GILT Gilat Satellite Networks Ltd

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM SD

SPECIALIZED DISCLOSURE REPORT

 

GILAT SATELLITE NETWORKS LTD

(Exact name of registrant as specified in its charter)

Gilat House

21 Yegia Kapayim Street

Kiryat Arye, Petah Tikva, 4913020 Israel

 (Address of principal executive offices)

(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, 2023.

 

Section 1- Conflict Minerals Disclosures

 

Item 1.01 Conflict Minerals Disclosure and Report

 

Gilat Satellite Networks Ltd. (the “Company”, “we” or “us”) evaluated its current product lines and determined that certain products that we manufacture or contract to manufacture contain tin, tungsten, tantalum, or gold, which are defined as “conflict minerals” by the United States Securities and Exchange Commission, that are necessary to the functionality or production of our products. Accordingly, we are filing this disclosure along with a Conflict Minerals Report to disclose the measures we have taken to determine the origin of the conflict minerals used in our products.

 

Conflict Minerals Disclosure

 

A copy of the Company's Conflict Minerals Report is provided as Exhibit 1.01 hereto and is publicly available at https://www.gilat.com/investor-relations/sec-filing/

 

Item 1.02- 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.

2

Exhibit 1.01

Conflict Minerals Report of

Gilat Satellite Networks Ltd.

 

                                           For the Year Ended December 31, 2023

Introduction

 

We are filing this report for the year ended December 31, 2023 pursuant to Rule 13p-1 (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended. The Rule was adopted by the U.S. Securities and Exchange Commission (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 (Dodd-Frank Act). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals which are necessary to the functionality or production of their products. Conflict Minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten and gold (“3TG”) for the purpose of this assessment.

If a registrant has reason to believe that any of the conflict minerals in its supply chain may have originated in the Democratic Republic of the Congo or an adjoining country (the “Covered Countries”), or if it is unable to determine the country of origin of those conflict minerals, then the registrant must exercise due diligence on the conflict minerals’ source and chain of custody. The registrant must annually submit the SEC a Conflict Minerals Report that includes a description of those due diligence measures.

As permitted by the Rule and the SEC, this report has not been subject to an independent private sector audit.

 

We are a worldwide leader in satellite networking technology, solutions and services of satellite-based broadband communications.

We are a leading global provider of satellite-based broadband communications. We design and manufacture ground-based satellite communications equipment and provide comprehensive solutions and end-to-end services powered by our innovative technology. Our portfolio includes a cloud-based satellite network platform, Very Small Aperture Terminals, or VSATs, amplifiers, high-speed modems, high-performance on-the-move antennas, and high efficiency, high power Solid State Power Amplifiers, or SSPAs, Block Upconverters, or BUCs,  and Transceivers. Our comprehensive solutions support multiple applications with a full portfolio of products to address key applications, including broadband internet access, cellular backhaul over satellite, enterprise, social inclusion solutions, In-Flight-Connectivity, or IFC, maritime, trains, defense, and public safety, all while meeting the most stringent service level requirements. We have a large installed base, and currently have hundreds of active networks.

 

We provide managed network and services through satellite and terrestrial networks in addition to developing and marketing ground-based satellite communications equipment. We have proven experience in delivering complex projects and services worldwide. We offer complete turnkey integrated solutions, including:

 

 

In these BOT and BOO projects, we build telecommunication infrastructure typically using fiber-optic and wireless technologies for broadband connectivity.

The information includes the activities of all majority- owned subsidiaries and, when applicable, variable interest entities that are required to be consolidated.

Our supply chain is complex. There are multiple tiers between our company and the sources of the 3TG minerals.  Accordingly, we rely on our direct suppliers to provide information on the origin of the 3TG minerals contained in components which are included in our products.

4.

Reasonable Country of Origin Inquiry (RCOI)

We have conducted a Reasonable Country of Origin Inquiry (“RCOI”) to determine whether any of the necessary 3TG minerals originated in Covered Countries and found that the 3TG minerals can be found in our products and are necessary to the functionality or production of those products. Therefore, we are subject to the reporting obligations of the Rule.

Due to the breadth and complexity of our products and supply chain, it will take time for many of our suppliers to verify the origin of all of the conflict minerals used in our products. Using our supply chain due diligence processes, we are working to develop transparency into our supply chain and drive accountability within the supply chain by employing the EICC/GeSI Responsible Minerals Initiative (formerly the Conflict Free Sourcing Initiative) (the “RMI”) and by continuing our outreach efforts.

The methods we used to try to determine the origin of 3TG minerals in our products included:

 

 

Based on the findings of our RCOI, we designed our due-diligence process based on the Organization for Economic Co-operation and Development’s (“OECD”) publication “OECD (2016), OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264252479-en (the “OECD Guidance”) and the related supplements for 3TG minerals.

