UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM SD

SPECIALIZED DISCLOSURE REPORT

ReWalk Robotics Ltd.

(Exact name of registrant as specified in its charter)

State of Israel (State or other jurisdiction of incorporation or organization)

001-36612 (Commission file number)

Not applicable (IRS Employer Identification No.)

                                                                 

3 Hatnufa Street, Floor 6, Yokneam Ilit, Israel  (Address of principal executive offices)

2069203 (Zip Code)

(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:

 

☒   Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2019.

 

Section 1 - Conflict Minerals Disclosures

 

Item 1.01 – Conflict Minerals Disclosure and Report

 

Introduction

This Specialized Disclosure Form (“Form SD”) of ReWalk Robotics Ltd. (the “Company,” “we,” or “us”) is filed pursuant to Rule 13p-1 (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended (the “1934 Act”), for the reporting period from January 1, 2019 to December 31, 2019.

 

The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products for which the minerals specified under the Rule are necessary to the functionality or production of those products. The specified minerals are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten (collectively, the “Conflict Minerals” or “3TG”), that originated in the Democratic Republic of the Congo (“DRC”) and certain adjoining countries (collectively with the DRC, the “Covered Countries”).

Per the Rule and the instructions to Form SD, the Company is required to exercise due diligence on the source and chain of custody of such Conflict Minerals if the Company knows or has reason to believe that those Conflict Minerals originated in the DRC or an adjoining country and knows or has reason to believe that they may not be entirely from recycled or scrap sources.

Conclusion Based on Reasonable Country of Origin Inquiry

In accordance with the Rule, the Company has concluded in good faith that during the year ended December 31, 2019:

On the basis of these conclusions, the Company proceeded to exercise due diligence with respect to the source and chain of custody of the Conflict Minerals contained in its Covered Products. The Conflict Minerals Report (the “CMR”) describing the Company’s due diligence efforts is attached as Exhibit 1.01 to this Form SD for the reporting period from January 1, 2019 to December 31, 2019.  This CMR has not been subject to an independent private sector audit.

Conflict Minerals Disclosure

A copy of the Company’s CMR is filed as Exhibit 1.01 hereto and is publicly available on the “Corporate Governance” page in the “Investor Relations” section of the Company’s website at http://ir.rewalk.com/static-files/5963cb2e-049c-4211-9d4d-8c443bd6044b .Information contained on, or that can be accessed through, the Company’s website does not constitute a part of this Form SD or the attached CMR and is not incorporated by reference herein.

 

Item 1.02 Exhibit

 

Section 2 - Exhibits

 

Item 2.01 – Exhibits

 

 

 

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 duly authorized undersigned.

(Registrant)

/s/Ori Gon                                                  May 29, 2020

Name: Ori Gon                                                  (Date)

Title: Chief Financial Officer          

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Conflict Minerals Report of

ReWalk Robotics Ltd.

For the year ended December 31, 2019

Introduction

 

This is the Conflict Minerals Report (the “CMR”) of ReWalk Robotics Ltd. (the “Company,” “we” or “us”) for calendar year 2019 in accordance with Rule 13p-1 (the “Rule”) under the Securities Exchange Act of 1934, as amended (the “1934 Act”). The Rule requires disclosure of certain information when a registrant manufactures or contracts to manufacture products that contain, or likely contain, the “Conflict Minerals” specified in the Rule, which are necessary to the functionality or production of products (the “Covered Products”).

Reasonable Country of Origin Inquiry

During the year ended December 31, 2019, we conducted a Reasonable Country of Origin Inquiry (“RCOI”) to determine, using good faith and reasonable best efforts, whether any of the necessary 3TG that was necessary to the production or functionality of our Covered Products in 2019 originated, or likely originated, from the  DRC or Covered Countries or whether the 3TG originated, or likely originated, from entirely recycled or scrap sources. We held meetings with management from various departments to discuss the applicable definitions of “manufacturer” and/or “contract to manufacture.” By way of this process, we identified specific types of product parts that contain within them 3TG that is necessary to their production or functionality and mapped them to their respective suppliers.

 

We developed a risk-based approach that focuses on our key suppliers involved in the manufacturing the majority of our finished products. We identified 17 relevant suppliers. We requested that all identified suppliers provide information regarding the origin of the Conflict Minerals contained in products supplied using version 5.10, or higher, of the Conflict Minerals Reporting Template (“CMRT”) of the Responsible Business Alliance and created by the Responsible Minerals Initiative (“RMI”).

