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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM SD

Specialized Disclosure Report

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HURCO COMPANIES, INC.

(Exact name of registrant as specified in its charter)

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One Technology Way

Indianapolis, IN 46268

(Address of principal executive offices) (Zip Code)

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Check the appropriate box to indicate the rule pursuant to which this form is being filed:

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Section 1 – Conflict Minerals Disclosure

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Item 1.01 Conflict Minerals Disclosure and Report

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This Form SD of Hurco Companies, Inc. (“Hurco,” the “Company,” “we,” “our,” or “us”) is filed pursuant to Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended (the “Conflict Mineral Rule”), for the reporting period January 1, 2021 to December 31, 2021.  The scope of this report includes all products that we manufacture or contract to manufacture within Hurco’s product portfolio.

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We design, manufacture, and sell computerized (i.e., Computer Numeric Control (“CNC”)) machine tools, consisting primarily of vertical machining centers (mills) and turning centers (lathes), to companies in the metal cutting industry through a worldwide sales, service, and distribution network.  Although most of our computer control systems and software products are proprietary, they predominantly use industry standard personal computer components.  Our computer control systems and software products are primarily sold as integral components of our computerized machine tool products.  We also provide machine tool components, automation integration equipment and solutions for job shops, software options, control upgrades, accessories, and replacement parts for our products, as well as customer service and training and support.  

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Conflict Minerals Disclosure

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We have determined that certain of our products contain columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, which are limited to tantalum, tin, and tungsten, that are necessary to the functionality or production of those products (such minerals are referred to herein as “necessary conflict minerals”).

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We conducted in good faith a reasonable country of origin inquiry that was reasonably designed to determine whether any necessary conflict minerals contained in our products originated in the Democratic Republic of the Congo (the “DRC”) or an adjoining country (together with the DRC, the “Covered Countries”), or were from recycled or scrap sources.  As part of this inquiry, we conducted a supply chain survey of our direct suppliers using the Conflict Minerals Reporting Template (the “CMRT”) created by the Responsible Minerals Initiative and a customized conflict minerals questionnaire to collect sourcing information related to necessary conflict minerals in our products.  

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With respect to necessary conflict minerals in our products, based on the results of our inquiry, we had reason to believe that such necessary conflict minerals (1) may have originated in the Covered Countries and (2) may not be solely from recycled or scrap sources.  Accordingly, we exercised due diligence on the source and chain of custody of such necessary conflict minerals, as described in the Conflict Minerals Report attached as Exhibit 1.01 to this Form SD.

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A copy of this Form SD, including the Conflict Minerals Report attached hereto as Exhibit 1.01, is publicly available on our website at https://offer.hurco.com/hurco-companies-inc.-investor-information-nasdaq-hurc?utm_source=Website&utm_medium=URL&utm_campaign=investors.

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Item 1.02Exhibit

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As specified in Section 3, Item 3.01, the Company is hereby filing its Conflict Minerals Report for the reporting period January 1, 2021 to December 31, 2021 as Exhibit 1.01 to this Form SD.

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Section 2 – Resource Extraction Issuer Disclosure

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Item 2.01 Resource Extraction Issuer Disclosure and Report

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Not applicable.

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Section 3 – Exhibits

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Item 3.01 Exhibits

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

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EXHIBIT INDEX

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SIGNATURES

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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.

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Date: May 31, 2022

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Exhibit 1.01

Hurco Companies, Inc.

Conflict Minerals Report

For the Year Ended December 31, 2021

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Overview

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This conflict minerals report for the year ended December 31, 2021 is presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (the “Rule”).  The Rule was adopted by the 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 (the “Dodd-Frank Act”). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals that are necessary to the functionality or production of their products (“necessary conflict minerals”).  “Conflict minerals” are defined as cassiterite, columbite-tantalite (coltan), gold, wolframite, and their derivatives, which are limited to tin, tantalum, and tungsten.  These requirements apply to registrants whatever the geographic origin of the necessary conflict minerals.

