The Global Leader in Long Range Acoustic Hailing Devices

Whistleblower Policy

Whistleblower Protection Policy

Introduction

As a public company, LRAD Corporation (“LRAD Corporation” or the “Company”) recognizes and respects that it has a responsibility to its stockholders for the stewardship of Company assets and resources. LRAD Corporation is committed to compliance with the laws and regulations to which it is subject, and to establishing Company policies and procedures to interpret and apply those laws and regulations within all of its operations. The Company’s system of internal controls and operating procedures are intended to detect and to prevent or deter improper or illegal activities. To insure a safe and confidential environment and to comply with the terms of the Sarbanes-Oxley Act, LRAD Corporation has retained a confidential third party reporting service to handle reports of any improper financial procedures.

It is LRAD Corporation’s policy to support and encourage its employees to report and disclose improper or illegal activities, and to fully investigate such reports and disclosures. It is also LRAD Corporation’s policy to address any complaints that allege acts or attempted acts of interference, reprisal, retaliation, threats, coercion or intimidation against employees who report, disclose or investigate improper or illegal activities and to protect those who come forward to report such activities.

his Whistleblower Protection Policy (the “Policy”) governs the reporting and investigation of improper or illegal activities at LRAD Corporation, as well as the protection afforded to those LRAD Corporation employees who report them (the “Whistleblowers”). This Policy DOES NOT apply to or change the Company’s policies and procedures for individual employee grievances or complaints relating to job performance, terms and conditions of employment or sexual harassment which will continue to be administered and reviewed by LRAD Corporation’s Human Resources Department. LRAD Corporation’s Chief Executive Officer shall have overall responsibility for implementation of this Policy.

Reporting Improper or Illegal Activities

To provide an outlet for complaints of improper or illegal activities relating to financial impropriety, LRAD Corporation has retained the services of a third party call center (Signius) to take any complaints rendered by employees or other individuals regarding alleged improper or illegal activities. This third party service is completely anonymous and reports are generated and forwarded confidentially to a member of the Audit Committee. Employees are welcome to self identify but it is not a requirement of the policy and the process is designed to be highly confidential.

Reports should be factual rather than speculative or conclusory, and contain as much specific information as possible to allow for proper assessment of the nature, extent and urgency of investigative procedures.

Reports should be submitted as follows:

1. Call the LRAD Corporation dedicated line at Signius (1-866-354-3017).
2. Do not give the operator the name of the Company. The call will be matched to our Company by Signius’s computer system.
3. Answer the questions posed by the operator in as detailed and accurate a manner as possible.
4. Obtain follow-up information to check on the investigation should you desire to do so.

The motivation of a whistleblower in making a report is irrelevant to the consideration of the validity of the allegations. However, the intentional filing of a false report is itself considered an improper activity that the Company has the right to act upon.

Whistleblowers frequently make their reports in confidence. To the extent possible within the limitations of law and policy and the need to conduct a competent investigation, confidentiality of whistleblowers will be maintained. Whistleblowers that chose to identify themselves are cautioned that their identity may become known for reasons outside of the control of the investigators. Similarly, the identity of the subject(s) of the investigation will be maintained in confidence with the same limitations.

Roles, Rights, Responsibilities and Protection of Whistleblowers

Whistleblowers provide initial information related to a reasonable belief that improper illegal activity has occurred. They have a responsibility to be specific and factual and provide any known information regarding any reported allegations. All employees of LRAD Corporation have a duty to cooperate fully with investigations initiated under this Policy.

Whistleblowers are “reporting parties,” not investigators. They are not to act on their own in conducting any investigative activities, nor do they have a right to participate in any investigative activities. They do, however, have a right to be informed of the disposition of their disclosure, absent overriding legal or other reasons. The third party call center will provide a methodology to follow up on the investigation results confidentially.

Reprisal, retaliation, threats, coercion, intimidation or interference with the right of any LRAD Corporation employee to report improper or illegal activities is strictly prohibited. No LRAD Corporation employee may directly or indirectly use or attempt to use the official authority or influence of his or her position to interfere with the right of a person to provide information under this Policy.

If an employee who has made a report under this Policy becomes the subject of such acts of actual or attempted reprisal, a complaint shall be filed with the employee’s immediate supervisor or next level of authority as defined in this Policy.

Legal protection is available to employees of public companies when they lawfully disclose information about fraudulent activities within their company.

Certification
Whistleblower Policy

I, __________________________________ do hereby certify that:

1. I have received and carefully read the Whistleblower Policy for LRAD Corporation.

2. I understand the Whistleblower Policy and will comply with the terms of the policy.

Date: ______________ Signature _______________________________

EACH EMPLOYEE, OFFICER AND DIRECTOR IS REQUIRED TO SIGN, DATE AND RETURN THIS CERTIFICATION TO THE HUMAN RESOURCES DEPARTMENT WITHIN 30 DAYS OF ISSUANCE. FAILURE TO DO SO MAY RESULT IN DISCIPLINARY ACTION.