UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM SD

Specialized Disclosure Report

 

 

Pacific Biosciences of California, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

1380 Willow Road

Menlo Park, California 94025

(Address of principal executive offices, including zip code)

(650) 521-8000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last 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:

☒Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2015.

 

 

---

 







Section 1.Conflict minerals disclsosure

Item 1.01 Conflict Minerals Disclosure and Report

For the reporting period from January 1, 2015 to December 31, 2015, Pacific Biosciences of California, Inc. (the “Company”) evaluated its current product lines and determined that certain products it manufactures or contracts to manufacture contain tin, tungsten, tantalum and/or gold. The results of the Company’s survey of its suppliers were inconclusive as to whether its supply chain is “DRC conflict-free” and, as a result, it is filing a Conflict Minerals Report. In accordance with Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended, and this Specialized Disclosure Report on Form SD, the Company has filed a Conflict Minerals Report, which is attached as Exhibit 1.01 hereto.  A copy of this Form SD and the Conflicts Minerals Report are publicly available at www.pacb.com.



Item 1.02  Exhibit

In accordance with Rule 13p-1, and this Form SD, the Company is hereby filing its Conflict Minerals Report for the calendar year ended December 31, 2015 as Exhibit 1.01 to this report.



Section 2.Exhibits

The following exhibits are filed as part of this report:



Item 2.01 Exhibits

Exhibit 1.01 — 2015 Conflict Minerals Report of Pacific Biosciences of California, Inc. as required by Items 1.01 and 1.02 of this Form SD.

.



---

 





SIGNATURE

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 26, 2016

---

 

EXHIBIT INDEX









---

Exhibit 1.01



Conflict Minerals Report of Pacific Biosciences of California, Inc.

in Accordance with Rule 13p-1 under the Securities Exchange Act of 1934



This is the Conflict Minerals Report (“CMR”) of Pacific Biosciences of California, Inc. (“PACB,” the “Company,” “we,” “us,” or “our”) for the reporting period January 1, 2015 to December 31, 2015 in accordance with Rule 13p-1 (“Rule 13p-1”) under the Securities Exchange Act of 1934, as amended (the “1934 Act”). Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions to the terms used in this Report, unless otherwise defined herein.



Company Overview



We design, develop and manufacture sequencing systems to help scientists resolve genetically complex problems. Based on our novel Single Molecule, Real-Time (SMRT®) Sequencing technology, our products enable: de novo genome assembly to finish genomes in order to more fully identify, annotate and decipher genomic structures; full-length transcript analysis to improve annotations in reference genomes, characterize alternatively spliced isoforms in important gene families, and find novel genes; targeted sequencing to more comprehensively characterize genetic variations; and real-time kinetic information for epigenome characterization. Our technology provides high accuracy, ultra-long reads, uniform coverage, and is the only DNA sequencing technology that provides the ability to simultaneously detect epigenetic changes. PacBio® sequencing systems, including consumables and software, provide a simple, fast, end-to-end workflow for SMRT Sequencing.



In September 2015, we announced that we had launched a new nucleic acid sequencing platform, the SequelTM System, which will provide higher throughput, more scalability, a reduced footprint and lower sequencing project costs compared to the PacBio® RS II System, while maintaining the existing benefits of our SMRT Technology.



PACB conducted an analysis of its products and found that the SEC defined “conflict minerals,” namely tin, tantalum, tungsten, and gold (“3TG”), can be found in its PacBio® RS II instrument and the SequelTM System. Therefore, the products that PACB manufactures are subject to the reporting obligations of Rule 13p-1.



Reasonable country of origin inquiry



Our Reasonable Country of Origin Inquiry (“RCOI”) process began with an evaluation of our suppliers that provided materials, components or products that became part of products PACB manufactured or contract to manufactured in 2015, which it knew contained or were likely to contain 3TG minerals. This evaluation consisted of examining internal records such as bills of materials or other product specifications and performing a qualitative review of purchasing records and/or information provided by the supplier. Based on PACB’s evaluation, it surveyed the suppliers of those materials, components or products which it concluded contained or were likely to contain 3TG minerals. The suppliers were asked to report on the presence of any 3TG minerals in the goods sold to us. In cases where PACB confirmed that 3TG minerals were present, it asked the applicable supplier to submit information to us about the country of origin of the 3TG minerals.



Due Diligence



In accordance with the rules, PACB performed due diligence procedures to determine the conflict minerals status of the 3TG minerals used in its products. In conducting its due diligence, PACB implemented the Organization for Economic Co-operation and Development (“OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the “OECD Framework”), an internationally recognized due diligence framework.  The Company designed its due diligence process, management and measures within the OECD Framework for a company downstream in the supply chain.



