Annual Report — Small Business — Form 10-KSB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10KSB Annual Report -- Small Business 30 113K
2: EX-14 Material Foreign Patent 8 43K
3: EX-31 Certification per Sarbanes-Oxley Act (Section 302) 2± 9K
4: EX-32 Certification per Sarbanes-Oxley Act (Section 906) 1 5K
EX-14 — Material Foreign Patent
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CODE OF BUSINESS CONDUCT AND ETHICS
INTRODUCTION
We are committed to maintaining the highest standards of honest and ethical
business conduct, including ensuring full, fair, accurate, timely and
understandable disclosures in our public documents and reports, compliance with
applicable laws, prompt internal reporting of violations of these standards and
accountability for adherence to these standards.
This Code of Business Conduct and Ethics (the "Code") reflects the business
practices and principles of behavior that support this commitment. We expect
every employee, officer, and director to read, understand, and comply with the
Code and its application to the performance of his or her business
responsibilities. References in the Code to employees are intended to cover
officers and, as applicable, directors, managers and supervisors as well as
employees.
Officers, managers and other supervisors are expected to develop in employees a
sense of commitment to the spirit, as well as the letter, of the Code.
Supervisors are also expected to ensure that all agents and contractors conform
to Code standards when working for or on behalf of the Company. Nothing in the
Code alters the employment at-will policy of the Company.
The Code cannot possibly describe every practice or principle related to honest
and ethical conduct. The Code addresses conduct that is particularly important
to proper dealings with the people and entities with whom we interact, but
reflects only a part of our commitment.
The following additional policies of the Company supplement or amplify the Code
in certain areas and should be read in conjunction with the Code:
- Action by members of your immediate family, significant others or other
persons who live in your household also may potentially result in ethical issues
to the extent that they involve the Company's business. For example, acceptance
of inappropriate gifts by a family member from one of our suppliers could create
a conflict of interest and result in a Code violation attributable to you.
Consequently, in complying with the Code, you should consider not only your own
conduct, but also that of your immediate family members, significant others and
other persons who live in your household.
- The integrity and reputation of the Company depends on the honesty,
fairness and integrity brought to the job by each person associated with us. It
is the responsibility of each employee to apply common sense, together with his
or her own highest personal ethical standards, in making business decisions
where there is no stated guideline in the Code. Unyielding personal integrity
is the foundation of corporate integrity.
YOU SHOULD NOT HESITATE TO ASK QUESTIONS ABOUT WHETHER ANY CONDUCT MAY VIOLATE
THE CODE, VOICE CONCERNS OR CLARIFY GRAY AREAS. SECTION 16 BELOW DETAILS THE
COMPLIANCE RESOURCES AVAILABLE TO YOU. IN ADDITION, YOU SHOULD BE ALERT TO
POSSIBLE VIOLATIONS OF THE CODE BY OTHERS AND REPORT SUSPECTED VIOLATIONS,
WITHOUT FEAR OF ANY FORM OF RETALIATION, AS FURTHER DESCRIBED IN SECTION 16.
- Violations of the Code will not be tolerated. Any employee who violates
the standards in the Code may be subject to disciplinary action, up to and
including termination of employment and, in appropriate cases, civil legal
action or referral for criminal prosecution.
1. LEGAL COMPLIANCE
Obeying the law, both in letter and in spirit, is the foundation of this Code.
Our success depends upon each employee's operating within legal guidelines and
cooperating with local, national and international authorities. It is therefore
essential that you understand the legal and regulatory requirements applicable
to your business unit and area of responsibility. We will send employees to
periodic training sessions to ensure that all employees comply with the relevant
laws, rules and regulations associated with their employment, including laws
prohibiting insider trading (which are discussed in further detail in Section 4
below). While we do not expect you to memorize every detail of these laws, rules
and regulations, we want you to be able to determine when to seek advice from
others.
If you do have a question in the area of legal compliance, it is
important that you not hesitate to seek answers from your supervisor or the
Corporate Responsibility Officer (see Section 16).
