Corporate Governance

HOUSTON NATURAL RESOURCES CORP  “HNRC”

REGULATORY COMPLIANCE & INSIDER TRADING POLICY

Effective as of May 15^th 2020:

Introduction: Due to their access or potential access to material, nonpublic information, all HNRC officers, directors and employees, and independent contractors and consultants who have access to material, nonpublic information, must comply with the provisions of this Insider Trading Policy. As described in further detail below, federal and state securities laws prohibit you from trading in HNRC’s securities or providing material, nonpublic information to others who may trade on the basis of that information. This policy seeks to (i) explain some of your obligations to HNRC and under the law, (ii) prevent insider trading and (iii) protect HNRC’s reputation for integrity and ethical conduct. Specifically, this policy describes:   The federal securities laws prohibiting insider trading;   HNRC’s policy on the handling of inside information;  HNRC’s policy on blackout periods;  HNRC’s policy on 10b5-1 trading plans.   HNRC’s procedure for the preclearance of trades; and  HNRC’s policy on certain prohibited transactions.

Insider Trading and Tipping Are Prohibited At All Times U.S. federal securities laws make it illegal for any of us to buy or sell a company’s securities at a time when we possess “material, nonpublic information” relating to the company. This conduct is known as “insider trading.” Passing such material, nonpublic information on to someone who may buy or sell securities – which is known as “tipping” – is also illegal. These prohibitions apply to stock, options, warrants, debt securities or any other securities of HNRC, as well as to securities of other companies if you learn something in the course of your duties that may affect their value.

“Material, nonpublic information” is information about a company that is not known to the general public and is likely to influence a typical investor’s decision to buy, sell or hold the company’s securities. Material, nonpublic information can include information that something is likely to happen – or just that it might happen. Examples of material, nonpublic information with respect to HNRC include, among other things, nonpublic information about:  Operating or financial results;  Known but unannounced future earnings or losses;  Projections of future earnings or losses, or other earnings guidance or targets;  Earnings that are inconsistent with the consensus expectations of the investment community;  The potential or actual gain or loss of a significant customer, supplier, contract or purchase order;  Joint ventures and distribution agreements;  A pending or proposed merger, acquisition or tender offer;  Changes in HNRC’s senior management, auditors or Board of Directors;  Plans for substantial capital investments or a pending or proposed acquisition or disposition of a significant asset;  Litigation, whether pending or threatened, and any positive or negative developments thereof;  A change in dividend policy, the declaration of a stock split, an offering of additional securities or the redemption or repurchase by HNRC of its securities;  Corporate restructuring, impending bankruptcy or the existence of liquidity problems; or  Any other information which is likely to have a significant impact on HNRC financial results or stock price. If you possess any material, nonpublic information, even if you are not in a blackout period, the law and this policy require that you refrain from buying or selling HNRC’s securities until after the information has been disclosed to the public and absorbed by the market (in most cases, the first safe day to trade is the third trading day after the public disclosure of such information) or is no longer material. This is true even if you do not trade such securities for your own benefit. It is also a violation of the law if such trading is done by another person to whom you disclosed the inside information prior to full public disclosure. In addition, it is also a violation of this policy if you communicate any material, nonpublic information about HNRC to any other person, including family and friends.  Legal Consequences of Violation Insider trading violations are vigorously prosecuted by the Securities and Exchange Commission, the Department of Justice and state enforcement authorities. Punishment for insider trading violations is severe, and could include any combination of the following:  A civil penalty of up to three times the profit gained or loss avoided;  Substantial criminal fines of up to $5,000,000; and  Imprisonment for up to 20 years. In addition, persons who violate this policy may be subject to disciplinary action by HNRC, including termination of employment, whether or not the failure to comply with this policy results in a violation of law.

Handling Inside Information: It is very important that any information which reasonably could be expected to affect the market for HNRC’s securities be kept strictly confidential until public disclosure of such information is proper. Consequently, all such information may be publicly disclosed only with the approval of the Chief Executive Officer and/or the Chief Financial Officer of HNRC. You should not discuss or disclose confidential inside information with or in the presence of any person outside HNRC. In addition, you should also refrain from commenting on our competitors’ and customers’ business. If you have knowledge of any such information, you must preserve its confidentiality until HNRC discloses such information to the public.

No Trading During the “Blackout Periods:” In order to protect you and HNRC from allegations of insider trading, HNRC’s policy prohibits you from buying or selling HNRC’s securities during the quarterly “blackout periods,”  which begin on the 15th day of the last month of each fiscal quarter and end on the third trading day after the public release of the quarter’s earnings. This policy is based on the presumption that, during a blackout period, you may have access to the quarter’s financial results, which are deemed material, nonpublic information until they are disseminated into the marketplace.

This policy does not apply to the vesting of restricted stock nor to a cash exercise of vested employee stock options granted by HNRC during a blackout period, since the purchase price for such stock options is fixed. You are not, however, permitted to sell the shares acquired through such exercises until the blackout period ends. Transactions in your 401(k) are, for blackout period purposes, no different than transactions for your own account.

Other Blackout Periods: From time to time, other types of material, nonpublic information regarding HNRC (such as mergers, acquisitions, dispositions or new product developments) may be pending and not be publicly disclosed. While such material nonpublic information is pending, HNRC may impose special blackout periods during which you are prohibited from trading in HNRC’s securities. You will be notified if HNRC imposes a special blackout period.

