APPULSE CORPORATION DISCLOSURE POLICY
INTRODUCTION
This disclosure policy addresses the TSX Venture Exchange’s (the “Exchange”) policy on timely disclosure, and National Policy 51-201 – Disclosure Standards.
This policy has been approved by the Board of directors (the “Board”) of Appulse Corporation (the “Company”) and must be adhered to by all directors, officers and employees of the Company and its subsidiaries with access to strategic or material non-public information involving the Company and its affairs.
1. DISCLOSURE OF MATERIAL INFORMATION
A. Policy
It is the policy of the Company to promptly disclose to the investing public, all material information concerning the operations and financial results of the Company other than such information as may be lawfully withheld from disclosure and only for such time as it may be lawfully withheld from disclosure.
B. Procedure
(I) Information is deemed “material” and will require prompt disclosure when such information, if made public, could reasonably be expected to cause a significant change in the market price or value of any of the Company’s stock. Material information consists of both material facts and material changes regarding the business and affairs of the Company.
(II) The Chief Executive Officer (the “CEO”) in conjunction with the Chief Financial Officer (the “CFO”) and securities counsel as required, shall determine whether or not any information pertaining to the Company is material and whether and when it will be disclosed, with the exception of the quarterly and annual financial information, which will be released following approval by the Board.
(III) The CEO and the CFO (the “Responsible Officers”) shall be the only persons authorized to disclose or discuss information concerning the Company to the media, analysts, institutional investors and other market professionals. All other directors, officers and employees approached by these or other parties for such information shall refer such inquiries to one or more of the Responsible Officers.
(IV) In the event that the Responsible Officer determines that material information should be disclosed, the Responsible Officer shall cause a news release to be issued disclosing all material facts and, where appropriate, shall supply a copy of the news release to Regulation Services at the Exchange in advance of its release. Appropriate filings shall be made with the securities regulatory authorities within 10 days of the date of a material change.
(V) In the event that material information which would otherwise be required to be promptly disclosed must, for any reason, be kept secret for any length of time, the Responsible Officer, on the advice and counsel of the Company’s securities counsel, shall so advise Regulation Services and explain the reasons for such request. In the event that such information or rumours thereof is divulged (other than in the necessary course of business), the Company shall immediately disclose the information to the general public in a news release.
(VI) In making material disclosure and preparing the text and content of news releases and other disclosure documents, the Responsible Officer shall observe that:
(a) unfavorable information must be disclosed as promptly and completely as favourable information;
(b) no disclosure of previously undisclosed information should be made to selected individuals or groups such as analysts, major shareholders or other market professionals including members of the financial press. If such selective disclosure is made through inadvertence, general disclosure of the subject information should immediately be made through a news release;
(c) disclosure must be updated if earlier disclosure has become misleading as a result of intervening events;
(d) the CEO and/or CFO will determine in advance what information is to be disclosed at meetings with analysts, and shall brief those officers in attendance accordingly. No material information concerning the finances or prospects of the Company is to be disclosed to analysts (in response to questioning or otherwise) before it has been released to the stock exchange and to Canada News Wire or other national news service. If material information is to be announced at an analyst or shareholder meeting or a press conference, its announcement must be coordinated with a general public announcement by a news release.
2. MAINTAINING CONFIDENTIALITY OF INFORMATION
A. Policy
No director, officer or employee in possession of non-public information concerning the finances, affairs and prospects of the Company that, if generally known, could be reasonably expected to cause a significant change in the market price of the Company’s stock shall disclose such information to any person outside the Company unless such person has been designated under this Policy or by the CEO to make such disclosure, nor shall any such director, officer or employee disclose any such information to any person within the Company whose job duties do not require the possession of such information.
Employees of the Company are permitted to disclose Confidential Information if required to do so in the necessary course of normal business operations.
B. Procedure
(I) If any ambiguity exists as to whether or not information should be confidential, it should be discussed with the CEO or CFO.
(II) The Company should limit access of information to only those parties who, as a function of their employment with the Company, are required to know the information.