Disregard of the law will not be tolerated. Violation of domestic or foreign
laws, rules and regulations may subject an individual as well as the Company to
civil and/or criminal penalties. You should be aware that conduct and records,
including emails, are subject to internal and external audits and to discovery
by third parties in the event of a government investigation or civil litigation.
It is in everyone's best interests to know and comply with our legal and ethical
obligations.
2. MISUSE OF COMPANY COMPUTER EQUIPMENT
You may not, while acting on behalf of the Company, or while using our computing
or communications equipment or facilities, either:
- Access the internal computer system (also known as "hacking") or other
resource of another entity without express written authorization from the entity
responsible for operating that resource;
- Commit any unlawful or illegal act, including harassment, libel, fraud,
sending of unsolicited bulk email (also known as "spam") in violation of
applicable law, trafficking in contraband of any kind, or espionage.
If you receive authorization to access another entity's internal computer
system, or other resource, you must make a permanent record of that
authorization so that it may be retrieved for future reference and you may not
exceed the scope of that authorization.
Unsolicited bulk email is regulated by law in a number of jurisdictions. If you
intend to send unsolicited bulk email to persons outside of the Company, either
while acting on our behalf or using our computing or communications equipment or
facilities, you should contact your supervisor or the Corporate Responsibility
Officer for approval.
All data residing on or transmitted through our computing and communications
facilities, including email and word processing documents, is the property of
the Company and subject to inspection, retention and review by the Company in
accordance with applicable law.
3. ENVIRONMENT COMPLIANCE
Federal law imposes criminal liability on any person or company that
contaminates the environment with any hazardous substance that could cause
injury to the community or environment. Violation of environmental laws can be
a criminal offense and can involve monetary fines and imprisonment. We expect
employees to comply with all applicable environmental laws.
It is our policy to conduct our business in an environmentally responsible way
that minimizes environmental impacts. We are committed to minimizing and, if
possible, eliminating the use of any substance or material that may cause
environmental damage, reducing waste generation and disposing of all waste
through safe and responsible methods, minimizing environmental risks by
employing safe technologies and operating procedures, and being prepared to
respond appropriately to accidents and emergencies.
4. INSIDER TRADING
Employees who have access to confidential (or "inside") information are not
permitted to use or share that information for stock trading purposes or for any
other purpose except to conduct our business. All non-public information about
the Company or about companies with which we do business is considered
confidential information. To use material non-public information in connection
with buying or selling securities, including "tipping" others who might make an
investment decision on the basis of this information, is not only unethical, it
is illegal. Employees must exercise the utmost care when handling material
inside information.
5. INTERNATIONAL BUSINESS LAWS
Our employees are expected to comply with the applicable laws in all countries
to which they travel, in which they operate and where we otherwise do business,
including laws prohibiting bribery, corruption or the conduct of business with
specified individuals, companies or countries. The fact that in some countries
certain laws are not enforced or that violation of those laws is not subject to
public criticism will not be
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accepted as an excuse for noncompliance. In
addition, we expect employees to comply with U.S. laws, rules and regulations
governing the conduct of business by its citizens and corporations outside the
U.S.
These U.S. laws, rules and regulations, which extend to all our activities
outside the U.S., include:
- The Foreign Corrupt Practices Act, which prohibits directly or indirectly
giving anything of value to a government official to obtain or retain business
or favorable treatment, and requires the maintenance of accurate books of
account, with all company transactions being properly recorded
- U.S. Embargoes, which restrict or, in some cases, prohibit companies, their
subsidiaries and their employees from doing business with certain other
countries identified on a list that changes periodically (including currently,
for example, Angola (partial), Burma (partial), Cuba, Iran, Iraq, Libya, North
Korea, Sudan and Syria) or specific companies or individuals
- Export Controls, which restrict travel to designated countries or prohibit
r restrict the export of goods, services and technology to designated countries,
denied persons or denied entities from the U.S., or the re-export of U.S. origin
goods from the country of original destination to such designated countries,
denied companies or denied entities
- Anti-boycott Compliance, which prohibits U.S. companies from taking any
action that has the effect of furthering or supporting a restrictive trade
practice or boycott that is fostered or imposed by a foreign country against a
country friendly to the U.S. or against any U.S. person
If you have a question as to whether an activity is restricted or prohibited,
seek assistance before taking any action, including giving any verbal assurances
that might be regulated by international laws.
