LEAPFROG ENTERPRISES, INC.

Conflict Minerals Report
For the reporting period from January 1 to December 31, 2014

This Conflict Minerals Report (the “Report”) of LeapFrog Enterprises, Inc. (the “Company”) has been prepared pursuant to Rule 13p-1 (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1 to December 31, 2014.

The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products and the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals, which we collectively refer to in this Report as the “Conflict Minerals,” are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten. The “Covered Countries” for the purposes of the Rule and this Report are the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola. As described in this Report, the Company contracts to manufacture products for which the Conflict Minerals are necessary to the functionality or production of those products.

Company Products Covered by this Report

This Report relates to products: (i) for which Conflict Minerals are necessary to the functionality or production of that product; (ii) that were manufactured, or contracted to be manufactured, by the Company; and (iii) for which the manufacture was completed during the period from January 1 to December 31, 2014.

These products, which are referred to in this Report collectively as the “Covered Products,” are the following:

LeapPad Learning Tablet Systems. The LeapPad learning tablets are a line of children’s learning tablets designed for children ages three to nine and are used with game cartridges as well as digital content available in the Company’s App Center.

LeapTV Gaming Systems. LeapTV is an educational video gaming system consisting of a game console, which connects to an external television, a controller and a motion-sensing camera.

Leapster Learning Game Systems. Our line of Leapster handheld learning game systems are handheld gaming devices designed for children ages four to nine and are used with game cartridges as well as digital content available in the Company’s App Center.

LeapReader Learning Systems. The LeapReader learning systems line of products consists of the LeapReader reading and writing system, a stylus-based learn-to-read-and-write product, designed for children ages four to eight, and the LeapReader Junior reading system, a ready-to-read system for children ages one to four.

Cartridges. We sell over 50 educational learning games in cartridge format, which are compatible with our LeapPad and Leapster systems. Our cartridges cover educational cornerstones such as math, reading, writing, geography and sciences, as well as other topics such as life skills, creativity through art, music and imaginative play.

Learning Toys. We have a variety of learning toys designed for children from birth to age four that support a wide variety of important educational skills for infants and young children, including phoneme, letter, number and color recognition, musical awareness and fine motor skills.

LeapFrog’s Conflict Minerals Program

The Company maintains a Conflict Minerals Policy (the “Policy”), incorporating standards set forth in the OECD (2013) Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High Risk Areas: Second Edition (the “OECD Guidance”), published by the Organisation for Economic Co-operation and Development (the “OECD”). The Policy provides that the Company is committed to identifying any Conflict Minerals contained in our products as a part of our social responsibility and in order to achieve compliance with the Rule. In addition, the Policy states that LeapFrog supports, contributes to and will rely on industry initiatives, such as the Conflict Free Smelter Program, to validate that the metals used in our products are not contributing to conflict. The policy is posted on our website at www.leapfrog.com/en-us/legal/conflict-minerals.

Consistent with the first step in the OECD Guidance, the Company has identified the key stakeholders within the Company with respect to Conflict Minerals in order to structure internal management to support supply chain due diligence. This group consists of a cross-functional team of employees from various departments, including members of the Company’s Legal, Internal Audit and Global Supply Chain departments in the United States and Hong Kong. The Company has assigned roles and responsibility for supply chain due diligence and compliance with the Rule to its key stakeholders. The Company has conducted training and education to members of this team regarding the key regulatory, environmental and human rights issues and developments involved in the Rule.

The Company’s supply chain with respect to the Covered Products is complex, and there are many third parties in the supply chain between the Company and the original sources of Conflict Minerals. The Company contracts to manufacture all of the Covered Products from contract manufacturers (“Contract Manufacturers”) and does not manufacture any of the Covered Products directly.

Similarly, the Company does not purchase the majority of the components of the Covered Products directly since it does not manufacture the Covered Products. However, the Company does negotiate for and purchase certain limited key components directly from suppliers (“Key Suppliers” and, together with the Contract Manufacturers, the “Covered Suppliers”). However, the vast majority of the components of the Covered Products are sourced and purchased by our Contract Manufacturers. The Company does not purchase any Conflict Minerals directly from mines, smelters or refiners.

