Overview and Goals
The success of PolarityTE MD, Inc. (“PolarityTE”) is built upon its commitment to act in accordance with high ethical standards and to conduct business honestly and legally. This Code of Business Conduct for Distributors and Agents (the “Code”) establishes the framework for legal and ethical compliance by PolarityTE’s distributors, consultants and third-party agents (collectively “Agents”). We expect not only our employees to act ethically and to comply with the law, but also that all of our Agents understand the importance of combining sound business practices with ethical standards.
As an Agent, it is your responsibility to safeguard against legal and ethical violations and to take appropriate action if you suspect that illegal or unethical business conduct has occurred or is occurring. Engaging in illegal or unethical business conduct can have serious consequences for you, up to and including termination of PolarityTE’s relationship with you, and even criminal or civil penalties.
We require that each Agent and any person performing services as an employee or contractor to an Agent fully understands the legal and ethical compliance obligations in this Code and complies in all respects. Accordingly, we expect that appropriate education and training will be provided to all such persons. As part of executing this Agreement, you, as an Agent, must certify via the attached Annex 2 that you and your employees and contractors will abide by all applicable laws and standards and this Code.
Compliance
You will be solely responsible to comply, at your expense, with all applicable laws and regulations and any amendments thereof, including, without limitation:
- Laws and regulations concerning the marketing, sale and use of wound care and/or other medical products.
- All applicable laws and regulations, including, without limitation, the Anti-Kickback Statute, the False Claims Act, Medicare and Medicaid, regulations, industry codes and standards, state and local laws, and requirements consistent with the regulatory registration, clearance, authorization or labeling of the products you market, sell or distribute on behalf of PolarityTE.
You further represent and covenant that:
- You will ensure that your employees and contractors are familiar and comply with the terms of the Code; and
- neither you nor any of your employees or contractors have taken or will take any action to cause a violation of the Code.
Policy Statement and Agent Obligations
Use of your funds, directly or indirectly through third parties, for any unlawful or unethical purpose related to PolarityTE is strictly prohibited. You could also be held liable if your actions indicate a conscious disregard or deliberate ignorance of circumstances that should reasonably alert you to the high probability of illegality.
The Code describes what is required to meet PolarityTE’s commitment to operate ethically in our business and personal interactions with third parties, including:
- Patients – members of the general public who use or may use PolarityTE products.
- External stakeholders – PolarityTE’s key stakeholders, other than patients, for example healthcare professionals (“HCPs”) (including members of the medical, dental, pharmacy and nursing professions, and relevant administrative staff), healthcare organizations, payors, scientists, medical societies, patient groups and public officials.
- Other third parties – third parties other than external stakeholders or patients, for example the media, vendors, suppliers, distributors, agents and partners.
Anti-Bribery & Anti-Corruption
PolarityTE sells its products in the US and its parent company’s securities are registered with the United States Securities and Exchange Commission (“SEC”) and publicly traded on the Nasdaq Capital Market. Therefore, PolarityTE is fully committed to complete compliance with anti-corruption laws, including the Anti-Kickback Statute, the U.S. Foreign Corrupt Practices Act, and all other laws prohibiting the payment of bribes to government officials (collectively, “Anti-Corruption Laws”). Agents working on behalf of PolarityTE must comply with the Anti-Corruption Laws. PolarityTE helps to serve public health in all the territories where its products are available. Decisions concerning the approval, pricing and purchase of PolarityTE products must be made solely on the basis of their clinical profiles of safety and efficacy. There is no room for improper or inappropriate influence in those decisions.
The term “something of value” refers to any financial or non-financial benefit, such as cash, compensation for services, a gift or other item of value, a meal or other hospitality, a contribution, or even providing access to resources or information.
Bribery is giving or receiving something of value that is intended or could be seen as improper influence – in other words, as an inducement or reward for behavior that is dishonest, illegal or a breach of a duty of impartiality, trust or good faith. PolarityTE has zero tolerance for bribery or any other form of corruption, even if PolarityTE loses business as a result.