6. CONFLICTS OF INTEREST
A "conflict of interest" occurs when an individual's personal interest may
interfere in any way with the performance of his or her duties or the best
interests of the Company. A conflicting personal interest could result from an
expectation of personal gain now or in the future or from a need to satisfy a
prior or concurrent personal obligation. We expect our employees to be free
from influences that conflict with the best interests of the Company. Even the
appearance of a conflict of interest where none actually exists can be damaging
and should be avoided. Whether or not a conflict of interest exists or will
exist can be unclear. Conflicts of interest are prohibited unless specifically
authorized as described below.
If you have any questions about a potential conflict, or if you become aware of
an actual or potential conflict, and you are not an officer or director of the
Company, you should discuss the matter with your supervisor or the Corporate
Responsibility Officer (as further described in Section 16). Supervisors may
not authorize conflict of interest matters without first seeking the approval of
the Corporate Responsibility Officer and filing with the Corporate
Responsibility Officer a written description of the authorized activity. If the
supervisor is involved in the potential or actual conflict, you should discuss
the matter directly with the Corporate Responsibility Officer. Factors that may
be considered in evaluating a potential conflict of interest are, among others:
- Whether it may interfere with the employee's job performance,
responsibilities or morale;
- Whether the employee has access to confidential information;
- Whether it may interfere with the job performance, responsibilities or
morale of others within the organization;
- Any potential adverse or beneficial impact on our business;
- Any potential adverse or beneficial impact on our relationships with our
customers or suppliers or other service providers;
- Whether it would enhance or support a competitor's position;
- The extent to which it would result in financial or other benefit (direct
or indirect) to the employee;
- The extent to which it would result in financial or other benefit (direct
or indirect) to one of our customers, suppliers or other service providers;
- The extent to which it would appear improper to an outside observer.
The following are examples of situations that may, depending on the facts and
circumstances, involve conflicts of interests:
- Employment by (including consulting for) or service on the board of a
competitor, customer or supplier or other service provider. Activity that
enhances or supports the position of a competitor to the
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detriment of the
Company is prohibited, including employment by or service on the board of a
competitor. Employment by or service on the board of a customer or supplier or
other service provider is generally discouraged and you must seek authorization
in advance if you plan to take such action.
- Owning, directly or indirectly, a significant financial interest in any
entity that does business, seeks to do business or competes with us. In
addition to the factors described above, persons evaluating ownership for
conflicts of interest will consider the size and nature of the investment; the
nature of the relationship between the other entity and the Company; the
employee's access to confidential information and the employee's ability to
influence corporation decisions. If you would like to acquire a financial
interest of that kind, you must seek approval in advance.
- Soliciting or accepting gifts, favors, loans or preferential treatment from
any person or entity that does business or seeks to do business with us. See
Section 10 for further discussion of the issues involved in this type of
conflict.
- Soliciting contributions to any charity or for any political candidate from
any person or entity that does business or seeks to do business with us.
- Taking personal advantage of corporate opportunities. See Section 7 for
further discussion of the issues involved in this type of conflict.
- Moonlighting without permission.
- Conducting our business transactions with your family member, significant
other or person who shares your household or a business in which you have a
significant financial interest.
- Exercising supervisory or other authority on behalf of the Company, over a
co-worker who is also a family member.
- Loans to, or guarantees of obligations of, employees or their family
members by the Company could constitute an improper personal benefit to the
recipients of these loans or guarantees, depending on the facts and
circumstances. Some loans are expressly prohibited by law and applicable law
requires that our Board of Directors approve all loans and guarantees to
employees.
