UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM SD

Specialized Disclosure Report

 

Tandem Diabetes Care, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

David B. Berger, Esq.

Tandem Diabetes Care, Inc.

Executive Vice President, General Counsel and Secretary

(858) 366-6900

(Name and telephone number, including area code, of the person to contact in connection with this report.)

 

 

Check the appropriate box below to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:

 

 

 

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Section 1 – Conflict Minerals Disclosure

Item 1.01Conflict Minerals Disclosure and Report

A copy of the Conflict Minerals Report of Tandem Diabetes Care, Inc. (“Tandem”) for the reporting period January 1 to December 31, 2017 is filed as Exhibit 1.01 to this Specialized Disclosure Report on Form SD (“Form SD”) and is also available at Tandem’s website at http://investor.tandemdiabetes.com/governance.cfm.  The information contained on or accessed through Tandem’s website does not constitute part of this Form SD (including the Conflict Minerals Report attached hereto as Exhibit 1.01).

Item 1.02Exhibit

Tandem has filed, as an exhibit to this Form SD, a Conflict Minerals Report as required by Item 1.01 of this Form SD.

 

Section 2 - Exhibits

 

Item 2.01Exhibits

 

The following exhibit is filed as part of this Form SD:

 

 

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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.

 

Date:  May 30, 2018

 

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Exhibit 1.01

Tandem Diabetes Care, Inc.

Conflict Minerals Report

For The Reporting Period January 1 to December 31, 2017

 

This Conflict Minerals Report (“CMR”) has been prepared by Tandem Diabetes Care, Inc. (herein referred to as “Tandem,” “we,” “our” or “us”). This CMR for the reporting period January 1 to December 31, 2017 (the “Reporting Period”) is presented to comply with the final conflict minerals implementing rules (“Final Rules”) promulgated by the Securities and Exchange Commission (“SEC”), as modified by SEC guidance issued on April 29, 2014 and the SEC order issued on May 2, 2014. The Final Rules were adopted by 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 as codified in Section 13(p) of the Securities Exchange Act of 1934. The Final Rules impose certain reporting obligations on SEC registrants whose manufactured products contain “conflict minerals” that are necessary to the functionality or production of their products. “Conflict Minerals” are currently defined by the SEC as cassiterite, columbite-tantalite (coltan), gold, wolframite, or their derivatives, which the SEC has currently limited to tin, tantalum, tungsten and gold.

 

To comply with the Final Rules, we conducted due diligence on the origin, source and chain of custody of the conflict minerals that were necessary to the functionality or production of the products that we manufactured or contracted to manufacture during the Reporting Period to ascertain whether these conflict minerals originated in the Democratic Republic of Congo or an adjoining country (collectively, “Covered Countries”) and financed or benefited armed groups (as defined in Section 1, Item 1.01(d)(2) of Form SD) in any of these countries.

 

Pursuant to SEC guidance issued April 29, 2014 and the SEC order issued May 2, 2014, Tandem is not required to describe any of its products as “DRC conflict free” (as defined in Section 1, Item 1.01(d)(4) of Form SD), “DRC conflict undeterminable” (as defined in Section  1, Item 1.01(d)(5) of Form SD) or “having not been found to be ‘DRC conflict free,’” and therefore makes no conclusion in this regard in the report presented herein. Furthermore, given that Tandem has not voluntarily elected to describe any of its products as “DRC conflict free,” an independent private sector audit of the report presented herein is not required to be and has not been conducted.

 

 

Tandem is a medical device company focused on the design, development and commercialization of a family of products for people with insulin-dependent diabetes.

