You are the CEO of L’Malle LLC, a nonpublic company that builds and manages shopping malls. L’Malle plans to raise $4,400,000 for construction of L’Malle’s newest shopping center complex, Grande L’Malle Geneva. In an effort to avoid the application of the Securities Act of 1933, L’Malle’s CFO has proposed that L’Malle issue 22 Profit Participation Plans (PPPs) to two insurance companies, four mutual funds, and 16 individual investors. Under the PPPs, each owner will contribute $200,000 cash to finance the construction of Grande L’Malle Geneva (GLG) and receive 3 percent of the profits generated by GLG. L’Malle will be the exclusive manager of GLG, making all decisions regarding its construction and operation, for which L’Malle will receive a fee equal to 34 percent of GLG’s profits.