7. CORPORATE OPPORTUNITIES
You may not take personal advantage of opportunities that are presented to you
or discovered by you as a result of your position with us, or through your use
of corporate property or information, unless authorized by your supervisor or
the Corporate Responsibility Officer. Even opportunities that are acquired
privately by you may be questionable if they are related to our existing or
proposed lines of business. Participation in an investment or outside business
opportunity that is related to our existing or proposed lines of business must
be pre-approved. You cannot use your position with us or corporate property or
information for improper personal gain, nor can you compete with us in any way.
8. MAINTENANCE OF CORPORATE BOOKS, RECORDS, DOCUMENTS AND ACCOUNTS;
FINANCIAL INTEGRITY; PUBLIC REPORTING
The integrity of our records and public disclosure depends on the validity,
accuracy and completeness of the information supporting the entries to our books
of account. Therefore, our corporate and business records should be completed
accurately and honestly. The making of false or misleading entries, whether
they relate to financial results or test results, is strictly prohibited. Our
records serve as a basis for managing our business and are important in meeting
our obligations to customers, suppliers, creditors, employees and others with
whom we do business. As a result, it is important that our books, records and
accounts accurately and fairly reflect, in reasonable detail, our assets,
liabilities, revenues, costs and expenses, as well as all transactions and
changes in assets and liabilities.
We require that:
- No entry be made in our books and records that intentionally hides or
disguises the nature of any transaction or of any of our liabilities, or
misclassifies any transactions as to accounts or accounting periods;
- Transactions be supported by appropriate documentation;
- The terms of sales and other commercial transactions be reflected
accurately in the documentation for those transactions and all such
documentation be reflected accurately in our books and records;
- Employees comply with our system of internal controls;
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- No cash or other assets be maintained for any purpose in any unrecorded or
"off-the-books" fund.
Our accounting records are also relied upon to produce reports for our
management, stockholders and creditors, as well as for governmental agencies.
In particular, we rely upon our accounting and other business and corporate
records in preparing the periodic and current reports that we file with the SEC.
These reports must provide full, fair, accurate, timely and understandable
disclosure and fairly present our financial condition and results of operations.
Employees who collect, provide or analyze information for or otherwise
contribute in any way in preparing or verifying these reports should strive to
ensure that our financial disclosure is accurate and transparent and that our
reports contain all of the information about the Company that would be important
to enable stockholders and potential investors to assess the soundness and risks
of our business and finances and the quality and integrity of our accounting and
disclosures.
In addition:
- No employee may take or authorize any action that would cause our financial
records or financial disclosure to fail to comply with generally accepted
accounting principles, the rules and regulations of the SEC or other applicable
laws, rules and regulations;
- All employees must cooperate fully with our Accounting, as well as our
independent public accountants and counsel, respond to their questions with
candor and provide them with complete and accurate information to help ensure
that our books and records, as well as our reports filed with the SEC, are
accurate and complete;
- No employee should knowingly make (or cause or encourage any other person
to make) any false or misleading statement in any of our reports filed with the
SEC or knowingly omit (or cause or encourage any other person to omit) any
information necessary to make the disclosure in any of our reports accurate in
all material respects.
Any employee who becomes aware of any departure from these standards has a
responsibility to report his or her knowledge promptly to a supervisor, the
Corporate Responsibility Officer or one of the other compliance resources
described in Section 16.
9. FAIR DEALING
We strive to outperform our competition fairly and honestly. Advantages over
our competitors are to be obtained through superior performance of our products
and services, not through unethical or illegal business practices. Acquiring
proprietary information from others through improper means, possessing trade
secret information that was improperly obtained, or inducing improper disclosure
of confidential information from past or present employees of other companies is
prohibited, even if motivated by an intention to advance our interests. If
information is obtained by mistake that may constitute a trade secret or other
confidential information of another business, or if you have any questions about
the legality of proposed information gathering, you must consult your supervisor
or the Corporate Responsibility Officer, as further described in Section 16.
You are expected to deal fairly with our customers, suppliers, employees and
anyone else with whom you have contact in the course of performing your job. No
employee may take unfair advantage of anyone through misuse of confidential
information, misrepresentation of material facts or any other unfair dealing
practice.
