****Exhibit 14.1****

 

**PRECISIONOPTICS CORPORATION, INC.**

 

**CORPORATECODE OF ETHICS AND CONDUCT**

 

**1.****                                                             ****General Policy**

 

It is the policy ofPrecision Optics Corporation, Inc. (“Precision Optics” or the “Company”)to conduct business in compliance with all applicable laws, rules andregulations. Further, it is our policy to conduct business with integrity. Wemake this commitment to our customers, to our partners, to our stockholders, toour community, to those government agencies that regulate Precision Optics, andto ourselves.

 

Each Precision Opticsemployee, officer and director must work to comply with the policies set forthin this Code of Ethics and Conduct (the “Code”). All employees, officers anddirectors should review this Code and related materials, including the Company’sEmployee Manual dated May 1, 2001 (the “Employee Manual”), portions ofwhich are referred to in this Code, and make sure that these policies guidetheir actions. Because of the complex and changing nature of legalrequirements, each member of Precision Optics must be constantly vigilant toensure that their conduct complies with the Code. If any employee, officer ordirector becomes aware of an issue of legal compliance which is not adequatelyaddressed in this Code, you should notify your supervisor or the ChiefFinancial Officer.

 

Precision Optics takescompliance with laws, regulations, rules and the Code seriously. Anyviolation of such will result in disciplinary action. Such action may includean oral or written warning, disciplinary probation, suspension,reduction in salary, demotion or dismissal from employment. These disciplinaryactions also may apply to an employee’s supervisor who directs or approves theemployee’s improper actions or is aware of those actions, but does not act appropriatelyto correct them or fails to exercise appropriate supervision.

 

If a question arises asto whether any action complies with Precision Optics’ policies or applicablelaw, an employee, officer or director should present that question directly tothe Company’s Chief Financial Officer (the “Compliance Officer”). TheCompliance Officer’s telephone number is (978) 630-1800 ext. 117. ** **Concernsabout violations of any part of this Code made to the telephone number may bemade anonymously.** **Any calls, detailed notes and/or emailswill be dealt with confidentially. In raising an issue, you may remainanonymous, although you are encouraged to identify yourself. Should you chooseto identify yourself, your identity will be kept confidential to the extentfeasible or permissible under the law. All employees, officers and directors ofPrecision Optics have the commitment of Precision Optics and of the AuditCommittee of Precision Optics’ Board of Directors that they will be protectedfrom retaliation. However, Precision Optics reserves the right to disciplineanyone who knowingly makes a false accusation, provides false information tothe Company or has acted improperly.** ** Failure to report known or suspectedwrongdoing of which any member of Precision Optics has knowledge may, byitself, subject that person to disciplinary action.

 

This Code generallyhighlights some of the more important legal principles with which employees,officers and directors are expected to be familiar. The fact that this Codedoes not specifically reference other applicable laws (some of which may becovered in other Precision Optics policies) does not diminish their importanceor application.

 

**2.****                                                             ****Compliance with the Law**

 

Precision Optics seeks tocomply with all applicable government laws, rules and regulations. We needthe cooperation of all employees, officers and directors to do so and to bringlapses or violations to light. While some regulatory schemes may not carrycriminal penalties, they may control the licenses and certifications that allowPrecision Optics to conduct its business. Precision Optics’ continued abilityto operate depends upon your help for compliance.

 

Some of the regulatoryprograms which employees may deal with in the course of their duties include,but are not limited to, the following:

 

·         Labor laws,

·         Occupational safety and health regulation,

·         Building, safety and fire codes,

 

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·         Wage and hour laws, and

·         Applicable U.S. Food and DrugAdministration regulations.

 

The Compliance Officercan provide employees with information on these rules, and can direct questionsor concerns to the proper person.

 

**3.****                                                             ****Stock**

 

Because our stock is apublicly-traded security, certain activities of Precision Optics are subject tocertain provisions of the federal securities laws. These laws govern thedissemination or use of information about the affairs of Precision Optics orits subsidiaries or affiliates, and other information which might be ofinterest to persons considering the purchase or sale of our stock. Violationsof the federal securities laws could subject you and the Company to stiffcriminal and civil penalties. Accordingly, Precision Optics does not sanctionand will not tolerate any conduct that risks a violation of these laws.

