The Lebrecht Group, APLC

The number of companies confused by issues of aggregation and integration is exceeded only by the number of companies that have never heard of these two terms. Few issues confuse companies engaged in the raising of capital through the sale of securities more than aggregation and integration. In this article we will tackle the issue of aggregation, leaving integration as the subject of a second article (a third article will discuss possible solutions to aggregation and integration violations). The detailed analysis that needs to be undertaken to spot potential aggregation and integration issues cannot be explained within the confines of these short articles. However, the penalty for violating one of these concepts is a violation of the federal exemption underlying the securities offering and potentially subjecting the company, and its officers and directors, to liability from investing shareholders and the Securities and Exchange Commission (the “SEC”), or both. Therefore, the goal of these articles is to summarily explain these two concepts in a way that can be understood and hopefully increase the chances that issues related to aggregation and integration are raised and discussed by companies and their counsel prior to the beginning of an offering of its securities.