EXHIBIT 99.1
VASO ACTIVE PHARMACEUTICALS, INC.
CODE OF ETHICS AND CONDUCT
The purpose of Vaso Active Pharmaceuticals, Inc.'s (the "Company") Code
of Ethics and Conduct (the "Code") is to establish specific standards and
policies for conduct of the Company's business in accordance with all applicable
federal, state and local laws, honesty in our business dealings, prudent use of
our assets and resources, sound growth and achievement of business objectives
and fair treatment of our employees. We are committed to achieving and
maintaining the highest level of integrity and ethics in our dealings with our
employees, customers, suppliers, shareholders and the public. For the purposes
of these business and ethical conduct standards (the "Standards"), the Company
considers its executive officers (including but not limited to the Company's
Chief Executive Officer, Chief Financial Officer, and Controller, or persons
performing similar functions), directors, employees, agents and consultants to
be "Employees" and each an "Employee."
As Employees, we are responsible for fully implementing the business
practices and corporate policies of the Company. These Standards are presented
to govern the conduct of all our Employees and are intended to supplement the
requirements as set forth in the Company's employee manual.
The purpose of this Code is to deter wrongdoing and to promote:
(i) honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and professional
relationships;
(i) full, fair, accurate, timely and understandable disclosure in
reports and documents that the Company files, or submits to, the Securities and
Exchange Commission ("SEC") or other governmental regulators and in other public
communications made by the Company;
(iii) compliance with applicable governmental laws, rules and
regulations;
(iv) prompt internal reporting of violations of this Code to an
appropriate person or persons identified herein; and,
(v) accountability for adherence to this Code.
CONFLICTS OF INTEREST
It is very important that every Employee avoid any situation which
involves a conflict with his/her duty to the Company and the interests of the
Company and its shareholders. We expect our Employees to exercise good judgment,
honesty and high ethical standards at all times. Adherence to these Standards
should prevent the occurrence of conflicts of interest. Employees should be
particularly sensitive to possible conflicts with suppliers, brokers or any
vendors which could arise from engaging in business dealings with, or accepting
gifts or compensation from, others. If the Employee is in doubt, the Ethics
Officer should be consulted. The transmittal letter accompanying the copy of
this Code of Ethics delivered to you identifies the Ethics Officer and the
Chairman of the Audit Committee of the Board of Directors. Should questions
arise regarding the appropriate handling of your responsibilities under this
Code of Ethics, please contact either of these persons; and, definitely, contact
the Chairman of the Audit Committee if and whenever you have concerns about the
prompt and responsive handling of any matter of concern to you.
Playing "favorites" or having conflicts of interest, in practice or
appearance, runs counter to the fair treatment to which we are all entitled.
Each Employee should avoid any relationship, influence or activity that might
impair, or have the appearance of impairing, his/her ability to make objective
and fair decisions when performing his/her job. Conflict of interest laws and
regulations must be fully and carefully observed. When in doubt, review Company
policies and procedures, and share the facts of the situation with the Ethics
Officer.
Here are some ways a conflict of interest could arise:
- - Employment by a competitor or potential competitor, regardless of the
nature of the employment, while employed by the Company
- - Acceptance of gifts, cash or in kind from those seeking to do business
with the Company
- - Placement of business with a firm owned or controlled by an Employee or
his/her family
- - Ownership of, or substantial interest in, a company which is a
competitor of or a supplier to the Company
- - Acting as a consultant to a Company customer or supplier without the
Company's express prior written approval. Approval is required for any
Employee's services as director, officer, employee, or consultant to
any company which is a supplier or a customer having business dealings
with the Company.
In order to preserve the Company's reputation for honesty and
integrity, the management of our Company must be advised of any matters which
might be considered sensitive. Any such notification should be addressed to the
Ethics Officer. Each Employee has a duty to ensure that proprietary information
relating to the Company or any entity or person with which the Company does
business is not disclosed to anyone without proper authorization. Every Employee
has a duty to keep proprietary documents protected and secure, particularly when
dealing with suppliers, customers and competitors.
FINANCIAL REPORTING
The Company's senior financial officers (e.g., principal financial
officer, comptroller, principal accounting officer and any person performing
similar functions) as well as any person whose responsibilities include
financial reporting duties ("Finance Personnel") have a heightened obligation to
perform their duties in a diligent, honest and ethical manner. This duty of
honesty extends to the full, fair, accurate, timely and understandable
disclosure of information relating to the Company's financial condition and
results of operation in its periodic reports and compliance with all applicable
government rules and regulations. The primary responsibility for financial
reporting, internal control, and compliance with laws, regulation, and ethics
rests with executive management.