Employees involved in procurement have a special responsibility to adhere to
principles of fair competition in the purchase of products and services by
selecting suppliers based exclusively on normal commercial considerations, such
as quality, cost, availability, service and reputation, and not on the receipt
of special favors.
10. GIFTS AND ENTERTAINMENT
Business entertainment and gifts are meant to create goodwill and sound working
relationships and not to gain improper with customers or facilitate approvals
from government officials. Unless express permission is received from a
supervisor or the Corporate Responsibility Officer, entertainment and gifts
cannot be offered, provided or accepted by any employee unless consistent with
customary business practices and not (a) excessive in value, (b) in cash, (c)
susceptible of being construed as a bribe or kickback or (d) in violation of any
laws. This principle applies to our transactions everywhere in the world, even
where the practice is widely considered "a way of doing business." Under some
statutes, such as the U.S. Foreign Corrupt
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Practices Act (further described in
Section 5), giving anything of value to a government official to obtain or
retain business or favorable treatment is a criminal act subject to prosecution
and conviction. Discuss with your supervisor or the Corporate Responsibility
Officer any proposed entertainment or gifts if you are uncertain about their
appropriateness.
11. ANTITRUST
Antitrust laws are designed to protect the competitive process. These laws
generally prohibit:
- Agreements, formal or informal, with competitors that harm competition or
customers, including price fixing and allocations of customers, territories or
contracts;
- Agreements, formal or informal, that establish or fix the price at which a
customer may resell a product;
- The acquisition or maintenance of a monopoly or attempted monopoly through
anti-competitive conduct.
Certain kinds of information, such as pricing, production and inventory, should
not be exchanged with competitors, regardless of how innocent or casual the
exchange may be and regardless of the setting, whether business or social.
Understanding the requirements of antitrust and unfair competition laws of the
various jurisdictions where we do business can be difficult, and you are urged
to seek assistance from your supervisor or the Corporate Responsibility Officer
whenever you have a question relating to these laws.
12. PROTECTION AND PROPER USE OF COMPANY ASSETS
All employees are expected to protect our assets and ensure their efficient use.
Theft, carelessness and waste have a direct impact on our profitability. Our
property, such as laboratory equipment, office equipment, office supplies and
computer equipment, are expected to be used only for legitimate business
purposes, although incidental personal use may be permitted. Employees should
be mindful of the fact that we retain the right to access, review, monitor and
disclose any information transmitted, received or stored using our electronic
equipment, with or without an employee's or third party's knowledge, consent or
approval. Any misuse or suspected misuse of our assets must be immediately
reported to your supervisor or the Corporate Responsibility Officer.
13. CONFIDENTIALITY
One of our most important assets is our confidential information. Employees who
have received or have access to confidential information should take care to
keep this information confidential. Confidential information may include
business, marketing and service plans, financial information, product
architecture, source codes, engineering and manufacturing ideas, designs,
databases, customer lists, pricing strategies, personnel data, personally
identifiable information pertaining to our employees, customers or other
individuals (including, for example, names, addresses, telephone numbers and
social security numbers), and similar types of information provided to us by our
customers, suppliers and partners. This information may be protected by patent,
trademark, copyright and trade secret laws.
Except when disclosure is authorized or legally mandated, you must not share our
or our suppliers' or customers' confidential information with third parties or
others within the Company, who have no legitimate business purpose for receiving
that information. Doing so would constitute a violation of the employment
agreement that you signed upon joining us. Unauthorized use or distribution of
this information could also be illegal and result in civil liability and/or
criminal penalties.
You should also take care not to inadvertently disclose confidential
information. Materials that contain confidential information, such as memos,
notebooks, computer disks and laptop computers should be stored securely.
Unauthorized posting or discussion of any information concerning our business,
information or prospects on the Internet is prohibited. You may not discuss our
business, information or prospects in any "chat room," regardless of whether you
use your own name or a pseudonym. Be cautious when discussing sensitive
information in public places like elevators, airports, restaurants and
"quasi-public" areas within the Company. All Company e-mails, voicemails, and
other communications are presumed confidential and should not be forwarded or
otherwise disseminated outside of the Company, except where required for
legitimate business purposes.