Exception for 10b5-1: Trading Plans The trading restrictions described above do not apply to transactions under a pre-existing written plan, contract, instruction or arrangement under Rule 10b5-1 (a “10b5-1 Plan”) that:   has been reviewed and approved at least thirty (30) days in advance of any trades thereunder by the Chief Executive Officer and Chief Financial Officer (or, if revised or amended, such revisions or amendments have been reviewed and approved by the Chief Executive Officer and Chief Financial Officer at least thirty (30) days in advance of any subsequent trades);   was entered into by you in good faith at a time when you were not in possession of material, nonpublic information about HNRC; and   gives a third party the discretionary authority to execute such purchases and sales, outside of your control, so long as such third party does not possess any material, nonpublic information about HNRC; or explicitly specifies the security or securities to be purchased or sold, the number of shares, the prices and/or dates of transactions, or other formula(s) describing such transactions. Unless otherwise approved by the Chief Executive Officer and Chief Financial Officer, you may not enter into, modify or terminate a 10b5-1 Plan during a blackout period. You are also required to notify the Chief Executive Officer and Chief Financial Officer of the termination of a 10b5-1 Plan. Following the termination of a 10b5-1 Plan, you must wait at least thirty (30) days before trading outside of the 10b5-1 Plan. Further, when a 10b5-1 Plan is in effect, you are prohibited from trading in HNRC’s securities outside of your 10b5-1 Plan. Unless approved by the Chief Executive Officer and Chief Financial Officer in accordance with this policy, you are not permitted to have multiple 10b5-1 Plans in operation simultaneously.

Preclearance Procedure:

To provide assistance in preventing inadvertent violations and avoiding even the appearance of an improper transaction, you are instructed to consult with and receive approval from the Chief Executive Officer and Chief Financial Officer of HNRC before buying or selling (or otherwise making any transfer, gift, pledge or loan thereof) any HNRC securities, even if you are not in a blackout period. However, preclearance is not required for purchases and sales of securities under a 10b5-1 Plan. With respect to any purchase or sale under a 10b5-1 Plan, the third party effecting transactions on your behalf should be instructed to send duplicate confirmations of all such transactions to the Company’s Chief Financial Officer.

HNRC shall record the date each preclearance request is received and the date and time each request is approved or disapproved. Unless revoked, preclearance of a transaction will normally remain valid until the close of trading three (3) business days following the day on which preclearance was granted. If the transaction does not occur during the three-day period, preclearance of the transaction must be requested again.

Prohibited Transactions: You, your spouse, other persons living in your household and minor children and entities over which you exercise control, are prohibited from engaging in the following transactions in HNRC’s securities, unless advance approval is obtained from HNRC’s Chief Executive Officer and Chief Financial Officer:  Short sales. You should at no time sell HNRC’s securities short;  Options trading. You may not engage in any transaction in publicly traded options on HNRC’s securities, including puts or calls or other derivative securities, since such speculation can harm HNRC by sending inappropriate or potentially misleading signals to the market. This prohibition applies to all types of publicly traded options (other than employee stock options granted by HNRC);  Short-term trading. If you purchase or sell HNRC securities, you may not conduct an opposite way transaction in any HNRC securities of the same class for at least six (6) months after the purchase or sale;  Trading on margin. You may not hold HNRC’s securities in a margin account or pledge HNRC’s securities as collateral for a loan; and  Hedging. You may not enter into hedging or monetization transactions or similar arrangements with respect to HNRC’s securities. Post-Termination Transactions This policy continues to apply to transactions in HNRC’s securities even after termination of service. If an individual is in possession of material, nonpublic information when his or her service terminates, that individual may not trade in HNRC’s securities until that information has become public or is no longer material. The preclearance procedures specified above, however, will cease to apply to transactions in HNRC’s securities upon the expiration of any blackout period or other HNRC-imposed trading restrictions applicable at the time of the termination of service.

Acknowledgment and Certification:  

You are required to sign the attached acknowledgment and certification.

 Other:

Please note that these prohibitions apply to all of HNRC’s officers, directors and employees, and independent contractors and consultants who have access to material, nonpublic information.

Noncompliance with the securities laws or this HNRC Regulatory Compliance and Insider Trading Policy constitutes grounds for disciplinary action, which may include termination of employment.

HOUSTON NATURAL RESOURCES CORP.

COMPENSATION COMMITTEE CHARTER

Purposes:

The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Houston Natural Resources Corp., a Nevada corporation (the “Company”), establishes and administers the Company’s policies, programs and procedures for compensating its senior management and members of the Board. Among other things, the Committee has direct responsibility to:

1. Determine and recommend to the Board for approval, the compensation of the Company’s Chief Executive Officer; and
2. Determine the compensation of the other executive officers of the Company.

Composition:

Size. The size of the Committee shall be determined by the Board, but it must always have at least two members.

Qualifications: Each Committee member shall be an “Independent Director” under the listing requirements of the Nasdaq Stock Market LLC (“NASDAQ”) and shall not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any subsidiary thereof. Such compensatory fees shall not include: (1) fees received as a member of the Committee, the Board or any other Board committee; or (2) the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company (provided that such compensation is not contingent in any way on continued service). In determining whether a Board member is eligible to serve on the Committee, the Board also must consider whether the Board member is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company to determine whether such affiliation would impair the Board member’s judgment as a Committee member.

In addition, at least two members of the Committee shall qualify as an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and satisfy the “non-employee director” standard contained in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Appointment and Removal: The Board shall select Committee members. The Chairman of the Board shall select the Committee Chair from among its members. Each Committee member shall serve at the pleasure of the Board for such term as the Board may decide or until such Committee member is no longer a Board member. The Board may remove any member from the Committee at any time with or without cause. Any vacancies on the Committee shall be filled by the Board in its discretion.

