**Exhibit99.1**

 

**RETRACTABLE TECHNOLOGIES, INC.**

 

**AUDIT COMMITTEE CHARTER**

 

**I.****              STATEMENT OF PURPOSE**

 

A.            The Audit Committee shall represent andassist the Board of Directors in discharging its responsibilities relating tothe accounting, reporting, and financial practices and legal compliance of RetractableTechnologies, Inc. (the “Company”). The Audit Committee has generalresponsibility for oversight of the accounting and financial reporting processesof the Company, including oversight of:  (1) theintegrity of the Company’s financial statements and its financial reporting anddisclosure practices, (2) the Company’s compliance with legal andregulatory requirements, and (3) the qualification and independence of theCompany’s auditors and the performance of the annual audit and interim reviews ofthe Company’s financial statements by the independent auditors. The AuditCommittee should also provide an open avenue of communication among theindependent auditors, financial and senior management, and the Board of Directors.

 

B.            While the Audit Committee has theresponsibilities and powers set forth in this Charter, it is not the duty ofthe Audit Committee to plan or conduct audits or to determine that the Company’sfinancial statements are complete and accurate and are in accordance withgenerally accepted accounting principles (“GAAP”).  This is the responsibility of management andthe Company’s independent auditors.

 

**II.****            AUDIT COMMITTEEMEMBERS**

 

A.            The Audit Committee shall consist of atleast three members appointed by the Board of Directors, one of whom shall beappointed as Chairperson. The Audit Committee shall consist entirely of “independent”members of the Board of Directors. “Independent” means a director who:  (i) satisfies all criteria forindependence established by the Securities and Exchange Commission (the “SEC”)with regard to members of an Audit Committee and (ii) meets The AmericanStock Exchange (the “AMEX”)definition of “independent” (including all criteria imposed with respect toservice on an audit committee). If a member of the Audit Committee ceases to beindependent, that member shall notify the Company immediately.

 

B.            Each member of the Audit Committee shall beable to read and understand fundamental financial statements, including theCompany’s balance sheet, statement of operations, statement of changes instockholders’ equity, cash flow statement, and related notes to financialstatements as determined in the Board of Directors’ judgment.

 

C.            At least one member of the Audit Committeeshall have past employment experience in finance or accounting, requisiteprofessional certification in accounting, or any other comparable experience orbackground which results in the individual’s 

 

1

----

 

financial sophistication, including, but not limited to, being orhaving been a chief executive officer, chief financial officer, or other seniorofficer with financial oversight responsibilities in compliance with criteriaestablished by the AMEXand, in addition, shall have such accounting or related financial managementexpertise as required to be an “audit committee financial expert” in compliancewith the criteria established by the SEC, both as determined in the Board ofDirectors’ judgment. The identity of such financial expert and whether suchfinancial expert meets the SEC’s “independence” criteria shall be disclosed inthe Company’s annual report as filed with the SEC and such other reports as theSEC may require.

 

D.            The members of the Audit Committee shall beelected by the Board of Directors and shall serve until their successors shallbe duly elected and qualified. Unless a chair is elected by the full Board ofDirectors, the members of the Audit Committee may designate a chair by majorityvote of the full Audit Committee.

 

**III.****           POWERS, DUTIES, ANDRESPONSIBILITIES**

 

**A.****            Oversight of CompanyRelationship with Its Independent Auditors**

 

1.             The Audit Committeeof the Company shall have sole authority and responsibility to appoint and engagea public accounting firm to serve as the Company’s independent auditors and toperform the Company’s annual audit and related work. This authority shallinclude the sole discretion to retain and discharge such independent auditorsand to approve the terms and conditions of all audit engagements as well as allsignificant non-audit engagements with such independent auditors, including adetermination of the compensation to be paid to such independent auditors.

