UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM SD

 

 

SPECIALIZED DISCLOSURE REPORT

 

 

SCHMITT INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Oregon   000-23996   93-1151989

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

2765 N.W. Nicolai Street

Portland, Oregon 97210-1818

(Address of principal executive offices, including zip code)

Ann M. Ferguson (503) 227-7908

(Name and telephone number, including area code, of the 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 January 1 to December 31, 2014.

 

 


SECTION 1 – CONFLICT MINERALS DISCLOSURE

Item 1.01 Conflict Minerals Disclosure and Report

Schmitt Industries, Inc. (the Company or Schmitt) designs, manufactures and sells high precision test and measurement products for two main business segments: the Balancer Segment and the Measurement Segment. For the Balancer segment, the Company designs, manufactures and sells computer-controlled vibration detection, balancing and process control systems to the worldwide machine tool industry, particularly for grinding machines., For the Measurement Segment, the Company designs, manufactures and sells laser and white light sensors for distance, dimensional and area measurement for a wide variety of commercial applications, and ultrasonic measurement products that accurately measure the liquid levels of propane and diesel tanks and transmit that data via satellite to a secure web site for display.

Schmitt Industries, Inc. is presenting this Specialized Disclosure Report on Form SD for the calendar year ended December 31, 2014 to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (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 term “Conflict Minerals” is defined by the Dodd-Frank Act and includes metals widely used in many of our products, regardless of origin. Schmitt has determined that certain Conflict Minerals are necessary to the functionality or production of the products in all of our product categories. As such, the Company undertook due diligence measures necessary to determine the source and chain of custody of conflict minerals used in the production of our products, including a reasonable country of origin inquiry of the conflict minerals used in our products.

Item 1.02 Exhibit

A copy of the Company’s Conflict Minerals Report is filed as Exhibit 1.01 hereto and is publicly available on our website at www.schmitt-ind.com.

SECTION 2 – EXHIBITS

Item 2.01

Exhibit 1.01 Conflict Minerals Report as required by Item 1.01 and 1.02 of this Form.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

SCHMITT INDUSTRIES, INC.

May 29, 2015

By: /s/ Ann M Ferguson
Name: Ann M Ferguson
Title: Chief Financial Officer and Treasurer


LOGO Exhibit 1.01

SCHMITT INDUSTRIES, INC.

Conflict Minerals Report

Calendar Year 2014

This Conflict Minerals Report for Schmitt Industries, Inc. for the calendar year ended December 31, 2014 (Report) is presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934. Rule 13p-1 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 (the Act). Numerous terms in this report are defined in Rule 13p-1, Form SD promulgated under the Exchange Act and Exchange Act Release No. 34-67716 and the reader is referred to those sources for such definitions.

This Report relates to products: (i) for which Conflict Minerals are necessary to the functionality or production of the products; (ii) that were manufactured, or contracted to be manufactured, by the Company; and (iii) for which the manufacturing process was completed during the calendar year 2014. This Report has not been subject to an independent private sector audit as allowed under Rule 13p-1, which provides smaller reporting companies a temporary accommodation for the first four calendar years following November 13, 2012.

Schmitt Industries, Inc. (Schmitt or the Company) designs, manufactures and sells high precision test and measurement products for two main business segments: the Balancer Segment and the Measurement Segment. For the Balancer segment, the Company designs, manufactures and sells computer-controlled vibration detection, balancing and process control systems to the worldwide machine tool industry, particularly for grinding machines. For the Measurement Segment, the Company designs, manufactures and sells laser and white light sensors for distance, dimensional and area measurement for a wide variety of commercial applications, and ultrasonic measurement products that accurately measure the liquid levels of propane and diesel tanks and transmit that data via satellite to a secure web site for display.

In accordance with Rule 13p-1, Schmitt undertook a reasonable country of origin inquiry (RCOI) that was designed to determine whether the Conflict Minerals necessary for the functionality or production of our products originated in the Democratic Republic of the Congo or an adjoining country (collectively, the Covered Countries) or are provided from recycled or scrap sources. As a purchaser of component parts, the Company is several levels removed from the actual mining of Conflict Minerals. Schmitt does not make direct purchases of raw ore or unrefined Conflict Minerals and makes no purchases in the Covered Countries.

Schmitt designed and implemented its due diligence measures as to the source and chain of custody of its Conflict Minerals to be in conformity, in all material respects, with the internationally recognized due-diligence framework 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: Second Edition and related supplements.

Schmitt’s due diligence measures performed to date included the following:

Establish Strong Company Management Systems – The Company has adopted a Conflict Minerals Policy, a copy of which can be found on our website at www.schmitt-ind.com. Our suppliers are expected to have in place policies and due diligence measures that will enable Schmitt to reasonably report the country of origin for product and components being supplied. The Company has also assigned authority and responsibility to oversee the due diligence process to a team, led by one of the executive officers, to manage the data collection, review and reporting process. Schmitt maintains electronic copies of supplier responses and other documents that support the due diligence process.

 


Identify and Assess Risks in the Supply Chain – Schmitt contacted each of its relevant suppliers and asked them to provide information on (1) the conflict minerals contained in each of the parts supplied by that supplier and (2) the source of the conflict minerals, including smelter/refinery information and location of mines. The Company surveyed 100% of its suppliers within the scope of its RCOI. Due to the breadth and complexity of Schmitt’s products and the respective supply chains, as well as being several layers removed from the mining of Conflict Minerals, it will take time for many of our suppliers to verify the original of all of the minerals. In addition, many of the suppliers in Schmitt’s supply chain are not publicly traded and are still developing their own Conflict Minerals processes. Due to the number of non-responses and supplier responses that were determined to be uncertain or unknown relative to the question of sourcing of raw materials, Schmitt’s due diligence efforts found that Schmitt products containing or utilizing Conflict Minerals are “DRC Conflict Undeterminable.” Schmitt will continue to work with its suppliers during the next compliance period to increase the response rate and will improve its own due diligence to reduce the risk that Conflict Minerals necessary for the functionality or production of our products do not benefit armed groups.

Design and Implement a Strategy to Respond to Identified Risks – Schmitt will continue to communicate our expectations and information requirements to our suppliers. We anticipate that the amount of information available globally on the traceability and sourcing of Conflict Minerals will continue to increase over time. To the extent that a supplier is identified as one needing improvement in its due diligence measures, we will continue to trade with this supplier while it makes the necessary changes. If the changes are not deemed by the Company to be sufficient, we will work to identify a substitute supplier.

Report Annually on Supply Chain Due Diligence – Schmitt has filed Form SD with the SEC for the calendar year 2014 which includes this Conflict Minerals Report. A copy of this filing can be found on our website at www.schmitt-ind.com.

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