 

**a****.****                                                              ****Disclosure of Transactions in Company’s Securities**

 

The Securities andExchange Commission (“SEC”) requires continuing disclosure of transactions inthe Company’s publicly traded securities by the Company, its directors,officers, major stockholders and other affiliated persons. We are committed tocomplying with obligations related to this disclosure.

 

**b.                     Insider Trading**

 

It is illegal for anyperson, either personally or on behalf of others, (i) to buy or sellsecurities while in possession of material non-public information, or (ii) tocommunicate (to “tip”) material non-public information to another person whotrades in the securities on the basis of the information or who in turn passesthe information on to someone who trades. All directors, officers, employeesand temporary insiders, such as accountants and lawyers, must comply with these“insider trading” restrictions. For more information, please see the sectionentitled *“Trades in Public Securities byCompany Personnel”*set forth in the Employee Manual, a copy of which has been previously providedto you but which may also be obtained upon request to the Compliance Officer.

 

**4.****                                                             ****Confidential Information**

 

You may be entrusted withPrecision Optics’ confidential business information. You are required tosafeguard and use such information only for Precision Optics’ purposes.Confidential information includes all non-public information that might be ofuse to competitors or harmful to Precision Optics or its customers, ifdisclosed. You are expected to maintain the confidentiality of any and all suchinformation entrusted to you by Precision Optics or our customers or partners.Examples of confidential business information include, but are not limited to:the Company’s trade secrets, business trends, information on productdevelopment programs, detailed sales and cost figures, new product or marketingplans, research and development ideas or information, manufacturing processes,and information about potential acquisitions, divestitures and investments.Failure to observe this duty of confidentiality may compromise our competitiveadvantage over competitors and may additionally result in a violation ofsecurities, antitrust or employment laws. It may also violate agreementsproviding for the protection of such confidential information. You should notdiscuss confidential Company information outside the Company, even with yourown family.

 

You may also possesssensitive, privileged information about our customers or partners. Theseparties properly expect that this information will be kept confidential.Precision Optics takes very seriously any violation of a customer’s or partner’sconfidentiality and will not tolerate such conduct.

 

For more information,please see the section entitled *“Confidentialityof Company Information”*set forth in the Employee Manual.

 

**5.****                                                             ****Special Ethical Obligations For Employees WithPublic Reporting Responsibilities**

 

As a public company, weare also committed to carrying out all continuing disclosure obligations in afull, fair, accurate, timely and understandable manner. Depending on theirposition with Precision Optics, employees, officers or directors may be calledupon to provide information to assure that the Company’s public reports arecomplete, fair and understandable. Precision Optics expects all of itspersonnel to take this responsibility very

 

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seriously and to provide prompt and accurateanswers to inquiries related to the Company’s public disclosure requirements.

 

The Accounting Departmentbears a special responsibility for promoting integrity throughout the organization,with responsibilities to stockholders both inside and outside of PrecisionOptics. The Chief Executive Officer, the Chief Financial Officer and otherAccounting Department personnel have a special role both to adhere to theseprinciples themselves and also to ensure that a culture exists throughout thecompany as a whole that ensures the fair and timely reporting of PrecisionOptics’ financial results and condition.

 

Employees, officers anddirectors should promptly report to the Compliance Officer and/or the AuditCommittee any conduct that the individual believes to be a violation of law orbusiness ethics or of any provision of the Code, including any transaction orrelationship that reasonably could be expected to give rise to such a conflict.Violations, including failures to report potential violations by others, willbe viewed as a severe disciplinary matter that may result in personnel action,including termination of employment.

 

**6.****                                                             ****Continuing Disclosure Obligations and Accuracy of Business Records**

 

In order to support allour disclosure obligations, it is our policy to record and report our factualinformation honestly and accurately. Failure to do sois a grave offense and will subject an individual to severe discipline by theCompany, as well as possible criminal and civil penalties.

 

Compliance withestablished accounting procedures, Precision Optics’ system of internalcontrols, and generally accepted accounting principles is necessary at alltimes. In order to achieve such compliance, the Company’s records, books anddocuments must accurately reflect the transactions and provide a full accountof Precision Optics’ assets, liabilities, revenues and expenses. Knowinglyentering inaccurate or fraudulent information into Precision Optics’ accountingsystem is unacceptable and may be illegal. Any individual that has knowledgethat an entry or process is false and material are expected to consult theCompliance Officer. In addition, it is the responsibility of each member ofPrecision Optics to give their cooperation to the Company’s auditors.