Duties and Responsibilities:

The duties and responsibilities of the Committee shall include the following:

1. Establish Executive Compensation Policies and Programs: The Committee will develop and implement the Company’s compensation policies and programs for executive officers and Board members.
2. Review and Recommend CEO, and Review and Approve Other Executive Officer Compensation: The Committee will review and recommend to the Board for approval, at least annually, corporate goals and objectives relevant to the compensation of the Chief Executive Officer of the Company. The Committee will, as a Committee, evaluate the performance of the CEO in the light of corporate goals and objectives and the duties and responsibilities of the CEO, and determine and recommend to the Board for approval, the compensation level of the CEO based on those evaluations and any other factors as it deems appropriate. In evaluating and determining CEO compensation, the Committee shall consider the results of the most recent stockholder advisory vote on executive compensation (“Say on Pay Vote”) required by Section 14A of the Exchange Act. The Committee will review and approve, at least annually, corporate goals and objectives relevant to the compensation of the other executive officers of the Company. The Committee will, as a Committee, evaluate the performance of the executive officers in the light of those corporate goals and objectives and the duties and responsibilities of the executive officers, and set or determine compensation levels for these executive officers based on those evaluations and any other factors as it deems appropriate, including the results of the most recent Say on Pay Vote.
3. Review and Approve Compensation Programs: The Committee will review and approve, at least annually, the Company’s executive compensation programs to determine whether they are properly coordinated and achieving their intended purposes and recommend any appropriate modifications.
4. Recommend Incentive Compensation Plans: The Committee will make recommendations to the Board with respect to the approval, adoption and amendment of all cash- and equity-based incentive compensation plans in which any executive officer of the Company participates. In determining the long-term incentive component of the compensation of the Company’s executive officers, the Committee should consider the Company’s performance and relative stockholder return, the duties and responsibilities of the executive officers, the value of similar incentive awards to the executive officers at comparable companies, the awards given to the Company’s executive officers in past years and the results of the most recent Say on Pay Vote.
5. Recommend Equity-Based Plans: The Committee will also make recommendations to the Board with respect to the approval, adoption and amendment of all other equity-based plans.
6. Administer Compensation Plans: The Committee will administer (or provide for the administration of) the Company’s equity-based incentive compensation plans and other plans adopted by the Board that contemplate administration by the Committee. The Committee, or a subcommittee, shall make recommendations to the Board, with respect to the Company’s executive officers, and approve (or provide for the approval of), with respect to all other employees, all grants of stock options and other equity-based awards, subject to the terms and conditions of applicable plans. The Committee’s administrative authority shall include the authority to approve the acquisition by the Company of shares of the Company’s stock from any plan participant.
7. Oversee Regulatory Compliance: The Committee will, in consultation with appropriate officers of the Company, the Company’s external tax accountants and/or its financial accountants, oversee regulatory compliance with respect to compensation matters, including overseeing any compensation programs intended to preserve tax deductibility, and, as may be required, establishing performance goals and determining whether performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code.
8. Review and Approve Employment Agreements and Severance Arrangements: The Committee will review and approve any proposed employment agreement with, and any proposed severance or other termination, or retention, plans or agreements applicable to, any executive officer of the Company. The Committee shall review and approve any retention, or severance or other termination, payments proposed to be made to any other corporate officer of the Company.
9. Review Director Compensation: The Committee will periodically review director compensation in relation to other comparable companies and in the light of such other factors as the Committee may deem appropriate. The Committee shall discuss this review with the Board.
10. Board Reports: The Committee will report its activities to the Board at least annually in such manner and at such times as the Committee or the Board deem appropriate.
11. CD&A. If required or desired to be included in the Company’s Annual Report on Form 10-K and proxy statement for the annual meeting of the Company’s stockholders, the Committee will review and discuss with the Company’s management the Compensation Discussion and Analysis (“CD&A”) under Item 402 of Regulation S-K. Based on such review and discussion, the Committee will determine whether to recommend to the Board that the CD&A be included in such reports.
12. Other Delegated Duties or Responsibilities: The Committee will discharge any other duties or responsibilities delegated to the Committee by the Board from time to time.

Meetings:

The Committee will meet as frequently as necessary to carry out its responsibilities under this Charter. The Committee Chair will, in consultation with the other members of the Committee and appropriate officers of the Company, establish the agenda for each Committee meeting. Any Committee member may submit items to be included on the agenda. Committee members may also raise subjects that are not on the agenda at any meeting. The Committee Chair or a majority of the Committee members may call a meeting of the Committee at any time. A majority of the number of Committee members selected by the Board will constitute a quorum for conducting business at a meeting of the Committee. The act of a majority of Committee members present at a Committee meeting at which a quorum is in attendance will be the act of the Committee, unless a greater number is required by law, the Company’s certificate of incorporation or its by-laws. The Committee Chair will supervise the conduct of the meetings and will have other responsibilities as the Committee may specify from time to time.

The Committee may request any officer or other employee of the Company, or any representative of the Company’s legal counsel or other advisers, to attend a meeting or to meet with any members or representatives of the Committee. Any individual whose performance or compensation is to be discussed at a Committee meeting should not attend such meeting unless specifically invited by the Committee. Notwithstanding the foregoing, the Chief Executive Officer may not be present while the Committee is voting or deliberating on the Chief Executive Officer’s compensation. Any Committee member may be excused from a meeting to permit the remaining members of the Committee to act on any matter in which such member’s participation is not appropriate, and such member’s absence shall not destroy the quorum for the meeting.

Delegation:

The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee. In particular, the Committee may delegate the approval of certain transactions to a subcommittee consisting solely of members of the Committee who are (1) “non-employee directors” within the meaning under Rule 16b-3 of the Exchange Act and (2) “outside directors” for the purposes of Section 162(m) of the Internal Revenue Code.

Resources and Authority:

The Committee shall have appropriate resources and authority to discharge its responsibilities, including, without limitation, appropriate funding provided by the Company, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, legal counsel or other adviser retained by the Committee. The Committee shall have the authority, in its sole discretion, to retain or obtain the advice of a compensation consultant, legal counsel or other adviser and the sole authority to approve the fees and other retention terms of such compensation consultants, legal counsel and other advisers. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other adviser retained by the Committee.