As a company in the DNA sequencing market, PACB is several levels removed from the actual mining of 3TG. PACB does not make purchases of raw ore or unrefined 3TG and makes no purchases of 3TG directly from the Democratic Republic of the Congo (“DRC”) or an adjoining country (together, the “Covered Countries”).

---

 

The following is a summary of the due diligence actions that PACB has taken with regard to the reporting period for which this CMR is submitted:





























PACB use resources from the GeSI and OECD, including their conflict free smelter lists and Conflict-Free Sourcing Initiative (“CFSI”) resources.  As a downstream company, PACB’s due diligence efforts rely on cross-industry initiatives such as a “conflict free” designation from the Conflict Free Smelter Program CFSP led by the CFSI.  The CFSI is a global leader for the responsible sourcing of minerals and provides information on conflict-free smelters and refiners, common tools to gather sourcing information, and forums for exchanging best practices on addressing Conflicts Minerals.



---

 



PACB plans to continue to report annually to the SEC by filing a Form SD and Conflict Minerals Report as required by applicable law.



Findings and Conclusion



PACB sent out surveys to the 60 suppliers identified in its due diligence efforts and received responses from 56 suppliers, providing a 93% response rate. A significant improvement was noted with regards to the completeness and quality of responses PACB received from its suppliers in 2015 compared to prior years.  Of the responses received in 2015, 71% were acceptable at the Company Level compared to only 20% in 2014, where “Company Level” refers to reports that do not identify the smelters or refiners used for a particular part, component, or business customer bur rather report the data for all of the company’s product lines in the aggregate.  However, suppliers and manufacturers generally provided facility information at the Company Level, representing the suppliers’ and manufacturers’ entire product lines, and generally did not limit their responses to facility information for Covered Minerals in products they supply to PACB specifically.  In 2015, only four suppliers provided responses specific to PACB products (“Product Level”) compared to zero in 2014. 



Out of the 56 responses received, 12 stated that their products do not contain 3TG minerals, 8 stated that the 3TG minerals were not sourced from the Covered Countries, 18 stated that at least some of their 3TG minerals were sourced from Covered Countries and 18 stated that they were uncertain as to the origin of the 3TG minerals in their products or did not provide sufficient information to adequately determine the source.  Of the 18 suppliers that stated that at least some of their 3TG minerals were sourced from Covered Countries, 10 noted that all of their products were from sources certified as being conflict free, active in the process to obtain conflict free certification or had complete control from mine to production.  The remaining sources were uncertified or had an unknown certification status.  However, PACB has not identified any known instances in which any 3TG minerals were sourced directly or indirectly from armed groups of the conflict region of the Covered Countries.



Of the 36 suppliers whose responses indicated that their products may contain 3TG sourced from the Covered Countries, all but one of those suppliers responded at a Company Level. As a result, many of those smelters identified in a Company Level declaration by PACB’s suppliers may not actually be involved in the products supplied to PACB.



Based on the representation made by its suppliers, PACB does not have sufficient information to determine whether its supply chain is “DRC conflict-free” for calendar 2015. PACB has been unable to determine the origin of all 3TG used in certain integrated circuits and other components used in the manufacturing of its instruments and related consumables. This was due to a lack of information from its suppliers to conclude whether the 3TG minerals originated in the Covered Countries and, if so, whether the 3TG minerals were from recycle or scrap sources, were DRC conflict free or have not been found to be DRC conflict free.



Future Steps



PACB is continuing to develop methods, implement tools and adopt procedures that are designed to be both auditable and in accordance with the OECD Framework. In the next compliance period, PACB intends to continue to develop its processes in working with its suppliers to provide accurate and complete information regarding Conflict Mineral sourcing.



Additional Risk Factors and Considerations



This CMR contains forward looking statements relating to actions that PACB may take in the future. Such statements are based on the current expectations of our management and are neither promises nor guarantees of future performance of the actions. Subsequent events and developments may cause management’s views to change. While PACB may elect to update these forward-looking statements at some point in the future, it specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this report.

---

 



The statements above are based on the due diligence performed in good faith by PACB. The statements are all based on information available at the time, and many factors can introduce error impacting PACB’s Conflict Minerals status. Some factors could include but are not limited to unavailable supplier data, incomplete supplier data, incomplete smelter data, errors or omissions in supplier or smelter responses, and suppliers or smelter operators who are unfamiliar with the Conflict Minerals rule and protocols for responding to requests for information about Conflict Minerals. 



Suppliers and manufacturers generally provided facility information at the company level, representing the suppliers’ and manufacturers’ entire product lines, and generally did not limit their responses to facility information for Covered Minerals in products they supply to PACB specifically. 



Independent Private Sector Audit



This CMR has not been subject to an independent private sector audit as allowed under Rule 13p-1.

 







---