Nuwellis, Inc.: Two Directors Resign Over Governance Concerns—Board Reduces Size Amid Dispute

Key Points

• Two directors, Mika Grasso and Katharyn Field, resigned from the Board of Nuwellis, Inc. on March 26, 2026.
• Both resignations were accompanied by detailed letters alleging significant governance concerns, lack of transparency, and exclusion of independent directors from major decisions.
• The company disputes the allegations, stating they disagree with the characterizations and conclusions in the resignation letters.
• In response to the resignations, the Board immediately reduced its size from seven to five members.
• There is ongoing and potential litigation risk and regulatory scrutiny due to the nature of the allegations and the company’s handling of material transactions.

Detailed Article

Nuwellis, Inc. (NASDAQ: NUWE), a medical device company, has announced the resignation of two independent directors—Mika Grasso and Katharyn Field—effective March 26, 2026. The boardroom shake-up comes amid sharp allegations of poor governance, lack of transparency, and the exclusion of independent directors from critical decision-making processes.

Background: Why Did the Directors Resign?

Both Grasso and Field submitted detailed resignation letters, which Nuwellis has attached unredacted to its SEC 8-K filing. Their letters paint a troubling picture of the company’s governance environment and raise questions about the integrity of the company’s board processes:

• Lack of Transparency: Grasso and Field allege they were not provided with sufficient information to perform their oversight duties. Grasso claims promised discussions about a proposed acquisition never occurred, and that an Executive Committee was formed and approved a highly dilutive transaction without their knowledge or participation.
• Exclusion from Key Decisions: Both directors state that they were asked to approve or sign documents, such as a resale S-1, with little to no time for review and without proper board meetings. Field emphasized that neither she nor Grasso were consulted or allowed to vote on a significant private placement or the appointment of a new CFO.
• Denial of Information: Field’s letter describes repeated requests for basic information being met with delays, obstructions, or outright silence. She details administrative hurdles that prevented her from fulfilling her EDGAR filing requirements.
• Potential Litigation and Regulatory Risk: Field notes that on January 30, 2026, the board was informed of threatened litigation by EF Hutton over alleged contract breaches related to a financing transaction. She claims these issues were ignored by the company’s leadership.
• Retaliation Claims: Field asserts that after raising her concerns, she was told she would not be renominated to the board—a move she interprets as retaliation for her attempts to fulfill fiduciary duties and raise red flags.

Company Response and Board Actions

Nuwellis, Inc. strongly disagrees with the substance and tone of both resignation letters. The company states that the allegations are “full of errors of fact, misleading speculations and malicious interpretations,” and has provided both former directors the opportunity to submit a formal response for filing with the SEC.

In direct response to the dual resignations, the board voted to reduce its size from seven to five members, effective immediately.

Why Investors Should Care—Potential Impact on Share Price

• Governance Red Flags: The nature and specificity of the allegations are significant. Claims of lack of board oversight, exclusion of independent directors from material transactions, and potential retaliation are serious governance issues that may draw regulatory attention and erode investor trust.
• Litigation & Regulatory Risk: Ongoing or potential litigation related to the company’s financing transactions, as well as possible breaches of securities laws, could result in legal costs, penalties, or even threaten the company’s listing status if not properly addressed.
• Board Instability: The reduction in board size and the circumstances surrounding the resignations may lead to further instability, raise questions about management’s commitment to independent oversight, and potentially trigger additional resignations or regulatory inquiries.
• Reputational Damage: The public filing of the resignation letters, in full, means that investors, analysts, and potential partners will scrutinize the company’s governance culture and risk profile.

Exhibits Filed

• Exhibit 17.1: Letter from Mika Grasso to the Board of Directors (March 26, 2026)
• Exhibit 17.2: Letter from Katharyn Field to the Board of Directors (March 26, 2026)

The company’s actions and the outcome of any regulatory or legal proceedings will be critical to monitor. Investors should consider the significant governance risk and potential for further negative developments.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The views expressed are based on publicly available filings and may not reflect all factors relevant to an investment decision. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions. The company’s statements and any responses from former directors or regulators may materially change the outlook described herein.

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