The Company must therefore rely on the Covered Suppliers to provide information regarding the origin of Conflict Minerals that are included in the Covered Products, but there are inherent limitations in the information provided to us by third parties, including the possibility of information being inaccurate, incomplete or falsified despite our efforts to validate and confirm the information. Moreover, the Company believes that the smelters and refiners of such Conflict Minerals are best situated to identify the sources of Conflict Minerals, and therefore has taken steps to identify the applicable smelters and refiners of Conflict Minerals. Therefore, the Company has developed a system of controls and transparency over its Conflict Minerals supply chain in order to enable it to meet the objectives of the Conflict Minerals Policy, including taking steps to identify the applicable smelters and refiners of Conflict Minerals in its supply chain.

First, the Company communicated information regarding the Company’s supply chain due diligence process to the Covered Suppliers. This consisted of the distribution of written material to the Covered Suppliers, providing: (i) an introduction to and overview of the Rule, (ii) LeapFrog’s commitment to sourcing responsibly and its position that mining activities that fuel conflict are unacceptable, and (iii) the process the Company was going to undertake to comply with the Rule. After the initial communication was distributed, the Company conducted training on the topic for its Covered Suppliers.

The Company also maintains contractual provisions in its contractual agreements with its Contract Manufacturers. These provisions require Contract Manufacturers to agree to (i) adopt policies and establish systems to procure Conflict Minerals to be used in the Covered Products from sources that have been verified as conflict free, (ii) communicate to and enforce such conflict minerals policy on their sub-suppliers, and (iii) assist LeapFrog with its system of controls and transparency over its Conflict Minerals supply chain. In addition, Contract Manufacturers have agreed to provide LeapFrog a certification or representation from the facility where the Conflict Minerals were processed demonstrating that the Conflict Minerals did not originate from the Covered Countries or that they originated from recycled or scrap sources.

Reasonable Country of Origin Inquiry

As part of its Reasonable Country of Origin Inquiry, the Company sent the EICC-GeSI Survey to all of its Covered Suppliers. The EICC-GeSI Survey refers to the Minerals Reporting Survey Template (Revision 3.01, the “EICC-GeSI Survey”), co-published by the Electronic Industry Citizen Coalition and the Global e-Sustainability Initiative (“EICC-GeSI”). The EICC-GeSI Survey is a standardized reporting template developed by the Conflict-Free Sourcing Initiative that facilitates the transfer of information through the supply chain regarding smelters, refiners and mineral country of origin. The EICC-GeSI survey enables the Company to obtain greater control and transparency over its mineral supply chain.

The Company reviewed and verified the completeness of the survey responses from the Covered Suppliers. The Company rejected incomplete or incorrectly completed surveys and instructed suppliers on the correct manner to complete the survey. In numerous instances the Company received, even after repeated inquires, conflicting or incomplete information regarding those facilities utilized to process the Conflict Minerals, as well as insufficient information regarding the mine(s) or source(s) of origin of the Conflict Minerals. In some cases, the Covered Suppliers responded by providing a list of all smelters or refiners used to process the Conflict Minerals for all products sold by the Covered Supplier, instead of limiting their responses to the smelters or refiners used to process the Conflict Minerals incorporated into the Company’s Covered Products. The Company worked to focus the responses on the Conflict Minerals only in the Company’s Covered Products and to resolve inconsistencies in the information provided. However, many of the Covered Suppliers do not have systems in place to allow them to accurately identify the facilities utilized to process the Conflict Minerals specifically for the Covered Products.

At the end of this process, the Company had received a response rate of acceptable EICC-GeSI surveys from 62% of its Covered Suppliers.

Due Diligence

The Company exercised due diligence on the source and chain of custody of the Conflict Minerals used in the Covered Products. The Company’s due diligence measures were designed to conform to the framework in the OECD Guidance.