In selecting, retaining or receiving the advice of a compensation consultant, legal counsel or other adviser, the Committee shall first consider all factors relevant to that person’s independence from management, including the following factors:

1. The provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other adviser;
2. The amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser;
3. The policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest;
4. Any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the Committee;
5. Any stock of the Company owned by the compensation consultant, legal counsel or other adviser; and
6. Any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of the Company.

Nothing in this section shall be construed: (i) to require the Committee to implement or act consistently with the advice or recommendations of the compensation consultant, legal counsel or other adviser to the Committee or (ii) to affect the ability or obligation of the Committee to exercise its own judgment in fulfillment of the duties of the Committee.

Notwithstanding the foregoing, the Committee is not required to conduct an independence assessment for in-house legal counsel or a compensation adviser that acts in a role limited to the following activities for which no disclosure is required under Item 407(e)(3)(iii) of Regulation S- K: (a) consulting on any broad-based plan that does not discriminate in scope, terms or operation in favor of executive officers or directors of the Company, and that is available generally to all salaried employees; and/or (b) providing information that either is not customized for a particular issuer or that is customized based on parameters that are not developed by the adviser, and about which the adviser does not provide advice.

Compensation Committee Report:

If required, the Committee, with the assistance of management and any outside advisers the Committee deems appropriate, shall prepare a report for inclusion in the Company’s proxy statement relating to the Company’s annual meeting of stockholders.

Annual Review:

At least annually, the Committee will (1) review and reassess the adequacy of this Charter with the Board and recommend any changes to the Board and (2) evaluate its own performance against the requirements of this Charter and report the results of this evaluation to the Board. The evaluation will include establishment of the goals and objectives of the Committee for the upcoming year. The Committee will conduct its review and evaluation in such manner as it deems appropriate.

May 2020

HOUSTON NATURAL RESOURCES CORP

CODE OF CONDUCT:

1. Our Commitment:

The officers, directors and employees of Houston Natural Resources Corp (the “Company”) are committed to honesty, fairness, providing a safe and healthy environment and respecting the dignity due everyone. For the communities in which we live and work, we are committed to observe sound business practices and to act as concerned and responsible neighbors, reflecting good citizenship. This Code of Conduct (the “Code”) applies to all officers, directors and employees of the Company.

For our stockholders, we are committed to pursuing sound growth and earnings objectives and to exercising prudence in the use of our assets and resources.

2. Promote a Positive and Safe Work Environment:

All employees want a workplace where they feel safe, respected, satisfied and appreciated. We respect cultural diversity and will not tolerate harassment or discrimination — especially involving race, color, religion, gender, age, national origin, disability and veteran or marital status.

Providing an environment that supports honesty, integrity, respect, trust, and responsibility enhances the opportunity to achieve excellence in our workplace. While everyone who works for the Company must contribute to the creation and maintenance of such an environment, our executives and management personnel particularly believe in fostering a work environment that will bring out the best in all of us. Supervisors and managers strive to be careful in words and conduct to avoid placing, or seeming to place, pressure on subordinates that could cause them to deviate from acceptable ethical behavior.

3. Protect Yourself, Your Fellow Employees and the World We Live In:

We are committed to providing a drug-free, safe and healthy work environment and to observing environmentally sound business practices. Each of us is responsible for compliance with environmental, health and safety laws and regulations. We do not ever wish for an employee to undertake an unreasonable physical risk in his or her job performance or a risk outside the scope of his or her employment.

4. Keep and Retain Accurate and Complete Records:

We must maintain accurate and complete Company records. Transactions between the Company and outside individuals and organizations must be promptly and accurately entered in our books in accordance with generally accepted accounting practices and principles and the Company’s system of internal controls. In addition, any Company filings with regulatory authorities must be accurate, understandable and prepared in a timely manner. No one should rationalize or even consider misrepresenting facts or falsifying records. Failure to do so is likely to result in disciplinary action.

The Company’s records must be retained according to applicable laws and policies relating to the retention of records. Any records that are potentially relevant to a breach of law, litigation or any pending, threatened or foreseeable, investigation or proceeding must not be destroyed. Any questions regarding records retention should be directed to the Company’s Corporate Secretary.

5. Obey the Law:

Officers, directors and employees must conduct our business in accordance with all applicable city, state, federal and international laws and regulations, both in letter and in spirit. Compliance with the law does not comprise our entire ethical responsibility. Rather, it is a minimum, absolutely essential condition for performance of our duties. Any question regarding compliance should be addressed to the Chief Financial Officer.

Officers, directors and employees must strictly adhere to all antitrust laws. These laws prohibit practices in restraint of trade such as price fixing and boycotting suppliers or customers. They also bar pricing intended to run a competitor out of business; disparaging, misrepresenting or harassing a competitor; stealing trade secrets; bribery; and kickbacks.

6. Avoid Conflicts of Interest:

Each officer, director and employee has an obligation to give his or her complete loyalty to the best interests of the Company. Each should avoid any action, position or interest that may involve, or may appear to involve, a conflict of interest with the Company or that may make it difficult to perform his or her work for the Company in an objective and effective manner. Officers, directors and employees should not have any financial or other business relationships that might impair, or even appear to impair, the independence of any judgment they may need to make on behalf of the Company. Officers, directors and employees should not have, directly or indirectly, any ownership interest in any customer, vendor or contractor of the Company, except the following are permissible: (i) a passive ownership interest in any investment fund or investment vehicle (including mutual funds, hedge funds and private equity funds), (ii) a passive investment in any entity that is publicly traded on a national securities exchange if such investment represents less than 5% of the outstanding ownership interests in such entity, or (iii) such other investment as may be approved by the Audit Committee.

Loans by the Company to, or guarantees by the Company of obligations of, any director or executive officer or their family members are expressly prohibited.

