SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Specialized Disclosure Report
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
1655 Roberts Boulevard, N.W., Kennesaw, Georgia 30144
(Address of principal executive office) (zip code)
Jean F. Holloway
Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
(Name and telephone number, including area code, of person to contact in connection with this report)
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
__X__ Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2017.
Section 1 -- Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
This Form SD of CryoLife, Inc. (the “Company”) is filed pursuant to Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2017 to December 31, 2017.
A copy of the Company’s Conflict Minerals Report is provided as Exhibit 1.01. This Form SD and the Conflict Minerals Report is publicly available on the Company’s website at http://phx.corporate-ir.net/phoenix.zhtml?c=80253&p=irol-confilctminerals.
Item 1.01 Exhibit
As specified in Section 2, Item 2.01 of this Form SD, the Company is hereby filing its Conflict Minerals Report as Exhibit 1.01 to this Form SD.
Section 2 – Exhibits
Item 2.01 Exhibits
|1.01||Conflict Minerals Report as required by Item 1.01 and 1.02 of this Form|
Pursuant to the requirements of the Securities Exchange Act of 1934, CryoLife, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Date: May 31, 2018||By:|
|Name:||D. Ashley Lee|
|Title:||Executive Vice President, Chief|
|Operating Officer and Chief|
|1.01||Conflict Minerals Report as required by Item 1.01 and 1.02 of this Form|
Conflict Minerals Report
For the reporting period January 1, 2017 to December 31, 2017
This Conflict Minerals Report (the “Report”) of CryoLife, Inc. (“CryoLife,” the “Company,” “we,” or “us”) 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, 2017 to December 31, 2017. 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, which we collectively refer to in this Report as the “Conflict Minerals,” are gold, columbite-tantalite (coltan), cassiterite, and wolframite (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 the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia, and Angola.
Company Overview and Conflict Minerals Approach
The Company, incorporated in 1984 in Florida, is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures focused on aortic repair. Our medical devices and processed tissues primarily include four product families: BioGlue® Surgical Adhesive; On-X® mechanical heart valves and surgical products; JOTEC® endovascular and surgical products; and cardiac and vascular human tissues including the CryoValve® SG pulmonary heart valve and the CryoPatch® SG pulmonary cardiac patch, both of which are processed using our proprietary SynerGraft® technology. Additional products include CardioGenesis® cardiac laser therapy, PerClot® and PhotoFix®.
Our approach to Conflict Minerals is based, to the extent applicable and feasible, on the framework set forth in the Organization for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Third Edition, including the related supplements on gold, tin, tantalum, and tungsten (the “Guidance”). As part of our approach, we maintain a Conflict Minerals Policy (the “Policy”), which incorporates the standards set forth in the Guidance. The Policy has been reviewed and approved by senior management and presented to the Audit Committee of the Company’s Board of Directors. In addition, our Purchasing and Legal and Compliance departments have been directed by management to communicate the Policy to employees who have responsibilities for applying, enforcing, or communicating it internally or to relevant outside parties. The Policy is maintained on our website.
Reasonable Country of Origin Inquiry
Under the Rule, if any Conflict Minerals are necessary to the functionality or production of a product manufactured by a company or contracted by the company to be manufactured, the company must conduct, in good faith, a reasonable country of origin inquiry (“RCOI”) regarding those Conflict Minerals to determine if the Conflict Minerals originated from a Covered Country or are from recycled or scrap sources. We undertook a process to identify any necessary Conflict Minerals. Through that process, we determined that Conflict Minerals from two of our suppliers are necessary and that it is uncertain whether any Conflict Minerals are used by a third supplier. We subsequently conducted a RCOI to determine whether any of these Conflict Minerals originated from the Covered Countries or are from recycled or scrap sources. One of our suppliers certified to our reasonable satisfaction that the Conflict Minerals did not originate in the Covered Countries. One of our suppliers indicated that it obtains Conflict Minerals from a direct supplier that, in turn, obtains Conflict Minerals from the Covered Countries. One of our suppliers, notwithstanding its due diligence, was unable to determine whether any Conflict Minerals are used at all because of the large number of upstream suppliers in its supply chain. As a result, we either know that some of our necessary Conflict Minerals originated from a Covered Country or we were unable to determine whether the supplier uses Conflict Minerals, which may have originated in the Covered Countries. Accordingly, the Company undertook the due diligence process described in the section below. Our recently acquired JOTEC products are not covered by this report.
Due Diligence Process and Results
Based on our RCOI, we exercised reasonable due diligence with respect to the source and chain of custody of the Conflict Minerals that are or might be contained in our products. As a result of our due diligence, one of our suppliers has provided evidence that the Conflict Minerals originated from conflict-free sources within the Covered Countries. This supplier obtains the Conflict Minerals directly from Global Tungsten & Powders Corp., a smelter located in Towanda, Pennsylvania, USA (“Global Tungsten”). Although Global Tungsten reportedly obtains Conflict Minerals from Covered Countries, Global Tungsten participates annually in the Responsible Mineral Initiative (“RMI”) independent third party audit that examines the purchasing activities, processes, and systems associated with Global Tungsten’s smelting pursuant to the Responsible Minerals Assurance Process (“RMAP”). As of the date of this report, Global Tungsten is listed as conformant tungsten smelter by RMI. Our other supplier was unable to determine whether any Conflict Minerals are used because of the large number of upstream suppliers in its supply chain. We have continued to engage directly with the supplier’s senior management on a number of occasions to determine whether any Conflict Minerals are used and to obtain information about the upstream supply, the origin of any Conflict Minerals, and whether they benefitted armed groups in the Covered Countries. For the reporting period, however, the supplier was unable to confirm precisely whether any Conflict Minerals are used or to conclusively determine the country of origin of those minerals.
There are many third parties in the supply chain between our direct suppliers and the original sources of any actual or potential Conflict Minerals. In this regard, we do not purchase Conflict Minerals directly from mines, smelters, or refiners. We must therefore rely on our suppliers and their upstream supplier to provide information regarding the origin of any Conflict Minerals.
This Conflict Minerals Report is unaudited.
We intend to take the following steps to mitigate the risk that our necessary Conflict Minerals benefit armed groups:
We will continue to work with our supplier who provided incomplete information to obtain complete and accurate information for 2018;
We will continue to follow our due diligence process and make improvements in our due diligence process as warranted; and
|•||We will continue to inform our suppliers about the principles set forth in our Policy.|
Statements made in this Report that look forward in time or that express management's beliefs, expectations, or hopes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include those regarding the steps the Company expects to take to improve its due diligence measures and further mitigate the risk that necessary Conflict Minerals contained in the Company’s products finance or benefit armed groups in the Covered Countries. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. These risks and uncertainties include, but are not limited to, internal and external resource constraints,, the continued implementation of satisfactory traceability and other compliance measures by our direct and indirect suppliers on a timely basis or at all, whether smelters, refiners and other market participants responsibly source Conflict Minerals, and political and regulatory developments, whether in the Covered Countries, the United States or elsewhere. These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for the year ended December 31, 2017, and our subsequent filings with the SEC. CryoLife does not undertake to update its forward-looking statements.