In addition to the above responsibilities, if you are handling information
protected by any privacy policy published by us, then you must handle that
information solely in accordance with the applicable policy.
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14. MEDIA/PUBLIC DISCUSSIONS
It is our policy to disclose material information concerning the Company to the
public only through specific limited channels to avoid inappropriate publicity
and to ensure that all those with an interest in the Company will have equal
access to information. All inquiries or calls from the press and financial
analysts should be referred to the CEO, President or the investor relations
department. We have designated our CEO, President and CFO as our official
spokespersons for financial matters. We have designated our CEO and President
as our official spokespersons for marketing, technical and other related
information. Unless a specific exception has been made by the CEO, President or
CFO, these designees are the only people who may communicate with the press on
behalf of the Company.
15. WAIVERS
Any waiver of this Code for executive officers (including, where required by
applicable laws, our principal executive officer, principal financial officer,
principal accounting officer or controller (or persons performing similar
functions)) or directors may be authorized only by our Board of Directors or a
committee of the Board and will be disclosed to stockholders as required by
applicable laws, rules and regulations.
16. COMPLIANCE STANDARDS AND PROCEDURES
COMPLIANCE RESOURCES
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To facilitate compliance with this Code, we have established the position of
Corporate Responsibility Officer to oversee this program. The Corporate
Responsibility Officer is a person to whom you can address any questions or
concerns. We will keep all applicable persons informed as to the identity of and
the contact information for the Corporate Responsibility Officer.
In addition to fielding questions or concerns with respect to potential
violations of this Code, the Corporate Responsibility Officer is responsible
for:
- Investigating possible violations of the Code;
- Training new employees in Code policies;
- Conducting annual training sessions to refresh employees' familiarity with
the Code;
- Distributing copies of the Code annually to each employee with a reminder
that each employee is responsible for reading, understanding and complying with
the Code;
- Updating the Code as needed and alerting employees to any updates, with
appropriate approval of the Board of Directors, to reflect changes in the law,
the Company's operations and in recognized best practices, and to reflect the
Company's experience;
= Otherwise promoting an atmosphere of responsible and ethical conduct.
Your most immediate resource for any matter related to the Code is your
supervisor. He or she may have the information you need, or may be able to
refer the question to another appropriate source. There may, however, be times
when you prefer not to go to your supervisor. In these instances, you should
feel free to discuss your concern with the Corporate Responsibility Officer.
CLARIFYING QUESTIONS AND CONCERNS; REPORTING POSSIBLE VIOLATIONS
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If you encounter a situation or are considering a course of action and its
appropriateness is unclear, discuss the matter promptly with your supervisor or
the Corporate Responsibility Officer; even the appearance of impropriety can be
very damaging and should be avoided.
If you are aware of a suspected or actual violation of Code standards by others,
you have a responsibility to report it. You are expected to promptly provide a
compliance resource with a specific description of the violation that you
believe has occurred, including any information you have about the persons
involved and the time of the violation. Whether you choose to speak with your
supervisor or the Corporate Responsibility Officer, you should do so without
fear of any form of retaliation. We will take prompt disciplinary action against
any employee who retaliates against you, up to and including termination of
employment.
Supervisors must promptly report any complaints or observations of Code
violations to the Corporate Responsibility Officer. The Corporate
Responsibility Officer will investigate all reported possible Code violations
promptly and with the highest degree of confidentiality that is possible under
the specific
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circumstances. Your cooperation in the investigation will be
expected. As needed, the Corporate Responsibility Officer will consult with the
Board of Directors.
If the investigation indicates that a violation of the Code has probably
occurred, we will take such action as we believe to be appropriate under the
circumstances. If we determine that an employee is responsible for a Code
violation, he or she will be subject to disciplinary action up to, and
including, termination of employment and, in appropriate cases, civil action or
referral for criminal prosecution. Appropriate action may also be taken to
deter any future Code violations.
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