NEW YORK – Following the resignation this week of its independent directors, 23andMe received a warning letter from the Nasdaq Listing Qualifications Department that it has fallen out of compliance with Nasdaq listing requirements.
The letter, disclosed in a filing with the US Securities and Exchange Commission posted after market close on Wednesday, explained that in order to regain compliance, the company must have an Audit Committee with at least three members, each of whom must be an independent director; it must have a Compensation Committee of at least two members, each of whom is an independent director; and it must have independent director oversight of director nominations. Additionally, the majority of 23andMe's board of directors must be comprised of independent directors.
Of the seven independent directors, who announced their resignation Tuesday, three sat on the Audit Committee and another three sat on the Compensation Committee.
The South San Francisco, California-based company has until Oct. 3 to submit a plan to regain compliance, which, if accepted, will provide an additional 180 days to provide evidence of compliance.
Neither the warning letter nor the company's noncompliance will have an immediate effect on 23andMe's listing or trading of Class A stock.