Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - BIOSTEM U.S. CORP | bosm_8k.htm |
| EX-99.5 - COMPENSATION COMMITTEE CHARTER - BIOSTEM U.S. CORP | bosm_ex995.htm |
| EX-3.1 - ARTICLES OF INCORPORATION, ONE AMEMDMENT - BIOSTEM U.S. CORP | bosm_ex31.htm |
| EX-99.6 - PRESS RELEASE - BIOSTEM U.S. CORP | bosm_ex996.htm |
| EX-99.1 - CORPORATE GOVERNANCE GUIDLINES - BIOSTEM U.S. CORP | bosm_ex991.htm |
| EX-99.2 - CODE OF BUSINESS CONDUCT AND ETHICS - BIOSTEM U.S. CORP | bosm_ex992.htm |
| EX-99.3 - NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER - BIOSTEM U.S. CORP | bosm_ex993.htm |
Exhibit
99.4
AUDIT
COMMITTEE CHARTER
of
the Audit Committee
of
Biostem U.S. Corporation
This
Audit Committee Charter (the “Charter”) was adopted by the Board of Directors
(the “Board”) of Biostem U.S. Corporation (the “Company”) on May 11,
2010.
Purpose
The
purpose of the Audit Committee (the “Committee”) is to oversee the accounting
and financial reporting processes of the Company and the audits of the financial
statements of the Company on behalf of the Board and to report the results of
its activities to the Board.
In
addition to the powers and responsibilities expressly delegated to the Committee
in this Charter, the Committee may exercise any other powers and carry out any
other responsibilities delegated to it by the Board from time to time consistent
with the Company’s bylaws. The powers and responsibilities delegated
by the Board to the Committee in this Charter, or otherwise, shall be exercised
and carried out by the Committee as it deems appropriate without any requirement
of Board approval, and any decision made by the Committee (including any
decision to exercise or refrain from exercising any of the powers delegated to
the Committee hereunder) shall be at the Committee’s sole
discretion. While acting within the scope of the powers and
responsibilities delegated to it, the Committee shall have and may exercise all
the powers and authority of the Board. To the fullest extent
permitted by law and consistent with this Charter, the Committee shall have the
power to determine which matters are within the scope of the powers and
responsibilities delegated to it.
Notwithstanding
the foregoing, the Committee’s responsibilities are limited to
oversight. Management of the Company is responsible for the
preparation, presentation and integrity of the Company’s financial statements as
well as the Company’s financial reporting process, accounting policies, internal
audit function, internal accounting controls and disclosure controls and
procedures. The independent auditor is responsible for performing an
audit of the Company’s annual financial statements, expressing an opinion as to
the conformity of such annual financial statements with generally accepted
accounting principles and reviewing the Company’s quarterly financial statements
(when requested to do so by the management of the Company). It is not
the responsibility of the Committee to plan or conduct audits or to determine
that the Company’s financial statements and disclosure are complete and accurate
and in accordance with generally accepted accounting principles and applicable
laws, rules and regulations. Each member of the Committee shall be
entitled to rely on the integrity of those persons within the Company and of the
professionals and experts (including the Company’s internal auditor, if any (or
others responsible for the internal audit function, including contracted
non-employee or audit or accounting firms engaged to provide internal audit
services) (the “internal auditor”) and the Company’s independent auditor) from
which the Committee receives information and, absent actual knowledge to the
contrary, the accuracy of the financial and other information provided to the
Committee by such persons, professionals or experts.
Further,
current auditing literature discusses the objectives of a “review,” including a
particular set of required procedures to be undertaken by independent
auditors. The members of the Committee are not independent auditors,
and the term “review” as used in this Charter is not intended to have that
meaning and should not be interpreted to suggest that the Committee members can
or should follow the procedures required of auditors performing reviews of
financial statements.
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Membership
Composition
The
Committee shall be comprised of two or more members of the Board; provided, that
if at any time there is a vacancy on the Committee and the remaining members
meet all membership requirements, then the Committee may consist of one member
until the earlier of the Company’s next stockholders meeting convened for the
election of directors or one year from the occurrence of the
vacancy.
If
applicable, the members of the Committee must meet the independence and
financial expertise requirements set forth by listing requirements for the
Company’s shares or the provisions of Rule 10A-3(b)(1) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”); provided, that if a
member of the Committee ceases to be independent for reasons outside the
member’s reasonable control, then the member may remain on the Committee until
the earlier of the Company’s next stockholders meeting convened for the election
of directors or one year from the occurrence of the event that caused the member
to cease to be independent.
