616.01 In a blank check offering, if a consummated acquisition meeting the requirements of Rule 419 has not occurred by a date 18 months after the effective date of the initial registration statement, funds held in the escrow or trust account must be returned to investors pursuant to Rule 419(e)(2)(iv) and escrowed securities must be returned to the registrant. In sum, the transaction must be unwound. For example, when the securities of a blank check company are all gifted to charities and no cash is actually paid, if after the expiration of the 18-month period no acquisition has been consummated, such escrowed shares must be returned to the registrant. [Jan. 26, 2009]

616.02 When a blank check company files a registration statement covering the resale of securities by selling shareholders, the issuer is required to comply with Rule 419 if the securities offered under the registration statement are “penny stock.” Rule 419 applies to all registered offerings of securities by blank check companies when the securities are “penny stock,” as defined in Exchange Act Rule 3a51-1. [Jan. 26, 2009]