Due Diligence Measures Performed

Based on its assessment of survey responses received from the Covered Suppliers, LeapFrog implemented due diligence measures which included, but were not limited to, the following:

• Reporting to senior management on Covered Suppliers’ responses to our Conflict Minerals information requests, including updates on monitoring and tracking corrective action and risk mitigation efforts (where applicable);
• Communicating our policy on Conflict Minerals to Covered Suppliers and our commitments and requirements expected of our suppliers, supported by email and phone dialogues;
• Comparing smelters and refiners identified by Covered Suppliers to (i) the Conflict Minerals Reporting Template developed by the Conflict-Free Sourcing Initiative which lists validated conflict free and verified facilities and (ii) the US Department of Commerce list of all known conflict mineral processing facilities worldwide; 
• Conducting our own supplemental research on smelters and refiners identified by our Covered Suppliers; and
• Developing a risk mitigation plan that allows for continued trade with a Covered Supplier during its risk mitigation efforts.

Product Determination

Based on the information that was provided by the Covered Suppliers and otherwise obtained through the due diligence process, the Company believes that, to the extent reasonably determinable by the Company, the facilities that were used to process the Conflict Minerals contained in the Covered Products included the smelters and refiners listed in Annex I. We are unable to definitively link the identified smelters and refiners to only those products and materials in our supply chain; therefore our smelter and refiner list likely contains more processing facilities than are actually in our supply chain and used to manufacture the Covered Products.

Based on the information obtained pursuant to the due diligence process, the Company does not have sufficient information to conclusively determine the country of origin of all of the Conflict Minerals in the Covered Products. At the same time, we received no information from our Covered Suppliers indicating that the tin, tantalum, tungsten or gold in our Covered Products directly or indirectly financed or benefitted armed groups in the Covered Countries. Also, due to the manner in which our Covered Suppliers disclosed country of origin information, we do not believe that all of the countries named are actually in our supply chain or Covered Products. However, based on the information that has been obtained, the Company has reasonably determined that the Conflict Minerals may have originated from the countries listed in Annex II, as well as from recycled and scrap sources.

Based on the information obtained pursuant to the due diligence process, the Company believes there is a risk that the Covered Products may contain Conflict Minerals from the Covered Countries. The Company’s due diligence into the supply chain did not determine conclusively whether any of the Covered Products did or did not contain any Conflict Minerals from any Covered Country which directly or indirectly financed or benefitted armed groups, as defined in the Rule.

Steps to Improve Due Diligence

The Company intends to further mitigate the risk that the necessary Conflict Minerals contained in the Company’s products finance or benefit armed groups in the Covered Countries by continuing to improve its due diligence processes. In particular, the Company intends to (i) strengthen the Company’s system of controls and transparency over its Conflict Mineral supply chain, (ii) continue to engage its Covered Suppliers to improve the transparency of its supply chain, (iii) continue to work with its Covered Suppliers to help them understand and satisfy the Company’s Conflict Minerals requirements and (iv) explore the feasibility of working with suppliers and contract manufacturers who are able to obtain a “conflict free” designation for their products.

Independent Private Sector Audit (IPSA)

Not required for calendar year 2014.

Websites Not Incorporated by Reference

The content of any website referred to in this Report is included for general information only and is not incorporated by reference in this Report.