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If Finance Personnel discover, or have reason to believe, that there is
an actual or potential conflict of interest between their personal and
professional relationships, they must report this information in a prompt
fashion to the Ethics Officer or the Company's Audit Committee. Examples of
information which should be reported include but are not limited to: (i)
internal control deficiencies such as failure to conduct quarterly reviews of
those controls, or control overrides (such as situations in which Company
officials responsible for a certain function have avoided performing such
function or their decisions are overridden); (ii) fraud by management or by
Employees with significant roles in financial reporting or internal controls
(regardless of materiality); (iii) utilization of proprietary Company
information by non-Company personnel for the benefit of persons or entities
other than the Company; and (iv) provision of non-auditing services by the
Company's auditors without the prior consent of the Company's Audit Committee.
The Company's Audit Committee has important oversight responsibilities
that relate to the Company's financial reporting, internal controls, compliance
with applicable laws and regulations and Company ethics. In this capacity, the
Audit Committee has the power to authorize investigations that are within the
scope of its responsibilities, including conducting interviews or discussions
with Employees and other persons whose views may be helpful to them. In its
oversight capacity, the Audit Committee also monitors internal control processes
by reviewing reports issued by external auditors and other information to gain
reasonable assurance that the Company is in compliance with pertinent laws and
regulations, is conducting its affairs ethically, and is maintaining effective
controls against conflict of interest and fraud. If you have any concerns
regarding the Company's financial reporting, internal controls, compliance with
applicable laws and regulations and compliance of Company Employees with this
Code of Ethics, you should contact the Chairman of the Audit Committee directly.
GIFTS, GRATUITIES AND ENTERTAINMENT
Customer and Supplier Personnel
- -------------------------------
The purchase of supplies, materials and services from vendors,
suppliers and subcontractors must be accomplished in a fair and
nondiscriminatory process based solely on quality, performance, price and
customer criteria (in cases where purchases are made for customers).
The Company specifically prohibits offering, attempting to give,
soliciting or receiving any form of bribe or kickback. These are criminal acts.
Since the mere receipt of a request to engage in such activity may be a
reportable event under the law, all Employees should immediately seek advice
from the Ethics Officer if any such request is received. Similarly, any dealings
with affiliated persons of the Company or of any officer of the Company must be
reviewed by the Ethics Officer. No transaction may be effected with an
affiliated person or entity absent the written approval of the Audit Committee.
Government Personnel
- --------------------
No Employee may give federal, state or local government employees any
meal, beverage, gift or form of entertainment regardless of value with the
following exceptions:
- - Promotional items which have a retail value of less than $25.00 and
which contain the Company's name or logo may be offered without
violating this Code,
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- - Employees may also provide (i) modest items of food and refreshments
offered other than as part of a meal (such as soft drinks, coffee and
doughnuts) to employees of federal executive agencies other than
uniformed services; and (ii) greeting cards and items with little
intrinsic value such as plaques, certificates and trophies, which are
intended solely for presentation,
- - Employees may socially entertain relatives or personal friends employed
by government agencies. It should be clear, however, that such
entertainment is not related to the Company's business. Expenditures
for such non-business entertainment are not reimbursable by the Company
to the Employee,
- - Employees may not make loans, guarantee loans or make payments to or on
behalf of federal, state or local government employees.
Anyone with questions regarding this section should contact the Ethics
Officer. The making of gifts that exceed these limits is a violation of the Code
of Ethics and other policies.
Non-Government Personnel
- ------------------------
Furnishing meals, refreshments, modest gifts/honorariums (see below)
and entertainment in conjunction with business discussions with non-government
personnel is a commonly accepted business practice. The Company permits its
Employees, within reason, to engage in such practices. The furnishing of meals,
refreshments or entertainment and the making of modest gifts/honorariums,
however, should not violate good common sense and the standards of conduct of
the recipient's organization, and must be consistent with past practices and
standards established from time to time by the Company.
Employees who make, and supervisors who approve, expenditures for
meals, refreshments or entertainment, must use discretion and care to ensure
that such expenditures are in the proper course of business and cannot
reasonably be construed as bribes or improper inducements.
Modest gifts/honorariums should only be given in order to commemorate a
specific holiday or special event. In no event should the value of such
individual items exceed $50.00 without the prior approval of the Chief Financial
Officer. Detailed records of all such gifts and their business purpose should be
maintained for at least three years. Employees should at all times be mindful of
the need to avoid the appearance of gift giving for the purpose of inducing
favorable treatment.