 

2.             The Audit Committee shall oversee the workperformed by the Company’s independent auditors (including resolution ofdisagreements between management and the independent auditors regardingfinancial reporting). Such independent auditors shall report directly to theAudit Committee, although they shall remain accountable to the entire Board ofDirectors as well as to the Audit Committee.

 

3.             The Audit Committee shall review with theindependent auditors the scope of the audit, pre-approve the audit services(which may entail providing comfort letters in connection with securitiesunderwritings) to be performed by the independent auditors, review the resultsof the annual audit examination, review the interim results, and review any otherreports of the independent auditors with respect to the Company’s financialstatements or policies.

 

4.             The Audit Committee shall pre-approve allnon-audit services provided to the Company by the independent auditors.  Pre-approval shall be either:  (i) specifically granted by the AuditCommittee or (ii) granted pursuant to pre-approval policies and proceduresestablished by the Audit Committee, provided the Audit Committee is informed ofeach non-audit service. In no event shall approval be granted for any non-auditservice that the SEC, AMEX, or other applicable regulatory authority determinesis 

 

2

----

 

impermissible. As may be required by the SEC, the Audit Committee shalldisclose the approval of non-audit services and/or any pre-approval policiesand procedures in periodic reports filed by the Company with the SEC.

 

5.             The Audit Committee shall periodicallyassess the independence of the Company’s auditors as defined by the rules,regulations, and standards of the SEC, the AMEX, and other applicableauthorities. The Audit Committee shall, at least annually, obtain and review a formalwritten statement by the Company’s independent auditors delineating: allrelationships between the independent auditors and the Company consistent withIndependence Standards Board Standard 1. Furthermore, the Audit Committee shallactively engage in a dialogue with the independent auditors regarding anydisclosed relationships or services that may impact the objectivity andindependence of the independent auditors. The Audit Committee is responsible for recommending that the Board takeappropriate action to oversee the independence of the independent auditors.

 

**B.****            Audit Practices andFinancial Reporting Matters**

 

1.             The Audit Committee shall obtain andreview all reports and other information that the independent auditors are requiredby law, rule, or regulation to submit to the Audit Committee, includingperiodic reports on:  (1) allcritical accounting policies and practices to be used by the Company, (2) allalternative treatments of financial information within GAAP in effect from timeto time that have been discussed with management, the ramification of the useof such alternative disclosures and treatment, and the treatment preferred bythe independent auditors, and (3) other material written communications betweenthe independent auditors and management of the Company, such as any managementletter or schedule of unadjusted differences.

 

2.             The Audit Committee shall discuss with theindependent auditors the matters required to be discussed by Statement on AuditingStandards No. 114 relating to the conduct of the audit and certaininformation related to the auditors’ judgments about the quality, not just theacceptability, of the Company’s accounting principles.

 

3.             The Audit Committee shall review anddiscuss with management and the independent auditors the Company’s annualaudited financial statements and quarterly financial statements, including adiscussion of the Company’s disclosures under “Management’s Discussion andAnalysis of Financial Condition and Results of Operation” and a discussion withthe independent auditors of their judgments as to the quality of the Company’saccounting principles.

 

4.             The Audit Committee shall review withmanagement and the independent auditors the results of any significant mattersidentified as a result of the independent auditors’ interim review proceduresprior to the filing of each quarterly report.

 

5.             The Audit Committee shall review changesin the accounting policies of the Company and accounting and financial reportingproposals that may have a 

 

3

----

 

significant impact on the Company’s financial reports, and make reportson the foregoing to the Board of Directors.

 

6.             The Audit Committee shall review asnecessary and appropriate with the independent auditors any audit problems ordifficulties and management’s response, including any restrictions on the scopeof the independent auditors’ activities or access to information and any significantdisagreements with management.

 

**C.****            Company GovernancePolicies and Compliance**

 

1.             The Audit Committee shall prepare thereport that SEC rules require to be included in the Company’s annual proxystatement.

 

2.             The Audit Committee shall review and discusswith management financial risk exposures and measures management has taken tomonitor and control such exposures.

