Dallas, Texas 08/19/2014 (FINANCIALSTRENDS) – FreeSeas Inc (NASDAQ:FREE) has posted substantial gains on the stock market by the end of trading day on Monday. The cause of the bull-run was the recent announcement by the company that it would once again become compliant with NASDAQ’s stockholders’ equity rule.
A look at equity rule: Marketplace Rule 5550(b) (1)
FreeSeas Inc (NASDAQ:FREE) recent return to complying with equity rules was with reference to Marketplace Rule 5550(b)(1) allowing the company back into the good books of the regulators.
As per regulatory requirements, a company will need to have $2.5 million stockholders’ equity to continue to be listed for the NASDAQ trading platform.
If any company falls out of compliance with this rule, then it will lose its place to trade on NASDAQ. Further, NASDAQ also has the right to disallow the company from future listing as well.
The recent filing of FreeSeas Inc (NASDAQ:FREE) of its Form 6-K proved that the company failed to meet the basic requirements of Marketplace Rule 5550(b)(1).
However, as of its latest filing, the company has been able to prove that it has more than the required number of shareholders’ equity – which is currently $37,563,000 proving its compliance with NASDAQ requirements.
The company claims that it has fulfilled the requirements and is now eligible for reinstatement on NASDAQ.
FreeSeas Inc (NASDAQ:FREE) has been able to generate this compliance by settling $15 million in debt forgiveness as well as 425 million in public offering as of May this year.
There were rough patches for this stock, and questions were plenty if it would be able to match the regulatory requirements. However, the company has been able to seek further resurgence and has since moved beyond the requirements to allow for the same.