Employees may accept meals, refreshments or entertainment in connection
with business discussions, provided, that they are not excessive as to cost or
frequency. It is the personal responsibility of every Employee to ensure that
his/her acceptance of such meals, refreshments or entertainment is within
prevailing Company Standards and could not reasonably be construed as an attempt
by the offering party to secure favorable treatment or create an appearance of
impropriety.
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Employees may not accept gifts, including travel and accommodations,
which have a retail or exchange value of $50.00 or more from an individual or
firm doing or seeking to do business with the Company. Exceptions may be granted
on an individual basis; however, Employees must immediately report the gift to
their supervisor and the Ethics Officer and request a waiver of this rule. In
any circumstance where an Employee is offered meals, refreshments, entertainment
or gifts and the offering may create an appearance of impropriety, regardless of
the value thereof, the Employee should disclose the offering to his/her
supervisor and the Ethics Officer in writing.
Except for loans by recognized banks and financial institutions which
are available generally at market rates and terms, no Employee or member of
his/her family may accept any loan, guarantee of loan or payment from an
individual or firm doing or seeking to do business with the Company; nor is it
permissible to accept any service, accommodation or travel of any value
whatsoever, unless the primary purpose of such is the performance of the
Company's business.
Gifts or Payments to Foreign Officials
- --------------------------------------
The Company will scrupulously adhere to the letter and spirit of the
Foreign Corrupt Practices Act, which prohibits, among other things, giving money
or items of value to a foreign official or instrumentality for the purpose of
influencing a foreign government. The Act further prohibits giving money or
items of value to any person or firm, such as a consultant or marketing
representative, when there is a reason to believe that it will be passed on to a
foreign government official for this purpose. All questions concerning
compliance with the Foreign Corrupt Practices Act should be referred to the
Ethics Officer.
Gifts or Payments in General
- ----------------------------
All approved expenditures for meals, refreshments and entertainment
must be fully documented and recorded on the books of the Company in strict
compliance with established policies and procedures. Employees are required to
report to their supervisors any instance in which they are offered money, gifts
which have retail or exchange value of $50.00 or more or anything else of value
by a supplier or prospective supplier to the Company. Laws and regulations
pertaining to entertainment, gifts and payments may be and are complicated.
Questions regarding interpretations of specific policies should be submitted to
the Ethics Officer.
ANTITRUST
The antitrust laws of the United States are calculated to promote free
and open competition. It is incumbent upon Employees to seek guidance and
instructions from supervisors, and if necessary, from the Ethics Officer
whenever any questions relating to their compliance with those laws and
regulations arise. All Employees are expected to conduct themselves in a manner
designed to promote the Company's compliance with the antitrust laws, and no
Employee shall discuss with any competitor: prices or terms of sale; division of
territories or markets; allocation of customers; or boycotts of customers or
suppliers.
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INTEGRITY OF COMPANY RECORDS
Financial Information and Records
- ---------------------------------
To ensure that public companies such as the Company disclose complete
and accurate financial information in their periodic reports, federal securities
law requires the Company's CEO and CFO to certify that: (i) they have reviewed
each periodic report; (ii) based on their knowledge, there are no materially
false statements or material omissions in the subject periodic report; (iii) the
report fairly presents the issuer's financial condition and results of
operations; (iv) the signing officers are responsible for establishing and
maintaining effective internal controls and have evaluated the effectiveness of
those controls as of the end of the fiscal period as of the date of the report;
(v) they have presented their conclusions about the effectiveness of the
controls in the subject report; (vi) they have disclosed control deficiencies
and any fraud by management or Employees with a significant role in internal
controls (regardless of materiality) to the auditors and the Audit Committee;
and (vii) they have disclosed any material weaknesses in internal controls to
the Company's auditors. In addition, all annual reports must include an internal
control report concerning management's responsibility for establishing and
assessing its internal control structure and procedures for financial reporting
to which the Company's auditors must also attest and report. It is anticipated
that additional requirements may be promulgated in the near future.