Officers and employees are under a continuing obligation to disclose to their immediate supervisor or the Company’s Chief Financial Officer any situation that presents the possibility of a conflict or disparity of interest between the officer, director or employee and the Company. A supervisor may not authorize or approve conflict of interest matters or make determinations as to whether a problematic conflict of interest exists without first providing the Chief Financial Officer with a written description of the activity and seeking the Chief Financial Officer’s written approval. Any transaction that may involve potential conflicts of interest with corporate officers and directors must be reviewed and approved by the Audit Committee. Directors should disclose any potential conflict to the Audit Committee and obtain a waiver from the Audit Committee before serving on the board of directors of a potential competitor or a customer, vendor or contractor of the Company. Disclosure of any potential conflict is the key to remaining in full compliance with this policy.

If a potential conflict of interest would constitute a “related party transaction” that would be required to be disclosed pursuant to applicable federal securities laws or accounting standards or regulations, the terms of the proposed transaction must be reported in writing to the Chief Executive Officer, Chief Operating Officer or Chief Financial Officer, and must be reviewed and approved by the Audit Committee. Generally, a related party transaction is a transaction that includes a director or executive officer, directly or indirectly, and the Company that exceeds $120,000. If an officer, director or employee has any questions as to whether a proposed transaction is a “related party transaction,” such person should contact the Company’s Chief Financial Officer for clarification.

Officers, directors and employees should not: (i) take for themselves personally opportunities that are discovered through the use of Company property, information or position; (ii) use Company property, information or position for personal gain; or (iii) directly compete with the Company.

7. Compete Ethically and Fairly for Business Opportunities:

We must comply with the laws and regulations that pertain to management of the Company. We will compete fairly and ethically for all business opportunities. Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. No director, officer or employee shall take unfair advantage of anyone through manipulation, concealment or abuse of privileged information, misrepresentation of facts or any other unfair dealing practices. In circumstances where there is reason to believe that the release or receipt of non-public information is unauthorized, do not attempt to obtain and do not accept such information from any source.

If you are involved in Company transactions, you must be certain that, to your knowledge, all statements, communications and representations are accurate and truthful.

8. Avoid Illegal and Questionable Gifts or Favors:

The sale and marketing of our products and services, and the procurement of products and services from third parties, should always be free from even the perception that favorable treatment was sought, received or given in exchange for the furnishing or receipt of business courtesies. Officers, directors and employees of the Company will neither give nor accept business courtesies that constitute, or could be reasonably perceived as constituting, unfair business inducements or that would violate law, regulation or policies of the Company, or could cause embarrassment to or reflect negatively on the Company’s reputation. Personal gifts and entertainment offered by persons doing business with the Company may be accepted when offered in the ordinary and normal course of the business relationship. However, the frequency and value of any such gifts or entertainment may not be so excessive that the ability to exercise independent judgment on behalf of the Company is or may appear to be compromised. Accordingly, if one receives or is offered a gift that is believed to have a value in excess of the lesser of (i) 0.5% of your annual base compensation, if applicable, and (ii) $500.00, or entertainment that is in excess of usual and customary levels, by any person providing or offering goods or services to the Company, you must promptly disclose the same to your supervisor who will advise you in writing whether the gift or entertainment is proper, based upon the standards set out in this Code. Any gift or entertainment determined to be improper must be returned, reimbursed or refused by you.

9. Maintain the Integrity of Consultants, Agents and Representatives:

Business integrity is a key standard for the selection and retention of those who represent the Company. Agents, representatives and consultants must certify their willingness to comply with the Company’s policies and procedures and must never be retained to circumvent the Company’s values and principles. Paying bribes or kickbacks, engaging in industrial espionage, obtaining the proprietary data of a third party without authority or gaining inside information or influence are just a few examples of what could give the Company an unfair competitive advantage and could result in violations of law.

10. Protect Proprietary Information:

Proprietary Company information may not be disclosed to anyone without proper authorization.

Proprietary documents must be protected and secure. In the course of normal business activities, suppliers, customers and competitors may sometimes divulge information that is proprietary to their business. Respect the confidentiality of such proprietary information. Please refer to the Company’s policy for additional requirements relating to proprietary information.

The Company prohibits the unauthorized disclosure of any nonpublic information acquired in the work- place and prohibits the misuse of material nonpublic information in securities trading. The Company has established procedures for releasing material information in a manner that is designed to achieve broad public dissemination of the information immediately upon its release. Officers, directors and employees may not, therefore, disclose information to anyone outside the Company, including family members and friends, other than in accordance with those procedures.

11. Obtain and Use Company Assets Wisely:

Personal use of Company property must always be in accordance with corporate policy. Proper use of Company property, information resources, material, facilities and equipment is the responsibility of each officer, director and employee of the Company. Each officer, director and employee of the Company should use and maintain these assets with care and respect, guarding against waste and abuse and not borrow or remove Company property without management’s permission.

12. Follow the Law and Use Common Sense in Political Contributions and Activities:

The Company encourages its employees to become involved in civic affairs and to participate in the political process. Employees must understand, however, that their involvement and participation must be on an individual basis, on their own time and at their own expense. Federal, local and state laws govern political contributions and activities and may restrict certain donations from the Company, whether in the form of funds, goods or services, or employees’ work time.

13. Disclosure:

The Company’s periodic reports and other documents filed with the Securities and Exchange Commission (the “SEC”), including all financial statements and other financial information, must comply with applicable federal securities laws and SEC rules. Each director, officer and employee who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must ensure that the Company’s books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants and counsel. In addition, each director, officer and employee who is involved in the Company’s disclosure process must be familiar with and comply with the Company’s disclosure controls and procedures and its internal control over financial reporting and take all necessary steps to ensure that all filings with the SEC and all other public communications about the financial and business condition of the Company provide full, fair, accurate, timely and understandable disclosure.

