A proxy fight and related management shake-up at Minnetonka-based Cogentix Medical has led to a warning letter from Nasdaq saying the company could be delisted from the exchange if it doesn't strengthen its internal governance.
Medical technology maker Cogentix, which dropped its old name Uroplasty last year as part of a deal to merge with another health care company called Vision-Sciences, disclosed the letter in securities filings Monday.
The company could be delisted from Nasdaq after May 2017 if it fails to appoint a third qualified member to its board of directors' audit committee, as per standing Nasdaq rules. Such warnings must be disclosed to shareholders.
"The company views this failure to comply with Nasdaq Listing Rule 5605 as an unintended consequence of the recent settlement of the company's recent proxy contest," Monday's disclosure says. "The company is in the process of identifying an independent director to be appointed to the audit committee."
Former Cogentix CEO Robert Kill agreed to resign from the company in late May as part of a legal settlement intended to resolve a proxy contest, securities filings say. The same announcement noted that Kenneth Paulus, who had been chairman of the company's audit committee, also agreed to resign.
News of the warning letter was announced after close of regular trading. Cogentix shares closed at $1 Monday, up 13 cents.