It is our policy to comply with accepted accounting rules and controls
at all times. All Company records must accurately reflect the transactions they
record. In particular, this policy requires the following:
- - No undisclosed or unrecorded fund or asset of the Company shall be
established for any purpose;
- - No false or misleading entries shall be made in the books or records of
the Company for any reason and no Employee shall assist in any
arrangement that results in any such entry;
- - No payment or expenditure of the Company shall be approved without
adequate supporting documentation or made with intention or
understanding that any Party of such payment or expenditure is to be
used, directly or indirectly, for any purpose other than that expressly
described by the supporting documentation;
- - Any Employee having information concerning any unrecorded fund or asset
or any prohibited act shall promptly report such matter to the Ethics
Officer;
- - Medical claims of Employees contain confidential information. Such
claims shall be treated in a manner to retain that confidentiality and
in a manner consistent with Company policy and procedures; and
- - The Company's internal and outside accountants must maintain all audit
and review work product for five (5) years from the end of the
applicable fiscal period.
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In addition, every Employee should be aware that:
- - It is a crime, punishable by imprisonment of up to ten (10) years, to
knowingly and willfully violate Sarbanes-Oxley Act of 2002 provisions
regarding retention of corporate audit records;
- - It is a crime, punishable by imprisonment of up to twenty (20) years,
to knowingly alter, destroy, conceal, etc. records or documents with
the intent to impede, obstruct, or influence a federal government
investigation or case filed in bankruptcy, or in relation to or
contemplation of any such matter or case;
- - It is a crime, punishable by imprisonment of up to twenty (20) years,
to "corruptly" alter, destroy, mutilate, or conceal records or
documents with the intent to impair their integrity or availability in
an official proceeding; or to otherwise obstruct, influence, or impede
a proceeding (or attempt to do so);
- - It is a crime, punishable by imprisonment of up to ten (10) years, to
knowingly, with the intent to retaliate, take any action harmful to a
person for providing to a law enforcement officer any truthful
information relating to the commission or possible commission of any
federal offense; and
- - You should contact the Ethics Officer should you have any question
regarding the foregoing discussion.
PERSONNEL RECORDS
Personnel records are treated as confidential by the Company, unless
otherwise required by law or permission to disclose their contents is given by
an Employee. Notwithstanding the foregoing, the Company will confirm length of
service and position held (and pay rate, when written permission is given by the
Employee) when contacted by a prospective lender to an Employee or by a
prospective employer after an Employee's separation from the Company.
INFORMATION TO CUSTOMERS
It is the Company policy to provide technical information which is as
accurate as possible in order to properly guide our own Employees and customers
in the sales and use of our products and services. No false or inaccurate data
shall knowingly be recorded or used by any Employee. Any Employee having
information concerning any such false data being recorded or used shall promptly
report such a situation to the Ethics Officer.
COMPUTER USAGE/SOFTWARE LICENSING
It is the Company policy to restrict access to computer databases and
electronic mail communications systems to authorized users for business and
business-related purposes only. It is the Company policy to maintain compliance
with software licensing requirements of our suppliers and vendors.
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POLITICAL CONTRIBUTIONS
The Company may not make any remuneration of money or offer to do so
directly or indirectly to any government official or politician in the United
States or abroad for the purpose of influencing such official's or politician's
actions. Our Employees are expected not to use Company funds or facilities or
services for any political purpose in contravention of this policy.
This policy shall not apply to purely individual contributions by
Employees. However, the use of Company funds to fund an Employee contribution,
or the reimbursement of an Employee contribution is strictly prohibited.
PROHIBITION AGAINST TRADING WHILE IN POSSESSION OF MATERIAL NON-PUBLIC
INFORMATION
Confidential Information and Insider Trading
- --------------------------------------------
Each Employee of the Company is forbidden from (i) utilizing non-public
information regarding customers, suppliers and other business contacts for
personal gain; and (ii) disclosing information regarding customers, suppliers
and other business contacts acquired through the Company to persons not in the
employ of the Company. All information obtained from a customer, supplier or
other business contact in the ordinary course of business is regarded as
confidential unless it is, beyond any doubt, widely and publicly known and is
also clearly not detrimental information that might be embarrassing to the
subject of the information. In addition, the Company forbids any Employee from
trading, either personally or on behalf of others, on material non-public
information ("Material Non-Public Information") or communicating Material
Non-Public Information regarding the Company or any supplier, customer or other
business contact of the Company to others in violation of the law. This sort of
conduct is frequently referred to as "insider trading."
The Company's policy applies to every Employee and extends to
activities within and outside their duties at the Company. Violation of this
policy may result in disciplinary action, including but not limited to,
termination; and any violation may constitute a crime. Furthermore, "insider
trading" can result in the imposition of civil and criminal penalties under
United States federal and state law. Every Employee must read and retain a copy
of this policy statement. Any questions regarding the Company's policy and
procedures should be referred to the Ethics Officer, whose name and location
will be published and made available to Employees.
