SBC Medical Group Holdings Incorporated (Nasdaq: SBC) reported in an 8-K filing that it has fallen out of compliance with Nasdaq listing rules governing board independence and audit committee composition, following the departure of director Mike Sayama at the company's July 8, 2026 annual meeting.
How the compliance lapse occurred
Mr. Sayama had previously disclosed his decision not to seek re-election. With his departure, SBC's board now has four members, only two of whom qualify as independent under Nasdaq Listing Rule 5605(a)(2). The audit committee, which under Nasdaq rules must have at least three independent members, now has just two independent directors.
The company notified Nasdaq of the non-compliance on the date of the annual meeting. Nasdaq responded with a written notice on July 10, 2026, confirming the deficiency but granting SBC a cure period to regain compliance.
The cure period timeline
Under Nasdaq Listing Rules 5605(b)(1)(A) and 5605(c)(4), the company has until the earlier of its next annual shareholders' meeting or July 9, 2027 to restore compliance. If the next annual meeting is held before January 5, 2027, SBC must demonstrate compliance by that January 5 date.
The notice has no immediate effect on the company's Nasdaq listing, provided SBC complies with the listing rules within the cure period.
Company's remediation plan
SBC stated that its board is actively searching for a fifth independent director. Once a suitable candidate is identified, the board intends to expand to five members and appoint the new independent director to the board as well as to the audit, nominating and corporate governance, and compensation committees. This would fill the positions previously held by Mr. Sayama.
Charter and bylaw amendments approved
The filing also detailed several governance changes approved by stockholders at the annual meeting. These include amendments to the company's certificate of incorporation that eliminate the plurality voting standard for director elections, remove the provision stating directors may be removed only for cause, opt out of Section 203 of the Delaware General Corporation Law, and provide for exculpation of officers. The restated charter became effective upon filing with the Delaware Secretary of State on July 9, 2026.
Additionally, the board approved amended and restated bylaws that update quorum requirements, enhance advance notice provisions for stockholder nominations and proposals, incorporate universal proxy card rules, and add a majority-vote resignation requirement for directors who fail to receive a majority of votes in uncontested elections.