Ralph W. Thompson, Jr., was the managing member and registered agent of Novus Technologies, LLC, which claimed to be a business consultant specializing in generating cash flow for clients. Novus claimed to have developed "Money Technology," a system "designed to generate and maintain cash flow for companies to use to grow and maintain the integrity of their business models." According to Novus, "the process is simple: a company makes a loan to Novus for a period no longer than six months at a time. Novus promises to pay the company back their original principal with an agreed upon monthly interest rate." Novus further represented that the loans were "backed by an unsecured Promissory Note and that note is backed by Novus's company assets."

Mr. Thompson told investors that they could "loan" funds to Novus through promissory notes. Investors were told that the minimum "loan" amount was $50,000 or $100,000, and that the notes were for a six-month term and paid between 3 percent and 5 percent interestper month.He also told investors that the funds would be used to invest in all of Novus's business activities, including manufacturing opportunities in China and Taiwan, a television station, stocks, foreign currency futures, and real estate. Mr. Thompson marketed Novus as a low-risk or no-risk investment. Indeed, to encourage investment, he told investors that their investments would be safer than a 401(k) plan or conventional mortgage. He told some investors that Novus would pool investors' funds with those from other individuals and invest only the interest earned on those funds. He told others that only 25 percent of their money would be at risk. By February 2007, Novus was not generating sufficient returns on its investments to pay Novus investors their promised interest payments, so it paid investor interest payments from funds received from new investors. The SEC wanted to charge Thompson with securities fraud, but that first required a determination that Thompson was offering to sell securities.

1. Based on these facts, was Thompson offering to sell securities to the public? How will you make that determination?