Financial
Expertise – Each member of the Committee must be able to read and understand
fundamental financial statements, including a company’s balance sheet, income
statement and cash flow statement. Members of the Committee are not
required to be engaged in the accounting and auditing profession and,
consequently, some members may not be expert in financial matters, or in matters
involving auditing or accounting.
However,
either at least one member of the Committee shall be an “audit committee
financial expert” within the definition adopted by the Securities and Exchange
Commission (the “SEC”) or the Company shall disclose in its periodic reports
required pursuant to the Exchange Act the reasons why at least one member of the
Committee is not an “audit committee financial expert.”
Appointment
and Removal of members
The
members of the Committee, including the Chair of the Committee, shall be
appointed by the Board on the recommendation of the Nominating and Corporate
Governance Committee. Any member may be replaced by the Board upon
their discretion on the recommendation of the Nominating and Corporate
Governance Committee. Committee members may be removed from the
Committee, with or without cause, by the Board. Any action duly taken
by the Committee shall be valid and effective, whether or not the members of the
Committee at the time of such action are later determined not to have satisfied
the requirements for membership provided herein.
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Meetings
and Procedures
The Chair
(or in his or her absence, a member designated by the Chair) shall preside at
each meeting of the Committee and set the agendas for Committee
meetings. The Committee shall have the authority to establish its own
rules and procedures for notice and conduct of its meetings so long as they are
not inconsistent with any provisions of the Company’s bylaws that are applicable
to the Committee.
The
Committee shall meet as often as it determines, but not less frequently than
once during each fiscal quarter. The Committee shall meet separately,
periodically, with management, with the internal auditor, if any, and with the
independent auditor.
Except as
provided below, all non-management members of the Board that are not members of
the Committee may attend meetings of the Committee, but may not
vote. The Committee may, in its discretion, invite other directors of
the Company, members of the Company’s management, representatives of the
independent auditor, the internal auditor, if any, any other financial personnel
employed or retained by the Company or any other persons whose presence the
Committee believes to be desirable and appropriate to attend and observe
meetings of the Committee. Such persons shall not participate
in any discussion or deliberation unless invited to do so by the Committee, and
in any event shall not be entitled to vote. The Committee may exclude
from its meetings any person it deems appropriate, including, but not limited
to, any non-management director that is not a member of the
Committee.
The
Committee may retain any independent counsel, experts or advisors (accounting,
financial or otherwise) that the Committee believes to be necessary or
appropriate. The Committee also may utilize the services of the
Company’s regular legal counsel or other advisors to the Company. The
Company shall provide for appropriate funding, as determined by the Committee,
for payment of compensation to the independent auditor for the purpose of
rendering or issuing an audit report or performing other audit, review or attest
services, for payment of compensation to any advisors employed by the Committee
and for ordinary administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties.
The
Committee may conduct or authorize investigations into any matters within the
scope of the powers and responsibilities delegated to the
Committee.
Committee
Powers and Responsibilities
Interaction
with the Independent Auditor
1.
Appointment and Oversight. The Committee shall be directly
responsible for the appointment, compensation, retention and oversight of the
work of the independent auditor (including resolution of any disagreements
between Company management and the independent auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report or related
work or performing other audit, review or attest services for the Company, and
the independent auditor shall report directly to the Committee.
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2.
Pre-Approval of Services. Before the independent auditor is engaged
by the Company or its subsidiaries to render audit or non-audit services, the
Committee shall pre-approve the engagement. Committee pre-approval of
audit and non-audit services will not be required if the engagement for the
services is entered into pursuant to pre-approval policies and procedures
established by the Committee regarding the Company’s engagement of the
independent auditor, provided the policies and procedures are detailed as to the
particular service, the Committee is informed of each service provided and such
policies and procedures do not include delegation of the Committee’s
responsibilities under the Exchange Act to the Company’s
management. The Committee may delegate to one or more designated
members of the Committee the authority to grant pre-approvals, provided such
approvals are presented to the Committee at a subsequent meeting. If
the Committee elects to establish pre-approval policies and procedures regarding
non-audit services, the Committee must be informed of each non-audit service
provided by the independent auditor. Committee pre-approval of
non-audit services (other than review and attest services) also will not be
required if such services fall within available exceptions established by the
SEC.
3.