 

Every individual shouldalso be aware that almost all business records of the Company may becomesubject to public disclosure in the course of litigation or governmentalinvestigation. Records are also often obtained by outside parties or the media.Employees should therefore attempt to be as clear, concise, truthful andaccurate as possible when recording any information. They must refrain frommaking legal conclusions or commenting on legal positions taken by the Companyor others. They must also avoid exaggeration, colorful language, and derogatorycharacterizations of people and their motives. Precision Optics will nottolerate any conduct that creates an inaccurate impression of Precision Optics’business operations.

 

**7.****                                                             ****Protection and Proper Use of Company Assets**

 

Employees, officers anddirectors should protect the Company’s assets and ensure their efficient use.Theft, carelessness and waste have a direct impact on the Company’sprofitability. All Company assets should be used for legitimate businesspurposes. Individual supervisors are responsible for ensuring Company resourcesare used productively or to enhance employees’ skills and job performance.

 

Everyone who works withthe Company’s computer-based resources is responsible for their appropriate useand protection from theft, damage or loss. Employees should take care tounderstand the risks and protect and ensure that the security features of thecomputer-based resources are not compromised. Information created, transmittedor accessed on Company networks is Company property and Precision Opticsreserves the right to monitor or restrict access to it. The same level of careshould be taken when using Precision Optics’ e-mail, internet and voice mailsystems as is used in written documents. For example, confidential informationabout Precision Optics should not be disclosed on electronic bulletin boards,in chat rooms or posted on an internet website. For more information, pleasesee the section entitled *“Use of Computers”*set forth in the Employee Manual.

 

**8.****                                                             ****Corporate Opportunities**

 

Employees, officers anddirectors are prohibited from (a) taking for yourself personallyopportunities that you discover through the use of Company property, informationor position, (b) using Company property, information or position forpersonal gain and (c) competing with the Company. An employee, officer ordirector owes a duty to the Company to advance its legitimate interests whenthe opportunity to do so arises.

 

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**9.****                                                             ****Fair Dealing**

 

Employees, officers anddirectors should endeavor to deal fairly with the Company’s customers,partners, suppliers, competitors and employees. You should not take unfairadvantage of anyone through manipulation, concealment, abuse of privilegedinformation, misrepresentation of material facts or any other unfair-dealingpractices.

 

**10.****                                                      ****Conflicts of Interest**

 

Precision Optics’employees, officers and directors should avoid all potential conflicts ofinterest or situations that give the appearance of a conflict of interest. Aconflict of interest occurs when the private interest of a Precision Opticsemployee or director (or an immediate family or household member or someonewith whom you have an intimate relationship) interferes, in any way — or evenappears to interfere — with the duties performed by the Precision Opticsemployee or director or with the interests of the Company as a whole. Aconflict situation can arise when an employee, officer or director takesactions or has interests that may make it difficult to perform his or her workobjectively and effectively. Conflicts of interest also arise when an employee,officer or director, or a member of his or her family, receives improperpersonal benefits as a result of his or her position in the Company. Loans to,or guarantees of obligations of, such persons are of special concern.

 

To this end, PrecisionOptics’ employees, officers or directors may not be employed by, act as aconsultant to, or have an independent business relationship with any ofPrecision Optics’ customers, competitors or suppliers. Nor may employees,officers or directors invest in any customer, supplier, or competitor (otherthan through mutual funds or through holdings of less than 2** **percentof the outstanding shares of publicly traded securities) unless they firstobtain written permission from the Chief Executive Officer. Employees, officersor directors may not divulge or use Precision Optics’ confidential information— such as financial data, customer information, and computer programs — fortheir own personal or business purposes.

 

Any personal or businessactivities by an employee, officer or director that may raise concerns alongthese lines must be disclosed to and approved in advance by the Compliance Officer.For more information, please see the section entitled *“Conflictof Interest”*setforth in the Employee Manual.

 

**11.****                                                      ****Gifts, Meals and Entertainment**

 

**a.****                                                              ****Entertainment and Gifts**

 

Precision Opticsrecognizes that in some instances, gifts and entertainment can provide anappropriate means of furthering a business relationship. However, no employee,officer or director should accept or provide gifts of more than $50 inconnection with their business dealings. The offer or receipt of any such giftover $50 should be reported immediately to the Compliance Officer. Normalbusiness courtesies involving no more than ordinary amenities (such as lunch,dinner, a spectator event or a golf game) are permitted, as are token non-cashgifts of nominal value. The guiding principle and spirit of this code is thatno gift, favor or entertainment, whether a single event or a pattern ofbehavior, should be accepted or provided if it will obligate, or appear toobligate, the recipient. If you are uncertain about the propriety of a gift,you should contact the Compliance Officer for guidance.

