THE OFFERINGS THAT PRECEDE AN INITIAL PUBLIC OFFERING - HOW TO PRESERVE EXEMPTIONS AND AVOID INTEGRATION

Before an initial public offering, a company often engages in transact ions such as financings; reorganizations, and sales to employees. The issuer must be careful to ensure that these transactions are exempt fr om registration requirements and to avoid integrating them with each o ther and the ensuing public offering. Recently, the SEC has taken a mo re aggressive stance towards some of these transactions: This article examines the relevant exemptions and explains how to avoid integration . It argues that a general safe harbor protecting all pre-initial publ ic offering transactions from integration would better serve the polic ies of the 1933 Act than the SEC's current approach.