Independence of Independent Auditor. The Committee shall, at least
annually, review the independence and quality control procedures of the
independent auditor and the experience and qualifications of the independent
auditor’s senior personnel that are providing audit services to the
Company. In conducting its review:
a. The
Committee shall obtain and review any report that may be prepared by
the
independent
auditor describing the auditing firm’s internal quality-control procedures or
any material issues raised by the most recent internal quality-control review or
peer review of the auditing firm, or by any inquiry or investigation by
governmental or professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the auditing firm and
any steps taken to deal with such issues, or similar matters.
b. The
Committee shall ensure that the independent auditor prepare and deliver,
at
least
annually, a written statement delineating all relationships between the
independent auditor and the Company, consistent with Independence Standards
Board Standard 1. The Committee shall actively engage in a dialogue
with the independent auditor with respect to any disclosed relationships or
services that, in the view of the Committee, may impact the objectivity and
independence of the independent auditor. If the Committee determines
that further inquiry is advisable, the Committee shall take appropriate action
in response to the independent auditor’s report to satisfy itself of the
auditor’s independence.
c. The
Committee shall confirm with the independent auditor that the
independent
auditor
is in compliance with the partner rotation requirements established by the
SEC.
d. The
Committee shall, if applicable, consider whether the independent
auditor’s
provision
of any permitted information technology services or other non-audit services to
the Company is compatible with maintaining the independence of the independent
auditor.
Annual
Financial Statements and Annual Audit
1.
Meetings with Management, the Independent Auditor and the Internal
Auditor.
a. The
Committee shall meet with management, the independent auditor and
the
internal
auditor, if any, in connection with each annual audit to discuss the scope of
the audit, the procedures to be followed and the staffing of the
audit.
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b. The
Committee shall review and discuss with management and the
independent
auditor: (i)
accounting principles and financial statement presentations, including any
changes in the Company’s selection or application of accounting principles,
significant estimates and accruals, the reasonableness of significant judgments,
and issues as to the adequacy of the Company’s internal controls and any special
audit steps adopted in light of material control deficiencies; (ii) any analyses
prepared by management or the independent auditor setting forth significant
financial reporting issues and judgments made in connection with the preparation
of the Company’s financial statements, including analyses of the effects of
alternative GAAP methods on the Company’s financial statements; and (iii) the
effect of regulatory and accounting initiatives on the Company’s financial
statements.
c. The
Committee shall review and discuss with management and the
independent
auditor
any material off-balance sheet transactions, arrangements, obligations
(including contingent obligations) and other relationships of the Company with
unconsolidated entities of which the Committee is made aware that do not appear
on the financial statements of the Company and that may have a material current
or future effect on the Company’s financial condition, results of operations,
liquidity, capital expenditures, capital resources or significant components of
revenues and expenses.
d. The
Committee shall review and discuss the annual audited financial
statements
with
management and the independent auditor, including the Company’s disclosures
under “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.”
2.
Separate Meetings with the Independent Auditor.
a. The
Committee shall review with the independent auditor any problems or
difficulties
the independent auditor may have encountered during the course of the audit
work, including special audit risks, materiality and any restrictions on the
scope of activities or access to required information or any significant
disagreements with management and management’s responses to such
matters. Among the items that the Committee should consider reviewing
with the independent auditor are: (i) any accounting adjustments that
were noted or proposed by the auditor but were “passed” (as immaterial or
otherwise); (ii) any communications between the audit team and the independent
auditor’s national office respecting auditing or accounting issues presented by
the engagement; and (iii) any “management” or “internal control” letter issued,
or proposed to be issued, by the independent auditor to the
Company. The Committee shall obtain from the independent auditor
assurances that Section 10A(b) of the Exchange Act has not been
implicated.
b. The
Committee shall discuss with the independent auditor the report that
such
auditor
is required to make to the Committee regarding: (i) all accounting
policies and practices to be used that the independent auditor identifies as
critical; (ii) all alternative treatments within GAAP for policies and practices
related to material items that have been discussed among management and the
independent auditor, including the ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the independent
auditor; and (iii) all other material written communications between the
independent auditor and management of the Company, including but not limited to
any management letter, management representation letter, reports on observations
and recommendations on internal controls, independent auditor’s engagement
letter, independent auditor’s independence letter, schedule of unadjusted audit
differences and a listing of adjustments and reclassifications not recorded, if
any.
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c. The
Committee shall discuss with the independent auditor all matters
required
to be
discussed by the applicable auditing standards then in effect.