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If a registrant can establish that the necessary conflict minerals in its products originated from sources other than the Democratic Republic of the Congo (“DRC”) or an adjoining country (together with the DRC, the “Covered Countries”), or from recycled and scrap sources, the registrant must submit a specialized disclosure report under Form SD that describes the steps that the registrant took to determine the origin of the necessary conflict minerals in its products.

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If a registrant knows or has reason to believe that any of the necessary conflict minerals in its products may have originated in the Covered Countries, or knows or has reason to believe that the necessary conflict minerals may not be solely from recycled or scrap sources, then the registrant must exercise due diligence on the conflict minerals’ source and chain of custody, and the registrant must annually submit a conflict minerals report to the SEC that includes a description of those due diligence measures.

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Company and Supply Chain Description

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This disclosure has been prepared by management of Hurco Companies, Inc. (herein referred to as “Hurco,” the “Company,” “we,” “us,” or “our”). Hurco is an industrial technology company that designs, manufactures, and sells computerized (i.e., Computer Numeric Control) machine tools, consisting primarily of vertical machining centers (mills) and turning centers (lathes), to companies in the metal cutting industry.  The scope of this report includes all products that we manufacture or contract to manufacture within Hurco’s product portfolio.

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Our products, such as our proprietary control systems that include printed circuit boards, connectors, liquid crystal displays, touch screens, and keypads, may contain necessary conflict minerals.  In addition, various components of our products, such as motors and drives and encoders, contain electronic components that may contain conflict minerals.  We determined that during the 2021 calendar year, we manufactured and sub-contracted to manufacture products that use purchased components containing necessary conflict minerals.

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We are a downstream consumer of necessary conflict minerals.  In most cases, there are several layers of third parties in the supply chain between the original source of the minerals and us.  The majority of our direct suppliers are several steps removed from smelters, refiners, and mines – purchasing their components and products from suppliers who are also removed from direct interaction with smelters, refiners, and mines.  Many of our suppliers and sub-suppliers also supply to other manufacturers of machine tools and related accessories.  Since we do not purchase necessary conflict minerals directly from mines, smelters, or refiners, we rely on our direct suppliers to provide information regarding the origin of these minerals.  

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Reasonable Country of Origin Inquiry

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We conducted in good faith a reasonable country of origin inquiry (“RCOI”) to determine whether or not any of the necessary conflict minerals in our products originated in the Covered Countries or were not made solely from recycled or scrap sources.  The methods we employed to determine the origin of necessary conflict minerals in our products were:

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Due Diligence Program

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We have adopted and communicated to the public a company policy on conflict minerals (the “Hurco Conflict Minerals Policy”), which can be found at the following website: http://www.hurco.com/en-us/about-hurco/investors/Documents/Conflict_Minerals_Policy.pdf.  Pursuant to the Hurco Conflict Minerals Policy, we developed a due diligence framework utilizing the Organisation for Economic Co-operation and Development (the “OECD”) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and related Supplements for gold and for tin, tantalum, and tungsten.  We also work with our direct suppliers to determine the potential use of conflict minerals in our supply chain and request our suppliers to conduct the necessary due diligence to provide us with proper verification of the source and chain of custody of the materials used in their products.  

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The due diligence measures performed for the reporting year ended December 31, 2021 are summarized below.  

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Maintain Strong Company Management Systems.

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We have structured a task force comprised of individuals from the Supply Chain Management, Procurement, Engineering, and Finance departments within the Company to support the process of supply chain due diligence.   We collaborated with management from various departments to identify products that are affected by the necessary conflict minerals and mapped them to their respective suppliers.  From the risks identified in our supply chain, we have established a strategy to respond to those risks by continuing to strengthen governance and communication with suppliers.  

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Identify and Assess Risk in the Supply Chain.