 

**b.****                                                              ****Relationships with Government Personnel**

 

Separate and morestringent gift, meals, and entertainment rules apply to dealings withgovernment officials. Federal and state anti-kickback laws prohibit PrecisionOptics and its representatives from knowingly and willfully offering, paying,requesting, or receiving any money or other benefit, directly or indirectly, inreturn for obtaining or rewarding favorable treatment in connection with the awardof a government contract. Any employee who becomes aware of any such conductshould immediately report it to the Compliance Officer.

 

The anti-kickback lawsmust be considered whenever something of value is given or received byPrecision Optics or its representatives or affiliates that is in any wayconnected to work performed for the government. There are many transactionsthat may violate the anti-kickback rules. As a result, no one acting on behalfof Precision Optics may offer or accept gifts, loans, rebates, services, orpayment of any kind to or from government suppliers and vendors without firstconsulting the Compliance Officer.

 

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**c.****                                                              ****Business Dealings in Foreign Countries**

 

Federal law prohibitsU.S. companies, and those acting on their behalf, from bribing foreignofficials to obtain or retain business. Foreign officials include officers andemployees of a foreign government or of a foreign governmental department oragency. Indirect payments including those to agents or third parties with theknowledge that at least a portion of the payment will be given to a foreignofficial for an illegal purpose are prohibited. Precision Optics will nottolerate any conduct that violates this law.

 

**12.****                                                      ****Interacting with the Government**

 

Precision Optics valuesits good relations with local, state, federal and foreign governments. We arecommitted to being a “good corporate citizen” and are proud of thecontributions we have made to help the communities where we do business.

 

The Company’s policy isto deal honestly and fairly with government representatives and agents and tocomply with valid and reasonable governmental requests and processes. Betruthful and straightforward in your dealings with governmental representativesand do not direct or encourage another Precision Optics employee (or someoneelse) to provide false or misleading information to any government agent orrepresentative. Do not direct or encourage anyone to destroy records relevantto a fact-finding process.

 

**13.****                                                      ****Employee Relations**

 

The Company recognizesand understands the importance of balancing work and family life. Even thoughan employee’s non-work-related activities outside of the Company are consideredpersonal business, employees should always remember that they are arepresentative of the Company.

 

All employees, officersand directors should review the Company’s policies regarding discrimination,workplace harassment (including sexual harassment), health and safety andrelated matters, which are set forth in the Employee Manual.

 

**14.****                                                      ****Purchasing**

 

Purchasing decisions mustbe made in accordance with applicable Precision Optics policy. In addition, theprohibitions discussed in Section 11 of this Code, entitled “Gifts, Mealsand Entertainment” apply to purchasing decisions made on behalf of PrecisionOptics. Purchasing decisions must in all instances be made free from anyconflicts of interest that could affect the outcome. Precision Optics iscommitted to a fair and objective procurement system which results in theacquisition of quality goods and services for Precision Optics at a fair price.

 

**15.****                                                      ****Exports and Imports**

 

There are many U.S. lawsgoverning international trade and commerce which serve to limit the export ofcertain products to certain countries. Precision Optics is committed tocomplying with those laws. Under no circumstances will Precision Optics makesales contrary to U.S. export laws. Because these regulations are complicatedand change periodically, employees seeking to make a sale to a customer in aforeign country must first confirm the legal trade status of that country. Ifan employee is uncertain about whether a foreign sale complies with U.S. exportlaws, he or she must contact the Compliance Officer for guidance. PrecisionOptics’ employees should be aware that there are also many U.S. laws thatgovern the import of items into the United States. Among other things, theselaws control what can be imported into the United States, how the articlesshould be marked, and the amount of duty to be paid. Precision Optics complieswith all U.S. import laws. If an employee is uncertain about whether atransaction involving the importation of items into the United States complieswith these laws, he or she must contact the Compliance Officer for guidance.