 

 

Tandem currently manufactures and sells two insulin pump products in the United States that are designed to address differentiated segments of the insulin-dependent diabetes market: (i) the t:slim X2™ Insulin Delivery System, or t:slim X2, our flagship product that can easily and discreetly fit into a pocket, and (ii) the t:flex® Insulin Delivery System, or t:flex, for people with greater insulin needs. We began commercial sales of our first insulin pump, t:slim, in August 2012. In 2015, we introduced two additional insulin pumps: t:flex and t:slim G4. In 2017, we launched the t:slim X2 and discontinued new sales of t:slim. In 2017, we launched t:slim X2 with Dexcom G5 Mobile continuous glucose monitoring, or CGM, integration, and discontinued new sales of t:slim G4. The t:slim X2 hardware platform now represents nearly 100% of our new pump shipments and we therefore intend to discontinue new sales of t:flex pumps in the third quarter of 2018, but will continue to provide ongoing service and support to existing t:slim, t:slim G4 and t:flex customers.

 

All of our insulin pump products share important common features, including a black aluminum case and chrome trim, that give them the look and feel of a modern consumer electronic device, such as a smartphone. Our insulin pumps are also watertight, with an IPX7 rating, eliminating concerns about accidentally getting our pumps wet. Each device also features a micro-USB connection that supports rapid recharging, which can be performed without disconnecting or interrupting insulin delivery. All of our insulin pumps also feature a vivid, full-color touch screen made of high-grade, shatter-resistant glass that provides users the ability to enter numbers and access features directly, rather than scrolling through a list of numbers and screens.

 

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Tandem currently manufactures its insulin pumps and disposable cartridges at its headquarters in San Diego, California. Tandem manufactures its insulin pumps with components and sub-assemblies supplied by outside vendors. Tandem then assembles, tests, packages and ships the finished insulin pumps as well as disposable cartridges. The disposable cartridges do not contain any metals or minerals.  

 

Tandem purchases certain components and materials from single sources due to quality considerations, costs or constraints resulting from regulatory requirements. We do not directly source Conflict Minerals from mines, smelters, or refiners, and we believe that we are many levels removed from these market participants and, therefore, have limited influence over their behavior. Furthermore, because of the depth, geographic diversity, and constant evolution of our supply chain, and due to competitive factors, we often have significant difficulty identifying market participants upstream from our direct suppliers. However, through the efforts described in this CMR, we seek to ensure that our sourcing practices are consistent with our Conflict Minerals Policy, which is described below.  

 

For purposes of this CMR, references to our “products” refer to tangible components of our insulin pumps, and references to our “suppliers” refer to our direct product suppliers.

 

 

Based upon a review of our products and our reasonable country of origin inquiry (“RCOI”), we have concluded that:

 

 

 

We are therefore required by the Final Rules to file with the SEC a Specialized Disclosure Report on Form SD (“Form SD”) and a Conflict Minerals Report as an exhibit thereto.

 

 

Tandem designed its due diligence with respect to the source and chain of custody of the conflict minerals contained in its products based on the five-step framework set forth in the Third Edition of the Organisation for Economic Co-operation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and the supplements thereto (the “OECD Guidance”).

 

 

Tandem performed the following due diligence measures in accordance with the OECD Guidance and the Final Rules:

 

OECD Guidance Step #1: Establish Strong Company Management Systems

 

 

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OECD Guidance Step #2: Identify and Assess Risk in the Supply Chain

 

 

 

 

OECD Guidance Step #3: Design and Implement a Strategy to Respond to Identified Risks

 

 

 

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OECD Guidance Step #4: Carry Out Independent Third-Party Audit of Supply Chain Due Diligence at Identified Points in the Supply Chain

 

Since we do not have a direct relationship with the smelters and refiners that process the conflict minerals that are present in our products, we rely on the Conflict-Free Sourcing Initiative (the “CFSI”) to conduct third-party audits of smelters and refineries.

 

OECD Guidance Step #5: Report on Supply Chain Due Diligence

 

As required by the Final Rules, we file a Form SD and a Conflict Minerals Report as an exhibit thereto for the Reporting Period.  The Form SD and Conflict Minerals Report are also available on our website at http://investor.tandemdiabetes.com/governance.cfm.