14. Role of Audit Committee/Chief Financial Officer; Waiver of this Code:

The Company has established an Audit Committee empowered to enforce this Code. The Company’s Chief Financial Officer is responsible for investigating all reported complaints and allegations concerning violations of the Code and, at his or her discretion, shall advise the Audit Committee. However, any reported complaints and allegations regarding an executive officer or a director shall be sent to the Audit Committee.

If an officer, director or employee is uncertain whether a particular activity or relationship is improper under this Code or requires a waiver of this Code, the officer, director or employee should disclose it to the Company’s Chief Financial Officer (or the Board of Directors if you are an executive officer or a director), who will determine whether a waiver of this Code is required. If a waiver is required, the Company’s Audit Committee (or the Board of Directors in the case of an executive officer or a director) will determine whether a waiver will be granted and any disclosures that must be made to stockholders. You may be required to agree to conditions before a waiver or a continuing waiver is granted.

15. Disciplinary Measures:

The Company shall consistently enforce this Code through appropriate means of discipline. Violations or suspected violations of the Code shall be promptly reported to your immediate supervisor, the Chief Executive Officer, Chief Operating Officer or the Chief Financial Officer in writing. If the Chief Executive Officer, Chief Operating Officer or Chief Financial Officer decides to or is required to advise the Audit Committee of a complaint or suspected violation, the Audit Committee shall then determine whether a violation of the Code has occurred and, if so, shall determine the disciplinary measures to be taken against any director, officer, employee or agent of the Company who has so violated the Code.

The disciplinary measures, which may be meted out at the discretion of the Audit Committee, include, but are not limited to, counseling, oral or written reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, forfeiture of options or other equity compensation, termination of employment and restitution. Violations may also result in civil or criminal actions against the violator.

It is the Company’s policy not to allow retaliation against any director, officer or employee for reports of misconduct or suspected violation of this Code by another person made in good faith, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense or for proving information on actions such person reasonably believes to be violations of securities laws, rules of the SEC or other federal laws relating to fraud against stockholders.

Persons subject to disciplinary measures shall include, in addition to the violator, others involved in the wrongdoing such as (i) persons who fail to use reasonable care to detect a violation, (ii) persons who if requested to divulge information withhold material information regarding a violation, and (iii) supervisors who approve or condone the violations or attempt to retaliate against employees or agents for reporting violations or violators.

16. Conclusion:

No Code can cover every situation that might arise in a company. This Code is designed to let all of the Company’s officer, directors and employees know the Company’s basic guiding principles and provide explanation on how to handle various situations. If you have questions on any situation, whether or not described in this Code, please ask. The first place to turn is your immediate supervisor or manager. If you are uncomfortable discussing a situation with your immediate supervisor or manager, you may go to anyone in management whom you feel comfortable with, including the Chief Financial Officer or the Audit Committee of the Company. We cannot stress our final point enough: “When in doubt, ask.”

This Code is subject to repeal and amendment at any time by the Board of Directors. This Code should not be construed as a contract of employment and does not change any person’s status as an at-will employee. This Code is for the benefit of the Company, and no other person is entitled to enforce this Code. This Code does not, and should not be construed to, create any private cause of action or remedy in any other person for a violation of the Code.

CODE OF CONDUCT:

ACKNOWLEDGMENT:

By signing below, I acknowledge and certify that I have received, read, and understand PeerStream, Inc.’s Code of Conduct (the “Code”).

I acknowledge that, unless otherwise stated in a separate employment agreement with the Company, my employment relationship with the Company is terminable at will, by the Company or me, at any time, for any reason, with or without cause.

I agree (i) to comply with the Code and conduct the business of the Company in keeping with the highest ethical standards and (ii) to comply with international, federal, state and local laws applicable to the Company’s businesses. I understand that failure to comply with the Code will lead to disciplinary action by the Company, which may include termination of my employment and/or the reduction of compensation or demotion.

Please note that regardless of whether you return an executed signature page, the Code is binding on you as long as you remain a director, officer or employee of Houston Natural Resources Corp.

(Please Print)

Please sign and return entire document to the Corporate Secretary and keep a copy for your own files.

Signature Page to the Acknowledgment of the Code of Conduct

HOUSTON NATURAL RESOURCES CORP.

AUDIT COMMITTEE CHARTER:

1. Purpose:

The Audit Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of Houston Natural Resources Corp., (the “Company”) to oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements. In that regard, the Committee assists the Board in monitoring (1) the quality and integrity of the financial statements of the Company, (2) the independent accountants’ qualifications and independence, (3) the performance of the Company’s internal audit function and independent accountants and (4) compliance with legal and regulatory requirements. The Committee shall also (a) prepare the report required by the rules of the U.S. Securities and Exchange Commission (the “SEC”) to be included in the Company’s annual proxy statement and (b) conduct an annual evaluation, in such manner as the Committee deems appropriate, of the performance of its duties under this charter and shall report the results of the evaluation to the Board.

In performing its duties, the Committee shall seek to maintain an effective working relationship with the Board, the independent accountants, the internal auditors and management of the Company. The Committee shall perform such other functions as the Board may from time to time assign to the Committee.

While the Committee has the responsibilities and powers set forth in this charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles (“GAAP”). This is the responsibility of management and the independent accountants.

The Committee shall exercise its business judgment in carrying out the responsibilities described in this charter in a manner that the Committee members reasonably believe to be in the  best interests of the Company and its stockholders. No provision of this charter, however, is intended to create any right in favor of any third party, including any stockholder, officer, director or employee of the Company or any subsidiary thereof, in the event of a failure to comply with any provision of this charter. Nothing contained in this charter is intended to expand applicable standards of liability under statutory or regulatory requirements for the directors of the Company or members of the Committee. The purposes and responsibilities outlined in this charter are meant to serve as guidelines rather than as inflexible rules and the Committee is encouraged to adopt such additional procedures and standards as it deems necessary from time to time to fulfill its responsibilities provided that such procedures are consistent with the Company’s charter, bylaws and any applicable law.