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We developed a risk-based approach that focused on our direct suppliers that we believed were likely to provide us with components and raw materials containing necessary conflict minerals. This was accomplished by members of our task force reviewing the listing of components and raw materials provided by our direct suppliers and identifying those components and raw materials that may contain necessary conflict minerals.   The task force identified eight direct suppliers who may have sold us goods or products containing necessary conflicts minerals (the “Identified Suppliers”).  As a result, we developed a customized conflict minerals questionnaire using the CMRT as guidance.

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We sent these customized questionnaires and a survey using the CMRT to our Identified Suppliers and requested information about the source of conflict minerals contained in the components supplied to us.  Eight out of the eight Identified Suppliers returned our questionnaire and survey and all eight of these Identified Suppliers responded “yes” to the presence of conflict minerals in their products.  However, all eight of these Identified Suppliers provided their responses to us at a company-wide level, rather than at a product-level specific to the materials they supplied to us.  Therefore, for necessary conflict minerals sourced from these Identified Suppliers, we were unable to determine which, if any, of the smelters and countries of origin listed in their responses were the actual source of necessary conflict minerals they supplied to us.  We intend to continue to work with our direct suppliers in the future to obtain and validate the names of smelters and refiners and related countries of origin that supply necessary conflict minerals for our products.  Using our supply chain due diligence processes, we hope to further develop transparency into our supply chain.

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Design and Implement a Strategy to Respond to Identified Risks.

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As part of our risk management plan, to ensure that our suppliers understand our expectations, we have described our intention to source responsibly in the Hurco Conflict Minerals Policy, which can be found at http://www.hurco.com/en-us/about-hurco/investors/Documents/Conflict_Minerals_Policy.pdf.

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Reliance on Independent Third-Party Audit of Supply Chain Due Diligence at the Smelter/Refiner Level.

As mentioned above, we conducted a survey of our eight Identified Suppliers using a customized questionnaire and the CMRT.  However, we do not have direct relationships with conflict minerals smelters and refiners in our supply chain; thus, we do not perform direct audits of the entities that provide our supply chain with the necessary conflict minerals.  We do rely upon the published results of audits conducted by the Responsible Minerals Initiative and other recognized certification programs to comply with OECD guidance to conduct independent third-party audits.  We also rely upon industry efforts to influence smelters and refineries to participate in the Responsible Minerals Assurance Process (“RMAP”).

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Report on Supply Chain Due Diligence.

The Company has filed with the SEC its specialized disclosure report on Form SD, which includes this Conflict Minerals Report as Exhibit 1.01, for the reporting period from January 1, 2021 to December 31, 2021.  In accordance with OECD Guidance and the Rule, the Company has also made these disclosures available on its website at www.hurco.com under the “Investors” section.

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Due Diligence Results

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As described above, components of our products contain necessary conflict minerals.  Based on the information we have obtained pursuant to our good faith RCOI and due diligence process described above, our Identified Suppliers provided us with a list of 335 smelters (listed in Exhibit A) as potentially having processed the necessary conflict minerals used in our products during 2021 (the “Identified Smelters”).  

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The table below summarizes certain information pertaining to the 335 Identified Smelters as of May 27, 2022:

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*  “Active/In progress” smelters are those that have committed to undergo a RMAP assessment.

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Although we request that our Identified Suppliers provide responses at the product-level, as stated above, all eight of our Identified Suppliers that responded “yes” to the presence of conflict minerals in their products provided responses at the company-level, meaning that they reported the smelter information for all of their products, not just for the products sold to us. As such, the list of Identified Smelters disclosed in Exhibit A likely contains more smelters than those that actually process or refine the necessary conflict minerals contained in our products.

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Continuous Improvement Efforts to Mitigate Risk

The due diligence discussed above is an ongoing process.  Subject to any changes to the Rule, for 2022, we currently intend to take the following steps to continue our efforts to improve our due diligence process:

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Independent Private Sector Audit

Not applicable.

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