blank-check company

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Blank-Check Company

A company that has not yet defined its business operations. Blank check companies issue penny stocks; the funds raised through a blank check offering must usually be placed in an escrow account until certain conditions have been met. Because a blank check company has not begun or even defined its operations, it effectively asks investors to trust it. Blank check companies are therefore subject to extra regulation to protect these investors from the possibility that the company is a fraud. In any event, investing in a blank check company is always speculative.

blank-check company

A company that issues penny stock in order to finance its involvement in establishing a business in which principal operations have not yet commenced. The company either has no business plan or plans to engage in a merger or acquisition with an unspecified business entity. Essentially, the company is given a blank check with regard to investors' money. Blank-check companies are required to provide certain information prior to and after the registration of securities. In addition, funds received from a penny stock offering must be placed in an escrow account for the benefit of the purchaser. See also Rule 419.
References in periodicals archive ?
Blank check companies are entities with no purpose other than merging with another firm.
The Company has been informed by the Exchange that a similar letter was sent to all of its listed companies, including blank check companies, that did not hold an annual meeting in 2008.
Unlike most blank check companies, this one will be listed on the American Stock Exchange, underwritten by Goldman Sachs.
Proposal Number One, to permit the continuance of the Company as a corporation without the restrictions relating to blank check companies, was approved by a vote of 13,096,144 for and 1,444,035 against the Proposal.
Hayground Cove has a successful track record in partnering with blank check companies, having sponsored India Hospitality Corp.
gov, and that its filing included the customary going concern qualification for special purpose acquisition corporations or blank check companies by its outside auditors, as expected given the Company's structure and its undertaking to promptly adopt a plan of distribution of assets and initiate procedures for dissolution if the Company does not complete a business combination within 18 months after the consummation of its initial public offering (or within 24 months after the consummation of the offering if certain conditions are met).
These blank check companies have found the federal services space a decent hunting ground given the number of mid-sized players that wish to stay independent and can use a public vehicle for liquidity to shareholders, employee compensation and currency for acquisitions.