Corporate Finance

Construction Partners Reports Nasdaq Audit Committee Compliance Gap

Construction Partners notified Nasdaq that its audit committee has two independent directors after the death of Michael H. McKay. The company intends to rely on a cure period while seeking a qualifying replacement director.

By Carter Hayes ยท

Key takeaways

  • Construction Partners notified Nasdaq on August 10, 2026, that its audit committee had been reduced to two independent directors.
  • The company said it is not compliant with the Nasdaq requirement for a minimum of three independent audit committee directors.
  • Construction Partners intends to rely on a cure period that generally ends at the earlier of its next annual stockholder meeting or July 22, 2027.
  • The company also issued 619,000 restricted Class B common shares to certain employees, with vesting scheduled for September 30, 2030, subject to continued service.

Audit committee compliance issue

Construction Partners reported that the death of Michael H. McKay, an independent director and audit committee member, reduced the committee to two independent directors. The company said this leaves it out of compliance with the applicable Nasdaq audit committee composition rule.

The company intends to use the available cure period to regain compliance. That period is generally the earlier of the next annual meeting of stockholders or July 22, 2027.

The board plans to begin identifying and selecting a new independent director as soon as practicable. Construction Partners noted that its ability to identify and retain a qualifying director during the cure period could affect its plans to regain compliance.

Restricted stock issuance

On August 6, 2026, following compensation committee approval, Construction Partners issued 619,000 restricted shares of Class B common stock to certain employees under its 2024 Restricted Stock Plan.

The shares have time-based vesting criteria and are set to vest in a single tranche on September 30, 2030, provided each recipient remains in service through that date. The company reported that the shares were issued without registration under the Securities Act, relying on the stated exemptions.

What the filing covers

The filing addresses an exchange-listing governance requirement and an employee equity award. It does not describe new borrowing, debt financing, or a change in debt terms.