You must not directly or indirectly give, offer or promise a bribe, or authorize anyone else to do so. You must not directly or indirectly receive, solicit or agree to accept a bribe, or authorize anyone else to do so. This also applies to third parties engaged by PolarityTE for any services. For example, you must not give or receive something of value:
- To influence, expedite or reward an official action or decision by a public official.
- To induce or reward an action favorable to PolarityTE, such as utilizing products.
- To compromise or influence an individual’s independence or judgment.
- To secure an improper business or personal advantage.
If you are in a situation where there is any suggestion of bribery, you must promptly notify PolarityTE at compliance@polarityte.com before taking any action that could result in a violation of applicable law.
Any and all payments to third parties on PolarityTE’s behalf may only be made with PolarityTE’s prior written approval and must be appropriately recorded in your books and records, which you agree to make available to PolarityTE upon request. Specifically-authorized third parties may make payments on PolarityTE’s behalf if there is a genuine business need, as long as the third party is required by signed contract or other written agreement to document, track and report the payments to PolarityTE.
Payments may never be made to any third party in cash or cash equivalent (such as a gift card).
Transparency
Any and all items of value, permissible or other of any other kind, hospitality, consulting payments or any other exchange of value with any HCP including, MDs, DOs, Dentists, Nurses, PAs and other US providers, must be recorded for required transparency reporting. For each exchange of value, you must capture and record:
- HCP’s full name
- Address including city and State
- NPI
- State of Medical license and License #
- Type of Value conferred (meal, educational item, etc.)
- Amount of Value
- Date of transaction
- Venue of transaction
- Purpose of transaction
Consultants
You may not retain any consultants on behalf of PolarityTE or with respect to SkinTE™.
Sales & Marketing
All your employees must follow federal, state and local laws, as well as the specific policies, procedures and guidelines of PolarityTE.
Only utilizing approved materials from PolarityTE, if any, you may inform but not advise or suggest how recipients may seek reimbursement or bill patients for resources or services specifically.
Items of value must never be used promote any products or uses before or after regulatory registration or authorization and must not create an appearance of doing so.
Promotional & Non-Promotional Activities & Materials
(a) All promotional and non-promotional activities and supporting materials must be approved in advance of use by PolarityTE. They must be accurate, substantiated, fair and balanced, and not misleading.
(b) Promotional and non-promotional activities and supporting materials directed to patients may only be conducted or used where permitted by local law. When communicating with patients, you must not give medical advice, but must instead refer the patients to their HCPs for further information.
(c) Scientifically-trained employees and commercial employees may collaborate or coordinate in appropriate circumstances to develop and deliver promotional and non-promotional activities and supporting materials, but they must not direct each other’s activities.
(d) Promotional activities and supporting materials include all activities and materials that are intended or could be seen to promote the ordering, administration, recommendation, purchase, payment, reimbursement, authorization, approval, supply or use of PolarityTE products.
(e) You must not promote PolarityTE products or uses before the product or use has received the necessary regulatory authorization or registration.
Pricing, Discounts & Rebates
PolarityTE must approve all contracts and pricing models, rebates and discounts (and other commercial advantages or favorable terms) given to third parties for PolarityTE products.
Any deviations from these models must be appropriately documented, approved by senior management and subject to review by PolarityTE.
Non-Promotional Activities & Supporting Materials
(a) Non-promotional activities and supporting materials include all activities and materials that are not promotional and that are intended to provide scientific or educational information about PolarityTE products or uses, relevant disease areas, or health and medicines generally. They may take a number of forms, including disease awareness programs, responses to inquiries from external stakeholders or patients, scientific/medical education at meetings, scientific publications, information to support the development of guidelines, and other information contributing to scientific exchange.
(b) Non-promotional activities and supporting materials must not be used to promote PolarityTE products or uses, must be presented in an objective, balanced manner, and must be scientific in tone, language, appearance and intent.