(III) Before a meeting with other parties at which Confidential Information may be imparted, the other parties should be told that they must not divulge that information to any other party, other than in the necessary normal course of business, and that they may not trade in the Company’s securities until the information is generally disclosed (see Item #3 of this Policy – “Trading by Insiders and Employees”).
(IV) Confidential Information may be disclosed if this disclosure takes place as part of the necessary course of normal business of the Company.
In the event that there is an ambiguity as to whether or not the disclosure of certain Confidential Information is considered to be in the necessary normal course of business, the party responsible for the disclosure should consult the CEO or CFO.
(V) All employees who are or who may be aware of Confidential Information must be explicitly warned to keep it confidential.
(VI) Directors, officers and employees of the Company should not comment on draft reports submitted to them by analysts other than identifying inaccuracies, omissions or publicly disclosed factual information that may affect an analyst’s model. Those parties appointed to speak to the media, analysts, institutional investors and other market professionals should be briefed in advance to review what information is material and what information has not been publicly disclosed. After a press conference, interview, discussion or visit to the Company’s premises by an analyst or other market professional, a debriefing should be conducted to review what information was imparted to the analyst and a record of what was said should be compiled and maintained. If a debriefing uncovers selective disclosure of previously undisclosed material information, the Company must immediately disclose the information to the general public in a news release.
3. TRADING BY INSIDERS AND EMPLOYEES
A. Policy
Trading in the securities of the Company (including dealings with options, etc.) or the provision to other parties of information to facilitate a possible trade (“tipping”) by any director, officer or employee with knowledge of undisclosed material information about the Company is strictly prohibited.
B. Procedure
(I) It is an offence for any person in a “special relationship” with the Company to trade securities of the Company while in possession of material non-public information that, if made public, could reasonably be expected to cause a significant change in the price of the Company’s stock. Persons in a “special relationship” with the Company include all directors, officers and employees of the Company.
(II) In the event a director, officer or employee proposes to make a trade, he/she should obtain from the CEO or the CFO (with the assistance of the Company’s securities counsel as required) a determination as to whether or not the undisclosed information that he/she possesses is material or whether a trade may be made.
(III) Certain circumstances will give rise to periods of time (“Black-out Periods”) during which no trading of securities is to take place at all by directors, officers and employees who are routinely (or in the special circumstances at hand) in possession of undisclosed material information (“Restricted Persons”). The imposition of Black-out Periods is to be determined and announced by the CEO and CFO. Unless otherwise announced, Black–out periods shall exist: 1- during the period commencing on the 15th day prior to the release of quarterly earnings and ending at the close of business on the third business day following the release of quarterly earnings and 2- during the period commencing on the 30th day prior to the release of annual earnings and ending at the close of business on the third business day following release of annual earnings. These Black-out Periods relating to the public release of earnings results may be amended to reflect specific circumstances on a case-by-case basis as determined by the CEO and CFO. A Black-out Period shall also be declared by the CEO and CFO pending the announcement of any material undisclosed development affecting the Company or following the crystallization of a material transaction involving the Company. Black-out Periods shall remain in effect until the close of business on the third business day following release of the material information concerned. In declaring a Black-out Period, the CEO and CFO may stipulate whether any particular class of Restricted Person is to be fully or partially excused from the application of the Black-out Period, and the CEO and CFO may determine whether any particular reason is to be given for the imposition of a Black-out Period.
(IV) Persons involved in the negotiation of material transactions will be held to a higher standard than other Restricted Persons as a result of their more intimate knowledge of a particular transaction. Accordingly, such persons should cease trading in the Company’s securities when any material transaction comes under serious negotiation rather than upon the imposition of a Black-out Period. If any ambiguity exists as to whether or when a transaction has come under “serious negotiation”, the matter should be discussed with the Company’s securities counsel.
(V) Persons, upon becoming insiders of the Company, must file with the appropriate securities regulatory authorities an initial report and must subsequently report all trades made in the securities of the Company within 5 days after the trade is made.
(VI) Breaches of this Policy may constitute violation of securities laws and can cause embarrassment to the Company. If the Company discovers that a director, officer or employee has violated applicable securities laws, it will refer the matter to the appropriate regulatory authorities.