The term "insider trading" is not defined in the federal securities
laws, but generally refers to the use of Material Non-Public Information for
trading in securities (whether or not one is an "insider") or to the
communication of Material Non-Public Information to others for their personal
use.
While the law concerning insider trading is not static, it is generally
understood that the law prohibits:
- - trading by an insider, while in possession of Material Non-Public
Information, or
- - trading by a non-insider, while in possession of Material Non-Public
Information, where the information either was disclosed to the
non-insider in violation of an insider's duty to keep it confidential
or was misappropriated, or
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- - communicating Material Non-Public Information to others.
The elements of insider trading and the penalties for such unlawful
conduct are discussed below. If, after reviewing this policy statement, you have
any questions, you should consult with the Ethics Officer.
Insiders
- --------
The concept of "insider" is broad. It includes Employees of the
Company. In addition, a person can be a "temporary insider" if he/she enters
into a special confidential relationship in the conduct of a company's affairs
and as a result is given access to information solely for the Company's
purposes. A temporary insider can include, among others, a company's attorneys,
accountants, consultants, bank lending officers, vendors, customers, and the
employees of such organizations. In addition, the company may become a temporary
insider of another company with which it is negotiating. According to the United
States Supreme Court, the company must expect the outsider to keep the disclosed
non-public information confidential and the relationship must at least imply
such a duty before the outsider will be considered an insider.
Material Information
- --------------------
Trading on inside information is not a basis for liability unless the
information is material. "Material Information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his/her investment decisions, or
information that is reasonably certain to have a substantial effect on the price
of a company's securities. Information that Employees should consider material
includes, but is not limited to, increases or decreases in dividends;
declarations of stock splits and stock dividends; financial announcements
including periodic results and forecasts, especially earnings releases and
estimates of earnings; changes in previously disclosed financial information;
mergers, acquisitions or takeovers; proposed issuances of securities;
significant changes in operations or business trends; significant increases or
declines in backlog orders or the gain or loss of a significant contract or
customer; significant new products to be introduced; extraordinary borrowings;
major litigation (civil or criminal); financial liquidity problems; significant
changes in management; purchase or sale of substantial assets; and/or
significant regulatory actions.
Material Information does not have to relate to the Company's business.
For example, material information may include information contained in an as yet
unpublished newspaper column which would affect the market price of various
companies' securities. If the reporter disclosed the dates that reports on
various companies would appear in The Wall Street Journal and whether those
reports would be favorable or not in advance of publication, the reporter could
be held criminally liable.
Non-public Information
- ----------------------
Information is non-public until it has been effectively communicated to
the marketplace. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in Dow Jones News, Reuters Economic Services,
The Wall Street Journal or other publications of general circulation would be
considered public.
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Public dissemination usually contemplates some period of delay after
release of the information to the press in order for outside investors to
evaluate the release. A delay of three (3) full days should suffice for a simple
announcement, such as a routine earnings announcement. A longer delay is
appropriate when a complex transaction, such as a merger or reorganization, is
involved.
Often there is Material Information within the Company that is not yet
ripe for public disclosure by the Company itself. For example, during the early
stages of discussion regarding a significant acquisition, the information about
the discussion may be too tentative or premature to require, or even permit,
public announcement by the Company. On the other hand, the information may be
highly material in the sense that individuals with access to that information
are themselves precluded from trading in the Company's stock. Whenever any doubt
exists, the presumption should be against trading in the Company's stock by any
insider with access to the information until approval has been sought through
appropriate channels.
Bases for Liability
- -------------------
BREACH OF FIDUCIARY DUTY
There is no general duty to disclose Material Information before
trading on that Material Non-Public Information. However, if a fiduciary
relationship exists between the parties to a transaction, and one of those
parties has the right to expect that the other party will either disclose any
Material Non-Public Information of which he/she is aware or refrain from
trading, and fails to do so, the that party has breached his fiduciary duty to
the other party.
Non-insiders may also be deemed to have fiduciary duties of insiders in
certain instances. For example, if an attorney or an accountant enters into a
confidential relationship with the Company through which he/she gains
information, he/she may be deemed an insider or "tippee" if he/she personally
benefits, directly or indirectly, from the disclosure. That non-insider may also
be deemed to owe a fiduciary duty to the Company's shareholders as a "tippee" if
he/she is aware or should have been aware that he/she possesses confidential
information from an insider (who has violated his fiduciary duty to the
Company's shareholders) and the "tippee" personally benefits, directly or
indirectly, from the disclosure.
