(Photo via Flickr)
Just recently, it was announced that Kalyx Development Inc. would be merging into Atlantic Alliance Partnership Corp. (NASDAQ:AAPC) as a means to go public. Atlantic Alliance Partnership Corp. is / was what is called a blank check company.
Many readers were left curious what a blank check company is and what it all means. Blank check companies are a necessary piece of many reverse-merger transactions, which is the method by which most cannabis-related companies make it to the public markets.
According to the SEC, "a blank check company is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person."
Essentially, a blank check company is exactly what it sounds like. Until the announcement of the merger with Kalyx Development, AAPC didn't have any business activities.
Atlantic Alliance Partnership Corp. "has not conducted any operations and has not generated any revenues," according to Reuters, and although they don't conduct operations, the company's vaguely stated purpose was to "pursue an acquisition opportunity in any business industry or sector."
Now that AAPC has signed with Kalyx, the two companies will merge and the "surviving public company, which is expected to be organized as a Maryland corporation, will be re-named Kalyx Properties Inc."
To stay posted on important developments in the cannabis world, be sure to subscribe to one or more of our free newsletters.