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Audit Committee Complaint Procedures

Cardima, Inc. (the "Company") is committed to maintaining compliance with all applicable securities laws and regulations, accounting standards, accounting controls and audit practices. We encourage employees to help maintain the integrity of our Company by reporting any misconduct. To assist in these efforts, any employee of the Company may submit a complaint regarding questionable accounting or auditing matters, instances of corporate fraud or violation of applicable laws ("Compliance Matters") to the management of the Company. The Audit Committee has established the following procedures for: (i) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (ii) the confidential, anonymous submission by Cardima employees of concerns regarding questionable accounting or auditing matters. The Company's Audit Committee will oversee treatment of employee concerns in this area.

Submission of Complaints

  1. Employees may report evidence of wrongdoing, complaints, or concerns relating to Compliance Matters to a member of the Audit Committee at any time. This report may be in person or in writing, and may be anonymous, at the employee's discretion, through the following hotline phone number:  (877) 888-0002.
  2. Employees submitting a report on an anonymous basis are strongly encouraged to keep a copy of the report (if made in writing) and a record of the time and date of their submission, as well as a description of the matter as reported if the report was not in writing.
  3. Employees are encouraged to provide as much specific information as possible, including names, dates, places, events that took place, and the employee's perception of why the incident(s) may be misconduct.

Scope of Matters Covered by These Procedures

These procedures relate to employee complaints relating to any Compliance Matter, including, for example:

  1. Fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of the Company;
  2. Fraud or deliberate error in the recording and maintaining of financial records of the Company;
  3. Deficiencies in or noncompliance with the Company's internal accounting controls;
  4. Misrepresentation or false statement to or by a senior officer or accountant regarding a matter contained in the financial records, financial reports or audit reports of the Company; or
  5. Deviation from full and fair reporting of the Company's financial condition.

Treatment of Complaints

  1. Upon receipt of a complaint, the Audit Committee will (i) determine whether the complaint actually pertains to Compliance Matters and (ii) when possible, acknowledge receipt of the complaint to the sender.
  2. Complaints relating to Compliance Matters will be reviewed, under Audit Committee direction and oversight, by the Company's Internal Audit staff or such other persons as the Audit Committee determines to be appropriate. Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate review.
  3. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of the Audit Committee.
  4. The Company will not discharge, demote, suspend, threaten, harass or in any manner discriminate against any employee in the terms and conditions of employment based upon any lawful actions of such employee with respect to good faith reporting of complaints regarding Compliance Matters.

Reporting and Retention of Complaints and Investigations

Copies of complaints and a log of all complaints, investigations, and resolutions will be maintained in accordance with the Company's document retention policy.