In the "tippee" situation, a breach of duty occurs only if the insider
personally benefits, directly or indirectly, from the disclosure. The benefit
does not have to be pecuniary, but can be a gift, a reputational benefit that
will translate into future earnings, or even evidence of a relationship that
suggests an expectation of some benefit.
MISAPPROPRIATION
Another basis for insider trading liability is the "misappropriation"
theory, where liability is established when trading occurs on Material
Non-Public Information that was stolen or misappropriated from any other person.
For example, the U.S. Supreme Court held that a columnist defrauded The Wall
Street Journal when he stole information which was to be used in an article and
used it for trading in the securities markets prior to the article's
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publication. It should be noted that the misappropriation theory can be used to
reach a variety of individuals not previously thought to be encompassed under
the fiduciary duty theory. To the extent that an Employee obtains Material
Non-Public Information about a supplier, customer or other business contact in
the course of his employ by the Company and trades on it or provides that
information to a third party who trades on it, the Employee may be deemed to
have "misappropriated" the information.
Penalties for Insider Trading
- -----------------------------
Penalties for trading on or communicating Material Non-Public
Information are severe, both for individuals involved in such unlawful conduct
and their employers. A person can be subject to some or all of the penalties
below even if he/she does not personally benefit from the violation. Penalties
include civil injunctions; disgorgement of profits; jail sentences; fines for
the person who committed the violation of up to three (3) times the profit
gained or loss avoided, whether or not the person actually benefited; and fines
for the employer or other controlling person of up to the greater of $1,000,000
or three (3) times the amount of the profit gained or loss avoided. In addition,
any violation of this Code of Ethics can be expected to result in serious
sanctions by the Company, including, without limitation, dismissal of the
persons involved.
Implementation Procedures
- -------------------------
The following procedures have been established to aid Employees in
avoiding insider trading, and to aid the Company in preventing, detecting and
imposing sanctions against insider trading. Every Employee of the Company must
follow these procedures or risk serious sanctions, including dismissal,
substantial personal liability and criminal penalties. If you have any questions
about these procedures, you should consult the Ethics Officer.
Before trading for yourself or others in the securities of a company
about which you may have potential inside information, ask yourself the
following questions:
- - Is the information material? Is this information that an investor would
consider important in making his/her investment decisions? Is this
information that would substantially affect the market price of the
securities if generally disclosed?
- - Is the information non-public? To whom has this information been
provided? Has the information been effectively communicated to the
marketplace by being published in Dow Jones News, Reuters Economic
Services, The Wall Street Journalor other publications of general
circulation?
If, after consideration of the above, you believe that the information
is material and non-public, or if you have questions as to whether the
information is material and non-public, you should take the following steps:
- - Report the matter immediately to the Ethics Officer.
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- - Do not purchase or sell the securities on behalf of yourself or others.
- - Do not communicate the information inside or outside the Company, other
than to the Ethics Officer.
After the Ethics Officer has reviewed the issue, you will be instructed
to continue to refrain from trading and communicating the information, or you
will be allowed to trade and communicate the information.
Personal Securities Trading
- ---------------------------
All officers and directors of the Company are required to obtain
clearance from the Ethics Officer prior to effecting any securities transaction
involving the securities of the Company in which they, their families (including
the spouse, minor children and adults living in the same household as the
Employee), or trusts of which they are trustees or in which they have a
beneficial interest are parties. An Employee who believes he/she has or is
uncertain whether information in his/her possession is material, non-public
information should also obtain clearance from the Ethics Officer. The Ethics
Officer will promptly notify the Employee of clearance or denial of clearance to
trade. Notification of approval or denial to trade may be verbally given;
however, it will be confirmed in writing within 72 hours of the verbal
notification. Clearance of any particular trade by the Internal Compliance
Officer will be based on his best judgment in reliance on the facts presented.
Each Employee remains individually responsible for compliance with U.S. federal
and state securities laws and the Code of Ethics.
Restricting Access to Material Non-public Information
- -----------------------------------------------------
Information in your possession that you identify as material and
non-public may not be communicated to anyone, including persons within the
Company, except as provided above. In addition, care should be taken so that
such information is secure. For example, files containing Material Non-Public
Information should be sealed; access to paper and computer files containing
Material Non-Public Information should be restricted; conversations in public
places, such as restaurants, elevators and airplanes should be limited to
information that is neither sensitive nor confidential; speaker phones should
not be used if, as a result, the conversation may be heard by a party who does
not have a "need to know."