ANNEX I

Subject Mineral - Smelter or Refiner Facility Name - Country Location of Smelter or Refiner
Gold - Aida Chemical Industries Co. Ltd. - Japan
Gold - Allgemeine Gold - und Silberscheideanstalt A.G. - Germany
Gold - AngloGold Ashanti Córrego do Sítio Mineração - Brazil
Gold - Argor - Heraeus SA - Switzerland
Gold - Asahi Pretec Corporation - Japan
Gold - Asaka Riken Co Ltd - Japan
Gold - Aurubis AG - Germany
Gold - Bangko Sentral ng Pilipinas (Central Bank of the Philippines)
Gold - Boliden AB
Gold - CCR Refinery; Glencore Canada Corporation - Canada
Gold - Chimet S.p.A. - Italy
Gold - China National Gold Group Corporation - China
Gold - Chugai Mining - Japan
Gold - Dowa - Japan
Gold - Eco - System Recycling Co., Ltd. - Japan
Gold - Heimerle + Meule GmbH - Germany
Gold - Heraeus Ltd. Hong Kong - Hong Kong
Gold - Heraeus Precious Metals GmbH & Co.KG - Germany
Gold - Ishifuku Metal Industry Co., Ltd. - Japan
Gold - Jiangxi Copper Company Limited - China
Gold - Johnson Matthey Inc - United States
Gold - Johnson Matthey Ltd. - Canada
Gold - JX Nippon Mining & Metals Co., Ltd. - Japan
Gold - Kennecott Utah Copper LLC - United States
Gold - Kojima Chemicals Co., Ltd - Japan
Gold - LS - NIKKO Copper Inc. - South Korea
Gold - Materion - United States
Gold - Matsuda Sangyo Co., Ltd. - Japan
Gold - Metalor Technologies (Hong Kong) Ltd - Hong Kong
Gold - Metalor Technologies (Singapore) Pte. Ltd. - Singapore
Gold - Metalor Technologies SA - Switzerland
Gold - Metalor USA Refining Corporation - United States
Gold - Mitsubishi Materials Corporation - Japan
Gold - Mitsui Mining and Smelting Co., Ltd. - Japan
Gold - Navoi Mining and Metallurgical Combinat - Uzbekistan
Gold - Nihon Material Co. LTD - Japan
Gold - Ohio Precious Metals LLC - United States
Gold - Ohura Precious Metal Industry Co., Ltd - Japan
Gold - PAMP SA - Switzerland
Gold - Rand Refinery (Pty) Ltd - South Africa
Gold - Royal Canadian Mint - Canada
Gold - SEMPSA Joyería Platería SA - Spain
Gold - Shandong Zhaojin Gold & Silver Refinery Co. Ltd - China
Gold - Shanghai Gold Exchange - China
Gold - Solar Applied Materials Technology Corp. - Taiwan
Gold - Sumitomo Metal Mining Co., Ltd. - Japan
Gold - Tanaka Kikinzoku Kogyo K.K. - Japan
Gold - The Great Wall Gold and Silver Refinery of China - China
Gold - The Refinery of Shandong Gold Mining Co. Ltd. - China
Gold - Tokuriki Honten Co., Ltd - Japan
Gold - Umicore SA Business Unit Precious Metals Refining - Belgium
Gold - United Precious Metal Refining, Inc. - United States
Gold - Valcambi SA - Switzerland
Gold - Western Australian Mint trading as The Perth Mint - Australia
Gold - Yamamoto Precious Metal Co. Ltd. - Japan
Gold - Yokohama Metal Co Ltd - Japan
Gold - Yunnan Copper Industry Co Ltd - China
Gold - Zhongyuan Gold Smelter of Zhongjin Gold Corporation - China
Gold - Zijin Mining Group Co. Ltd - China
Tantalum - Exotech Inc. - United States
Tantalum - F&X Electro-Materials Ltd. - China
Tantalum - Global Advanced Metals Aizu - Japan
Tantalum - Global Advanced Metals Boyertown - United States
Tantalum - H.C. Starck Co., Ltd. - Thailand
Tantalum - H.C. Starck GmbH Goslar - Germany
Tantalum - H.C. Starck GmbH Laufenburg - Germany
Tantalum - H.C. Starck Group - Germany
Tantalum - H.C. Starck Hermsdorf GmbH - Germany
Tantalum - H.C. Starck Inc. - United States
Tantalum - H.C. Starck Ltd. - Japan
Tantalum - H.C. Starck Smelting GmbH & Co.KG - Germany
Tantalum - Jiujiang Tanbre Co., Ltd. - China
Tantalum - Mitsui Mining & Smelting - Japan
Tantalum - Ningxia Orient Tantalum Industry Co., Ltd. - China