 

We reviewed the responses received, checked for inconsistencies, incomplete forms, and inaccurate responses, and sent reminders to suppliers who did not respond to our requests for information. One of the relevant suppliers noted that they do not provide us with Conflict Minerals. We compared the Conflict Minerals smelters or refiners reported in the surveys by the remaining 16 suppliers against the lists of facilities that received a conformant or active designation by the RMI’s Responsible Minerals Assurance Process (“RMAP”). In accordance with the Rule, we concluded in good faith that during the year ended December 31, 2019:

 

As a result, we exercised due diligence on the Conflict Minerals’ source and chain of custody and are filing this CMR with our Form SD to comply with the requirements of the Rule. This CMR has not been subject to an independent private sector audit. The due diligence measures performed by the Company are discussed below.

 

Part I. Company Overview and Description of the Company’s Products Covered by This Report

            We are an innovative medical device company that is designing, developing and commercializing robotic exoskeletons that allow individuals with mobility impairments or other medical conditions the ability to stand and walk once again. We have developed and are continuing to commercialize our ReWalk Personal and ReWalk Rehabilitation devices for individuals with Spinal Cord Injury (“SCI Products”), which are exoskeletons designed for individuals with paraplegia that use our patented tilt-sensor technology and an on-board computer and motion sensors to drive motorized legs that power movement. We have also developed and began commercializing our ReStore device in June 2019, following receipt of CE mark and FDA clearance in the second quarter of 2019. ReStore is a powered, lightweight soft exo-suit intended for use in the rehabilitation of individuals with lower limb disability due to stroke. Our principal markets are the United States and Europe. .

Part II. The Company’s Due Diligence Process

 

Design of Due Diligence

 

Due Diligence Performed

 

Step 1. Establish Strong Company Management Systems

 

Adopt, communicate and commit to a supply chain policy for minerals from conflict-affected and high-risk areas.

We have adopted our Conflict Minerals Policy (the “Policy”) related to our sourcing of 3TG. Our Policy outlines our commitment to responsible sourcing and the requirements imposed on participants in our supply chain, and is available on the “Corporate Governance” page in the “Investor Relations” section of our website at http://ir.rewalk.com/static-files/6ab6976a-0ab5-4021-b61f-682f26dc74b4. Information contained on, or that can be accessed through, our website does not constitute a part of this CMR and is not incorporated by reference herein.

Structure internal management systems to support supply chain due diligence.

We provide, from time to time as necessary, training on the relevant Rule and process for relevant employees (e.g., purchasing, legal and finance).

Establish a System of Controls and Transparency over the Conflict Minerals Supply Chain.

We have implemented a supply chain system of controls and transparency through the use of due diligence tools created by the RMI. These tools include, as discussed in “Step 2” below, accepting at a minimum version 5.10, or higher, of the CMRT, which is designed to identify and verify information regarding the smelters or refiners that process the necessary Conflict Minerals contained in our products. We have also adopted a process to maintain business records relating to 3TG due diligence, including retention of records of our due diligence processes, findings and resulting decisions for a period of five years.

Strengthen the Company’s Engagement with Suppliers

The Company informs its in-scope manufacturers and suppliers of its disclosure requirements, including its compliance with the OECD Guidance and the Rule.

Establish a Company-level Grievance Mechanism.

 

Our Policy includes a grievance procedure by which suppliers and other external parties may contact us should they wish to seek guidance or report concerns regarding Conflict Minerals. Concerns or grievances reported through this procedure are reviewed by the relevant staff members and follow-up activities are conducted, as appropriate.

 

Step 2. Identify and Assess Risks in the Supply Chain

 

Identify Risks in the Supply Chain by Identifying Company Suppliers.

 

 

As explained above, we do not buy raw ore or unrefined Conflict Minerals directly from refiners, smelters or mines. Our supply chain with respect to the Covered Products is complex, with multiple intermediaries and third parties in the supply chain between the manufacturing of the Covered Products and the original sources of the necessary Conflict Minerals. Because we believe that the smelters or refiners of the Conflict Minerals are best situated to identify the sources of Conflict Minerals, we rely on our direct suppliers to provide information on the origin of the Conflict Minerals contained in components and materials supplied to us.