 

3.             The Audit Committee shall annually reviewand assess the adequacy of this Charter and make recommendations to the Boardof Directors necessary to provide for the continued adequacy of the Charter toachieve its stated purpose.

 

4.             The Audit Committee shall review withmanagement and the independent auditors any correspondence with regulators orgovernmental agencies and any employee complaints or published reports, which raisematerial issues regarding the Company’s financial statements or accounting policies.

 

5.             The Audit Committee shall establish andmaintain procedures for (a) the receipt, retention, and treatment ofcomplaints regarding accounting, internal accounting controls, or auditing matters,and (b) the confidential, anonymous submission by employees of the Companyof concerns regarding questionable accounting or auditing matters.

 

6.             The Audit Committee shall review andapprove any related party transactions.

 

The Audit Committee shall oversee management’s internal control overfinancial reporting as part of its oversight responsibilities for the Company’sfinancial reporting.  The Audit Committeeshall obtain a report from management as to all material weaknesses andsignificant deficiencies in internal controls based upon management’sevaluation.  The Audit Committee shall bereasonably knowledgeable and informed about the evaluation process andmanagement’s assessment.

 

4

----

 

**D.****            General Powers**

 

1.             The Audit Committee shall have the ability(but not the obligation) to conduct or authorize, if it considers appropriate,investigations into any matters within the scope of its responsibilities.

 

2.             The Audit Committee shall have theauthority (without separate approval from the Board of Directors) to obtainadvice, services, and assistance from independent counsel, and accounting orother advisors, as the Audit Committee deems necessary to assist it in carryingout its responsibilities, and to determine the compensation for any suchadvisors.

 

3.             The Audit Committee shall perform suchactivities consistent with this Charter, the Company’s Third Amended andRestated Bylaws, as they may be amended, and applicable law as the Board ofDirectors or the Audit Committee deems necessary or appropriate.

 

4.             The Audit Committee may otherwise makeregular reports and recommendations to the Board of Directors within the scopeof its functions.

 

5.             The Company shall provide for appropriatefunding, as determined by the Audit Committee, in its capacity as a committeefor: 1) payment of compensation to the independent auditors employed for thepurpose of preparing or issuing an audit report or review or attestation, 2)payment to any advisors employed by the Audit Committee and 3) payment of ordinaryexpenses that are necessary or appropriate in carrying out its duties.

 

**IV.****           AUDIT COMMITTEEMEETINGS**

 

A.            The Audit Committee shall meet as often asit determines, but not less frequently than quarterly. The meetings may beeither in person or in any other manner permitted by law and at such times andplaces as the Board of Directors or the Audit Committee determines. The AuditCommittee may request any officer or employee of the Company or the Company’soutside counsel or independent auditors to attend a meeting of the AuditCommittee or to meet with any members of, or consultants to, the Audit Committee.

 

B.            The majority of the members of the AuditCommittee shall constitute a quorum for Audit Committee meetings and, unlessotherwise required by this Charter or the Company’s Third Amended and RestatedBylaws, as they may be amended, action may be taken by majority vote of themembers present at such meetings. Minutes shall be maintained of each meeting.

 

C.            At the next meeting of the Board ofDirectors following any meeting of the Audit Committee, a report of the AuditCommittee findings and actions shall be rendered by the Chairman of the AuditCommittee.

 

5

----

 

The above constitutes the complete Audit Committee Charter ofRetractable Technologies, Inc. effective as of September 26, 2008.

 

 
|                      |   | s/ Thomas J. Shaw     |
|---------------------------|--------|-----------------------|
|                      |   | THOMAS J. SHAW        |
|                      |   | Chairman of the Board |
|                      |   |                  |
| ATTEST:                   |   |                  |
|                      |   |                  |
| s/ Michele Larios         |   |                  |
| MICHELE LARIOS, Secretary |   |                  |

 

6

----