If you become aware of a leak of Material Information, whether
inadvertent or otherwise, you should report that fact immediately to the Ethics
Officer or to the Chairman of the Audit Committee.
Communications With Outsiders
- -----------------------------
The Company typically communicates any disclosable Material Information
with the press, its shareholders and the financial community through the
issuance of press releases and the filing of periodic reports. All requests from
outsiders for information regarding the general business or financial condition
of the Company should be referred to one of the officers of the Company. Courts
have even treated the confirmation of information in some circumstances to
constitute tipping. If you become aware of a rumor circulating about the
Company, details concerning the rumor should be reported to the Ethics Officer
as soon as possible so that a determination can be made whether it is necessary
or advisable to make a general public announcement to dispel such rumor.
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Resolving Issues Concerning Insider Trading
- -------------------------------------------
If, after consideration of the items set forth in this Code of Ethics,
you have concerns as to whether information is material or non-public, or if
there is any other unresolved question as to the applicability or interpretation
of the foregoing procedures, or as to the propriety of any action, you must
presume the information to be material and non-public and must discuss the
matter with the Ethics Officer before trading or communicating the information
to anyone.
Exceptions to the Code of Ethics
- --------------------------------
The Ethics Officer may make exceptions on a case-by-case basis of this
Code upon a determination that the conduct at issue involves a negligible
opportunity for abuse or otherwise merits an exemption from the Standards set
forth herein. All such exceptions must be received in writing by the person
requesting the exemption before becoming effective.
Supervisory Procedures
- ----------------------
The role of the Ethics Officer is critical to the implementation and
maintenance of this Code of Ethics. Supervisory Procedures can be divided into
two classifications: (i) prevention of violations of law; and (ii) the
preservation of systems necessary to assure the integrity of the Company's
financial reporting.
Prevention of Violations of Law
- -------------------------------
To prevent insider trading, the Ethics Officer should:
- - provide, on a regular basis, a program to familiarize Employees with
the Company's policy and procedures, including the furnishing of this
Code of Ethics to all Employees and to each new Employee upon
commencement of employment;
- - answer questions regarding the Code of Ethics;
- - resolve issues of whether information received by an Employee of the
Company is material and non-public;
- - review, with the assistance of the Company's legal counsel, on a
regular basis and update as necessary the Code of Ethics;
- - when it has been determined that an Employee of the Company has
Material Non-Public Information, implement measures to prevent
dissemination of such information, and if necessary, restrict Employees
from trading the securities; and
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- - promptly review, and either approve or disapprove, in writing, each
request of an Employee for clearance to trade in specified securities.
Detection of Insider Trading
- ----------------------------
To detect insider trading, the Ethics Officer should:
- - review the trading activity reports and beneficial ownership
disclosure, as filed with the SEC, filed by each officer and director;
- - maintain regular communication with and be available to answer
questions from Employees of the Company who are contemplating
securities transactions; and
- - coordinate the review of such reports with other appropriate officers
or directors of the Company.
SPECIAL REPORTS TO MANAGEMENT
Upon learning of a potential violation of the Code, the Ethics Officer
should promptly prepare a written report to management and the Audit Committee
providing full details and recommendations for further action.
ANNUAL REPORTS TO MANAGEMENT
On an annual basis, the Ethics Officer should prepare a written report
to the management of the Company and the Audit Committee setting forth the
following:
- - a summary of existing procedures to detect and prevent violations of
the Code;
- - full details of any investigation, either internal or by a regulatory
agency, of any suspected reporting impropriety, violation of this Code
of Ethics or of any other Company standard or policy, or any violation
of law, including insider trading; and the results of such
investigation;
- - an evaluation of the current procedures and any recommendations for
improvement; and
- - a description of the Company's continuing program to educate parties
regarding insider trading, including the dates of such programs, since
the last report to management and the Audit Committee.
AMENDMENTS
This Code or any provision contained therein may be amended or repealed
by the Board, provided any such amendment is done in writing and is specifically
approved or ratified by the Board.
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ACKNOWLEDGMENT
We will expect every Employee, after he/she has read this Code, to
execute an acknowledgment form affirming his/her knowledge and understanding of
this Code and affirming his/her responsibility as an Employee to promptly notify
his/her immediate supervisor if he/she has any questions or concerns regarding
conduct that may raise concern that any of these policies have not been
observed.