As discussed above under “Reasonable Country of Origin Inquiry” and “Part I. Company Overview and Description of the Company’s Products Covered by This Report,” we identified our Covered Products falling within the scope of the Rule (i.e., products which were manufactured or contracted to be manufactured by us) during the 2019 calendar year. Based on these Covered Products, we were able to identify the suppliers from which we purchase components or materials for the Covered Products that may include Conflict Minerals. We identified 17 relevant suppliers whose products may contain 3TG. One supplier reported that it does not provide the Company with Conflict Minerals, and therefore the number of relevant suppliers for the 2019 supply chain inquiry was limited to 16 suppliers that provided us with products or product components containing Conflict Minerals.

 

We surveyed 17 suppliers to identify the 3TG contained in the products they supply us with, the smelters or refiners that process the 3TG and the country of origin, or likely country of origin, of such 3TG. The survey was conducted by utilizing version 5.10, or higher, of the CMRT. We utilize this RMI reporting template to collect data and information from our suppliers in order to identify the origins of 3TG in our supply chain. We received responses from 10 out of 17 suppliers (59%).

Assess Risks in the Supply Chain.

 

We compared smelters or refiners identified in the supply chain survey against the RMI’s “conformant” smelter or refiner list, which lists all facilities that have received a RMAP “conformant” designation from the RMI. We reviewed all of the responses to determine whether smelters or refiners identified in our supply chain obtained a designation of “conformant” or “active” from the RMI.

 

Of the CMRT responses we received from suppliers, some included incomplete responses as well as inconsistencies and inaccuracies within the reported data. In such cases, we contacted the suppliers directly in an effort to secure revised responses. Through this process, we have identified, to the best of our efforts, the smelters or refiners in our supply chain and country of origin, or likely country of origin, information for the smelters or refiners identified in the supply chain survey.

 

To compile its list, the RMI employs independent third-party auditors to audit the source, including mines of origin and chains of custody, of the Conflict Minerals processed by smelters or refiners which agree to undergo an audit. A smelter or refiner receives a RMAP “conformant” designation from the RMI if the smelter or refiner (i) completes an independent third-party audit, (ii) adheres to the RMAP’s assessment protocols by disclosing to auditors the identities and locations of the mines from which it sources Conflict Minerals, (iii) has been found by its independent third-party auditor to possess the systems and processes to support responsible sourcing of Conflict Minerals and can provide evidence to support its sourcing activities and (iv) maintains good standing in the program, through a continual validation process. The RMI’s RMAP “conformant” list provides the names, locations and links to Conflict Minerals policies of all smelters or refiners deemed compliant with the RMAP’s assessment protocols. Smelters or refiners with a “re-audit in progress” are still considered to be RMAP “conformant.”

Smelters or refiners labeled as “active” have committed to undergo an audit, which may be in progress, or are participating in one of the cross-recognized certification programs, namely, the London Bullion Market Association Responsible Gold Certification or Responsible Jewelry Program Chain-of-Custody Certification. These “active” smelters or refiners may be at various stages of the audit cycle, anywhere from completing the necessary documents to scheduling the audit date to enacting corrective actions in the post-audit phase. Smelters or refiners may not retain their “active” status if they are unresponsive to requests for re-audit or corrective action past a certain time. Companies that have been determined to be downstream of smelters or refiners may not take part in the RMAP. However, they may participate in the RMI’s Downstream Audit Program, an independent validation of companies’ sourcing practices outside of the RMAP audit process.

 

Step 3. Design and Implement a Strategy to Respond to Identified Risks

 

We are working to improve our due diligence processes with respect to 3TG. Our risk mitigation efforts during 2019 included those discussed in this section.

 

Participate in Existing Industry Conflict Minerals Initiatives.

 

In light of the complexity of our and our suppliers’ supply chains, we are currently unable to assess adequately all of the risks in our supply chain. However, we continue to engage with suppliers to obtain current, accurate and complete information about our supply chain through the use of version 5.10, or higher, of the CMRT and to improve due diligence efforts to ensure responsible sourcing in compliance with our Policy.

Report Findings to Designated Senior Management.

 

The Company’s senior management, including our Chief Executive Officer and Chief Financial Officer, is briefed periodically about our supply chain due diligence efforts, risk analysis results and mitigation efforts.

Devise, Adopt and Implement a Risk Management Plan and Monitor Risk Mitigation Efforts.