 

The design of the due diligences processes conforms substantially to the OECD Guidance as it relates to “downstream” purchasers of products and components. The due diligence processes have been described below under sub-headings corresponding to the five-step framework of the OECD Guidance. Our due diligence was conducted during the year ended December 31, 2023 and through April 2024.

 

Our Company management systems include the following:

 

 

Because of our size, the breadth and complexity of our products and the constant evolution of our supply chain, it is difficult to identify actors downstream from our direct suppliers. Such difficulty affects our ability to complete an accurate database.

We conducted a supply-chain survey with direct suppliers of materials containing Conflict Minerals using the Conflict Minerals Reporting Template to identify the smelters or refiners (“SORs”).

As part of our risk-based approach, we chose to focus our efforts on first priority suppliers that were selected based on our purchasing spend. The first priority suppliers cover 90%.

 

We report the findings of the supply chain risk assessment to our senior management.

We internally report certain suppliers identified as high risk to relevant personnel for follow up actions, such as, contacting such suppliers whose responses were identified as incomplete, inconsistent or inaccurate.

We compare SORs identified by the supply chain survey against the list of facilities issued by the RMI that have received a “conflict free” validation.

 

In our due diligence process, we utilize the Conflict Minerals Reporting Template designed by the RMI.

6.5	Report Annually on Supply Chain Due Diligence

 

The following factors materially affect our results of assessment:

•

we are dependent on information received from our direct suppliers to conduct our good faith RCOI process;

•

we do not have a direct relationship with 3TG SORs, nor do we perform direct audits of the other entities in our supply chain;

•

we have a varied supplier base with differing levels of resources and sophistication, and many of our suppliers are not themselves subject to the Rule;

•

the information our suppliers provided was sometimes incomplete and required significant follow-up;

•

most of suppliers provided responses at a company or divisional level, and not at a product level specific to the materials and components we use in the subject products

The suppliers we contacted were the direct suppliers for our products that are within the scope of the RCOI, which account for 90% of our spending on supplies. Despite our efforts to follow up with suppliers, we did not receive responses from all suppliers, and the suppliers who responded showed varying degrees of cooperation with our inquiries.  We received responses from 75% of such suppliers to date indicating that they either provided conflict free minerals or that they are unsure of the origin of the source of the 3TG minerals that they supplied to us.

 

Based on the information obtained pursuant to the good faith RCOI and due diligence processes described above, for the reporting period, we do not have sufficient information to determine the country of origin of all of the 3TG minerals we use to manufacture or contract to manufacture products and thus are unable to determine whether any of the 3TG minerals originated in the Covered Countries and, if so, whether the 3TG minerals were from recycled or scrap sources and whether they financed or benefited directly or indirectly armed groups in one or more of the Covered Countries. Therefore, as explained, we have not been able to identify all of the SORs from which our suppliers sourced the 3TG minerals.

 

We identified through our good faith RCOI and related due diligence a total of 347 SORs compared to 331 in the previous year, out of which 225 are either verified by RMI as conflict-free or are in the audit process.

1 gold smelter (African Gold Refinery, CID003185, Uganda) has been identified in our supply chain, that is included in OFAC (U.S. Department of the Treasury, Office of Foreign Assets Control) sanctioned entities lists. We have no direct business with the refinery. We will act to identify the direct suppliers who reported utilizing this smelter in their supply chain, to confirm if the refinery actually exists in our supply chain.

SORs verified by RMI as conflict-free or in audit process:

Based on the information obtained pursuant to our good faith RCOI and due diligence process, we compiled a list of known SORs and their countries of origin for the 3TG minerals originating from the SORs listed in Exhibit A attached hereto.

 

Cautionary Statement about Forward-Looking Statements

Statements in this Conflict Minerals Report, which express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements. These forward-looking statements are subject to various risks, uncertainties and assumptions, including, among other things, our customers’ requirements to use certain suppliers, our suppliers’ responsiveness and cooperation with our due diligence efforts, our ability to implement improvements in our Conflict Minerals program, our ability to identify and mitigate related risks in our supply chain, our ability to constructively work with our suppliers to achieve compliance, our ability to obtain complete and accurate information from our suppliers, our ability to improve the efficiency and effectiveness of our due diligence measures, our ability to identify and constructively engage with SORs in our supply chain, changes in our supply chain, changes to the parts or materials used by or supplied to us, changes in SORs, changes in country of origin information of the necessary Conflict Minerals received from our suppliers, and changes in the Rule and other political and regulatory developments relating to the sourcing of Conflict Minerals, whether in the Covered Countries or elsewhere. If one or more of these or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of risk factors, see our other filings with the SEC, including our Annual Report on Form 20-F for the year ended December 31, 2023. We caution that undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this report, and we undertake no obligation to update or revise any forward-looking statement, except to the extent required by federal securities laws.

 

Exhibit A - SORs List

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