2. Committee Membership:

2.1 Appointment: Committee members shall be appointed by the Board and may be removed by the Board with or without cause, in its discretion. Vacancies in the Committee shall be filled by action of the Board. The Chairperson of the Committee may be designated by a vote of the Board. If a Chairperson is not so designated, the members of the Committee shall select a Chairperson by majority vote of the Committee. The Chairperson of the Committee shall not serve  as the chairperson of the Board’s Compensation Committee simultaneously.

2.2 Term: Each of the directors serving on the Committee shall serve until his or her successor has been duly elected and qualified or his or her death, resignation or removal, if earlier.

2.3 Qualifications and Number:

2.3.1 The members of the Committee shall initially be designated by the Board, and at or prior to such time as the Company’s common stock is listed on a market operated by The Nasdaq Stock Market LLC (“Nasdaq”), the members of the Committee shall meet the requirements of the SEC (the “SEC Rules”), the NASDAQ Stock Market LLC Marketplace Rules (the “Nasdaq Rules”) and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

2.3.2 The Committee shall initially be comprised of a number of members as determined by the Board, and at or prior to such time as the Company’s common stock is listed on a market operated by Nasdaq, the Committee shall be comprised of at least three members, in each case as determined by the Board, all of whom shall be “independent directors,” as such term is defined in the Nasdaq Rules, the SEC Rules and the Sarbanes-Oxley Act.

2.3.3 All members of the Committee shall have a working familiarity with basic finance and accounting practices and be able to read and understand fundamental financial statements, including the Company’s balance sheet, statement of earnings and statement of cash flow. Committee members may enhance their familiarity with finance and accounting by participating in educational programs conducted by the Company or an outside consultant. At or prior to such time as the Company’s common stock is listed on a market operated by Nasdaq, at least one member of the Committee shall qualify as an “audit committee financial expert” as defined in the SEC Rules.

2.3.4 No member of the Committee shall have participated in the preparation of  the financial statements of the Company or any of its subsidiaries in the past three years.

3. Meetings and Procedures:

3.1 As part of its responsibility to foster free and open communication, the Committee should meet periodically with members of management and the independent accountants in executive sessions to discuss any matters that the Committee or any of these groups believe should be discussed privately, as the Committee deems necessary to assist in carrying out its duties and responsibilities.

3.2 The Committee should meet with the independent accountants and management to review the Company’s financial statements prior to their public release consistent with the provisions set forth below in Section 4.

3.3 The Committee shall meet separately with management and the Company’s independent accountants to discuss, among other things, the appropriateness of the Company’s accounting policies as the Committee deems necessary to assist in carrying out its duties and responsibilities.

3.4 The Committee may also meet from time to time with the Company’s investment bankers, investor relations professionals and financial analysts who follow the Company.

4. Committee Responsibilities and Duties:

The Committee shall have the following primary duties and responsibilities, and shall perform any other activities consistent with this charter, the Company’s bylaws and governing law as the Committee or the Board may deem appropriate or necessary:

4.1 Oversight of the Financial Reporting Processes:

4.1.1 In consultation with the independent accountants and the internal auditors, review the quality and integrity of the organization’s financial reporting processes, both internal and external.

4.1.2 Review and approve all related party transactions of the Company and its subsidiaries as defined by the SEC Rules and in accordance with Auditing Standard No. 18, including (i) transactions involving potential conflicts of interest with corporate officers and directors, (ii) transactions involving any immediate family members of any corporate officers and directors and (iii) any other related party transactions.

4.1.3 Consider the independent accountants’ judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting. Consider alternative accounting principles and estimates.

4.1.4 Annually review major issues regarding the Company’s auditing and accounting principles and practices and its presentation of financial statements.

4.1.5 Meet with management, the internal auditors, the controller and the independent accountants in separate executive sessions as the Committee deems necessary to assist in carrying out its duties and responsibilities.

4.1.6 Review all major analyses prepared by management and the independent accountants of significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any analysis of the effect of alternative GAAP methods on the Company’s financial statements and a description of any transactions as to which management obtained Statement on Auditing Standard No. 50 letters.

4.1.7 Review with management and the independent accountants the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the Company’s financial statements.

4.1.8 Review disclosures made to the Committee by the Company’s Chief Executive Officer and Chief Financial Officer during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls.

4.1.9 Review and discuss with the independent auditors any matters required to be discussed by Auditing Standard No. 1301 (f/k/a Auditing Standard No. 16).

4.2 Review of Documents and Reports:

4.2.1 Review and discuss with management and the independent accountants the Company’s annual audited financial statements and quarterly financial statements and related footnotes (including disclosures under the section entitled “Management’s Discussion and Analysis  of Financial Condition and Results of Operation”) and any certification, report, opinion or review rendered by the independent accountants, considering, as appropriate, whether the information contained in these documents is consistent with the information contained in the financial statements and whether the independent accountants and legal counsel are satisfied with the disclosure and content of such documents. These discussions shall include, as the Committee deems necessary, consideration of the quality of the Company’s accounting principles as applied in its financial reporting, including review of audit adjustments (whether or not recorded) and any such other inquires as may be appropriate. The review should include, as the Committee deems necessary, separate discussions with management and with the independent auditors of significant issues and disagreements, if any, regarding accounting principles, practices and judgments, any difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information and the effect on using different accounting principles, practices and judgments. Based on the review, the Committee shall make its recommendation to the Board as to  the inclusion of the Company’s audited consolidated financial statements in the Company’s annual report on Form 10-K.

4.2.2 Review and discuss with management and the independent accountants earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies prior to releasing such information.

