Due to the resignation of Richard Middlekauff from the board and audit committee at Heelys Inc., the company on Wednesday received a letter of noncompliance from the Nasdaq Stock Market’s Listing Rule 5605.
As per Nasdaq’s regulations, Heelys must have an audit committee composed of at least three independent members, but the company currently has only two. The Dallas-based firm has until Nov. 23 to become compliant with the rule.
In response to Nasdaq’s letter, Gary Martin, Heelys’ chairman, said in a statement, “We have initiated a search for a new independent director and we intend to be fully compliant as soon as possible.”
Middlekauff resigned his position on Heelys’ board on May 28, along with his cousin, Roger Adams, the inventor of the company’s wheeled footwear.
In their resignation letters, Middlekauff and Adams said they were troubled by the board’s refusal to entertain an offer made a year ago by Skechers USA Inc. to buy the company at $4.75 to $5.10 a share.