(c) PolarityTE scientifically-trained employees are highly-trained experts with relevant, specialized scientific or medical knowledge, whose responsibilities include providing scientific and/or medical information. This category of employees excludes anyone in local marketing company sales or marketing roles, even if they have scientific or medical training or backgrounds.
(d) Inquiries about unapproved or unregistered PolarityTE products or uses from external stakeholders or patients must be referred to scientifically-trained PolarityTE employees.
(e) All PolarityTE responses to such inquiries, either oral or written, must come directly and only from such scientifically-trained employees.
Contributions (Donations, Sponsorships & Partnerships)
Agent may not make any contribution, including but not limited to a donation, sponsorship, or partnership payment on behalf of PolarityTE. Any such request should be referred to PolarityTE for consideration.
Obligations to our Customers
At PolarityTE, we are proud of our reputation for integrity and fairness in our commercial dealings with our customers, suppliers and competitors. Each of us must assume a personal responsibility to understand the standards of conduct that apply to our commercial dealings and to ensure that we are treating our customers, suppliers and competitors in an ethical and respectful matter.
Relationship with PolarityTE Employees
Employees of PolarityTE may not give to or receive from Agents anything more than modest and customary and meals and hospitality. Cash, gift certificates, loans, etc. may never be exchanged.
Business Records
You must maintain accurate and complete records of transactions relating to the Agreement and be able to provide proper documentation to PolarityTE, including invoices for products and receipts for expenses. All records must reflect the true nature of expenses and should be maintained consistent with generally accepted accounting practices. You must retain records as long as necessary in order to comply with applicable laws and government regulations. PolarityTE has the right to inspect the records of any Agent at PolarityTE’s discretion in order to ensure compliance with this Policy.
Avoiding Conflict of Interest
Conflicts of interest should always be avoided. Employees of PolarityTE may not participate in any activities that could conflict with their responsibilities at PolarityTE. Therefore, PolarityTE’s employees may not work for, or have any relationship, financial or otherwise, with any Agent while working for PolarityTE, or do any work for, or provide assistance to, an Agent that may adversely affect their performance or judgment to act in PolarityTE’s best interests. If an Agent’s employee has a family relation (spouse, parent, sibling, grandparent, child, grandchild, mother- or father-in-law, or domestic partner) to a PolarityTE employee, or if an Agent has any other relationship with a PolarityTE employee that might represent a conflict of interest, the Agent must disclose this fact to PolarityTE or ensure that the PolarityTE employee does so.
Employees of PolarityTE may not engage in transactions on behalf of PolarityTE with any Agent in which such employee or a member of his/her family has a substantial beneficial interest or in which he/she serves as a trustee or in a similar fiduciary capacity. An Agent may not engage in significant financial transactions with PolarityTE employees with whom it has a reporting relationship or with whom it has a relationship which will pose, or appear to pose, difficulties for supervision, security, safety or morale. If any such relationships exist, the Agent should disclose this fact to PolarityTE or ensure that the PolarityTE employee does so.
nsider Trading Prohibited
Under applicable laws and rules promulgated by the applicable regulatory authorities, including but not limited to the SEC, no person may buy or sell shares or other PolarityTE securities, or give advice thereon, if he or she has access to any material, non-public information relating to PolarityTE or any other company, including a customer or supplier, that has a significant relationship with PolarityTE. Trading in violation of these restrictions is a breach of the agreement with the Agent and grounds for immediate termination of the agreement.
Reporting Unethical or Illegal Conduct
Compliance with this Code includes the responsibility to report promptly any violation or apparent violation of the standards of conduct detailed herein. Whether you are uncertain as to the legality or appropriateness of specific conduct or certain that such conduct violates the law or PolarityTE’s policies, you should contact PolarityTE and report such conduct. Failure to report may constitute grounds for termination of PolarityTE’s relationship with you. Reports should be made by email to PolarityTE at compliance@polarityte.com
Changes and Updates
PolarityTE reserves the right to make any necessary changes and/or updates to this Code.
Last Updated: April 21, 2020
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