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Ps allege D solicited funds from Ps for investment in three real estate development projects: (1) River Ridge--a condominium development near Banner-Elk, North Carolina; (2) West Indies Village--a condominium development in Pensacola, Florida; and (3) Isle de Mer--a condominium development also in Pensacola, Florida. These solicitations were accomplished through both oral and written communications. D primarily used documents called 'Project Offerings'--one for each of the three developments--to outline the merits of the investments. Ps invested approximately $2.2 million in the development projects by purchasing ownership interests in the companies developing them. D transmitted subscription agreements purporting to convey the Ownership Interests to Ps. P refused to execute the subscription agreements because there wasn't a return of capital agreement. Nonetheless, upon D's representation that the projects were in need of emergency funds because of 'urgent circumstances,' and after D promised to change the subscription agreements, P wired its portion of the investment funds to D. Ps also allege that they made a further investment in the River Ridge project in the form of a $926,515.03 loan. Ps allege that the Ownership Interests were never conveyed, that the development projects were never constructed and that the proceeds from their investments were distributed to other investors. Ps outline a number of untrue statements and omissions made by D in the course of soliciting the investment funds from Ps. These statements are the basis of Ps' claims under § 12(a)(2) and §10(b). The parties entered into an Investment Workout Agreement in January 2007. D promised to convey a 22.1% interest in a company called Flatrock, which was represented to be a profitable real estate development in Texas. Ps allege that D breached the Investment Workout Agreement by failing to convey the Flatrock interest. D has motioned to dismiss the claims for relief under §12(a)(2) of the Securities Act of 1933, §10(b) of the Securities Exchange Act of 1934 in that Ps failed to state a claim for relief because there was no allegation of a public offering.

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