Kaival Brands Innovations Group (NASDAQ: KAVL) has received a notification from The NASDAQ Stock Market concerning non-compliance with Nasdaq's audit committee requirements, following the recent resignation of two directors.
The company, which is known for distributing vaping products, was informed on Monday that it no longer meets the criteria set out by Nasdaq's Listing Rule 5605 due to the departures of Mr. John Brooks and Mr. George Chuang, leaving Mr. David Worner as the sole independent director on the audit committee.
The company's non-compliance stems from the requirement to have an audit committee composed of at least three independent directors. Nasdaq's rules stipulate that Kaival Brands must submit a plan to regain compliance within 45 calendar days of the notification date. The plan is due to be presented to the Listing Qualifications Department before April 24, 2024.
If the plan to address the deficiency is accepted, Nasdaq may grant Kaival Brands an extension of up to 180 days from the original notification date to demonstrate full compliance. Should the compliance plan fail to satisfy Nasdaq's requirements, the company has the right to appeal the decision before a Hearings Panel.
It's important to note that the notice from Nasdaq does not immediately affect Kaival Brands' listing on the exchange. The company's common stock will continue to trade under the ticker symbol "KAVL" while it works to resolve the compliance issue. The information reported is based on a recent SEC filing.
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