

 

We have established procedures for identifying the use of Conflict Minerals in our products and have established a team responsible for implementing our Conflict Minerals compliance strategies.

 

  

We evaluated survey responses from our Product Suppliers and followed up to clarify or amplify their responses as necessary. We are continuing to follow-up on these responses.

 

Due to the complexity of our supply chain, it is time consuming and difficult to verify the origin of all of the necessary Conflict Minerals in our products. As a downstream purchaser of Conflict Minerals, or components containing Conflict Minerals, our diligence processes are based (by necessity) upon seeking data from our Product Suppliers, with those suppliers seeking similar information within their supply chains to identify the original sources of Conflict Minerals. Accordingly, we rely on information collected and provided by third parties. In some cases, this information may be inaccurate or incomplete. We hope to further develop transparency

with respect to such items. Nonetheless, our diligence procedures can provide only reasonable, not absolute, assurance regarding the source and chain of custody of such Conflict Minerals.

 

 

We requested that some of our largest contract manufacturers, which provided products that represented over 90% of our revenues in 2021, to complete the template (the “RMI Template”) provided by the Responsible Minerals Initiative (“RMI”). We requested several other larger Product Suppliers to also complete the RMI Template and conducted a survey of the remaining Product Suppliers via a written questionnaire about the use of Conflict Minerals in products (or components) that they supply to us, their Conflict Minerals program, and their suppliers’ use and sourcing of Conflict Minerals. We contacted non-responsive Product Suppliers, requesting their responses, and we provided Product Suppliers with feedback on responses containing incomplete information and encouraged them to resubmit a valid response.

 

We received survey responses from almost all our Product Suppliers. In addition, as a downstream purchaser, our diligence processes depend upon our Product Suppliers seeking data within their supply chains to identify the original sources of Conflict Minerals, and some of our Product Suppliers have advised us that they did not receive responses to their requests for due diligence information from all of their suppliers. Moreover, there are other factors that could affect the accuracy of our due diligence results, including but not limited to, incomplete supplier data or unavailable smelter data, gaps in supplier education and knowledge, language barriers and translation, lack of timeliness of data, errors or omissions by suppliers or their smelters in responding to information requests, and incomplete information from industry or other third party-sources.

 

Based on the data provided by our Product Suppliers, we concluded that we are unable to determine the country of origin of all of the Conflict Minerals in our supply chain during the reporting period, whether the Conflict Minerals came from recycled or scrap sources, the facilities used to process them, or their mine or location of origin. Some of the facilities that we believe may have been used to process the Conflict Minerals in our supply chain are discussed below.

 

This Conflict Minerals Report has been filed with the SEC and is available at the “Investors – Company– Corporate Governance” page of the Company’s website, http://ir.ui.com/company/corporate-governance.

 

3.3    Description of Facilities used to Process Conflict Minerals

 

The RMI Template that we distributed to the Product Suppliers noted in Section 3.1 above requests that such Product Suppliers provide information on the smelters and refiners that they or the vendors in their supply chains use to process the Conflict Minerals. We relied on responses from such Product Suppliers in order to determine the facilities used to process the Conflict Minerals used in our products. Certain Product Suppliers responded that they were unable to provide all smelter and refiner information at this time and we are continuing to follow up on these responses. Many of the responses that we received provided information at the supplier level, which is not sufficient to tie with the products supplied to us back to the smelters and refiners in our supply chain. In summary, the responses from our Product Suppliers identified 358 smelters and refiners as potential sources of Conflict Minerals that were reported to be in our supply chain, of which 265 have been or are in the process of being verified by RMI (see Schedule). As to the remainder of the smelters and refiners identified by our Product Suppliers that are not verified by RMI, we are unable to determine the mines of origin of the Conflict Minerals sourced from such smelters and refiners.

 

Certain statements in this Conflict Minerals Report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact including words such as “look”, “will”, “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “consider” and “plan” and statements in the future tense are forward-looking statements. These statements that could be deemed

forward-looking statements include statements regarding the development and implementation of our internal plans and processes and any statements or assumptions underlying any of the foregoing. 

Forward-looking statements are subject to certain risks and uncertainties that could cause our actual future results to differ materially or cause a material adverse impact on our results. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date made. We do not undertake any obligation to update information contained herein. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

 

No documents, third-party materials or references to websites (including, but not limited to, our website) are incorporated by reference in, or considered to be a part, of this Conflict Minerals Report, unless expressly incorporated by reference.