 

 

Tandem made requests of 22 suppliers to complete the CMRT.  As a result of Tandem’s RCOI, 17 suppliers provided completed CMRTs to Tandem, three suppliers provided statements declaring that no Conflict Minerals are used in the products they supply to Tandem, one supplier is a large component distributor that provided its conflict minerals policy, rather than the CMRT, and one supplier that provided a CMRT is also a large component distributor that provided a statement of its policy not to supply products containing Conflict Minerals from the Covered Countries and assurances that each of its suppliers warrants compliance with such policy. Finally, one supplier was eliminated based upon a determination it does not supply components of any of Tandem’s commercially distributed products.

 

Seven suppliers declared in their completed CMRTs that they do not use Conflict Minerals in the manufacture of products supplied to Tandem.  Some suppliers reported information to us at a “company” level (meaning that they reported all of the smelters and refiners that may have processed the Conflict Minerals contained in all of their products, not just those pertaining to the products sold to us). Some suppliers also may have reported to us smelters and refiners that were not in our supply chain due to over-inclusiveness in the information received from their suppliers or for other reasons. For example, one supplier purporting to report on a “product” scope basis listed over 263 smelters.  One supplier reporting on a “company” scope level listed 296 smelters and two others each listed over 300 smelters, in each case including both smelters which have been certified compliant by the CFSI’s Conflict-Free Smelter Program (the “CFSP”) and those which have not.  Collectively, our suppliers listed 350 unique smelters and refiners. In reviewing these lists of smelters and refiners, four of the 350 unique smelter locations were in the Covered Countries.  Furthermore, the smelters and refiners described below may not be all of the smelters and refiners in our supply chain, since the suppliers did not identify all of the smelters and refiners in their supply chains and because we did not receive responses from all of the suppliers. Due to our position in the supply chain, we rely on our suppliers for accurate smelter and refiner information and our reasonable country of origin inquiry and due diligence measures do not provide absolute certainty regarding the source of the necessary Conflict Minerals contained in our in-scope products.  

 

Other than suppliers providing company level information mentioned above and duplicates, but including suppliers providing company level information amounting to less than 25 unique smelters, Tandem’s suppliers identified the names of approximately 263 unique smelters and refineries from which they source conflict minerals.  We compared the list of 263 unique smelters or refiners against compliant and active smelter or refiner lists per the CFSP for verification of existence and location of the smelters or refiners.  That data is set forth below:

 

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As used in the table, “compliant” and “active” have the meanings given those terms by the CFSI. “Other known metal processors” are those additional smelters and refiners on the Standard Smelter Names tab of the CFSI’s Conflict Minerals Reporting Template (the “Conflict Minerals Reporting Template”) and the list of known processing facilities published by the U.S. Department of Commerce (the “Commerce Department List”).  The compliance status reflected in the table is based solely on information made publicly available by the CFSI as of May 25, 2018 without independent verification by us.

 

The identified smelter locations for the smelters and refiners described in the table included the following countries:  Andorra, Australia, Austria, Belgium, Bolivia, Brazil, Canada, China, Czech Republic, France, Germany, India, Indonesia, Italy, Japan, Kazakhstan, Republic of Korea, Kyrgyzstan, Malaysia, Mexico, Netherlands, Peru, Philippines, Poland, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sudan, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, the United States, Uzbekistan, Vietnam, and Zimbabwe.

 

 

Tandem intends to take the following steps to mitigate the risk that its necessary conflict minerals benefit armed groups:

 

 

 

 

FORWARD LOOKING STATEMENTS

 

Statements relating to due diligence improvements are forward-looking in nature and are based on Tandem’s management's current expectations or beliefs. These forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors that may be outside of Tandem’s control and that could cause actual events to differ materially from those expressed or implied by the statements made herein.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Unless otherwise stated herein, any documents, third party materials or references to websites (including Tandem’s) are not incorporated by reference in, or considered to be a part of this CMR, unless expressly incorporated by reference herein.

 

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