Tantalum - Plansee SE Liezen - Austria
Tantalum - Plansee SE Reutte - Austria
Tantalum - Solikamsk Metal Works - Russian Federation
Tantalum - Taki Chemicals - Japan
Tantalum - Ulba - Kazakhstan
Tin - Alpha - United States
Tin - China Tin Group Co., Ltd. - China
Tin - CNMC (Guangxi) PGMA Co. Ltd. - China
Tin - Cookson - United States
Tin - Cooper Santa - Brazil
Tin - CV Duta Putra Bangka - Indonesia
Tin - CV JusTindo - Indonesia
Tin - CV Makmur Jaya - Indonesia
Tin - CV Nurjanah - Indonesia
Tin - CV Serumpun Sebalai - Indonesia
Tin - CV United Smelting - Indonesia
Tin - EM Vinto - Bolivia
Tin - Fenix Metals - Poland
Tin - Gejiu Non - Ferrous Metal Processing Co. Ltd. - China
Tin - Gejiu Zi-Li - China
Tin - Jiangxi Nanshan - China
Tin - Laibin Smelter - China
Tin - Magnu's Minerais Metais e Ligas LTDA - Brazil
Tin - Malaysia Smelting Corporation (MSC) - Malaysia
Tin - Metallo Chimique - Belgium
Tin - Mineração Taboca S.A. - Brazil
Tin - Minmetals Ganzhou Tin Co. Ltd. - China
Tin - Minsur - Peru
Tin - Mitsubishi Materials Corporation - Japan
Tin - Novosibirsk Integrated Tin Works - Russian Federation
Tin - OMSA - Bolivia
Tin - PT Artha Cipta Langgeng - Indonesia
Tin - PT Babel Inti Perkasa - Indonesia
Tin - PT Babel Surya Alam Lestari - Indonesia
Tin - PT Bangka Kudai Tin - Indonesia
Tin - PT Bangka Putra Karya - Indonesia
Tin - PT Bangka Timah Utama Sejahtera - Indonesia
Tin - PT Bangka Tin Industry - Indonesia
Tin - PT Belitung Industri Sejahtera - Indonesia
Tin - PT BilliTin Makmur Lestari - Indonesia
Tin - PT Bukit Timah - Indonesia
Tin - PT DS Jaya Abadi - Indonesia
Tin - PT Eunindo Usaha Mandiri - Indonesia
Tin - PT Fang Di MulTindo - Indonesia
Tin - PT HP Metals Indonesia - Indonesia
Tin - PT Koba Tin - Indonesia
Tin - PT Mitra Stania Prima - Indonesia
Tin - PT REFINED BANGKA TIN - Indonesia
Tin - PT Sariwiguna Binasentosa - Indonesia
Tin - PT Stanindo Inti Perkasa - Indonesia
Tin - PT Sumber Jaya Indah - Indonesia
Tin - PT Tambang Timah - Indonesia
Tin - PT Timah (Persero), Tbk - Indonesia
Tin - PT Timah Nusantara - Indonesia
Tin - PT Tinindo Inter Nusa - Indonesia
Tin - PT Yinchendo Mining Industry - Indonesia
Tin - Rui Da Hung - Taiwan
Tin - Soft Metais Ltda. - Brazil
Tin - Thaisarco - Thailand
Tin - White Solder Metalurgia e Mineração Ltda. - Brazil
Tin - Yunnan Chengfeng Non-ferrous Metals Co., Ltd. - China
Tin - Yunnan Tin Company, Ltd. - China
Tungsten - A.L.M.T. Corp. - Japan
Tungsten - Chongyi Zhangyuan Tungsten Co Ltd - China
Tungsten - Ganzhou Huaxing Tungsten Products Co., Ltd. - China
Tungsten - Ganzhou Non-ferrous Metals Smelting Co., Ltd. - China
Tungsten - Ganzhou Seadragon W & Mo Co., Ltd. - China
Tungsten - Ganzhou Tejing Tungsten and Molybdenum Co., Ltd. - China
Tungsten - Global Tungsten & Powders Corp - United States
Tungsten - Guangdong Xianglu Tungsten Industry Co., Ltd. - China
Tungsten - HC Starck GmbH - Germany
Tungsten - HC Starck Smelting GmbH & Co.KG - Germany
Tungsten - Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd. - China
Tungsten - Kennaemetal Huntsville - United States
Tungsten - Wolfram Company CJSC - Russian Federation
Tungsten - Xiamen Tungsten (H.C.) Co., Ltd. - China
Tungsten - Xiamen Tungsten Co Ltd - China
Tungsten - Zhuzhou Cemented Carbide Group Co Ltd - China

 

ANNEX II

Argentina
Australia
Bolivia
Brazil
Canada
Chile
China
Colombia
Democratic Republic of the Congo
Ethiopia
Germany
Hong Kong
Indonesia
Japan
Malaysia
Mexico
Nigeria
Papua New Guinea
Peru
Russia
Rwanda
South Africa
South Korea
Spain
Switzerland
Taiwan
Thailand
United States of America
Vietnam
Zimbabwe