The Company’s Policy seeks to encourage suppliers to responsibly source Conflict Minerals, but does not necessarily seek to eliminate sourcing from the DRC or Covered Countries. We also periodically review our progress, assess identified risks and determine follow-up action, as follows:

 

 

 

Step 4. Carry Out Independent Third-Party Audit of Smelter/Refiner’s Due Diligence Practices

 

 

Step 5. Report Annually on Supply Chain Due Diligence

 

Our supply chain due diligence efforts are described in this CMR. We have filed this CMR in accordance with the Rule by submitting to the U.S. Securities and Exchange Commission a Form SD attaching this CMR. This CMR is also available on our website at http://ir.rewalk.com/sec-filings.

 

Our Conflict Minerals process, as described above, allowed us to identify in-scope products and the corresponding suppliers. These 17 identified suppliers were surveyed using version 5.10, or higher, of the CMRT. One of the relevant suppliers noted that they do not provide us with Conflict Minerals. We received survey responses from 59% of our suppliers. The results of the survey do not allow us to make definitive conclusions as to the source or likely source of any potential Conflict Minerals that were necessary to the production or functionality of our products that were manufactured, or contracted to manufacture, in 2019.

Facilities Used to Process the Conflict Minerals in the Covered Products

Based on the information obtained by the Company during the minerals supply chain due diligence process, the Company was unable to conclusively determine the origin or likely origin of all the Conflict Minerals contained in the Covered Products. Based on the information provided by our suppliers as well as by the RMI, as of the date of this CMR, we believe that the facilities that may have been used to process the Conflict Minerals in our products during the reporting period in the 2019 calendar year may include the smelters or refiners listed in Annex I hereto.

Countries of Origin of the Conflict Minerals in the Covered Products

Based on the information provided by our suppliers as well as by RMI, as of the date of this CMR, we believe that the facilities for processing of the Conflict Minerals countries of origin, or likely countries of origin of the Conflict Minerals contained in our products may include one or more of the countries listed in Annex II hereto.

We can only provide reasonable, not absolute, assurance regarding the source and chain of custody of the Conflict Minerals in our Covered Products, since the information comes from direct and secondary suppliers and the RMI. Information gathered from our suppliers is not on a continuous, real-time basis. Despite our efforts to follow up with certain suppliers, we did not receive responses from all suppliers, and the suppliers who responded showed varying degrees of cooperation with our inquiries.

Part IV. Implementation of Strategies to Respond to Identified Risks and Future Steps

We have taken, and intend to continue taking, steps to improve our due diligence processes and to minimize the risk that our necessary Conflict Minerals benefit, or likely benefit, armed groups in the DRC or Covered Countries. Going forward, we will continue working with our global supply chain to ensure responsible sourcing and assure compliance with applicable regulations through the following steps:

Forward-Looking Statements

 

In addition to historical facts, this CMR contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the 1934 Act, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information regarding further supplier engagement, due diligence and risk mitigation efforts and strategy, and involve certain risks and uncertainties. Actual results could differ materially from the forward-looking statements. Words such as “expects,” “anticipates,” “intends,” “seeks,” “believes,” “may,” “will,” variations of these words, and similar expressions are intended to identify such forward looking statements. Risks and uncertainties that could cause actual results to differ include, without limitation, risks and uncertainties associated with the progress of industry and other supply chain transparency and smelter or refiner validation programs for Conflict Minerals (including the possibility of inaccurate information, fraud and other irregularities), inadequate supplier education and knowledge, limitations on the ability or willingness of suppliers to provide more accurate, complete and detailed information and limitations on our ability to verify the accuracy or completeness of any supply chain information provided by suppliers and other factors discussed under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission and other documents subsequently filed with or furnished to the U.S. Securities and Exchange Commission. Any forward-looking statement made in this CMR speaks only as of the date hereof. Except as otherwise required by law, the Company undertakes no obligation to update publicly the information contained in this CMR, or any forward looking statements, to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.

 

Annex I

 

 

 

Annex II

 

Based on our due diligence, the above smelters or refiners reported by our relevant suppliers may process Conflict Minerals from one or more of the following reported countries of origin:*

 

 

*As our suppliers’ Smelters or Refiners (“SOR”) did not provide complete information on the location of mine in their CMRTs, and the Company was not able to establish the exact country of origin of the from the sourcing information reported regarding their Conflict Minerals. Therefore, the Company has indicated the countries of origin information as reported in our suppliers’ CMRTs, in the relevant “Smelter or Refiner Country” field of the CMRT declaration.

 

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