CONFIDENTIALITY
The Company will, to the fullest extent possible without contravening
any law, regulation or statute, hold confidential the name of any Employee
reporting any event or conduct which he/she believes, in good faith, may raise
concern that any policy described in the Code may not have been observed. In
some circumstances, however, the Company may be required to furnish such
information to law enforcement or governmental officials and counsel in order to
address issues raised by such reports.
INTERNAL USE
This Code is intended solely for internal use by the Company. It is not
intended to and does not create any rights in any employee, investor, supplier,
competitor, shareholder or any other person.
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ACKNOWLEDGMENT
I have read the Vaso Active Pharmaceuticals, Inc. Code of Conduct and
Ethics. I understand my responsibility to comply with the Code of Conduct and
Ethics and the process and consequences for dealing with violations thereof.
If I have any questions or concerns regarding conduct that may raise
concern under this Code of Conduct and Ethics, I will immediately follow one of
the procedures suggested in the Code and will notify my immediate supervisor and
the Chairman of the Audit Committee of the Board of Directors.
----------------------------------------
Signature
----------------------------------------
Print Your Name
----------------------------------------
Date
----------------------------------------
Job Title or Classification
----------------------------------------
Location
CONFIDENTIAL
BUSINESS CONDUCT QUESTIONNAIRE AND ANNUAL CERTIFICATION
RELATING TO THE PERIOD ___________, 200__ TO ___________, 200__
The Company will, to the fullest extent possible without contravening
any law, regulation or statute, hold confidential the name of the Employee
reporting any event or conduct which he/she believes, in good faith, may raise
concern that any policy described in the Vaso Active Pharmaceuticals, Inc. Code
of Conduct and Ethics may not have been observed.
Yes* NO
1. Have you read the Company's Code of Conduct and Ethics ____ ____
and are you adhering to the policies and standards set
forth therein?
2. Have you or do you know of any other Employee who has ____ ____
offered to pay or otherwise compensate any federal, state,
local or foreign government official or employee for
services performed on behalf of the Company?
3. Have you or do you know of any person who has received ____ ____
anything having a value of over $50.00 from any person or
company doing or seeking to do business with the Company?
4. Have you or do you know of any Employee who has supplied ____ ____
any services or confidential Company information to a
competitor or supplier of the Company?
5. Do you have or do you know of any Employee who has any ____ ____
interest (other than ownership of publicly traded shares)
in any entity with which the Company does business or which
competes with the Company? Do any of your close relatives
work for a customer or competitor of the Company?
6. Have you or do you know of any Employee who has used the ____ ____
Company's assets, influence or information for personal
purposes without adequately reimbursing the Company, and
without making full disclosure of the same to a supervisor?
7. Have you or do you know of any other Employee who has made ____ ____
inaccurate, improper or misleading entries to documents the
Company is required to maintain for or submit to any
governmental agency or authority or any customer?
8. Have you or do you know of any Employee who has made ____ ____
inaccurate or misleading entries to the Company's records or
failed to disclose properly any assets or liabilities of
the Company?
9. Have you or do you know of any Employee who has failed to ____ ____
comply with any law or regulation applicable to the Company,
including without limitation any environmental requirements?
10. Do you know of any Employee that has violated the Code of ____ ____
Ethics or any other Company policy or standard?
11. Do you know of any report, or other information that has been ____ ____
filed by the Company with the Securities and Exchange
Commission, any stock exchange on which the Company's
securities are listed or quoted, or distributed to any
shareholders or prospective shareholders of the Company that
contains any untrue statements of a material fact or omits to
state a material fact necessary in order to make the
statements made in such materials, in light of the
circumstances under which such statements were made, not
misleading?
12. Do you know of any financial statements, or other financial ____ ____
information included in any report, or other information
that has been filed by the Company with the Securities and
Exchange Commission, any stock exchange on which the
Company's securities are listed or quoted, or distributed to
any shareholders or prospective shareholders of the Company,
that do not fairly present in all material respects the
financial condition and results of operation of the Company
as of and for the period presented in the materials?
13. Do you know of any significant changes in internal controls ____ ____
or in other factors that could significantly affect internal
controls subsequent to the date of their evaluation, including
any corrective actions regarding to significant deficiencies
and material weaknesses?
*IF YES FOR QUESTIONS 2-13, PLEASE EXPLAIN ON REVERSE SIDE OR
AN ATTACHED SHEET.
Signature:________________________ Name (please print):__________________
Position:_________________________ Phone Number:_________________________
The completed form should be mailed to:
Dilworth Paxson LLP
1818 N Street, N.W., Suite 400
Washington, D.C. 20036
Attn: F. Alec Orudjev