4.2.3 Review with management and the independent accountants any correspondence with regulators or government agencies and any employee complaints or published reports that raise issues regarding the Company’s financial statements or accounting policies.

4.2.4 Prepare the report as required by the SEC Rules to be included in the Company’s annual proxy statement.

4.2.5 Submit the minutes of all meetings of the Committee to the Company’s

Secretary:

4.2.6 Review any restatements of financial statements that have occurred or were recommended. Review the restatements made by other clients of the independent accountants.

4.3 Independent Accountant Matters:

4.3.1 Interview and retain the Company’s independent accountants, considering the accounting firm’s independence and effectiveness, and approve the engagement fees and other compensation to be paid to the independent accountants. The Committee shall have the exclusive authority to retain the Company’s independent accountants. Meet with the independent accountants and the Company’s financial management to review the scope of the proposed external audit for the current year.

4.3.2 Approve, in advance of the work being performed, the scope of all audit   and permissible non-audit services of the independent accountants and discuss planning and staffing of the audit.

4.3.3 On an annual basis, the Committee shall evaluate the independent accountants’ qualifications, performance and independence. To assist in this undertaking, the Committee shall require the independent accountants to submit a report (which report shall be reviewed by the Committee) describing (a) the independent accountants’ internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the accounting firm or by any inquiry or investigations by governmental or professional authorities (within the preceding five years) respecting one or more independent audits carried out by the independent accountants, and any steps taken to deal with any such issues and (c) all relationships the independent accountants have with the Company and relevant third parties in order to determine the impact, if any, of such relationships on the independent accountants’ independence. In making its determination, the Committee shall consider not only auditing and other traditional accounting functions performed by the independent accountants, but also non-audit services performed or proposed to be performed. The Committee shall also consider whether the provision of any of these non-audit services is compatible with the independence standards under the guidelines of the SEC and other applicable authorities (including, possibly, the Public Company Accounting Oversight Board) and shall approve in advance any non-audit services to be provided by the independent accountants.

4.3.4 The Committee shall ensure the regular rotation of the lead audit partner and audit review partner as required by law and consider whether there should be a periodic rotation of the Company’s independent accountants.

4.3.5 Review the performance of the independent accountants and terminate the independent accountants when circumstances warrant. The Committee shall have the exclusive authority to discharge the independent accountants.

4.3.6 Establish and periodically review hiring policies for employees or former employees of the independent accountants.

4.3.7 Review with the independent accountants any problems or difficulties the auditors may have encountered and any “management” or “internal control” letter provided by the independent accountants and the Company’s response to that letter. Such review should include:

(a) any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information and any disagreements with management;

(b) any accounting adjustments that were proposed by the independent accountants that were not agreed to by the Company;

(c) communications between the independent accountants and its national office regarding any issues on which it was consulted by the audit team and matters of audit quality and consistency; and

(d) any changes required in the planned scope of the internal audit.

4.3.8 Obtain from the independent accountants in connection with any audit of the annual audited financial statements a timely report describing (a) alternative treatments of financial information within the parameters of GAAP, the ramifications of the use of such alternative treatments and the treatment preferred by the independent accountants, (b) critical accounting policies and practices to be used in preparing the audit report and (c) other material written communications between the independent accountants and management, and discuss the matters contained in such report with the independent auditors.

4.3.9 Periodically consult with the independent accountants out of the presence of management about internal controls and the fullness and accuracy of the organization’s financial statements.

4.3.10 Oversee the relationship with the independent accountants by discussing with the independent accountants the nature and rigor of the audit process, receiving and reviewing audit reports and ensuring that the independent accountants have full access to the Committee (and the Board) to report on any and all appropriate matters.

4.3.11 Advise the independent accountants that they are expected to provide the Committee with a timely analysis of significant issues and practices relating to accounting principles and policies, financial reporting and internal control over financial reporting.

4.4 Oversight of Internal Audit Control Matters:

4.4.1 Establish regular and separate systems of reporting to the Committee by each of management, the independent accountants and the internal auditors regarding any significant judgments made in management’s preparation of the financial statements and the view of each as  to the appropriateness of such judgments.

4.4.2 Following completion of the annual external audit, review separately with each of management, the independent accountants and the internal auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.

4.4.3 Review with the independent accountants, the internal auditors and management the extent to which changes or improvements in financial or accounting practices have been implemented. This review should be conducted at an appropriate time subsequent to implementation of changes or improvements, as decided by the Committee.

4.4.4 Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

4.4.5 Periodically discuss with the Chief Executive Officer and Chief Financial Officer (a) the effectiveness and adequacy of the Company’s system of internal controls and any significant deficiencies in the design or operation of the internal controls that could adversely affect the Company’s ability to record, process, summarize and report financial data and (b) any fraud, whether or not material, that involves management or other employees who have a significant role   in the Company’s internal controls.

4.4.6 Oversee officers, directors and persons acting under the Committee’s direction with the goal of preventing them from fraudulently influencing, coercing, manipulating or misleading the independent accountants for purposes of rendering the Company’s financial statements materially misleading.

5. Delegation of Duties and Committee Resources:

The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate and approve the fees and retention terms of counsel or other experts or consultants, as it deems appropriate without seeking approval of the Board or management. The expense of retaining such counsel, experts or consultants shall be borne by the Company. Ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties shall also be borne by the Company.

In fulfilling its responsibilities, the Committee shall be entitled to delegate any of its responsibilities to a subcommittee of the Committee, to the extent consistent with the Company’s charter, bylaws and applicable law and the requirements of the Nasdaq Rules.

6. Amendment and Annual Review:

This charter may be amended from time to time by the Board and any amendment must be disclosed as required by, and in accordance with, applicable laws, rules and regulations.

The Committee shall review this charter at least annually and recommend any proposed changes to the Board for approval.