Mickey Mantle was the CEO and sole shareholder of Vending Machines, Inc. (VMI). The vending machines were offered for sale to purchasers with a site lease and a management agreement. The purchase price for this vending machine package was $12,000. Under the agreements, the purchasers were promised a fixed amount of $100 per month, which was a 10% annual return on the purchase price. If the monthly profit collected from the vending machines exceeded $100, the excess would go to VMI. Mantle and his employees handled the day-to-day operations of the vending machines, including choosing sites, installing and repairing the equipment, and collecting the coins from the machines. The vending machines did not generate enough revenue for VMI to make the payments to the purchasers required by the agreements, so VMI depended on funds from new purchasers to pay its existing purchasers. Finally, VMI filed for bankruptcy. The Securities and Exchange Commission (the SEC) filed suit against VMI.

What is the issue in this case?

Group of answer choices

Is Ihe sale of these investments exempt from registration under the small offering exemption?

Is the sale of these investments exempt from registration as securities under the private offering exemption?

Can an investment that yields a fixed return be exempt from registration under the intrastate offering exemption?

Can an investment that yields a fix return be labeled as a security and thus be subject to registration requirements under the 1933 Securities Act??