We at AMERICAN PIONEER ELECTRONICS, INC., [AMPEL] believe in quality both in terms of products and services and assure the same to our customers. We are dedicated to exceed the expectations of our customers with uncompromising integrity. Our main objective is to satisfy the needs of the customer and maintain sound relations. Today’s competitive environment demands continuous improvement in the Quality of products and services across the supply chain. We always bear in mind that a failure to meet quality objectives can have consequences that may adversely affect the customer, and our organization.

Keeping the above things in mind, a strategic management and operating philosophy has been developed to provide the approach to implement Total Quality Management. We have created an environment of Quality in every facet of our corporation in which we continually strive to improve all areas of our system to ensure total commitment to and satisfaction from our customers.

The Ampel Quality System Profile is intended to provide our customers with a summary of Ampel Policies and Procedures, as well as, an overview of the AMPEL Quality Management System. This summary is not intended as a substitute for our Quality manual or other detailed procedures.

QUALITY SYSTEM PROFILE

     QUALITY-PURCHASE

General

The suppliers of products, for resale, will ensure that purchased products conform to our requirements.

The suppliers of products, for resale, will be documented on an approved supplier list and will include the scope and method of each supplier’s approval.

The selection of suppliers, along with the type and extent of control exercised is dependent upon the type of product and, where appropriate, on records of subcontractor’s previously demonstrated capability and performance.

A supplier will be removed from the approved supplier list as a result of poor quality or delivery performance. Supplier quality performance will be evaluated. Records of performance are kept as part of the quality records.

Contract Review

All customer requests for quotations are reviewed by AMPEL to ensure that:

The requirements are adequately defined and documented; where no written statement of requirement is available for an order received by verbal means, Ampel, ensures that the order requirements are agreed upon before their acceptance.

All special contract requirements, special instructions, quality requirements, and delivery requirements are carefully reviewed, to determine whether the company is able to meet these requirements.

Any requirements differing from those in the order are resolved. After acceptance, any changes to the scope of the contract will force additional contract review.

Corrective Action

The company maintains a system for the timely corrective action of all conditions detrimental to product and process quality, including deficiencies encountered during processing. Supplier, Customer, and Internal Audit corrective action systems are in effect.

The prime objective of the corrective action system is to preclude the recurrence of a nonconformance by identification and correction of the root cause and contributing factors.

A documented system is in place to control non-conforming material. The procedure outlines how non-conforming material is segregated and dispositioned.

All identified non-conforming material is segregated into the warehouse. Material received into this warehouse code cannot be inadvertently mixed or used as good inventory.

The Corporate Product Manager is responsible for the disposition of non-conforming material identified during receiving inspection.

The Director of Asset Management, Director of Quality Assurance, and the Warehouse Manager are responsible for the disposition of all other non-conforming material.

Records are maintained on all non-conforming material.

     HANDLING-QUALITY

Our warehouse personnel handle product in such a way as to prevent damage and deterioration to the products and to provide for the safety of personnel using handling equipment. A foolproof system also exist to prevent electrostatic discharge (ESD) damage to devices.

     STORAGE - QUALITY

Our warehouse personnel will maintain suitable storage areas for products. Products are stored on racks, pallets, or in containers that will prevent damage and deterioration to the products during handling and storage.

Products are stored and preserved in a manner that will not cause damage, deterioration, or loss of identification. Any limited shelf-life products are identified and their status is assessed at specified intervals. Methods are in place to control receipt into, and removal from, storage areas.

Stock is periodically reviewed to detect any possible deterioration. These reviews are planned and, fully implemented and records are kept.

     PACKAGING AND PRESERVATION - QUALITY

Packaging, preservation and marking processes are in place to ensure conformance to requirements. The packing, preservation and marking processes are controlled to identify, preserve, and segregate products from receipt until shipment.

     DELIVERY - QUALITY

Packaging that is suitable for the method of transportation of the product shipped to the customer.