 

**16.****                                                      ****Media/Public Relations and Governmental Inquiries**

 

When Precision Opticsprovides information to the news media, securities analysts and stockholders,it has an obligation to do so accurately and completely. In order to ensurethat Precision Optics complies with its obligations, employees receivinginquiries regarding Precision Optics’ activities, results, plans or position onpublic issues should refer the request to the Company’s Chief ExecutiveOfficer, Chief Financial Officer or the designated corporate spokesperson. PrecisionOptics’ employees may not speak publicly for the Company unless specificallyauthorized by senior management.

 

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Although unlikely, agovernment representative may seek to interview an employee regarding PrecisionOptics’ business activities or an employee’s work at the Company. If anemployee is contacted by a government agent or representative and asked toprovide information, contact the Chief Financial Officer at (978) 630-1800 ext.117.

 

Occasionally, someonewill arrive unexpectedly or a government representative may seek to inspectCompany property. If this happens, an employee should immediately notify his orher manager or supervisor and contact the Chief Financial Officer at (978)630-1800 ext. 117.

 

**17.****                                                      ****Response to Investigations or Government Inquiries**

 

Numerous state andfederal agencies have broad legal authority to investigate Precision Optics andreview its records. Precision Optics will comply with subpoenas and respond togovernmental investigations as required by law. The Compliance Officer isresponsible for coordinating Precision Optics’ response to investigations andthe release of any information.

 

If an employee, directoror officer receives an investigative demand, subpoena, or search warrantinvolving Precision Optics, it should be broughtimmediately to the Compliance Officer. No documents should be released orcopied without authorization from the Compliance Officer or Precision Optics’legal counsel. If an investigator, agent or government auditor comes toPrecision Optics’ corporate headquarters, the Chief Executive Officer should becontacted immediately. In the absence of the Chief Executive Officer, contactPrecision Optics’ Compliance Officer. Ask the investigator to wait until thecontacted individual arrives before reviewing any documents or conducting anyinterviews. The Compliance Officer, his designee, or Company’s legal counsel isresponsible for assisting with any interviews. If Precision Optics’ employeesare approached by government investigators and agents while they are away fromPrecision Optics’ premises and asked to discuss Company affairs, the employeehas the right to insist on being interviewed during business hours with asupervisor or counsel present. Alternatively, any employee may choose to beinterviewed or not to be interviewed at all. The Company recognizes the choiceof how to proceed in these circumstances is left entirely to the employee. Ifan employee chooses to speak with government personnel, it is essential thatthe employee be truthful. Questions may be directed to the Compliance Officer.

 

Precision Optics’employees are not permitted to alter, remove, or destroy documents or recordsof Precision Optics except in accordance with regular document retention anddestruction practices.

 

**18.****                                                      ****Disciplinary Action**

 

It is essential that allemployees accept personal responsibility for maintaining high standards ofconduct and job performance, including the observance of the Code and otherCompany rules and policies. The Company shall consistently enforce theCode through appropriate means of discipline. Violations of the Code shall bepromptly reported to the Compliance Officer and the Audit Committee. The AuditCommittee shall determine whether violations of the Code have occurred and, ifso, shall determine the disciplinary measures to be taken against any employeeof the Company who has so violated the Code. Disciplinary measures, which maybe invoked at the discretion of the Audit Committee, include, but are notlimited to, oral or written warnings, disciplinary probation, suspension, reductions in salary, demotion or termination of employment.The purpose of disciplinary measures short of termination is corrective, toencourage employees to improve their conduct or performance so that they maycontinue their employment with the Company. These corrective disciplinarymeasures will not apply in the event of a serious offense that warrantsimmediate termination or in other circumstances when the Audit Committeedetermines that corrective measures would be inappropriate.

 

**19.****                                                      ****Amendments And Waivers**

 

This Code applies to allof Precision Optics’ employees, officers and directors. There shall be nosubstantive amendment or waiver of any part of the Code affecting thedirectors, senior financial officers, or executivesofficers, except by a vote of the Board of Directors, which will ascertainwhether an amendment or waiver is appropriate and ensure that the amendment orwaiver is accompanied by appropriate controls designed to protect PrecisionOptics.

 

In the event that anysubstantive amendment is made or any waiver is granted, the substantiveamendment or waiver will be filed with the SEC on a Current Report on Form 8-K(or such other form as may be prescribed by the SEC), thereby allowing thePrecision Optics stockholders to evaluate the merits of the particularsubstantive amendment or waiver.

 

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