3.
Recommendation to Include Financial Statements in Annual Report. If applicable,
the Committee shall, based on the review and discussions in paragraphs 1(d) and
2 above, and based on the disclosures received from the independent auditor
regarding its independence and discussions with the auditor regarding such
independence pursuant to subparagraph 3(b) above, determine whether to recommend
to the Board that the audited financial statements be included in the Company’s
Annual Report on Form 10-K for the fiscal year subject to the
audit.
Quarterly
Financial Statements
1.
Meetings with Management, the Independent Auditor and the Internal
Auditor. The Committee shall review and discuss the quarterly
financial statements with management, the independent auditor and the internal
auditor, if any, including the Company’s disclosures under “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.”
Other
Powers and Responsibilities
The
Committee, through its Chair, shall report regularly to, and review with, the
Board any issues that arise with respect to the following:
1. The
Committee shall discuss with management and the independent auditor the
Company’s earnings press releases (with particular focus on any “pro forma” or
“adjusted” non-GAAP financial information), as well as financial information and
earnings guidance provided to analysts and rating agencies. The
Committee’s discussion in this regard may be general in nature (i.e., discussion
of the types of information to be disclosed and the type of presentation to be
made) and need not take place in advance of each earnings release or each
instance in which the Company may provide earnings guidance.
2. The
Committee shall review all related party transactions on an ongoing basis and
all such transactions must be approved by the Committee.
3. The
Committee shall discuss with management and the independent auditor any
correspondence from or with regulators or governmental agencies, any employee
complaints or any published reports that raise material issues regarding the
Company’s financial statements, financial reporting process, accounting policies
or internal audit function.
4. The
Committee shall discuss with the Company’s General Counsel or outside counsel
any legal matters brought to the Committee’s attention that could reasonably be
expected to have a material impact on the Company’s financial
statements.
5. The
Committee shall request assurances from management, the independent auditor and
the Company’s internal auditor, if any, that the Company’s foreign subsidiaries
and foreign affiliated entities, if any, are in conformity with applicable legal
requirements, including disclosure of affiliated-party
transactions.
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6. The
Committee shall discuss with management the Company’s policies with respect to
risk assessment and risk management. The Committee shall discuss with
management the Company’s significant risk exposures and the actions management
has taken to limit, monitor or control such exposures.
7. The
Committee shall set clear hiring policies for employees or former employees of
the Company’s independent auditor.
8. The
Committee shall provide the Company with the report of the Committee with
respect to the audited financial statements required by Item 306 of Reg. S-K,
for inclusion in each of the Company’s annual proxy statements, if
applicable.
9. The
Committee shall prepare minutes of its meetings and provide such minutes to the
Board. In addition, the Committee, through its Chair, shall report
periodically to, and review with, the Board any issues that the Committee
determines are necessary or advisable to report to the Board, such as any issues
with respect to the quality or integrity of the Company’s financial statements,
the Company’s compliance with legal or regulatory requirements, the performance
and independence of the Company’s independent auditor and the performance of the
Company’s internal audit function.
10. The
Committee shall at least annually perform an evaluation of the performance of
the Committee and its members, including a review of the Committee’s compliance
with this Charter.
11. As it
deems necessary, the Committee shall review the results of an annual independent
audit of the Company’s employee benefit plans, if any, which may be, but need
not be, conducted by the Company’s independent auditor. As it deems necessary,
the Committee shall review with management and the Company’s tax advisors the
status of tax returns, including open years and potential disputes, and it shall
review with the independent auditors the adequacy of tax reserves included in
the Company’s consolidated financial statements.
12. As it
deems necessary, the Committee shall review compliance with all applicable SEC
rules and regulations and the rules and regulations of FINRA.
13. The
Committee shall at least annually review and reassess this Charter and submit
any recommended changes to the Board for its consideration.
Complaints
and Accounting Matters
The
Committee shall establish procedures for the following: (a) the
receipt, retention and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing and (b) the confidential,
anonymous submission by Company employees of concerns regarding questionable
accounting or auditing matters. Among other things, the Committee
will cause the Company to implement, maintain and monitor an ethics helpline
that is designed to receive anonymous reports of any known or suspected
violations of the Company’s Code of Business Conduct and Ethics or any
applicable laws and regulations. The Committee will investigate any
reports received through the ethics helpline and report to the Board
periodically with respect to the information received through the ethics
helpline and any related investigations.
[End of
Audit Committee Charter]
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