SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
SPECIALIZED DISCLOSURE REPORT
Shoals Technologies Group, Inc.
(Exact name of the registrant as specified in its charter)
| | | | | | | | |
| Delaware | | 001-39942 |
| (State or other jurisdiction of incorporation) | | (Commission file number) |
| | | | | | | | |
| 1400 Shoals Way, Portland, TN | | 37148 |
| (Address of principal executive offices) | | (Zip code) |
Dominic Bardos
Chief Financial Officer
Tel: (615) 451-1400
(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.
___ Rule 13q-1 under the Securities Exchange Act (17 CFR 240.13q-1) for the fiscal year ended .
Item 1.01 Conflict Minerals Disclosure and Report
Pursuant to Rule 13p-1 under the Securities Exchange Act of 1934, as amended, and Form SD, the Shoals Technologies Group, Inc. (the “Company”) Conflict Minerals Report (the “Conflict Minerals Report”) is provided as Exhibit 1.01 to this Form SD. A copy of the Conflict Minerals Report is also publicly available at https://investors.shoals.com/governance/governance-documents. Information contained on the Company’s website is not part of, nor incorporated by reference into, this Form SD or the Conflict Minerals Report.
Item 1.02. Exhibit.
The Conflict Minerals Report described in Item 1.01 is filed as Exhibit 1.01 to this Form SD.
Item 3.01 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.
SHOALS TECHNOLOGIES GROUP, INC.
(Registrant)
By: /s/ Dominic Bardos
Dominic Bardos
Chief Financial Officer
May 31, 2024
Exhibit 1.01
Shoals Technologies Group, Inc.
Conflict Minerals Report
For the Year Ended December 31, 2023
The information in this Specialized Disclosure Report on Form SD (this “Report”) includes the activities of Shoals Technologies Group, Inc. (“we,” “us,” “our,” “Shoals,” or the “Company”) and its subsidiaries. Rule 13p-1 under the Securities Exchange Act of 1934, as amended, and Form SD, are referred to collectively as the “Rule.” Refer to the Rule for definitions of certain terms used in this report, unless otherwise defined herein.
A. Overview and Conclusion
Shoals is a leading provider of electrical balance of system (“EBOS”) solutions and components for solar, battery storage and electric vehicle (“EV”) charging applications, selling to customers primarily in the United States (“U.S.”) as well as internationally. EBOS solutions encompass all of the components that are necessary to carry the electric current produced by solar panels to an inverter and ultimately to the power grid.
This Report provides a description of the measures that the Company has taken to determine the origin of columbite-tantalite (also known as coltan), cassiterite, wolframite, gold and their derivatives tantalum, tin and tungsten (“conflict minerals” or “3TG”) that were necessary to the functionality or production of products that the Company may be deemed to have contracted to manufacture (the “Covered Products”) from January 1 to December 31, 2023 (the “Reporting Period”).
The Company’s due diligence efforts indicate that most of its suppliers do not source 3TG from the Democratic Republic of the Congo or the adjoining countries of Angola, Burundi, Central African Republic, Republic of Congo, Rwanda, South Sudan, Tanzania, Uganda and Zambia (the “Covered Countries”) although a few suppliers might have supplied 3TG originated from Covered Countries during the Reporting Period. As further described below, the Company has no reason to believe that the Covered Products were produced with 3TG sourced from smelters or refiners (“SORs”) that directly or indirectly financed or benefited armed groups within the Covered Countries.
B. In-scope Product Determination
The Company evaluated the application of the terms “manufacture” and “contract to manufacture” (as used in the Rule) as they relate to the Company’s products, including products over which the Company may have specific influence in the manufacturing process and so may be products the Company is deemed to have “contracted to manufacture.” A total of 29 suppliers were identified as providing Covered Products during the Reporting Period and were contacted as part of the Company’s conflict minerals due diligence process.
The Company’s due diligence steps indicate that most of its suppliers do not source 3TG from the Covered Countries although certain suppliers reported that they have supplied 3TG originated from Covered Countries during the Reporting Period. As further described below, the Company has no reason to believe that the Covered Products were produced with necessary 3TG sourced from smelters or refiners (“SORs”) that directly or indirectly financed or benefited armed groups within the Covered Countries.
C. Reasonable Country of Origin Inquiry
The Company identified the suppliers of the Covered Products and conducted a good faith reasonable country of origin inquiry (“RCOI”).
The Company does not directly source minerals from SORs or mines. The supply chain is complex and there are intermediaries between the Company and mines from which participants in the supply chain source minerals. As a result, the Company must rely on its direct vendors and suppliers for information relating to the 3TG in the products sourced from them, who in turn often similarly rely on their own vendors and suppliers as they too are often far removed from the actual source of any 3TG. To seek to ensure the sanctity of our supply chain, the Company is in contact with its suppliers about conflict minerals and informs new suppliers about its Supplier Code of Conduct and conflict minerals policy to educate its suppliers regarding the relevant requirements and its due diligence expectations.
The Company’s RCOI consisted of multiple rounds of correspondence with its suppliers and vendors. We emailed the suppliers of our Covered Products requesting a signed Conflict Minerals Reporting Template (“CMRT”) or other declaration confirming whether the products they supplied during the Reporting Period contained any 3TG. For those who responded that the products supplied did not contain conflict minerals, we required no further action.
Suppliers who failed to respond to the initial request received regular reminders from our sourcing managers. The suppliers were urged to respond in a timely manner.
We received responses from all identified suppliers and nine out of twenty-nine suppliers indicated that their SORs source 3TG from Covered Countries. As a result of the Company’s RCOI, we have no reason to believe that the Covered Products were produced with necessary 3TG sourced from SORs that directly or indirectly financed or benefited armed groups within the Covered Countries.
D. Due Diligence Process
1.Supplier Code of Conduct
The Company has adopted a Conflict Minerals Policy Statement as part of its Supplier Code of Conduct and its Human Rights policy, both of which are posted at our website at: https://investors.shoals.com/governance/governance-documents.
2.Supplier Engagement
We have instituted procedures for surveying the suppliers that we believe may potentially use 3TG in products they supply to us using the CMRT. Specifically, our Product and Sourcing teams produce a list of all Shoals products/parts that could contain 3TG. Next, our sourcing managers reach out to all the suppliers identified on the list requesting that they complete a CMRT or declaration. The Company then evaluates all responses for accuracy and consistency.
For this year’s report, we received responses for all identified suppliers. We have determined that seeking information about 3TG smelters and refiners in our supply chain by requesting the relevant suppliers to complete the CMRT represents the most reasonable effort we can make to determine the mines or locations of origin of the 3TG in our supply chain.
3.Reporting Annually on Supply Chain Due Diligence
The Company files a Form SD and Conflict Minerals Report each year with the SEC.
4.Maintenance of Records
We retain relevant documentation in an electronic system for a period of not less than five years.
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